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HomeBusinessReal EstateLack of quality industrial land blamed for FDI strife

Lack of quality industrial land blamed for FDI strife

For the first time in 30 years, the southern province of Dong Nai was knocked out of the top five localities attracting the largest foreign-invested capital in the country. The statistics, published by the Foreign Investment Agency under the Ministry of Planning and Investment, showed that over January-November, the province lured $1.21 billion in foreign-invested capital, as compared to $2.18 billion in 2021.

Along with Dong Nai, the northern province of Quang Ninh is disappointed about capital attraction from overseas this year. There were 26 newly registered and added capital projects covering $639 million, equalling 64 per cent on-year and equalling just under half of initial expectations for 2022.

Da Nang Hi-tech Park, source:

Elsewhere, at the 10th session of Danang People’s Council for the 2021-2026 term on December 13, delegations expressed concern about the plunge in foreign-invested capital in the city and asked the representative of the Department of Planning and Investment to clarify the situation.

From the start of the year to the end of November, foreign investors poured a total $133.4 million into the city, equalling 77.8 per cent on-year. Newly registered capital accounted for 46.7 per cent on-year and reached $69.8 million.

Representatives of local authorities said that lack of industrial land is a major reason for the situation, while almost all existing industrial zones (IZs) are filled. Danang has six IZs covering 1,160 hectares, with three completely filled.

Developing new IZs is a challenge for the likes of Dong Nai and Danang. Three other IZs have been added to the planning of the latter, namely Hoa Cam, Hoa Ninh, and Hoa Nhon.

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In 2020, Danang Hi-tech Park and Industrial Zones Management Authority (DHPIZA) began to hold international bidding to entice investors to develop the three IPs. Although the organising board received high interest, no-one was qualified enough and the bidding was cancelled.

Nguyen Xuan Dai, head of the Investment Supporting, Promoting, and Managing Division under DHPIZA, said that the authority issued a notification in August to invite contractors to submit bidding documents for phase two of the Hoa Cam project, worth around $97.4 million.

“As of early October, we received a number of dossiers. DHPIZA is appraising these dossiers based on the Law on Bidding and then will submit them to the provincial leadership for approval,” Dai said.

Regarding Hoa Ninh IZ, DHPIZA will complete procedures for changing the forest land usage purpose and then submit to the prime minister for approval as soon as possible, Dai added.

Back in Dong Nai, Pham Van Cuong, deputy head of the province’s Industrial Zones Management Authority, said it is still an attractive hub for foreign investors thanks to the potential of Long Thanh International Airport. For example, Japanese retail giant AEON is accelerating procedures to open a shopping mall in the province.

Besides that, last month Dutch livestock company De Heus inaugurated a premix factory, with a capacity of 60,000 tonnes. This is the company’s first premix factory in Asia.

“Plenty of foreign investors from Japan, South Korea, Taiwan, and the EU want to develop large-scale projects in the province. However, existing land funds do not meet their demand. Lack of industrial plots mean the province is missing out on a number of large-scale projects, including Pandora,” Cuong said.

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Danish jewellery brand Pandora previously arrived in Dong Nai to survey and rent land in Long Thanh IZ to build a new jewellery crafting facility. It is hoped the facility would boast a capacity of 60 million units per year, accounting for 30 per cent of the company’s entire facilities.

But the province was forced to ask the investor to wait for access to the land, leading the investor to move the project to Binh Duong province instead. A similar situation occurred with Lego Group. At present, Dong Nai boasts 32 IZs with a fulfilment ratio of 85 per cent.

According to the planning approved by the government, Dong Nai has been allowed to add eight new IZs with a total area of 8,200ha, such as Cam My, Gia Kiem, Long Duc (phase 2), and also Long Duc (phase 3). However, according to Dong Nai’s IZs authorities, these zones face trouble in investment procedures, changing the land usage purpose, auction, and bidding. Many problems will fester until solutions are forthcoming from ministries.

Expressing concern about the lack of industrial land, Nguyen Thi Hong, Vice Chairwoman of Dong Nai People’s Committee said, “The province will have to accelerate to resolve problems for new IZs. If the slowdown persists, the province will face difficulties in attracting foreign investors in the next few years, leading to an impact on the province’s economic growth.”

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