Investment capital pumped heavily into HCMC

In the first quarter of this year, domestic and foreign investment capital flow still poured heavily into export processing zones and industrial parks in Ho Chi Minh City which shows that the city is a safe destination for the investment of enterprises.

A paper mill is under construction in Hiep Phuoc Industrial Park in Ho Chi Minh City. (Photo: SGGP)

A paper mill is under construction in Hiep Phuoc Industrial Park in Ho Chi Minh City. (Photo: SGGP)

However, to be able to maintain the growth momentum the Ho Chi Minh City Export Processing and Industrial Zones Authority (HEPZA) has been implementing strict measures to prevent the spread of the Covid-19 pandemic.

The representative of the HEPZA said that the total investment capital, including newly-registered and additional capital, since the beginning of this year reached US$117.76 million, an increase of 86.04 percent compared to the same period last year. Of these, 11 projects adjusted their investment capital for an addition of $60.51 million, 14 times higher compared to the same period last year. There were six newly-registered projects with a total investment of $5.48 million, down 74.25 percent compared to the same period last year. However, the investment capital of Vietnamese enterprises in the investment structure increased strongly. Particularly, the total domestic investment capital hit $51.77 million, up 37.27 percent over the same period last year. Of which, there were 13 newly-registered projects with total investment capital of $37.76 million, up 26.55 percent. Besides, 12 projects increased their investment capital by $14.02 million, up 77.98 percent.

However, in comparison with the country’s investment attraction, including additional capital, capital contribution, and purchase of shares of foreign investors which nearly reached $6.5 billion, a decrease of 23.6 percent year-on-year, the investment attraction at the export processing and industrial zones in the city has increased compared to the same period last year. The increase in investment capital was mainly planned in advance.

Economic experts said that although the global economy is being affected seriously and hard to predict because of the Covid-19 pandemic, Vietnam is currently considered as one of the safe destinations for investors.

Since the end of last year, to create favorable conditions for domestic and foreign enterprises to invest in the city, the city has reviewed the operation, as well as the capacity to receive enterprises of the export processing and industrial zones. Mr. Pham Thanh Kien, Director of the Department of Industry and Trade, said that up to now the city has 17 out of 19 export processing and industrial zones that were established and put into operations with the leased land area of nearly 1,800 hectares out of a total of more than 2,500 hectares of industrial land, reaching an occupancy rate of 68.4 percent.  Moreover, the city has been speeding up the new investment progress of Vinh Loc 3 Industrial Park in Binh Chanh District with an area of around 200 hectares, expanding Hiep Phuoc Industrial Park phase 3 with an additional area of 392.89 hectares. According to the planning, by the end of this year, the city will have 23 export processing and industrial zones with a total area of 5,797.62 hectares.

However, there are still many shortcomings in the operations of export processing and industrial zones. Mr. Marvin Tsao, CEO of Tan Thuan Co., Ltd, said that the available area in export processing and industrial zones is still large but it is difficult for them to attract enterprises that need large-scale factories, especially end-product manufacturers. Therefore, along with investing in new industrial parks, the city must take into account the land-use efficiency to avoid the same coverage problem as the existing industrial parks.

Another important issue that was also emphasized by many enterprises to create favorable conditions for enterprises to invest, as well as expand investment scale, is that the city and competent authorities need to provide transparency in information on the planning of industries in industrial parks in general and improve the infrastructure of industrial parks that have been downgraded after operating for a long time. The paperwork related to the certificate of land use rights or land transfer in industrial parks should also be implemented quickly, reducing administrative procedures, ensuring a clear business environment.

It is forecast that investment attraction in the second quarter of this year and the next months will encounter several difficulties due to the worldwide impacts of the Covid-19 pandemic. Hence, besides efforts to improve the investment environment of the city, the effective maintenance of stability, inflation control, and control of the Covid-19 pandemic from the central to grassroots level will be the factors that attract foreign investors in the coming months.

By Minh Xuan – Translated by Gia Bao

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