Mekong Delta unattractive to industrial investors

Provinces in the Mekong Delta are trying to attract investors in local industrial parks and processing zones

Waste of site

According to the Can Tho Branch of Vietnam Chamber of Commerce and Industry (VCCI), as of June 2016, the Mekong Delta had 78 industrial parks and processing zones covering 14,787ha which has been so far vacant of more than 11,099ha.

Some industrial parks and processing zones have not attracted any investment projects yet, including the Xuan To Industrial Park in An Giang Province which was planned in 2004 and 15 of 43 industrial parks in Long An Province.

According to Director of the Can Tho City Department of Planning and Investment Nguyen Van Hong, the city has eight industrial parks covering 2,267ha, but investors just rent 567.2ha to implement 220 projects with total registered capital of nearly US$2 billion. 21 of 220 projects are foreign direct investment (FDI) projects worth of US$198.4 million. The majority of industrial parks in the city recorded just 12-13 percent occupancy rates, which means that local industrial parks have failed to attract investors.

It’s a waste of site for localities planning too many industrial parks with low occupancy rates. These parks were poorly located and planned, therefore less attractive to investors despite currently available infrastructure. Moreover, an unfair competition among localities in attracting investors was also one of the key reasons to distract investors.

What solutions?

To turn industrial parks and processing zones into a socio-economic motivation, the Mekong Delta should define the urban and industrial development corridor and based on which to develop a system of industrial parks and processing zones with modern infrastructure, avoiding environmental pollution, especially water pollution. Industrial parks and processing zones should be linked to resettlement areas to offer resettled farmers more job opportunities.

According to Head of the Japan External Trade Organization of (JETRO) in Ho Chi Minh City Takimoto Koji, improved traffic facilitates rides from Ho Chi Minh City to provinces in the Mekong Delta. The delta has better potential in raw materials and workforce than Laos and Cambodia, which is appreciated by Japanese investors who are increasingly interested in the land.

Herb Cochran, Executive Director of the American Chamber of Commerce in Vietnam, suggested that to attract more investors, especially from the US, the Mekong Delta should make the most use of its online networks providing investors information on investment environment, policies and incentives. In addition, the delta should focus on developing key products and industries including garment and textile, consumer goods, support industries, engineering and manufacturing, agro-products, seafood, fertilizers and feeds.

Ngoc Thao & Thuy Duong