Business Business

12/06/2019 - 08:23

Attracting investment at industrial zones: “Try before you trust”

Selective investment aiming at the capacity of the investor, hi-tech fields and high value added, using fewer workers and ensuring stable environment is what industrial zones emphasize.

Wood processing at La Son Industrial Zone

Shortage of labor force

According to Tran Van Phu, President of Scavi Joint Stock Company (France), in order to cut off transport fees and increase competition, the group has, for many years, organized three conferences to promote and call for investment in textile supporting technology at Phong Dien Zone such as producing dye, material, buttons, buckles, etc. However, after surveys, many investors have not been able to build factories yet because these fields require proper central wastewater processing. 

According to Mr. Phu, after 10 years at Phong Dien Industrial Zone, from a small work of hundreds of workers, Hue Scavi Company now has 3 large-scaled sewing factories with more than 7,000 workers and will build the fourth at the end of 2019. Thanks to abundant land fund, besides building works for production, the group has invested tens of billion VND to build accommodation for workers, kindergartens and a sport complex to ensure its workers’ livelihood and healthcare. 

At Phu Da Industrial Zone, though there has not been any investor in infrastructure yet, there are now 9 investors in brick, textile, synthetic fibers, etc., with the total capital of around VND1,000 billion with four factories belonging to Son Ha Co. Ltd, Huong Phu Company and Hue Textile Garment Company. It leads to a shortage in labor force. 

According to Mr. Huynh Trong Nghia, Development Manager of Son Ha Co., Ltd, being an entrepreneur with 10 textile factories at export processing zones in Thai Binh, Quang Nam, Dong Nai, Vinh Phuc, etc., choosing Phu Da to build another factory is the right decision because there are a lot of advantages such as large land, cheap labor force and diverse means of transport. However, his company now encounters the problem of lacking workers because there are too many textile entrepreneurs who have factories here. 

According to Mr. Nghia, at the moment, the factory has 23 production lines with over 500 workers and the investment capital of VND200 billion. From now to 2020, other works will be built to increase to 150 production lines with 3,000 workers. However, it is not easy to fulfill the plan because drop-outs are increasing and new recruitment is difficult.

According to Nguyen Thanh Ty, Vice-Director of Hue Textile Garment Company, if more textile factories are allowed at Phu Da and Phu Bai II Zones, soon there will be a serious shortage of workers on location. There have been too many textile plants, and each needs approximately 1,000 workers.

La Son Industrial Zone in Phu Da encourages projects on wood processing to balance workers in the area.

Selective investment

In the first phase of 2019, the export processing zones in the area have attracted 2 more projects: one at Phu Bai Zone by Vinatex Phu Hung Joint Stock Company with its registered capital of VND290 billion and the other by Frit Huong Giang Joint Stock Company in Phong Dien Zone with the registered capital of VND140 billion.

In addition, one entrepreneur has completed the survey and chosen the location, waiting for his investment license. It is the project by Kanglongda Vietnam about building a factory producing PE fibers and gloves with the capacity of 800,000 tons of PE fibers and 10 billion gloves each year with the registered capital of $210 million at Phong Dien Industrial Zone on a site of 35ha. 

Together with supervising and studying intensively projects before granting licenses, in recent time, the management board at economic zones has called for selective investment to ensure using materials in the area, hiring local workers and avoiding environmental pollution.

At Phong Dien Industrial Zone, the priority is given to entrepreneurs in sand processing to exploit the high-olden sand pit of 3,800ha and entrepreneurs in textile to fill the textile supporting zone. Meanwhile, Tu Ha Industrial Zone specializes in building materials, medication, medical apparatus and fashion and La Son Zone in wood processing and building materials. Especially, Phu Da and Phu Bai II Zones are limiting projects in textile to relieve the pressure on labor force for the entrepreneurs. 

According to Mr. Nguyen Van Son, Vice-Manager of the Provincial Industrial Zone Management Board, investment at industrial zones has had breakthroughs. Many factories have been built and are being expanded. In the coming time, the board will balance by decreasing entrepreneurs in textile to relieve the pressure on transport infrastructure and labor force and calling for investment in hi-tech with high value added, using fewer workers and limit to the minimum investment which might pollute the environment.

According to Mr. Son, at the moment, many groups which have factories in Binh Duong, Dong Nai, Vinh Phuc Zones are rushing in to research, survey and ask for land to build factories at the industrial zones. In the coming time, projects which are environment-friendly, land- and worker-efficient and related to hi-tech will be given priority. 

Until now, the 6 industrial zones in the area have attracted 143 projects with the total registered capital of VND 92 billion, providing jobs for nearly 25,000 workers. In terms of infrastructure at the zones, 4 out of 6 have investors with the total registered capital of VND 4,000 billion, 40% of which is operating capital.

Story and photos: THANH HUONG