MPI defends industrial parks

09:10 | 14/11/2011
The Ministry of Planning and Investment has come out on the front foot after criticism from National Assembly deputies that industrial parks are nothing more than a big waste of space.

mpi defends industrial parksThe attacks came after the government announced plans to add a further 260 industrial parks to the country’s current tally of 267 by 2020. The government also revealed it wanted to raise total industrial land to 200,000 hectares by 2020, well up on the 73,000ha already given over to industrial use.

These ambitious plans met with fierce opposition from many National Assembly deputies with Ho Chi Minh City deputy Tran Du Lich saying it would take 50 years from now to use up the existing 73,000ha of industrial land.

But a report from the Department of Economic Zones Management at the Ministry of Planning and Investment (MPI) said the development of the industrial parks was not a waste of land. The report estimates the existing industrial park land will see full occupation by 2015.

Many private industrial park developers are still preparing for developing new projects in Vietnam, a sign that they remain optimistic about the outlook of investment attraction to Vietnam.
“The plan for industrial park development is based on targets for the period from now to 2020 including annual economic growth at 7-8 per cent, contributions of industry and service sectors to gross domestic product (GDP) and job creation in industry,” said Vu Dai Thang, director of the department.

Thang claimed the industrial parks would not affect 3.8 million hectares of cultivation land planned by the government. “The operation of industrial parks over the past few years has played an important role in the economy,” he said.

To date, industrial parks have lured $57 billion of committed foreign direct investment (FDI), accounting for 30 per cent of total FDI commitment in the country. If domestic capital is included, the total investment registered in the parks to date stands at $75 billion.

This year, the total revenue of enterprises operating in industrial parks is expected to hit $40-$42 billion. Predictions for total export turnover are hovering around $20-$22 billion, or 25 per cent of the country’s total export turnover. Vietnam’s industrial parks have also created 1.7 million jobs to date.

On average, each hectare of industrial park land has attracted $3.5 million of investment capital, earning $2 million of revenue and $1 million of export turnover as well as creating 80 direct jobs this year. The contribution of industrial parks to the state budget this year is estimated at around $1 billion. This means each hectare will contribute $50,000 to state’s budget in 2011.

“Overall, it is clear that industrial park land is more effective than agricultural land,” said Thang.
And while FDI commitment has dropped this year in the face of domestic and global economic slowdown, foreign investors remain committed to industrial parks with nearly $4 billion pledged this year.

Among the bigger deals this year, Taiwanese Wintek Group in March registered to build a factory to produce touch panels for Apple’s iPhones and iPads in northern Bac Giang province’s Quang Chau Industrial Park.

In May, the world’s leading glass and glazing system manufacturer NSG Group announced plans to expand investment in My Xuan A Industrial Park in Ba Ria-Vung Tau province. The total investment will be in the order of $320 million, with both lines due to start production in 2013.

Nestle Vietnam recently received an investment certificate to build a $16 million coffee processing factory in southern Dong Nai province’s Amata Industrial Park. The firm this year announced its intention to invest an additional $270 million in Vietnam in the coming years. The MPI expects total FDI commitment into industrial parks this year will reach $6.5-$7 billion, accounting about 50 per cent of total commitment in the country.

By Ngoc Linh

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