As of the end of May 2024, Vietnam had established 425 industrial parks and export processing zones with a total industrial land fund of approximately 89,200 hectares. Of these, 299 industrial zones have been put into operation, attracting a large amount of investment capital, supplementing important resources for the economic and social development of the country in general and localities in particular. The information revealed at the Vietnam Industrial Parks Forum (VIPF) 2024, themed “Going green to attract new investment” organized by Dau Tu Newspaper on July 30th.
As of 2023, industrial parks (IP) and economic zones (EZ) nationwide attracted over 11,200 foreign direct investment (FDI) projects and 10,600 domestic investment projects, with total investment reaching US$251.6 billion and VND 2,670 trillion, respectively; realized investment capital accounted for approximately 68.2% and 45.3%, respectively.
Vietnam’s FDI attraction increased by 34% in 2023, which would be much more impressive when compared to the total FDI growth of the world, which was only 3%, according to Ms. Trang Le, Senior Director of Research and Consulting, JLL Vietnam. This shows that while FDI shifts globally have slowed down, Vietnam still stands out as a bright spot.
Looking back at the development journey of over 30 years, it can be affirmed that the IPs and EZ model has, is, and will continue to play an important role and position, being the driving force for growth and the process of industrialization and modernization of Vietnam. It is a channel to attract domestic and foreign investment resources, contributing to improving the business environment and enhancing competitiveness, ensuring sustainable development.
However, in the context of green growth, where sustainable development is becoming the chosen trend of many countries in the world, the pressure from market and partner requirements for sustainable development is increasing, and greening industrial zones and economic zones to welcome green investment flows is a mandatory requirement.
Practical difficulties
Recently, many large domestic and foreign investors, especially foreign investors like LEGO, Heineken, have paid special attention to green production by building carbon-neutral factories in Vietnam and simultaneously using renewable energy, green energy for production and business activities.
Therefore, eco-IPs are becoming the selection criteria of foreign investors with the goal of sustainable development, economic benefits in parallel with responsibility to the community and society, especially linked to ESG criteria as required by industry chains. Although there are many advantages, according to Ms. Trang Le, Vietnam is in the early stages of piloting the eco-industrial model. However, bringing eco-industrial models into practice will face many difficulties.
First, there can be mentioned the lack of financial support for investors. The green transition is costly in the initial stages, and there needs to be some support to put the green model into practice. Currently, it mainly comes from the private sector, but not everyone has enough resources to expand.
Next are the policies, which still only have basic frameworks and do not have specific, in-depth regulations which are needed to easily bring the eco-industrial model into practice.
Mr. Hardy Diec, CEO of KCN Vietnam Management and Services JSC, said that along with continuing to change to make the business and investment environment more favorable, the licensing process should also be changed to be easier. Vietnam is in the sights of many multinational companies, but they are still wary of this barrier. If these barriers are removed, international investors will continue to pour into Vietnam, and when they come to Vietnam, they will bring with them an entire ecosystem, allowing Vietnam to compete even better… In particular, when we talk about greening, the biggest challenge is cost. Certainly, there will be a percentage of the land we use that will require costs to be environmentally friendly. With IPs, there will be programs to ensure that our projects are always environmentally friendly and meet the needs of customers, Mr. Hardy Diec emphasized.
