Positive outlook ahead for Haiphong’s industrial production

DEEP C Industrial Zones (Photo: kinhtevadubao.vn)

Most of Haiphong’s industrial parks (IP) are located within the Dinh Vu – Cat Hai economic zone, one of the country’s 15 economic zones, real estate services provider Savills Vietnam noted in a recently-released report.

According to Article 16 of the Government’s Decree 218/2013/ND-CP, new investment projects which are located within these economic zones are provided with a tax exemption for four years and a reduction of 50 per cent in payable tax for the next nine years. Savills cited this as a major advantage in comparison to other IPs.

In addition, local authorities are keen to offer the best conditions for investors by reducing delays for site clearance and investment licensing.

Haiphong is a key industrial hub thanks to its improving logistics infrastructure, abundant land
supply, and strong efforts from the municipal authorities, said John Campbell, a senior consultant for industrial services from Savills Vietnam.

The port city has prioritized public private partnership developments of infrastructure in industrial zones, economic zones, seaports, port logistics services, and commercial infrastructure. Up to the first quarter of 2019, Haiphong was home to a total of 32 seaports. Of these, four are international seaports, including one deep-water port, Tan Vu – Lach Huyen.

The Government has approved over US$268 million to finance 11 key road infrastructure projects to be carried out between 2019 and 2020.

Haiphong’s industrial production has been active since 1994 and has swiftly grown into one of the leading markets in northern Vietnam. By the first quarter of this year, 11 local IPs have offered approximately 2,700 ha of leasable area, accounting for 57 per cent of the total area.

Hai An district is the most dynamic, accounting for 64 per cent of the total industrial area in Haiphong, followed by the districts of An Duong, Thuy Nguyen, and Do Son. Five IPs have fully been occupied whilst rent ranged from US$73 to US$135 per square meters, excluding yearly management fees, Savills said.

The key land supply set to accommodate expected interest comes from the Deep C HP II Industrial Zone (Phase 2 and 3) and the Nam Dinh Vu Industrial Park.

Future supply includes Trang Cat Industrial Park with infrastructure set to be inagurated by late 2019 and the Nam Cau Kien Industrial Park Phase 2 which is due to be completed in July.

Under an industrial cluster development planning to 2020 with a vision towards 2025, the port city will have 12 new industrial clusters, raising the total land area to 1,080 ha while trying to maintain an
occupancy rate of 70 per cent.

By 2025, the total land scale is projected to increase to 1,377 ha with an occupancy rate of between 80 and 90 per cent. Furthermore, statistics released by the Foreign Investment Agency under the Ministry of Planning and Investment show that Haiphong attracted a total of US$3 billion in registered foreign direct investment during 2018, ranking third for FDI attraction nationwide.

With regards to nationwide industrial production, the country saw many major transactions and projects during the first three months of the year.

Most notably, the US-based TTI, Inc. planned to set up a solar panel manufacturing plant and an R&D centre in Saigon Hi-Tech Park in Ho Chi Minh City, worth US$150 million in total.

Meanwhile, the Universal Alloy Corporation, a US aircraft components manufacturer, began construction of a US$170 million Sunshine aerospace components factory in the central city of Danang.

In February, the Republic of Korea’s (RoK) Changshin Vietnam Co. Ltd began construction of a US$100 million footwear factory in Tan Phu Industrial Park, the biggest FDI project in the southern province of Dong Nai.

In addition, With US$200 million investment, Vietnam’s first aircraft engine parts factory, the RoK - based Hanwha Aero Engines, began shipping products in January.