Despite facing various challenges and obstacles, tenants in Vinh Phuc province’s industrial parks (IPs) have successfully navigated these difficulties and leveraged favorable opportunities. They are now stabilizing and ramping up their production and business operations, which is fostering growth, generating additional employment opportunities, and contributing significantly to the local socioeconomic development.
Lumi Smart Factory in Thang Long Vinh Phuc Industrial Park
Seizing opportunities, striving to overcome hardships
In the first six months of 2024, the world economy advanced on global market recovery, slowing inflation, falling inventories in countries whose markets are partners of Vietnamese companies, and rebounding orders from traditional markets. These were positive signals for tenants in industrial parks to maintain production and business operations and achieve growth targets.
The business performance of tenants in IPs improved in the first 6 months of 2024 as compared to the corresponding period in 2023. Some key industrial products increased significantly from a year ago such as electronics. However, some fields shrank from a year earlier period, including automobile, motorbike, textile, garment and construction materials.
According to the Management Board of Vinh Phuc Industrial Parks, labor shortages and order fluctuations are significant challenges faced by tenants in these industrial zones. The instability in orders has led to frequent changes in staffing, which has adversely impacted the product quality for some companies. In response to these difficulties, businesses are proactively seeking new orders, expanding their markets, and securing employment for their workers. Additionally, they are planning to invest in new machinery and equipment to enhance product design and quality, thereby boosting competitiveness. These efforts are aimed at stabilizing production, meeting, and exceeding their output and revenue targets for 2024.
Positive signals
With their ongoing efforts, in the first six months of 2024, tenants in IPs achieved positive business results. Foreign direct investment (FDI) firms reported an estimated revenue of US$5.871 billion in the first half of 2024, reflecting an 11% year-on-year increase. Their estimated export value reached US$4.965 billion, up by 16%, while contributions to the State Budget amounted to VND3,663 billion, marking a 4% increase. Conversely, domestic direct investment (DDI) companies reported an estimated revenue of VND8,000 billion, a 10% decrease, but saw an 8% increase in estimated export value to VND430 billion and a 13% rise in State Budget payments to VND142 billion. In the first half of 2024, companies in IPs employed 2,448 new workers, bringing total workers to 136,160 as of June 5, 2024, including 74,298 Vinh Phuc people (accounting for 54.6%).
At Lumi Smart Factory (based in Thang Long Vinh Phuc Industrial Park), which manufactures Smarthome and IoT devices, its production lines are operating at nearly 70% capacity, more than 30% higher than a year-ago period. In particular, it made 1,500 - 2,000 lights a month, soldered the surface of 240,000 electronic circuits a month, and installed 200,000 electronic circuit boards a month.
A representative of Lumi Smart Factory said: The domestic economy, including Vinh Phuc, is recovering quite well. To reduce volume and enhance quality, the factory has expanded into electronic component processing for domestic and international partners. The typical example is CNC Tech Group Joint Stock Company - one of the large-scale industrial support companies in Vinh Phuc. Some factories in South Korea and China are shifting production stages to Vietnam, helping local companies to have more production orders to further stabilize and develop production activities.
In addition to the efforts of companies, to achieve these results, the Management Board of Vinh Phuc Industrial Parks has been proactive in assisting local companies in overcoming challenges, enhancing the investment and business environment, and reducing operational costs. The agency prioritizes listening to businesses' recommendations and proposals, adhering to the province's guiding principle of “Placing businesses at the center: as the subject, goal, driving force, and resource for development.” It has promptly and effectively addressed feedback on regulatory issues, investment-related problems, and business inadequacies. Additionally, the Board provides ongoing post-investment support to mitigate and prevent disputes, and offers guidance to its leadership for resolving conflicts and issues faced by investors.
At the same time, the board stepped up administrative reform, applied information technology to administrative management, improved the effective operation of document management and operation systems, provided full-process online public services and managed projects with software, hence creating a favorable climate for investment, business and production for tenants in industrial parks.
By Bao Ngoc, Vietnam Business Forum
Vietnamese
October 2024
Hanoi