More industrial parks were set up in Vietnam in the first five months of the year. Local developers are seeking to attract big investors. (Photo: cafef.vn) According to CBRE, the industrial realty sector tended to increase just beforethe pandemic as Vietnam was said to be a promising destination for the wave ofproduction relocation from China, with interest from many large corporations.
The research firm said industrial real estate would be the "backbone"for any developing manufacturing economy, and Vietnam was no exception.
Seeing the potential, many localities promoted the establishment and investmentof infrastructure for industrial parks in the area. According to the latestreport of the Ministry of Planning and Investment (MPI), as of May 2021, thecountry has 394 industrial parks established with a total natural land area of121,900 ha. Of which, 286 industrial parks are in operation with an occupancyrate of 71.8 percent, creating 3.78 million direct jobs in the country.
The report said by the end of 2020, there were 369 industrial parks establishednationwide and in the first five months of 2021, 25 new industrial parks wereestablished. According to a representative of the MPI, the number of IPs set upwas impressive, as in the first six months of 2020, Vietnam established six newindustrial parks.
Tran Dinh Thien, former director of the Central Institute for EconomicManagement, said: "Localities have correctly identified opportunities andthat there will be investment booms in Viet Nam as they see the benefit of manyfree trade agreements.”
As the flow of investment in the world was shifting to other parts including Vietnam,IP developers and leaders of the localities understood they can promote theattraction of investment with their IPs.
Though Thien appreciated the new establishment of IPs in Vietnam, he said suchwork must go in hand in hand with many other factors in order to be truly effectivein attracting investment.
He told local media: "IP developers should not be too impatient whenwaiting for good investors as low-quality investors can help fill the parks butit may not necessarily be a good thing for the future development."
Thien said an IP with electricity, a fence or a nearby road was not enough,adding: “Big corporations need more for their IPs such as a nationalinfrastructure connection as well as policies supporting their work such ashuman resources and environment-friendly facilities.”
"Otherwise, Vietnam will spend a lot of time living with low-levelprojects and environmental pollution.”
Le Thanh Van, a member of the Finance and Budget Committee of the NationalAssembly, said: "The IP model of Vietnam is outdated compared to the levelof development of the world and the region."
Van said: “Vietnam is deeply involved in value chains and the scale of IPs withsome hundreds of hectares or 1,000-1,500 ha is no longer suitable. The currentmodel of IPs is a perfect supply chain with much bigger spaces. Some countrieshave IPs of about 20,000-30,000 ha each.”
“As Vietnam does not have an industrial park of 1,000 ha and a new model, itwould be difficult for us to call for a wave of investment,” adding: “We mustcreate an attractive space with a new model in the planning of IPs," she said.
The latest report by Colliers Vietnam for the first quarter said co-industrialparks are a suitable model for sustainable development and are gradually beingpromoted by many businesses and manufacturers in the world.
Ten years ago, the Asian Development Bank (ADB)'s handbook on the developmentof eco-industrial parks for developing countries in Asia already classified thetype into five groups including agro-industrial parks, resource recovery parks,renewable energy industrial parks, petrochemical parks and power plant parks.
Colliers Vietnam said the model of eco-IPs will play an important role in thesustainable development strategy in general, helping to reduce resourceexploitation, limit the impact on the environment while still not affecting theperformance of businesses. In addition, the environment contribution will alsomake a positive contribution to the efforts to combat climate change in Vietnamand globally.
The report by Colliers Vietnam also said localities with IPs should regularly updatethe development of their parks with policies and best practices so that allcould develop together, forming a synchronous system, adding that such sharingcould help localities to solve many problems more effectively, make good use ofthe advantages of each province, create harmony in the inter-regionaldevelopment process and make positive contributions to the nationalsocio-economic development strategy.
The linkage between IPs was very important to develop logistics and commodityproduction chains, said the report, adding that this can help to improve thecompetitiveness of products, lowering production costs, and improving thesustainability of the whole industry./.
VNA
