Thăng Long Industrial Park II, developed by Sumitomo Corporation, in the northern province of Hưng Yên. Photo coutersy of Sumitomo Corporation

TOKYO — Japan’s Sumitomo Corporation will spend more than 14 billion yen (US$129.7 million) to expand its Thăng Long Industrial Park II in the northern province of Hưng Yên.

With additional area of 181ha, the site which already spans 346ha will be one of the biggest Japanese industrial parks in Việt Nam.

Ground breaking is scheduled for 2021, with lots going on sale in 2022, the company said in a statement.

Việt Nam’s economy is rapidly growing, with ten-year high GDP growth of 7.1 per cent in 2018, the company said, adding that the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) entering into force for Việt Nam in January 2019 and the EU-Vietnam Free Trade Agreement (EVFTA) in June are expected to lead to further industrial growth.

“Thanks to industrial diversification and vigorous domestic demand associated with the population increase, further entry of foreign companies, primarily manufacturers, as well as expansion of foreign companies that already have operations in the country, are anticipated in Việt Nam,” it said.

Sumitomo Corporation has been developing, selling and operating special economic zones and industrial parks in Việt Nam, Indonesia, the Philippines and Myanmar and India.

In Việt Nam, Sumitomo Corporation has operated industrial parks for over 20 years since opening Thăng Long Industrial Park in 1997.

Projects funded by Japanese companies in Việt Nam rose 7 per cent last year to 643, according to the Japan External Trade Organisation (JETRO).

Spending has increased for three consecutive years to a new record. Việt Nam's proximity to China and its cheap labour costs have made it a draw for relocating production capacity.

As of August 2018, Japan was the second largest source of Việt Nam’s foreign direct investment with 4,247 projects, worth more than $58.22 billion, statistics from the Foreign Investment Agency revealed. — VNS