Vinh Phuc - Safe and potential investment destination

21/12/2021

With the drastic direction and administration of the provincial leaders, creating the most favorable conditions for the investors; promptly removing difficulties and obstacles for the enterprises; Over the past 25 years, Vinh Phuc has always been affirmed as an attractive destination for the investors with the open investment environment, impressive economic growth, and investment flows of both FDI and DDI increasing gradually; Hundreds of corporations, businesses and investors have come to Vinh Phuc, even in the complicated developments of the Covid-19 pandemic.

The destination investors want to come

The Covid-19 pandemic is considered as "Fire proves gold" period for all the localities when simultaneously implementing "dual goals" - preventing and control of the pandemic, developing the economy and ensuring social security. With Vinh Phuc - the first locality in the country to have a positive case go SARS-CoV-2 and so far, after 5 outbreaks, the Covid-19 pandemic has appeared in all districts and cities in the province then the past 2 years have further demonstrated Vinh Phuc's right decisions, successes and breakthroughs in socio-economic development, building solid trust among the people and business community.

In the industrial areas, if previously, the occupancy rate was still low and the province could only attract FDI enterprises under large corporations such as: TALO, YCH, GSE&C (Singgapore), Kumho, Lotte (Korea), Toyota, Honda (Japan)...until now, the average occupancy rate of industrial area is over 63%, with 20 countries and leading regions having investment projects, in which many countries have strengths in capital, technology such as: United States, Federal Republic of Germany, Italy, Australia, New Zealand, Netherlands, Spain, France. FDI projects mainly invest in the industrial sector, with 49.7% investment projects in manufacturing electronic components; 7.8% textile; 7.2% manufacturing auto and auto components; 6.1% manufacturing motorcycles, motorcycle components and 28.6% other sectors.

By the end of 2021, the province has attracted 429 FDI projects with a total investment capital of 7.1 billion USD from 20 countries and territories; 824 DDI projects, with a total investment of nearly 110 thousand billion VND, increase of 421 FDI projects and 823 DDI projects compared to 1998. The attractiveness of the investment environment and the spillover effects from the "profitable business" of existing investors, attracting FDI projects which have increased gradually in both the number of projects and the amount of investment capital, from 26 projects in 2015 to 30 projects in 2016, 40 projects in 2017, 57 projects in 2018, 56 projects in 2019. Particularly in 2020, overcoming difficulties affected by the Covid-19 pandemic, the whole province has attracted and adjusted to capital increase for 60 new FDI projects, with a total capital of over 677 million USD. 

Mr. Nguyen Van Do, Director of the Department of Planning and Investment, said that in 2021, on the basis of difficulties and obstacles, especially the drastic direction and operation, deciding on measures that have not yet had precedent and flexibly adapted according to the Government's Resolution 128, Vinh Phuc is continuing to successfully prevent and control the pandemic, ensure the absolute safety of people's health and lives, and ensure the production environment, favorable production and business for enterprises and the economic recovery and development with many targets achieved, far exceeding the set plan. In which, it has to mention the outstanding success in attracting investment, because during the pandemic, there are localities with "empty books", unable to attract any FDI projects, but our province by the end of the second quarter has exceeded the target of attracting DDI capital, by the end of the third quarter, it far exceeds the target of attracting FDI capital for the whole year of 2021. Especially, the investment capital of DDI projects this year accounts for one-third of the total investment capital of DDI projects and FDI projects accounted for 1/5 of the total investment capital of DDI and FDI projects, have been invested in industrial area so far.  

Secretary of the Provincial Party Committee Hoang Thi Thuy Lan hands over the Memorandum
of Understanding on investment cooperation between the People's Committee
of Vinh Phuc province and SOJITZ Group and its investment partners in Vietnam

The investment capital has been increasingly came to the province even in the Covid-19 pandemic because over the years, the province's leaders have known to take advantage of the province's opportunities and strengths, show their vision and be decisive in their leading and directing the implementation of economic development tasks, to attract investment projects with specific programs and schemes suitable to each period. Specifically, if in the early years of re-establishing the province, Vinh Phuc focused on attracting FDI on a large scale, for the projects that use a lot of labor to create jobs for people and increase budget revenue. The province began to move towards high-quality FDI projects with high technology content, using more trained labor. From 2016 up to now, FDI attraction has been shifted in depth, with investment projects in modern industrial fields, high-tech environment-friendly, creating products with great added value, using economically, effectively and aiming to create jobs for highly qualified workers. At the same time, resolutely "screening" for projects that have poor capacity, using a lot of land resources, and having negative impacts on the environment.

Sharing with reporters from a number of press agencies recently, Chairman of the Provincial People's Committee Le Duy Thanh said: Although the province has gone through many periods of attracting FDI with different orientations, with the motto "All investors has come into Vinh Phuc are citizens of Vinh Phuc", the province has issued and implemented many preferential policies to attract investment in accordance with the actual local context. That is to select qualified investors to invest in industrial area infrastructure; land rent reduction and land tax payment extending; promulgating service land policies, mobilizing funds for quick site clearance; promulgating policies to develop supporting industries; promoting administrative reform, focusing on removing difficulties and obstacles related to compensation for site clearance; perfecting the system of mechanisms and policies on investment attraction, concentrating investment capital in technical infrastructure outside the fences of industrial areas. 

In particular, in July 2021, the province established the assisting team for the Chairman of the Provincial People's Committee in order to adapt and be flexible in on-site investment promotion work through proactively removing difficulties for local investors; building the new investment process, shortening about 20% of the time to handle administrative procedures; enhancing online administrative procedures. After nearly 3 months of operation, the assisting team for the Chairman has directly resolved and reported to the Chairman to direct quick handling, ensuring no more than 24 hours of nearly 1,000 phone calls from businesses, mainly asking the province to remove the difficulties in experts’ immigration, the circulation of goods, transportation of labor... Besides, in order to facilitate investors to learn information about the province, professional agencies regularly update and supplement the database, design a new set of investment promotion documents into 5 languages: Vietnamese, English, Japanese, Korean, Chinese, and print DVDs introducing the general planning of the province. Publicizing socio-economic development master plans and plans, portfolio of investment attraction sectors, and prioritized investment projects...

As a result, the province's FDI attraction is always in the leading group of localities and the FDI sector is considered as "pillar" for industrial development. Because if compared in terms of investment capital and number of projects, Vinh Phuc is much lower than the top localities in attracting FDI nationwide, but the scale of capital/projects in the province is among the highest in the country, average about 11 million USD/project. This is a clear demonstration of Vinh Phuc's effectiveness in selecting quality foreign investors over the years.

Enterprises’ trust

Back to 25 years ago, when the first Japanese company, Toyota Corporation, decided to build an auto factory in Phuc Yen, not many people thought that this would be an important milestone, even contributing to the decision to bring Vinh Phuc quickly to become an industrial "important province" on a national scale. Because thanks to the rapid success of Toyota, following in its footsteps, many large Japanese corporations in turn also chose Vinh Phuc as a destination such as: Honda, Sumitomo Corporation; Nissin, Exedy… Up to now, the province has more than 50 Japanese projects, mainly investing in large-scale industrial parks, modern technology, manufacturing in the field of automobiles and motorbikes, mechanical engineering, fabrication and manufacturing of auto and motorcycle spare parts, creating jobs for over 22,000 employees.

Mr. Hyroyoshi Masuoka, General Director of Thang Long Vinh Phuc Industrial Park Company Limited said that: "The reason Sumitomo Corporation chose Vinh Phuc to build industrial park infrastructure is because the province has a convenient location near the airport, with synchronous transport infrastructure, abundant labor resources. Especially the provincial leaders always pay attention to, support and promptly remove difficulties in site clearance, grant investment certificates... to help infrastructure construction of the industrial park to take place smoothly and conveniently. Up to now, the items outside the fence of the industrial park as committed by the government have been completed and put into operation, which has created even more attractiveness of this industrial park in the eyes of investors.

Not only Japanese investors, many big Korean investors also choose Vinh Phuc as a destination. At the recent online conference "Vinh Phuc government accompanies with businesses", Mr. Trinh Van Quang, Project Development Manager, Vina CPK Joint Stock Company (VinaCapital Group), the investor of industrial park infrastructure Ba Thien II said: After 10 years of starting the project, Ba Thien II industrial park has attracted more than 55 projects, with a total investment capital of over 885 million USD, reaching 100% of phase I occupancy rate. Currently, the company is actively coordinating with the province to remove difficulties in clearing the remaining 100 hectares for infrastructure investment to meet the site needs of secondary investors.

According to Mr. Quang, there are 3 important factors that make Vinh Phuc attractive to foreign investors, which are geographical location, favorable natural conditions; good quality of technical infrastructure and investor support services of industrial parks; the provincial government always accompanies, listens and promptly offers measures to remove difficulties for investors.

After 25 years of re-establishing the province, thanks to the timely support mechanisms and policies of the Government and the province, especially the initiative and flexibility in changing management methods, production, goods supply, businesses from countries such as Japan, Korea, Europe...all have developed production and business activities, making important contributions to state budget revenue, creating jobs for employees such as: Piaggio Vietnam Co., Ltd. (Italy), North Stair Precision Co., Ltd (USA), De Heus Co., Ltd (Netherlands), Heasung vina Co., Ltd.

To gain this trust and love, at any stage of development, Vinh Phuc also creates openness and friendliness with investors, from mechanisms, policies to working environment, living environment, civilized, friendly, responsible behavior...

New Breakthrough in “New Normal” situation

Resolution of the 17th Provincial Party Congress has set the goal of striving by 2025 Vinh Phuc will become a developed industrial province, one of the centers of industry, service and tourism of the region and the whole country; attracting more capital from 2-2.5 billion USD in FDI capital and 20-25 thousand billion VND in DDI capital. To achieve this goal, the Provincial People's Committee has directed the Department of Planning and Investment and the Management Board of Industrial areas to develop programs and plans to attract investment and develop industrial areas for each year, each period. Accordingly, in the period 2021-2025, each year Vinh Phuc will attract about 25 more FDI projects and 10 DDI projects.

From 1 DDI project and 8 FDI projects in 1998 unil now the province has 429 FDI projects,
824 DDI projects

According to the evaluation of the Management Board of the provincial industrial areas, the implementation of the right roadmap will help Vinh Phuc by 2025 to attract 5.88 billion USD in investment capital of FDI projects in industrial parks; revenue of projects will reach to 5.46 billion USD, increase by 1.2 times compared to 2020; export turnover will reach to 3.5 billion USD; state budget contribution will reach to 3,500 billion, increase by 1.1 times compared to 2020. FDI enterprises will create jobs for over 115 thousand employees. As for DDI projects, if on average each year it attracts 10 more projects, by 2025, industrial parks will attract 23,518 billion VND of DDI projects; revenue of projects will reach to 18,100 billion VND, increase by 1.5 times compared to 2020; export turnover will reach to 90 billion dong, increase by 1.5 times; contribution to the state budget will reach to 535 billion VND, increase by 1.2 times compared to 2020 and will create jobs for over 7.3 thousand employees. 

Adapting flexibly in the "new normal" situation according to Resolution No. 28 of the Government, in 2021, Vinh Phuc has carried out a variety of investment promotion activities. At the end of October, the Provincial People's Committee coordinated with the German Chamber of Industry and Commerce in Vietnam to organize an online conference to connect investment and trade for provincial businesses and potential German investors to promote exports of goods to Germany and Europe. Most recently, in the presence of Prime Minister Pham Minh Chinh, Secretary of the Provincial Party Committee Hoang Thi Thuy Lan has handed over the Memorandum of Understanding on investment cooperation between Vinh Phuc province and SOJITZ Group and other investment partners of the Group's investments in Vietnam which are Vinamilk and Vilico on the investment and development of the Investment Project to renovate the farm, change from pigs to beef cattle, build slaughter, processing, preservation and production facilities and distributed in Tam Dao district, Vinh Phuc province with a total investment of about 500 million USD.

Implementing the plan to attract investment in 2022, the Provincial People's Committee has directed the authorities to enhance the management of projects after the issuance of investment registration certificates; strictly manage laborers working at enterprises in industrial areas, especially foreign workers in the context of the Covid-19 pandemic. Promoting the development of grassroots trade unions and the effectiveness of trade unions in ensuring the interests of both enterprises and employees, minimizing labor strikes in order to further improve the investment environment. At the same time, mobilizing investment resources to build housing areas and cultural institutions for workers in industrial parks to ensure living conditions for workers. Continuing to promote and improve the investment environment, reform administrative procedures to create the most favorable conditions for business investment, minimize start-up costs, reduce input costs, encourage technological innovation, enhance the competitiveness of enterprises in the process of world economic integration.

Determined to create competitive advantages to attract investment and fulfill the goals set out by the Resolution of the 17th Provincial Party Congress, Vinh Phuc has prepared more than 500 hectares of clean land for industry, which can be ready for immediate delivery to investors when needed; approving the portfolio of projects calling for investment in the form of direct investment or investment in the form of public-private partnership (PPP) focusing on the development of high-tech industry, supporting industry, tourism - service, high-tech agriculture…

In the coming time, along with drastic prevention and control of the Covid-19 pandemic, the province will focus on removing difficulties and supporting businesses to solve problems arising due to interruptions in supply and lack of workforce, professional force to ensure stability and development. Increasing investment and build modern and synchronous industrial parks and industrial areas. Continuing to improve administrative procedures, the investment and business environment in the direction of electronic information technology application, and settle administrative procedures according to the one-stop mechanism.

Spreading the effect of a stable and attractive investment environment, in the context of the pandemic, many large investors are continuing to come to explore investment opportunities in the province.

Thanh Nga

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