Vietnam - Small sized projects increase

Supporting industry and software service investments pouring into Vietnam are stimulating the  proliferation of small-sized projects in southern hub industrial parks.

The size of new projects in southern hub industrial parks (IP) now commonly feature a capital value in the range of $200,000 to $3 million.

According to Long An Industrial Zones Authority (Liza), Liza granted 77 new investment certificates in the first nine months of 2012, an increase of 35 per cent compared to the corresponding time of 2011.

This included 31 foreign direct investment (FDI) projects with capital of $92.205 million, a reduction of 35.2 per cent, and 46 local, non-FDI projects with a capital of VND2,024.73 billion ($100 million), a reduction n 69.6 per cent compared to the corresponding time of 2011.

The development of supporting industry projects in IPs in Long An, with investments in small and medium enterprises in 2012, have led to more projects with a lower registered capital, said Nguyen Van Tinh, head of the Liza’s investment division.

According to Dong Nai Industrial Zones Authority (Diza), 35 new FDI projects came to Dong Nai in first 9 months of 2012 with capital of $614.725 million. Among them, Japan-based Lixil's construction material project accounts $511 million, while the remaining 34 projects account for $103.7 million.

Nguyen Phuong Lan, vice director of Diza, said there have been more and more supporting industry projects, especially from Japan, that have resulted in a reduction of average capital per project.

Supporting industry projects from Japan are usually small-sized projects. Moreover, they often lease factory space instead of investing in building a factory, which leads to a lower investment size, she added.

IP infrastructure investors that back built-in factories serve this trend, enhancing the wave of supporting industry, she said.

The Ho Chi Minh City Export Processing and Industrial Zone Authority (Hepza) reported , 41 FDI projects including expansion projects with capital of $134.17 million in the first nine months of 2012, including 13 new FDI projects with capital of $27.13 million.

Nguyen Tan Phuoc, vice chairman of Hepza, said that besides supporting industry projects, IPs and processing zones in Ho Chi Minh City have also seen more projects in sectors of distribution and software services with capital size of $200,000 to $1 million. Projects with investments of less than $200,000 have not been welcomed in the region's IPs, he added.

Hai Long | vir.com.vn

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