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Ha Noi industrial zones earn $1.9b in H1
Enterprises operating within the capital's industrial zones (IZs) managed a turnover of US$1.9 billion between January and the middle of July, according to the Ha Noi Industrial and Export Processing Zone Authority (HIZA).
Turnover represented a 17.6 per cent increase compared to the same period last year.
As part of the total figure, more than $1 billion came from exports, having increased by 13.1 per cent over last year. Export turnover accounted for nearly 40 per cent of the city's total export earnings.
HIZA expected that its firms would earn a turnover of $2.2 billion this year, $1.3 billion of which would come from exports.
In order to meet such a target, HIZA said, while it would assist firms in dealing with accessing bank loans and land lease extensions, some were currently struggling due to high inflation and interest rates as well as a shortage in labour, especially with regard to skilled workers.
A representative from Hong Kong's Chee Wah Toy Company, operating from the Phu Nghia Industrial Zone, situated in Ha Noi's Chuong My District, said that, while his company needed to employ roughly 300 additional workers in order to ensure on time deliveries, finding suitable staff would prove difficult.
HIZA Director Nguyen Xuan Chinh said that the capital currently had 18 IZs covering an area of roughly 7,000ha, including eight zones having completed their construction and a total number of 520 projects with combined capital of more than $4 billion.
During the first half of this year alone, HIZA attracted more than $55 million to the city's IZs through licensing 15 new projects and allowing 11 current ones to raise their registered capital, Chinh said.
HIZA expects to lure roughly $115-135 million worth of projects to the city's IZs this year while increasing the number of IZs to 20 by 2015 with the aim of creating jobs for roughly 500,000 locals.
Lack of financial priority
The lack of emphasis on land lease prices and corporate income taxes in determining policy remains an obstacle for securing investment capital for industrial and processing zones, Chinh said.
He spoke at a recent conference of the Northern Industrial Zones Managers Club.
Infrastructure construction in Ha Noi's industrial zones is in a difficult situation. The rate of compensation, support and ground clearance remains high, amounting to five times the price of agricultural land, he said.
Any increase in compensation leads to an increase in rent prices, which affects the ability of a site to attract investment.
Construction costs in Ha Noi's industrial zones are about US$109 per square metre and the price of the land lease can reach $120.
Chinh has asked the Government to study the incentive policies such as preferential loans and partial support for moving and resettlement, in order to lower cost of infrastructure leases.
At the conference, a representative of Nomura-Hai Phong Industrial Park Development Company proposed that compensation rates and rental prices be calculated in accordance with business objectives so that the secondary investors can get real preference.
Although industrial zones were on the government's preferential list, this area had not received preferential treatment from the law of corporate income tax, said Duong Nhu Ru, deputy-in-chief of the Management Board of Industrial Zones in the northern province of Hoa Binh.
Because of this, the area had not really encouraged and attracted domestic and foreign investors, Ru added.
Le Quan Hoa, Vice Chairman of the management board of Dong Nam industrial zones in the central province of Nghe An, said the Government should adopt policies to fund the development of infrastructure for industrial parks annually.
Additionally, in order to secure more investment, the projects with over 50ha should be considered a priority for services outside industrial zone like urban and residential services, suggested Nguyen Tien Dung, vice chairman of the industrial zone management board in the northern mountainous Province of Lao Cai.
Particularly, financial priority policies should be expanded by studying stock options, Dung recommended.
The provincial People's Committee would issue convertible bonds to investors to attract capital and use those funds to carry out projects. Investors would receive interest from the purchase of bonds from the deal, Dung said.
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