For many years, inadequate infrastructure network has deterred foreigncompanies from investing in the central coastal region, but things arechanging with progress reported in many infrastructure projects in theregion. Report by the Vietnam Investment Review.
Vietnam-Singapore Industrial Park (VSIP), a leading industrial park andtownship developer in Vietnam, this week will start the construction ofan industrial park and township complex in the central province of QuangNgai. The project, costing 337.8 million USD, comprises a 600-hectareindustrial park located within the province’s Dung Quat Economic Zone(EZ) as well as a 520-hectare commercial and residential area neardowntown Quang Ngai city. This is VSIP’s fifth project in Vietnam andits first factory in the central region.
Once completed, theproject will contribute notably to improving the infrastructure systemnot only in Quang Ngai, but also in the broader central region as well,which is expected to attract more foreign investors in the future.
VSIP hopes its infrastructure project will lure foreign manufacturersfrom the fast moving consumer goods sector as well as electronicsproducers and service providers.
Industry growth
Inadequate infrastructure is a major concern of many foreign investorsin the central coastal region. Since the Vietnamese government openedthe economy to foreign investors in 1987, most chose to set up shops inthe north and south of the country where the infrastructure system isbetter.
But as foreign direct investment (FDI) to the centralcoast started increasing in 2005, the region has emerged as a populardestination for foreign firms in Vietnam. For example, in 2004 therewere only 28 FDI projects with a total capital of 112 million USD,including those in Thua Thien-Hue, Da Nang, Quang Nam, Quang Ngai, BinhDinh, Phu Yen and Khanh Hoa. But one year later, that number hit 60projects worth 460 million USD, an increase of 400 percent compared tothe previous year. Last year, this region lured 54 FDI projects worth478 million USD.
During the first eight months of this year,foreign investors registered 32 new projects and expanded investments ateight other ongoing projects, with a total registered investment of 1.1billion USD.
“Better infrastructure is key to drawing moreinvestments in this region,” said Ho Ky Minh, director of the Economicand Social Research Institute in Da Nang.
In 2005, theVietnamese government decided to develop six EZs in the central coastalregion: Chan May-Lang Co in Thua Thien-Hue, Chu Lai in Quang Nam, DungQuat in Quang Ngai, Nhon Hoi in Binh Dinh, South Phu Yen in Phu Yen andVan Phong in Khanh Hoa. These EZs aim to attract more privateinvestments, especially FDI to boost the regional economic growth.
Investors in these EZs will enjoy tax incentives offered by thecentral government and the local authorities. In addition, 51 industrialparks (IPs) have been built in Da Nang and eight provinces to offerindustrial-use land for manufacturers.
These EZs havepositively affected FDI inflows to this region. Some leadinginternational investors like South Korea’s Doosan Group and Canada’s RioTinto Alcan have built factories in Thua Thien-Hue and Quang Ngai.
The Doosan Vina plant in Dung Quat EZ, worth 300 million USD, producesmajor components and equipment for Doosan Heavy Industries &Construction’s flagship power and water businesses, including boilers,heat-recovery steam generators, seawater desalination evaporators, andmaterial handling equipment.
At the nearby Dung Quat EZ, theVietnamese government is planning to develop the Chu Lai EZ as anautomotive industry hub. Truong Hai Auto Corporation last year brokeground on its auto engine manufacturing project in the zone. Theproject, with a total investment capital of 250 million USD, willmanufacture 20,000 engines each year under a technology transferagreement signed with South Korean’s Hyundai Motor Company.
Korean Aerospace Industries Ltd, South Korea’s airplane builder, isplanning to build a manufacturing facility in Vietnam to make equipmentand components for Airbus. The facility will be built in Da Nang Hi-TechPark in Da Nang.
Doan Hung Ngoc Anh, deputy general directorof Da Nang Hi-Tech Park Management Authority, said the Korean investorwas taking administrative steps to get an investment certificate forthis project.
Transport moves along
The Ministryof Transport on May 19 broke ground on a project to build a nationalexpressway from Da Nang to Quang Ngai. The 140-kilometre expressway willboast four lanes designed for vehicles travelling at a maximum speed of120 kilometres per hour. It extends from the Hoa Vang district of DaNang to Quang Ngai province with more than 100 bridges and one tunnelalong the way.
This is part of the trans-Vietnam expressway andis being built by the Vietnam Expressway Corporation at a total cost ofnearly 1.47 billion USD in loans from the World Bank and officialdevelopment assistance from Japan.
With completion expectedwithin the next four years, it will reduce the travel time between DaNang, Quang Nam and Quang Ngai. It will also facilitate transportbetween Laos, Vietnam and Cambodia via the East-West Economic Corridorto seaports in central Vietnam. The expressway will help createinvestment opportunities in central provinces and ease the trafficoverload on National Highway 1A.
Also in May, the ministrykicked off the construction of Phuoc Tuong and Phu Gia tunnels which arethe last needed on National Highway 1A, both are in Thua Thien-Hue.
Phuoc Tuong tunnel is 345 metres long plus approach roads measuring3.4km, while the 497m Phu Gia tunnel has a linking road of 2.4km.
After completion, the two tunnels will shorten travel time, contributeto the socio-economic development of those central provinces, meet theincreasing transport demand and reduce traffic congestion and accidentsin the region.
“Travelling to the central region from the southand the north has never been better than now. That makes investors feelbetter about doing business here than in the past,” said Minh from theEconomic and Social Research Institute.
Airport projects arealso boosting the region as foreign investors will have an easieraccess. At present, this region is home to six airports. Ninh Thuan,Binh Thuan and Quang Nam are the only provinces to not have their ownairport. However, Quang Nam could see residual trade and effect from DaNang international airport and Chu Lai airport.
In December2011, a new terminal was put in operation at the Da Nang internationalairport, easing the overload caused by growing passenger demand.
Just last week, the ministry inaugurated a new terminal at Tuy Hoaairport in Phu Yen and is planning to reopen Phu Bai internationalairport in Thua Thien-Hue on September 20 after closing it six monthsago for renovation.
In addition, there are at least fivedeep-sea ports in the central region, offering potential for import andexport activities.-VNA
Vietnam-Singapore Industrial Park (VSIP), a leading industrial park andtownship developer in Vietnam, this week will start the construction ofan industrial park and township complex in the central province of QuangNgai. The project, costing 337.8 million USD, comprises a 600-hectareindustrial park located within the province’s Dung Quat Economic Zone(EZ) as well as a 520-hectare commercial and residential area neardowntown Quang Ngai city. This is VSIP’s fifth project in Vietnam andits first factory in the central region.
Once completed, theproject will contribute notably to improving the infrastructure systemnot only in Quang Ngai, but also in the broader central region as well,which is expected to attract more foreign investors in the future.
VSIP hopes its infrastructure project will lure foreign manufacturersfrom the fast moving consumer goods sector as well as electronicsproducers and service providers.
Industry growth
Inadequate infrastructure is a major concern of many foreign investorsin the central coastal region. Since the Vietnamese government openedthe economy to foreign investors in 1987, most chose to set up shops inthe north and south of the country where the infrastructure system isbetter.
But as foreign direct investment (FDI) to the centralcoast started increasing in 2005, the region has emerged as a populardestination for foreign firms in Vietnam. For example, in 2004 therewere only 28 FDI projects with a total capital of 112 million USD,including those in Thua Thien-Hue, Da Nang, Quang Nam, Quang Ngai, BinhDinh, Phu Yen and Khanh Hoa. But one year later, that number hit 60projects worth 460 million USD, an increase of 400 percent compared tothe previous year. Last year, this region lured 54 FDI projects worth478 million USD.
During the first eight months of this year,foreign investors registered 32 new projects and expanded investments ateight other ongoing projects, with a total registered investment of 1.1billion USD.
“Better infrastructure is key to drawing moreinvestments in this region,” said Ho Ky Minh, director of the Economicand Social Research Institute in Da Nang.
In 2005, theVietnamese government decided to develop six EZs in the central coastalregion: Chan May-Lang Co in Thua Thien-Hue, Chu Lai in Quang Nam, DungQuat in Quang Ngai, Nhon Hoi in Binh Dinh, South Phu Yen in Phu Yen andVan Phong in Khanh Hoa. These EZs aim to attract more privateinvestments, especially FDI to boost the regional economic growth.
Investors in these EZs will enjoy tax incentives offered by thecentral government and the local authorities. In addition, 51 industrialparks (IPs) have been built in Da Nang and eight provinces to offerindustrial-use land for manufacturers.
These EZs havepositively affected FDI inflows to this region. Some leadinginternational investors like South Korea’s Doosan Group and Canada’s RioTinto Alcan have built factories in Thua Thien-Hue and Quang Ngai.
The Doosan Vina plant in Dung Quat EZ, worth 300 million USD, producesmajor components and equipment for Doosan Heavy Industries &Construction’s flagship power and water businesses, including boilers,heat-recovery steam generators, seawater desalination evaporators, andmaterial handling equipment.
At the nearby Dung Quat EZ, theVietnamese government is planning to develop the Chu Lai EZ as anautomotive industry hub. Truong Hai Auto Corporation last year brokeground on its auto engine manufacturing project in the zone. Theproject, with a total investment capital of 250 million USD, willmanufacture 20,000 engines each year under a technology transferagreement signed with South Korean’s Hyundai Motor Company.
Korean Aerospace Industries Ltd, South Korea’s airplane builder, isplanning to build a manufacturing facility in Vietnam to make equipmentand components for Airbus. The facility will be built in Da Nang Hi-TechPark in Da Nang.
Doan Hung Ngoc Anh, deputy general directorof Da Nang Hi-Tech Park Management Authority, said the Korean investorwas taking administrative steps to get an investment certificate forthis project.
Transport moves along
The Ministryof Transport on May 19 broke ground on a project to build a nationalexpressway from Da Nang to Quang Ngai. The 140-kilometre expressway willboast four lanes designed for vehicles travelling at a maximum speed of120 kilometres per hour. It extends from the Hoa Vang district of DaNang to Quang Ngai province with more than 100 bridges and one tunnelalong the way.
This is part of the trans-Vietnam expressway andis being built by the Vietnam Expressway Corporation at a total cost ofnearly 1.47 billion USD in loans from the World Bank and officialdevelopment assistance from Japan.
With completion expectedwithin the next four years, it will reduce the travel time between DaNang, Quang Nam and Quang Ngai. It will also facilitate transportbetween Laos, Vietnam and Cambodia via the East-West Economic Corridorto seaports in central Vietnam. The expressway will help createinvestment opportunities in central provinces and ease the trafficoverload on National Highway 1A.
Also in May, the ministrykicked off the construction of Phuoc Tuong and Phu Gia tunnels which arethe last needed on National Highway 1A, both are in Thua Thien-Hue.
Phuoc Tuong tunnel is 345 metres long plus approach roads measuring3.4km, while the 497m Phu Gia tunnel has a linking road of 2.4km.
After completion, the two tunnels will shorten travel time, contributeto the socio-economic development of those central provinces, meet theincreasing transport demand and reduce traffic congestion and accidentsin the region.
“Travelling to the central region from the southand the north has never been better than now. That makes investors feelbetter about doing business here than in the past,” said Minh from theEconomic and Social Research Institute.
Airport projects arealso boosting the region as foreign investors will have an easieraccess. At present, this region is home to six airports. Ninh Thuan,Binh Thuan and Quang Nam are the only provinces to not have their ownairport. However, Quang Nam could see residual trade and effect from DaNang international airport and Chu Lai airport.
In December2011, a new terminal was put in operation at the Da Nang internationalairport, easing the overload caused by growing passenger demand.
Just last week, the ministry inaugurated a new terminal at Tuy Hoaairport in Phu Yen and is planning to reopen Phu Bai internationalairport in Thua Thien-Hue on September 20 after closing it six monthsago for renovation.
In addition, there are at least fivedeep-sea ports in the central region, offering potential for import andexport activities.-VNA
