Vinh Phuc- a boon to foreign investment

Recently, Japan’s Suzukaku Vietnam Limited became the second foreign investor to set up shop in the Ba Thien 2 industrial park (IP) in Vinh Phuc, a northern province bordering Hanoi.

As planned, the company’s $5 million auto part manufacturing plant will finish construction and be commissioned this month, providing jobs to several hundred local labourers.

According to the management of the company, after conducting market surveys in several countries in Southeast Asia, Suzukaku Vietnam decided to drop anchor in Vietnam with Vinh Phuc province as its top choice location.

“We got an investment offer from the provincial authorities and given the strong and skilled workforce in the area and its proximity to an airport, which makes it convenient for material imports, as well as active support from the local government in tackling investment procedures, we made our decision to build our factory in Vinh Phuc,” Suzukaku Vietnam chairman Kakunori Suzuku said.

The company is just one of several Japanese firms settling down in the province amid a still challenging business climate. Its opening of an auto part manufacturing facility in the province showcases Vinh Phuc’s appealing investment environment that has led it to take a leading position in terms of industrial production in northern Vietnam.

Drastic measures to accelerate site clearance and get investors the space they need to invest and grow has been a major advantage in the province successfully luring investors.

Honda Vietnam factory in Vinh Phuc

Vinh Phuc has urged authorities at every level to take measures to improve the investment climate.

The province has also proven flexible in respect to applying the law (within regulations) to maximise investor comfort, which has made it a friendly venue for investors.

A key task this year is to further improve the investment climate and capacity of provincial management at a number of levels to further facilitate business development.

This task is of foremost importance to the Vinh Phuc People’s Committee and it will be carried out continuously over the long-term.

Towards this end the provincial people’s committee formed a working group responsible for land acquisition and land fund development, it has also promulgated Vinh Phuc general urban planning, sector planning, socio-economic development planning and land use planning at diverse locations.

Efforts have been made to push up construction of transport infrastructure, enact policies supporting vocational training, and promote the area as an investment destination to strong regional and international markets.

The province has also accelerated reform of administrative procedures via breakthrough measures such as successful deployment of a single window, one-stop shop mechanism to help people and businesses save time and costs and ensure transparency in settling investment and business procedures.

Notably, in January 2013 the province established a committee to promote investment under the direct management of the people’s committee. Its core functions are to support the provincial steering committee for investment promotion, chaired by the people’s committee chairman, to conduct activities that help the province attract domestic and foreign investors, and then to help them tackle administrative procedures and keep them supported throughout their project lifespan.

Also, given a challenging business climate, provincial authorities frequently meet with investors to help them address hardships in a timely manner.

Diverse incentive policies such as tax reductions/exemptions and credit provisioning have been effectively applied to ease investor burdens.

Investment has been made on a selective basis targeting the completion of important infrastructure projects while diverse resources and support from government and relevant state agencies have been tapped for development of a modern socio-economic infrastructure.

Over the past several years, the province’s leaders have taken due heed to promoting investment and the province has hosted trips to a number of locations in Japan such as Aichi, Shizuoka, Akita and Korea including Chungcheoungbuk to attract businesses to the area.

A number of delegations from the US, France, Japan, South Korea, and Italy have visited the province hunting for investment opportunities.

To further improve the local business climate, the province has made great efforts to upgrade the road network, water supply and sewer systems, the power grid, and social and technical infrastructure outside IPs.

Great attention has been paid to improving human resource quality to satisfy ever-growing demands from investment projects, particularly major hi-tech projects. More dialogues have been opened between provincial authorities and businesses to help overcome obstacles.

Improving the efficiency of forecasting and tailoring diverse support programmes to benefit small and medium businesses, as well as start-ups, have also been prioritised.

According to Vinh Phuc People’s Committee chairman Phung Quang Hung, in the coming time the province will pay even more attention to capital intensive hi-tech projects that produce export goods, as well as foster co-operation in training to satisfy enterprise demands.

In the year ending July, Vinh Phuc licenced 47 investment projects that included 22 domestic projects with total committed capital of VND3.825 trillion ($182 million), of which five projects increased existing investment in the province by a total VND1.49 trillion ($71 million), 255 per cent of the annual target. Also licensed were 25 foreign direct investment projects valued at $241 million (four projects increased their capital by a total $36.7 million), reaching 134 per cent of the full year target. Vinh Phuc is currently home to 21 Japanese projects worth $717 million in total committed capital, putting Japan in second place in this regard and in the top position in terms of total disbursed capital among countries and territories doing business in the province.