With its great location near Hanoi and excellent investment promotion policies, northern Vinh Phuc province is a good destination for foreign investors.
Vinh Phuc province is home to companies such as Piaggio, Compal, Lotte and Foxconn
The 1,371 square kilometre Vinh Phuc province, with a population of 1.2 million people, is located in the Red River Delta next to Hanoi. The province has seven districts, one town and one city and there are 152 communes, wards and townships.
The province is home to national highways 2A, 2B and 2C, plus the Hanoi-Lao Cai railway, which links the province to China. National Highway 18 also connects with Haiphong port and the Cai Lan deep-water seaport in Quang Ninh province. There are several large rivers including the Lo, Pho, Day and Red, all of which run through the province, creating favourable conditions for constructing ports for the transportation of materials, goods and equipment from Haiphong and Quang Ninh seaports to the province.
In terms of government’s planning, Vinh Phuc is part of the northern key economic zone, while being defined as a centre of automobile and motorbike industry development. The province is also included in the government’s national tourism development programme with advantageous geographic location, investment promotion policies and level of investors’ confidence having all contributed to fuelling the province’s economic growth.
With 20 industrial parks covering over 6,000 hectares, coupled with an open-hearted investment environment, Vinh Phuc bears in mind that foreign direct investment (FDI) contributes greatly to its socio-economic development.
Nguyen Cong Loc, head of the province’s Industrial Parks Management Authority, said that over the past five years, Vinh Phuc had remarkably improved its investment climate by concentrating on zoning and developing industrial parks and encouraging all economic sectors to invest in the province.
Loc said priority was given to investors with healthy balance sheets and projects in high technology, new material production, bio-technology, mechanics (including motorbike and automobile manufacturing and assembling), electronics and environmentally-friendly industries.
Loc said that the best conditions and investment incentives were given to all investors under the current legal regulations. As a result, the province has so far lured a great deal of FDI.
By the end of 2010, the province had 601 projects, including 121 FDI projects with total registered capital of over $2.32 billion, of which 40.4 per cent had been disbursed. Vinh Phuc has for many years appeared on the list of Vietnam’s top 10 localities for FDI attraction.
In 2008, the province’s provincial competition index ranked third on this list. According to the Taiwan Electronics and Electromechanics Association’s 2009 report, Vinh Phuc was the sole locality listed on a list of eight ASEAN-based cities and provinces that should be invested in the most by foreign investors. At present, the province is home to many big economic groups such as Italy’s Piaggio, Taiwan’s Foxconn, Compal and Fullpower, South Korea’s G.O. Max, Kumho and Lotte and Singapore’s YCH and CPK Group.
In 2010, construction of Compal’s $500 million laptop manufacturing project at Ba Thien Industrial Park was given a strong boost, while satellite projects were also being called for. This project is expected to come online in the first quarter of 2011. Foxconn projects to build industrial park infrastructure and manufacture mobile phones were also being accelerated.
FDI projects have greatly contributed to the province’s socio-economic development. FDI projects’ industrial production value occupies over 90 per cent of the province’s total industrial production value, which is showing an annual growth of 20.6 per cent. FDI also contributes to raising the province’s gross domestic product growth rate to 17.4 per cent per year. In 2010 alone, the FDI sector made up 42 per cent of the whole province’s economic structure.
In addition, the total export turnover for foreign industrial enterprises was estimated to be $403 million last year, accounting for 88 per cent of the province’s total export turnover. These foreign companies employ over 30,000 workers, of whom 60 per cent were from Vinh Phuc.
The province’s annual budget collections continued to grow, with a rise of over VND42.2 trillion ($2.16 billion) during 2006-2010. In 2010 alone, the figure was estimated to be VND14.55 billion ($746.1 million), some 80 per cent of which was from FDI projects.
Vinh Phuc hopes to lure 25 FDI projects with total investment capital expected to be $300 million each year between 2011-2015. It also expects to coax some 50 domestic direct investment projects with total investment capital of VND1.5 trillion ($76.92 million) each year from 2011-2015. These projects will annually employ 6,000-7,000 workers and this will significantly contribute to the province’s economy and labour restructuring.
The province’s Communist Party Congress Resolution for 2011-2015 targets that Vinh Phuc will become a modern industrial province by 2015. The resolution stresses that the province will continue attracting investments and developing industrial parks.
“Industrial development will be the foundation for creating high economic growth and boosting the development of other economic sectors,” the resolution states.
“The province would also continue coaxing investments into hi-tech projects using more skilled workers, while improving the local industry’s competitiveness,” it stresses.
Tourism and services-oriented projects will also be focused on, based on effectively tapping the province’s competitive advantages, so that tourism is projected to become one of the province’s key economic sectors.
Vinh Phuc is home to such beautiful landscapes as Tam Dao, Tay Thien, Dai Lai and Dam Vac. The Tam Dao tourism spot is considered one of the best places of interest in the northern region of Vietnam.