HCMC orders infrastructure investors to diversify land fund in EPZs-IPs

Recently, the People's Committee of Ho Chi Minh City has requested the infrastructure investors of export processing zones and industrial parks (EPZs and IPs) to quickly complete infrastructure and diversify the land fund to meet the maximum investment needs of enterprises.
HCMC orders infrastructure investors to diversify land fund in EPZs-IPs ảnh 1 Illustrative image. (Photo: SGGP)

According to Mr. Do Phuoc Tong, Chairman of HCMC Mechanical and Electrical Enterprise Association, 98 percent of enterprises in the city are small and medium-sized ones. However, it is difficult for them to access a land fund suitable to the production scale of enterprises. Earlier, many enterprises went to EPZs and IZs to rent land to invest in factories, but they could not find suitable land areas because the land plots there often have large areas from a few hectares to tens of hectares. Therefore, enterprises have to buy or rent land in the outskirts to invest in factories. The risk is that if these factories no longer match the local planning, they will be forced to relocate if they cause environmental pollution. Along with that, they will not meet the standards to join the global supply chain.

Sharing the same view, the Japan External Trade Organization said that 90 percent of Japanese enterprises operating in the field of processing and manufacturing supporting industry products have a small and medium production scale. They needed land plots with a small area of about 1,000 square meters to build factories, but it was difficult for Japanese enterprises to find them in HCMC before.

Mr. Tran Viet Ha, Head of the Division of Investment Management of IZs and EPZs in HCMC, informed that the land fund for enterprises is now more diverse. If enterprises need a large land plot, they can go to Hiep Phuoc Industrial Parks in Nha Be District, Tan Phu Trung, Northwest Cu Chi in Cu Chi District. Those who need an area of 1,000 square meters can go to Tan Thuan EPZs in District 7, Linh Trung, and Binh Chieu EPZs in Thu Duc City. Export processing zones and industrial parks, including Tan Thuan, Binh Chieu, and Linh Trung, have invested in building high-rise factories to both meet the diverse needs of enterprises and help to reduce the pressure of operating costs and land rental for enterprises, especially in the context that enterprises are severely affected by the Covid-19 pandemic. So far, the leasing area of land in EPZs and IPs in the city has reached 54.07 hectares, and the leasing area of factories has reached 33,032 square meters.

Mr. Nguyen Ngoc Hoa, Chairman of the Board of Members of the HCMC State Financial Investment Company, said that besides diversifying the fund of houses and land for rent in the IPs-EPZs, the current approach to loan sources, especially loans from the State budget with preferential interest rates, has been more open. In case enterprises belong to industries that are encouraged to develop by the city, such as fast-moving consumer goods, essential goods, logistics, cold storage, cool storage, and means of transport, depending on the investment scale, they will be supported with a maximum loan interest rate equal to the average input interest rate of four big banks, along with a lower lending margin than banks. To help enterprises to implement investment loan procedures quickly and accurately, the company will have a specialized department to coordinate with enterprises to set up projects, analyze, and find solutions to improve the feasibility of investment projects.

With the above move of HCMC, many enterprises, especially small and medium-sized ones, which encounter difficulties in investment capital and the workplace, are expected to have better development opportunities.