Vĩnh Phúc has attracted 493 FDI projects with investment capital of US$6.60 billion, making it the 16th largest FDI province in Việt Nam. VNA/VNS Photo Danh Lam

HÀ NỘI — In the North Economic Zone (NEZ), Vĩnh Phúc Province is emerging as an attractive investment destination with a good infrastructure system and methodical development, according to Savills Việt Nam.

Vĩnh Phúc is proving an attractive and safe destination for multinational companies (MNCs), thanks to its proximity to Hà Nội and Nội Bài International Airport, flexible support mechanisms, and comprehensive investment, production and business policies.

“We have seen a significant increase in demand for ready-built facilities. Although foreign rental developers have capitalised on this in the NEZ, Vĩnh Phúc remains untapped. It presents development opportunities given its proximity to Hà Nội, upcoming land supply, lack of existing rental projects, and burgeoning added-value and supporting industries,” said John Campbell, associate director, head of Industrial Services, Savills Việt Nam.

The province has made great efforts to create a business-friendly regulatory environment. Between 2020 and 2021, it improved its PCI standing from 29th to fifth.

“The local authorities have done a fantastic job of improving the technical infrastructure and ease of doing business, as referenced in its jump to 5th place in 2021’s PCI list,” Campbell said.

“Vĩnh Phúc has established itself as a worthy competitor amongst the key provinces in the NEZ. Added-value industries and MNC tenants drive its manufacturing and processing base, it is less than 30 minutes from Nội Bài International Airport, and land prices remain competitive.”

Vĩnh Phúc has a sizeable industrial land supply, but a noticeable lack of factories or warehouses for rent for smaller tenants that require less than 10,000sq.m. There are opportunities for ready-built factory (RBF) and warehouse (RBW) developers.

Currently, companies establishing themselves in Vĩnh Phúc face capital-intensive processes that require commitments of up to 50 years. Conversely, ready-built supply will offer tenants speed to market, minimum capital expenditure, and flexible lease terms starting from only three years.

With established electronics and automotive manufacturers in the area, ready-built properties will allow supporting industries and suppliers to relocate or diversify their manufacturing in Vĩnh Phúc. As supporting industries increase, demand for RBFs and RBWs will rise.

Spare parts for electronics are Vĩnh Phúc’s leading export, and it is one of the largest hubs of automotive production hubs in the NEZ.

Industry is fundamental to Vĩnh Phúc’s development. It is calling for investment and implementing mechanisms and policies that encourage and attract investment, such as administrative reform and effective provincial industrial development, CIT incentives for supporting enterprises, and funding supporting industries.

Convenient infrastructure

Vĩnh Phúc's infrastructure system facilitates trade, thanks to its transport links and proximity to Hà Nội, Nội Bài International Airport, and neighbouring provinces. It has a comprehensive road network that connects to China, Hà Nội, Hải Phòng, and key industrial provinces.

Each day, up to 500 tonnes of cargo can be moved on the Red River and the Lô River via Vĩnh Thịnh and Như Thụy ports in the province.

Vĩnh Phúc ICD Logistics Centre & Super Port, the first "super port" within a smart logistics network in the ASEAN region is expected to start operations in the fourth quarter of 2023.

The 83-ha ICD logistics centre and super port by T&T Group and YCH Group will receive investment of VNĐ3.8 trillion and will have a customs clearance capacity of 530,000 TEUs per year.

Besides that, Vĩnh Phúc currently has seven industrial parks (IPs) and the future supply by 2023 will be 13 IPs.

Ring Road 4 with the estimated investment of US$3.81 billion will connect 14 districts across Hà Nội, Hưng Yên and Bắc Ninh. It would address traffic congestion and enable further economic links and trade between Hà Nội, Hưng Yên, Bắc Ninh, Vĩnh Phúc, and Bắc Giang.

That will mean expats working in Vĩnh Phúc, Hưng Yên, Bắc Ninh and Bắc Giang provinces will be able to live in Hà Nội because the roads will cut commutes significantly. Given the high-value manufacturing in the area, the roads will support the recruitment of skilled labour from Hà Nội to work in Vĩnh Phúc. 

In 2021, the province’s population reached about 1.2 million. The labour force of 578,400 is increasingly skilled, with the proportion of skilled workers over the age of 15 rising from 22.4 per cent in 2018 to 34.7 per cent in 2021. With proximity to Hà Nội, Vĩnh Phúc is also accessible to expats and foreign skilled workers.

To date, the province has attracted 493 FDI projects with investment capital of $6.60 billion, making it the 16th largest FDI province in Việt Nam.

In the first nine months of 2022, total registered FDI reached $102 million, and 16 of the 18 newly registered projects were in manufacturing and processing and contributed over $85 million. — VNS