Singapore investors back Vietnam on wave of global integration

September 16, 2016 | 10:39 am GMT+7
Singapore investors back Vietnam on wave of global integration
VSIP has managed to develop seven industrial parks throughout Vietnam over the past 20 years. Photo by Sembcorp Group

Industrial parks are expanding in the expectation more foreign funds will start flooding into the country.

Following a series of free trade agreements, including the pending massive Trans-Pacific Partnership, global investors are moving their manufacturing facilities to Vietnam to take advantage of tariff incentives.

Vietnam, on the back of more foreign investment, is setting up more industrial parks across the country. At the end of last year, Vietnam had nearly 300 industrial parks, mainly located in satellite provinces out of the northern capital Hanoi and the country’s southern economic engine Ho Chi Minh City.

Recently, the Vietnam-Singapore Industrial Park or VSIP - one of the leading industrial park developers in the country - won government approval to expand by 23 percent to 8,100 hectares.

VSIP, a joint venture between Vietnamese state-run Becamex IDC Corp. and a group of Singaporean investors, has managed to develop seven industrial parks throughout Vietnam over the past 20 years. These industrial zones have created more than 174,000 jobs and attracted about $9 billion from over 630 foreign companies, VSIP chairman Kelvin Teo said, adding that their export revenue has hit about $32 billion.

The joint venture has a strong footprint in the southern province of Binh Duong where the VSIP founded its first two facilities in 1996, and will soon add an additional 1,000 hectares to the current 2,545 hectares that is 85 percent occupied.

Industrial parks have helped Binh Duong, 48 kilometers north of Ho Chi Minh City, to transform from a rural area into an industrial hub. Statistics show that industries and services account for 97 percent of the province’s total economic output.

"The success of Binh Duong encourages us to extend this transformation model further in Vietnam," said co-chairman Nguyen Van Hung, who represents Becamex's 49 percent ownership in the joint venture.

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