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Struggling logistics firms in dire need of support to survive COVID-19 crisis | Business | Vietnam+ (VietnamPlus)


Struggling logistics firms in dire need of support to survive COVID-19 crisis hinh anh 1A worker wears protective clothing while working at Golden Logistic Co Ltd in the northern province of Bac Ninh (Photo courtesy of the company)

Hanoi (VNS/VNA) – The COVID-19 health crisis and resulting wide-ranging and
deeply-felt economic upheaval has flipped the logistics industry on its head,
leaving ill-protected freight firms in dire need of emergency State support to
survive hardships.

Mandatory preventive measures among nations to contain the spread of the
pandemic has resulted in disrupted trade flow and fragmented supply lines,
dealing a blow to the logistics industry, which is viewed as an auxiliary for
trade and commerce, enabling other industries to deliver goods and services
to consumers.

Factories reducing production or suspending operations has led to a curtailment
in the transportation and delivery of goods in the supply chain, greatly
affecting the operation of logistics companies.

“Right from the early stages of the COVID-19 outbreak, the number of freight
orders received by logistics companies in Bac Ninh fell sharply, at the same
time, the delivery of goods, storage and warehousing activity is slowed and
disrupted,” said Nguyen Hoai Nam, sales manager of Golden Logistic Co. Ltd. in
the northern province.

“Following government guidelines on COVID-19 prevention and control, we
businesses are making a continuing effort to realise the dual goal of
maintaining production while ensuring work-related safety during the pandemic,
prioritising workers’ health,” he said.

Every stage involving transportation, warehousing, regular health check-ups for
workers and drivers transporting goods in pandemic-hit areas was all in
strict compliance with guidelines for disinfection and sterilisation. But this
had resulted in a surge in operational costs.

Travel restrictions also led to worsening shortages of truck drivers to pick up
containers, he said.

“Multiple unexpected costs have pressured logistics service
providers. However, it is time both manufacturing enterprises and logistics
enterprises need to work together,” Nam said.

Logistics costs in Vietnam account for about 20 percent of the goods value,
which is relatively high compared to the average costs over the world.

“However, devastating consequences caused by the prolonged pandemic, together
with the rising prices of warehousing and freight services, makes logistics
costs continue to increase, putting great pressure on businesses,” Nam said.

Businesses also faced a significant reduction in revenue from goods exported and
imported from pandemic-affected countries. Commodities shipped to Vietnam
dropped dramatically, those undergoing customs clearance were strictly
quarantined. Delivery time from suppliers in the Asian market and some other
regions is reportedly longer.

According to statistics of the Vietnam Logistics Business Association, up to 50
per cent of enterprises providing logistics services of all
types experienced a downturn in activities and revenue. Air and road
transportation services were hit the hardest.

Roughly 80 percent of the association’s members are micro, small and medium
enterprises, thus many of them are on the brink of collapse, meaning workers
are losing their jobs.

In Vietnam, infection cases were detected at large-scale industrial parks of Bac
Ninh and Bac Giang, causing many disturbances in the production lines of
enterprises, which inevitably placed a direct impact on logistics enterprises.

A report summarising recommendations of businesses and associations in April-May
2021 has been submitted to the Prime Minister by the Private Sector Development
Research Board (Board IV), under the government’s Advisory Council for
Administrative Procedure Reform and Young Presidents’ Organisation (YPO).

In the report, Board IV said amid the pandemic, manufacturing enterprises in
industrial parks, logistics and transportation businesses suffered, causing
economic hardship and supply chain disruption.

Exporting enterprises confronted great challenges due to worsening shortages of
containers and merchant ships on a global scale, as well as skyrocketing fees.

Board IV, therefore, recommended the Government consider and direct ministries,
branches and localities to simplify administrative processes or consider
according to priority for import and export processes, as in the priority just
applied to the export of Bac Giang lychee.

This would help businesses optimise time and costs in the domestic stages to
speed up the import procedures for essential goods or accelerate the export of
agricultural products and other key export commodities.

Le Duy Hiep, Chairman of the Vietnam Logistics Service Association (VLA), said
in light of COVID-19 developments, in order to support logistics businesses,
VLA proposed the Government grant a reduction of 50 percent on corporate income
tax for 2020 as a way to support businesses to overcome hardships.

It also proposed the extension and postponement for employers’ tax payment,
their contributions to the Social Insurance Fund, Unemployment Insurance and Health
Insurance Fund, he said.

VLA’s recommendations on tax payment extension have been approved by the
Government. However, “this takes time and many procedures are required by
the banks,” Hiep said.

Decisions on petrol retail price reduction benefited both businesses and
the whole economy, he said.

The Vietnam Maritime Administration in May last year decided to reduce the
pilotage fee by 10 percent for Vietnamese shipping enterprises operating on
domestic routes, as a support measure amid the COVID-19 pandemic.

Hiep said Vietnam’s logistics costs were still higher than the regional and
global averages of 16-20 percent.

“We are trying to reduce the cost to equal other countries in the region, such
as Thailand at 14-15 percent and Singapore at 8-10 percent,” he said.

The government targets that by 2025, the contribution of logistics services to Vietnam’s
GDP will touch 5-6 percent, with the growth rate of logistics industry reaching
15-20 percent, the rate of outsourced logistics services at 50-60 percent,
achieving Global Logistics Performance Index at 50 or higher.

Logistics enterprises
should urgently apply IT solutions, modernising management and operation
methods, use software systems and logistics optimisation platforms to cut costs
and improve service quality, Hiep said.

They should promote
linkages with other logistics providers and with manufacturing enterprises in
order to create competitive advantages in negotiation and improve service
provision capacity.

VLA would actively coordinate with localities and manufacturing companies
to devise solutions promoting the transportation and circulation of goods,
ensuring safety amid the pandemic, at the same time applying supportive
measures such as reducing freight, storage and warehousing costs.

Trade centres and supermarkets should consider augmenting the purchase of
agricultural products from farmers in pandemic-hit localities such as Bac
Giang, he said./.





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Central region’s seaports to be upgraded | Business | Vietnam+ (VietnamPlus)


Central region’s seaports to be upgraded hinh anh 1

Cam Ranh Port in Khanh Hoa Province. Ports across central Vietnam are planning to upgrade their capacity. – Photo baodautu.vn

Hanoi (VNA) – The central region is racing to upgrade their seaports to meet high demand on transporting goods, especially to serve container ships, reported Dau Tu (Investment) newspaper.

In its adjusted planning to 2020 with a vision to 2030, the Dung Quat Port Complex in the central province of Quang Ngai has been designed with 14 ports to become a modern and large-scale one that can serve both large
barges and container ships.

However, after more than ten years, it currently has only eight ports in operation, three general ports and five specialised ports.

Of these, only the Hoa Phat Dung Quat port can receive vessels with a capacity of
150,000 – 200,000 tonnes and the rest can only handle those with a capacity of
50,000 – 70,000 tonnes.

Quang Ngai province currently has more than 20 enterprises involved in
importing and exporting goods using container ships with around 6,500
containers per year. However, Dung Quat has no container port, forcing local exporters to transport their containers of export goods to Da Nang or neighbouring seaports in the central region.

 

Dang Van Minh, chairman of Quang Ngai Province’s People’s Committee, said most of the ports at Dung Quat Port Complex have operated at their full capacity, so they will not be able to meet the import and export needs of businesses in the long term. Therefore, fresh investment in ports is very necessary.

In nearby Binh Dinh province,  the cargo throughput of Quy Nhon port skyrocketed from 4.5 million tonnes in 2010 to 9.1 million tonnes in 2019 and more than 12 million
tonnes in 2020.


The port now handles 2,500 tonnes of goods per berth metre, more than five
times higher than the designed capacity. Therefore, the upgrading of Quy Nhon
port is extremely essential.

The Quy Nhon Port Joint Stock Company will start upgrading Quy Nhon Port’s wharf No 1 in August to ease the overloading at the port. The project will help to increase the port’s capacity in receiving ships up to 30,000 DWT ships.

In a recent document sent to the Ministry of Transport, voters in Phu Yen
province proposed to invest in Bai Goc deep-water port and seaport logistics
area in order to tap the local advantages to enhance the competitiveness and
promote regional linkages, creating a driving force to attract large
industrial and service projects to the Nam Phu Yen Economic Zone. 

 

The Ministry of Transport has expressed its backing of the proposal.

Meanwhile, the Cam Ranh Port Joint Stock Company which operates Ba Ngoi port in Khanh Hoa province also suggested the port be upgraded in order to receive ships of up to 70,000 dead weight tonnes (DWT), according
to provincial Department of Transport and Communications.

Nguyen Tan Tuan, Chairman of Khanh Hoa
Provincial People’s Committee said that the province has approved the proposal and is consulting the Ministry
of Defence before submitting to the Prime Minister for approval./.

VNA





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Businesses struggle with rising costs during COVID-19 | Business | Vietnam+ (VietnamPlus)


Businesses struggle with rising costs during COVID-19 hinh anh 1A seaport in HCM City. Many businesses around the country and in HCM City are struggling with rising costs, with tens of thousands of businesses being forced to close down (Photo: VNA)

HCM City (VNS/VNA) – Many businesses have closed down or are
struggling with rising overheads due to COVID-19.

From January to the
end of May, nearly 60,000 businesses around the country closed. As many as
31,800 of them closed temporarily, while the rest were dissolved or are in the
process of dissolution.

Many others are
struggling with rising production costs.

Ly Kim Chi, chairwoman
of the Food and Foodstuff Association of Ho Chi Minh City, said that since the
start of the year businesses have been struggling with rising costs for raw
ingredients such as condiments, rice and seafood.

Production materials
and items like packaging and rubber gloves have also risen in cost.

Do Van Khuol, supply
director of the Saigon Food Company, said that COVID-19 was driving up the cost
of imported ingredients, and prices could rise by 10-25 per cent in the third
and fourth quarters.

Last month the Vietnam
Association of Seafood Exporters and Producers called for HCM City to delay its
plan to charge extra fees for using seaport infrastructure works and utilities.

The city planned to
begin doing this from July 1 to raise funds to upgrade seaport infrastructure.

The association
proposed delaying that plan until at least 2022.

If the plan begins in
July, businesses will face a serious financial burden on top of existing
problems such as rising sea transportation costs and falling purchase demands,
according to the association.

Although HCM City’s
seaports play a key logistical role in transportation within the southern
region and the Mekong Delta, traffic infrastructure for the seaports is still
underdeveloped, leading to frequent congestion and high logistics costs.

Chi said that the next
few months will see businesses importing a high volume of raw ingredients.

Businesses have asked
that the proposed seaport fees be lowered so they can recover and improve
competitiveness more easily, she added.

Businesses are also
asking the Ministry of Industry and Trade to facilitate cooperation between
them and e-commerce platforms to boost their business activities./.





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Vietnam resolutely protests all violations of its sovereignty over Truong Sa archipelago | Politics | Vietnam+ (VietnamPlus)


Vietnam resolutely protests all violations of its sovereignty over Truong Sa archipelago hinh anh 1Vietnamese agencies always keep a close watch on all activities in the Hoang Sa (Paracel) and Truong Sa (Spratly) archipelagos as well as Vietnam’s territorial waters in the East Sea. (Illustrative photo: VNA)


Hanoi (VNA) –
Vietnam resolutely protests all
violations of its sovereignty over Truong Sa (Spratly) archipelago, Foreign
Ministry spokesperson Le Thi Thu Hang stated at the ministry’s regular press
conference held online on June 10.

Responding to questions related to the situation on the East Sea,
the spokesperson said Vietnamese agencies always keep a close watch over all
activities in the Hoang Sa (Paracel) and Truong Sa archipelagos as well as on
Vietnamese waters in the East Sea.  

Regarding reports that several Chinese vessels appeared near Tri
Ton island in Vietnam’s Truong Sa archipelago, Hang reiterated that Vietnam has
sufficient historical evidence and legal grounds to testify to its sovereignty
over Hoang Sa and Truong Sa in accordance with international law.

As a member of the 1982 UN Convention on the Law of the Sea
(UNCLOS 1982), Vietnam has sovereignty, sovereign rights and jurisdiction over
related waters in the East Sea as defined in line with the Convention, she
said.

Commenting
on a report that the chief of staff of the Philippine armed forces made a trip
to Thi Tu island in Vietnam’s Truong Sa and affirmed the Philippines’ plan to
convert the island into its logistics hub, the spokesperson stressed that
Vietnam resolutely objects to all violations of its sovereignty and related
rights over the Truong Sa archipelago.

“Vietnam requests that all concerned parties respect Vietnam’s
sovereignty and international law as well as the Declaration on the Conduct of
Parties in the East Sea (DOC) and take no actions to complicate the situation
while making practical and positive contributions to the maintenance of peace
on the East Sea as well as creating favorable conditions for the negotiation on
a Code of Conduct on the sea (COC),” spokesperson Hang said./.

VNA





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Egyptian localities wish for closer ties with Vietnam in port services, logistics | Politics | Vietnam+ (VietnamPlus)


Egyptian localities wish for closer ties with Vietnam in port services, logistics hinh anh 1Vietnamese Ambassador Tran Thanh Cong to Egypt (second, left) meets with Port Said Governor Adel e-Ghadban on June 9. (Photo: VNA)

Cairo (VNA) – Egypt’s coastal governorates of
Damietta and Port Said want to beef up cooperation with Vietnam in various
fields, including port services and logistics, heard the meetings of their
governors with Vietnamese Ambassador Tran Thanh Cong on June 9.

Cong and his entourage met with Port Said Governor
Adel e-Ghadban and Damietta Governor Manal Awad Mikhail to continue effectively
enforcing agreements signed by the two countries.

The Vietnamese diplomat said Vietnam and Egypt have
maintained a good relationship in wartime in the past and national construction
at present. The bilateral ties have seen important progress over the previous
years, particularly after the official visits made by the two countries’
leaders in 2017 and 2018, he said.

Briefing about Vietnam’s economic development and
advantages alongside its incentives for investment attraction, he said Vietnam
and Egypt have inked various documents and agreements to bolster the bilateral
relations in economics, trade and investment.

Cong proposed the two sides to hold more seminars and
trade promotion events to connect enterprises from both countries and help them
explore the strengths of each other.

He also asked the Egyptian side to share experience in
managing ports and logistics and to facilitate Vietnamese investors to do
business in the two governorates.

Port Said Governor Adel e-Ghadban expressed his hope the two
sides step up partnership in port services, logistics, gas, fisheries,
textile-garment, agriculture, road construction, tourism and culture.

Damietta Governor Manal Awad Mikhail, meanwhile, expected
the two sides to enhance cooperation in port services, logistics, canned
seafood, agriculture, timber production, medical equipment, textile-garment,
cultural exchange.

Both of them welcomed Vietnamese firms to invest in the
East Port Said and Damietta export processing zones./.





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Ben Tre to outlay nearly 28.5 trillion VND on transport infrastructure, logistics | Business | Vietnam+ (VietnamPlus)


Ben Tre to outlay nearly 28.5 trillion VND on transport infrastructure, logistics hinh anh 1Upgrading National Highways 57 in Ben Tre (Photo: VNA)



Ben Tre (VNA)
– The Mekong Delta province of Ben Tre has
earmarked over 28.46 trillion VND (1.24 billion USD) for the development of local
infrastructure and logistics services in the 2021-2025 period.

The sum will be poured into 89 projects, including upgrades to National Highways
57 and 57B and the North-South Expressway sections serving the local Phu
Thuan Industrial Park and Phong Nam industrial cluster.

In the subsequent period of 2026-2030, more than 29.91 trillion VND will
be invested in 41 transport and logistics projects in the province, including those involving
the completion of a coastal road and the HCM City-Tien Giang-Ben Tre-Tra Vinh Expressway.

Local authorities are also calling for more than 1.47 trillion VND in business
investment to develop ports at local industrial parks and clusters.

In 2026-2030, it will channel money into in a new deep-water port in
Binh Dai district and continue upgrading and expanding existing ports.

According to the Chairman of the provincial People’s Committee Tran
Ngoc Tam to realise these goals, Ben Tre will deploy a raft of solutions on
institutions, capital, land, human resources, and communications.

The province’s funding for such development in the 2016-2020 period totalled 82.9 trillion VND./.

VNA





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Import-export activities likely to be vibrant over remainder of 2021: Expert | Business | Vietnam+ (VietnamPlus)


Import-export activities likely to be vibrant over remainder of 2021: Expert hinh anh 1Illustrative image (Photo: VNA)

Hanoi (VNA)Bright prospects are likely to
be seen in import-export activities over the rest of this year thanks to the effective
and comprehensive implementation of free trade agreements (FTAs) and rising prices
for strong export products of Vietnam, according to Deputy Director of the
Import-Export Department at the Ministry of Industry and Trade (MoIT) Tran
Thanh Hai.

Hai noted that demand in the global market has been recovering
along with the gradual easing of lockdown measures in the US and Europe, which
presents an opportunity for Vietnam to promote its exports.

However,
he advised exporters to bolster their competitiveness and adaptive capacity in
order to overcome the difficulties posed by the ongoing fourth COVID-19 outbreak
in Vietnam, while actively adjusting their business strategy to seize opportunities
in the new circumstances.

He asked
MoIT agencies and Vietnamese Trade Offices abroad to provide up-to-date
information on the COVID-19 situation in their host countries and propose
measures to expand export markets, while supporting Vietnamese firms seeking input
sources for production.

He said the
MoIT is working with the Ministry of Transport and the Vietnam Logistics Business
Association as well as shipping firms to provide consultancy to exporters on dealing
with logistics issues.

In the
first five months of 2021, despite the impact of COVID-19 on industrial parks
in the northern industrial hubs of Bac Giang and Bac Ninh, Vietnam still posted
a year-on-year increase of 30.7 percent in export revenue, to 130.94 billion
USD.

Of this, the domestic sector contributed 33.06 billion USD and the FDI sector
(including crude oil) 97.88 billion USD, increases of 16.6 and 36.3 percent
year-on-year, respectively.

During the period, 22 products recorded export value of over 1
billion USD each and together accounted for 87.3 percent of Vietnam’s total
exports.

Exports by the group of heavy industrial goods and minerals reeled in some 70.7
billion USD, up 33 percent against the same period last year. It was followed
by the groups of light industrial goods and handicrafts, at 47.32 billion USD
(up 33 percent), and agricultural and forestry products, at 9.69 billion USD
(up 13.5 percent). The group of aquatic products posted 3.24 billion in export
revenue, an annual increase of 12 percent.

The US remained Vietnam’s largest export market, outlaying 37.6 billion USD on
imports from the country, a year-on-year rise of 49.8 percent. China followed with
20.1 billion USD, up 26 percent, then the EU and ASEAN, with 16.1 billion USD
and 11.5 billion USD, increases of 20.8 and 23.7 percent, respectively.

In May alone, Vietnam’s exports were valued at 26 billion USD, down 2.1 percent
against April but up 35.6 percent year-on-year.

Meanwhile, the country’s imports in the five-month period hit 131.31 billion
USD, for annual growth of 36.4 percent, with China the country’s largest source
market./.

VNA





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Industrial real estate benefits from M&A deals, new supply: Savills | Business | Vietnam+ (VietnamPlus)


Industrial real estate benefits from M&A deals, new supply: Savills hinh anh 1Illustrative image (Photo: VNA)

Hanoi (VNA) – The growth of Vietnam’s industrial real estate market benefits greatly from
merger and acquisition (M&A) deals and new supplies, Savills Vietnam Industrial
Services Manager John Campbell has said.

The market is
immune from COVID-19 as many new industrial parks (IPs) have been recently opened
and major projects begun operations, despite the complex developments of the
ongoing pandemic.

New deals have
been seen this year, notably Singaporean real estate solutions provider
Boustead Projects acquiring 49 percent of shares in the Yen Phong IP in northern
Bac Ninh province, at a cost of some 6.9 million USD.

Another was a
joint venture between two major logistics and industrial real estate management
firms – ESR Cayman Limited and BW Industrial Development JSC – to own and
develop 240,000 sq m at the My Phuoc 4 IP near Ho Chi Minh City.

Various projects in
the pipeline also affirm the market’s vibrancy.

Figures from the Ministry
of Planning and Investment show that Vietnam had 370 IPs on a total area of 115,200
ha as of the end of the first quarter of this year, which helped create
approximately 3.6 million new jobs.

Dozens of
industrial projects in 13 cities and provinces received approval during the period.

Bac Ninh is home
to the largest number of upcoming projects, with five new IPs. Of note, Que Vo
III will have an additional 208.54 ha with a combined investment of 120.87
million USD.

New IPs will also
come into operation elsewhere, such as Vinh Phuc in the north, Quang Tri in the
central region, Dong Nai in the south, and Long An in the Mekong Delta.

According to
Savills Vietnam, new M&A deals and supplies are still on the rise.

Leading industrial
production projects came in May from investors in Hong Kong (China) and
Singapore to the two northern provinces of Quang Ninh and Bac Giang.

Efforts made by
the Vietnamese Government and businesses in realising the dual targets of
curbing the spread of COVID-19 and maintaining operations are hoped to
facilitate industrial production, experts said./.





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Vietnamese lychees increase presence in Singapore | Business | Vietnam+ (VietnamPlus)


Vietnamese lychees increase presence in Singapore hinh anh 1A farmer harvests lychees in Thanh Quang commune of Thanh Ha district, Hai Duong province (Photo: VNA)

Hanoi (VNA) – The early-ripening “u hong” lychees from Thanh Ha district, the northern province of Hai Duong – a lychee farming
hub of Vietnam, hit the shelves of Singaporean supermarkets on June 3.

The fruit made a good impression in this market thanks to its quality and prices, the Vietnamese trade office in Singapore said.

The Vietnamese lychees will be sold at all the 230 FairPrice
supermarkets this year, many more than last year when they were sold only at
hypermarkets or major shopping malls of FairPrice.

From now to the end of the harvest season, Singapore will
purchase at least one 40-foot container of lychees every week, and the export
volume is expected to reach 100 tonnes by the end of July, according to the
importer.

This year, the lychees from Vietnam are sold at higher
prices, 105,000 VND (4.5 USD) per kg in the first week and about 120,000 VND
per kg in the following weeks.

The Vietnamese trade office in Singapore noted that Singapore is a small
market with a population of less than 6 million, but its people have high and
stable demand for lychee which they considered it a fruit bringing about good
luck and frequently present in important anniversaries and big parties.

Given this, the office has moved to promote Vietnamese
lychees such as by making posters, posting articles about the fruit’s history
and benefits on its website, and inviting a Singaporean expert to persuade
importers.

Every year, Singapore imports more than 2,000 tonnes of
lychees from China, Vietnam, Thailand, and countries in the southern hemisphere
like Australia, South Africa, Madagascar, and Mauritius. Without lychee
cultivation, it still exports nearly 400 tonnes of lychees annually, both fresh
and canned ones, equivalent to some 20 percent of its total import volume.

Singapore ships fresh lychees mostly to Malaysia, Indonesia,
Brunei, and the Philippines and the canned fruit to ASEAN countries, South
Asia, Maldives, Barbados, Fiji, Papua New Guinea, Kenya, Seychelles, and the
ones bordering the Persian Gulf.

Tran Thu Quynh, head of the trade office, said this is a
challenge and also an opportunity for Vietnamese lychees as both countries are
members of many large free trade agreements like the Comprehensive and
Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive
Economic Partnership (RCEP).

Though the export value remains modest, authorities’ efforts
and businesses’ resolve to explore foreign markets for the fruit have
demonstrated the supply, post-harvest preservation, and logistics capacity of
Vietnam, which is also the key for all commodities of the country to reach the
world, she added./.





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IPs set up, but Vietnam still needs to do more to attract investors | Business | Vietnam+ (VietnamPlus)


IPs set up, but Vietnam still needs to do more to attract investors hinh anh 1More industrial parks were set up in Vietnam in the first five months of the year. Local developers are seeking to attract big investors. (Photo: cafef.vn)

Hanoi (VNS/VNA) – There were positive developments of industrial parks
in Vietnam in the first five months of the year, but experts still say the
country should do more to attract big investors.

According to CBRE, the industrial realty sector tended to increase just before
the pandemic as Vietnam was said to be a promising destination for the wave of
production relocation from China, with interest from many large corporations.

The research firm said industrial real estate would be the “backbone”
for any developing manufacturing economy, and Vietnam was no exception.

Seeing the potential, many localities promoted the establishment and investment
of infrastructure for industrial parks in the area. According to the latest
report of the Ministry of Planning and Investment (MPI), as of May 2021, the
country has 394 industrial parks established with a total natural land area of
121,900 ha. Of which, 286 industrial parks are in operation with an occupancy
rate of 71.8 percent, creating 3.78 million direct jobs in the country.

The report said by the end of 2020, there were 369 industrial parks established
nationwide and in the first five months of 2021, 25 new industrial parks were
established. According to a representative of the MPI, the number of IPs set up
was impressive, as in the first six months of 2020, Vietnam established six new
industrial parks.

Tran Dinh Thien, former director of the Central Institute for Economic
Management, said: “Localities have correctly identified opportunities and
that there will be investment booms in Viet Nam as they see the benefit of many
free trade agreements.”

As the flow of investment in the world was shifting to other parts including Vietnam,
IP developers and leaders of the localities understood they can promote the
attraction of investment with their IPs.

Though Thien appreciated the new establishment of IPs in Vietnam, he said such
work must go in hand in hand with many other factors in order to be truly effective
in attracting investment.

He told local media: “IP developers should not be too impatient when
waiting for good investors as low-quality investors can help fill the parks but
it may not necessarily be a good thing for the future development.”

Thien said an IP with electricity, a fence or a nearby road was not enough,
adding: “Big corporations need more for their IPs such as a national
infrastructure connection as well as policies supporting their work such as
human resources and environment-friendly facilities.”

“Otherwise, Vietnam will spend a lot of time living with low-level
projects and environmental pollution.”

Le Thanh Van, a member of the Finance and Budget Committee of the National
Assembly, said: “The IP model of Vietnam is outdated compared to the level
of development of the world and the region.”

Van said: “Vietnam is deeply involved in value chains and the scale of IPs with
some hundreds of hectares or 1,000-1,500 ha is no longer suitable. The current
model of IPs is a perfect supply chain with much bigger spaces. Some countries
have IPs of about 20,000-30,000 ha each.”

“As Vietnam does not have an industrial park of 1,000 ha and a new model, it
would be difficult for us to call for a wave of investment,” adding: “We must
create an attractive space with a new model in the planning of IPs,” she said.

The latest report by Colliers Vietnam for the first quarter said co-industrial
parks are a suitable model for sustainable development and are gradually being
promoted by many businesses and manufacturers in the world.

Ten years ago, the Asian Development Bank (ADB)’s handbook on the development
of eco-industrial parks for developing countries in Asia already classified the
type into five groups including agro-industrial parks, resource recovery parks,
renewable energy industrial parks, petrochemical parks and power plant parks.

Colliers Vietnam said the model of eco-IPs will play an important role in the
sustainable development strategy in general, helping to reduce resource
exploitation, limit the impact on the environment while still not affecting the
performance of businesses. In addition, the environment contribution will also
make a positive contribution to the efforts to combat climate change in Vietnam
and globally.

The report by Colliers Vietnam also said localities with IPs should regularly update
the development of their parks with policies and best practices so that all
could develop together, forming a synchronous system, adding that such sharing
could help localities to solve many problems more effectively, make good use of
the advantages of each province, create harmony in the inter-regional
development process and make positive contributions to the national
socio-economic development strategy.

The linkage between IPs was very important to develop logistics and commodity
production chains, said the report, adding that this can help to improve the
competitiveness of products, lowering production costs, and improving the
sustainability of the whole industry./.





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