FIRST INDUSTRIAL PARK – NORTHERN VIETNAM REGION
If Bien Hoa Industrial Park 1 (1963) was the first Industrial Park of Vietnam and is a symbol of the industrial sector in the South after the country’s unification. On December 29, 1987, the National Assembly passed the Law on Foreign Investment in Vietnam.By 1992, the top leaders of the Nomura Securities Group (Japan) had visited Vietnam to explore investment policies in industrial parks and invested in the Nomura Industrial Park – Hai Phong (now called the Japan-Hai Phong Industrial Park), with a project implementation period of 50 years from December 23, 1994.
NOMURA INDUSTRIAL PARK – HAI PHONG (JAPAN-HAI PHONG INDUSTRIAL PARK)
Area: 153 ha (153 ha of farmland along National Road 5, located in An Hung and An Duong communes, Hai Phong province) Total Investment: Over $140 million Location
Located 12.7 km from the center of Hai Phong city;
Located 90 km from Hanoi;
Located 19.3 km from Cat Bi Airport;
Located 6 km from Nam Ninh Seaport;
Located 9.5 km from Thuong Ly Train Station;
Located 3 km from National Road 5.
Investor
- In 1994, the investor was Nomura Securities Group (Japan).
- On July 25, 2022, Nomura Holdings, Inc. transferred its entire 70% stake in Nomura Asia Investment (Vietnam) Pte. Ltd. (NAIV), equivalent to a 70% stake in the Nomura Hai Phong Industrial Park, to PC1 Group Joint Stock Company.
Rental Costs
- Minimum Lease Area: 5,000 m2
- Factory Rental Price: $5-6 USD/m2/month
- Management Fee: 2,061 VND/m2/month
- Electricity Costs: According to Governmentregulations
- Water Costs: 21,600 VND/m3
- Wastewater Treatment Fee: 13,479 VND/m3
Lease Term
- Phase 1:
– Start Date: November 12, 2008
– End Date: November 12, 2058
- Phase 2:
– Start Date: 2025
– End Date: 2075
The Nomura Industrial Park has been developed with a focus on the electronics and high-tech industries. In addition, Nomura has been very selective in choosing investors, and many companies that wanted to invest were not approved by Nomura. By 2004, the occupancy rate of the industrial park had not reached 50%, further exacerbated by the Asian financial crisis and intense competition from the rapid construction of industrial parks in various localities. This made it extremely difficult for Nomura and forced them to accept other companies to invest in order to increase the occupancy rate. On July 25, 2022, Nomura Holding, INC. transferred all of its 70% stake in Nomura Asia Investment (Vietnam) Pte. Ltd (NAIV), equivalent to 70% of the stake in the Nomura-Hai Phong Industrial Park, to PC1 Corporation. At the same time, the name of the industrial park was changed from Nomura-Hai Phong Industrial Park to Japan-Hai Phong Industrial Park.
OVERVIEW OF THE NORTHERN INDUSTRIAL PARK
Out of the total 25 provinces and cities in the Northern region, the concentrated industrial land area is mainly located in several key provinces: Hanoi, Hai Phong, Hai Duong, Bac Ninh, Hung Yen, Vinh Phuc, and Quang Ninh.
Although the industrial parks in the North were developed later compared to the South, the industrial provinces here are very attractive for high-tech industries. The average occupancy rate at the industrial parks in the North is around 80%. A key reason for this is that by coming later, the industrial parks in the North were able to be developed in a more comprehensive and organized manner, and the rental rates are also at a moderate level.
Geographic Location:
The Northern region has a convenient geographic location for trade through various modes of transportation: sea, road, rail, and air. This has facilitated easy transportation within the region and between regions.
- The Northern region borders China to the north,
- Laos to the west,
- the East Sea to the east,
- and Central Vietnam to the south.
The industrial parks are spread across various provinces in the Northern region. This also presents an opportunity for the industrial parks to expand in scale when the conditions are right. The advantageous location of the Northern region is its gateway to the sea, with several major container ports such as Dinh Vu Port and Cai Lan Port that have been invested in and are continuously expanding. This has contributed to the development of logistics services and increased the competitiveness of this region compared to the key economic region in the South. The entire region has 27 logistics centers, accounting for 55% of the national total, concentrated mainly in Bac Ninh, Hanoi, and Hai Phong.
Government Incentives:
- The Government has issued Decree 35/2022/ND-CP on the Management of Industrial Parks and Economic Zones, which helps to complete the regulations applicable to Industrial Parks and Economic Zones.
- In addition, the government has also introduced specific incentives for different types of industrial parks, promoting sustainable development and the harmonious development of the economy, society, and the environment.
- The trend of changing the transportation structure to connect the region and the national territory through the formation of a system of expressways, airports, and seaports will create trends in the spatial distribution of the industrial park system.
Investors:
- Many investors are adopting the “China + 1” strategy (a business strategy where international corporations establish production bases outside of China in addition to their operations in China). This presents opportunities for industrial parks located near or bordering China.
- Among them, provinces like Bac Giang, Bac Ninh, Quang Ninh, Hung Yen, Hai Duong, and the city of Hai Phong are currently leading in attracting foreign direct investment (FDI).
- As of February 20, 2023, Bac Giang province attracted over $824.3 million in newly registered FDI capital, accounting for over 26.6% of the total registered investment capital and an increase of more than 8.4 times compared to the same period in 2022. Bac Giang province is also leading the country in attracting FDI capital (according to the Ministry of Planning and Investment).
- Previously, in January 2023, Quang Ninh province was only ranked 13th out of 53 provinces in attracting FDI. However, by February 2023, the province had jumped 9 places, surpassing even Dong Nai, to become one of the top 4 provinces with the highest FDI attraction in the first 2 months of the year.
Reference article: Overview of industrial parks in Southern Vietnam
Current Situation
1. Delayed Development According to the Master Plan
- By 2020, Hanoi City was oriented to plan and develop 34 industrial parks with a total area of over 7,400 hectares.
- To date, only 10 industrial parks with a total area of over 1,300 hectares have been established and put into operation. Among them, 9 industrial parks have completed the construction of infrastructure and have a nearly 100% occupancy rate, and 1 industrial park has completed the technical infrastructure and is attracting investment. In addition, 3 industrial parks have been established and are in the process of building technical infrastructure, and 3 industrial parks are in the process of investment procedures.
2. Poor performance in environmental protection
Environmental and air pollution is mainly concentrated in the older industrial parks, as they are using outdated technologies and have not built effective waste treatment systems. In contrast, the newer industrial parks, with investments in modern technologies, have better waste treatment systems that better protect the environment. Hanoi City is working to upgrade the equipment and strengthen the wastewater treatment capabilities of the older industrial parks, while also developing new industrial parks with a focus on environmental protection.
3. Abandoned industrial parks
- The Supporting Industrial Park of South Hanoi (Hanssip Industrial Park), located less than 30 km from the center of Hanoi, has a very good location and is conveniently situated. Location: It is located in Dai Xuyen commune, Phu Xuyen district Access: It is located right next to the Cau Gie – Ninh Binh expressway Convenience: It is less than 30 km from the center of Hanoi
- The Hanssip Industrial Park is planned to cover a total area of 640 hectares, of which around 500 hectares is for industrial use and around 140 hectares is for an urban services area. This land has long been cleared and has been called for investment for 6-7 years.
- However, this industrial park faces competition from many factors, with the issue of pricing being the most impactful factor..
Do KCN Nam Hà Nội nằm cách các KCN của tỉnh Hà Nam chỉ vài cây số nên chịu sức ép lớn về giá.
Hai địa phương ở cạnh nhau nhưng suất đầu tư ở Hà Nội cao gấp đôi ở Hà Nam.
Nếu ở Hà Nam, doanh nghiệp chỉ phải chi 70 USD/m2 thì ở Hà Nội lên tới 180 USD/m2.
4. Other reasons:
- The connected infrastructure is imbalanced, with road transportation accounting for 77% of the country’s total cargo transport, indicating a lack of synchronization. The technical standards of the infrastructure and factory facilities are still at a low level.
- The synchronization and integration between the planning of industrial parks, economic zones, and the planning of social infrastructure, human resources, construction, land use, and urban development is not yet strong.
- The development of industrial parks and economic zones has not been given sufficient attention in terms of pursuing sustainable development, harmonizing industry, urban areas, and services, and forming value chains through linkages and cooperation among enterprises within and outside the industrial parks and economic zones.
- The technical infrastructure for environmental protection in industrial parks is not synchronized across some localities. The operation of environmental protection facilities is not serious enough, and the requirements of environmental laws are not fully complied with. In some areas, the lack of planning for the storage and treatment of hazardous waste poses a high risk of environmental pollution. Specifically, the coverage rate of wastewater treatment plants in industrial parks is only 88%, lower than the 100% target set for 2020.
- The demand for electricity and water supply for production is still insufficient, and the energy efficiency in factories remains low.
- The system of concentrated parks, green buffer zones, and the selection of tree species in industrial parks and factories are not reasonable, which limits their effects on air conditioning and landscaping.
- The utilization of rainwater and process water for irrigation and cleaning in industrial parks has not been widely implemented. The development of eco-industrial park models towards sustainable industrial parks is still limited.
- The social infrastructure within industrial parks, including worker housing, cultural, sports, and welfare facilities, is insufficient and not well integrated with the development of industrial parks and economic zones. Moreover, the 20% land set aside for social housing or worker dormitories has not been implemented in many places.
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