VietNamNet Bridge – HCM City, the largest commercial hub in Vietnam, plans to built multi-story workshops in industrial zones (IZs) in an effort to lure small- and medium-sized investors who need space at “reasonable costs”.

Tran Viet Ha, head of the Investment Division of the HCM City IZ and Export Processing Zone (EPZ) Board of Management (Hepza), said that multistory workshops would be built in four IZs and EPZs -- Dong Nam, Hiep Phuoc, Tan Thuan and Linh Trung.

The workshops would have a floor area of 10,000-40,000 square meters and three to eight stories.

Ha said this kind of workshop is popular in South Korea, Japan and Taiwan. The multi-story workshops, which have not been used in Vietnam’s IZs, would allow savings on land fund, which is at a premium in HCM City, at lower costs.

An analyst said that multi-story workshops would be suitable to enterprises which make light products. Thus, they would target the enterprises in high technology or support industries.

The investors that Hepza wants to attract are enterprises that use advanced technologies and treat their solid waste, waste water and noise.

Hepza, in recent years, has been trying to lure investors by offering to lease land and infrastructure facilities under different modes.

Most recently, it decided to build factories and workshops itself to lease to foreign manufacturers.

The investors, instead of leasing land and building workshops on the land allocated, can lease ready-made workshops and begin their production immediately.

This, according to the analyst, allows investors to save time and hasten the production process.

He noted that  small FIEs arrive in Vietnam and make investment there in a plan to explore the market. Therefore, they want to lease ready made workshops for two or three years during which they would make products on a trial basis.

If the business goes smoothly, the investors would think more about what they would do in the future. If not, they may quit the Vietnamese market. This explains why the most of the projects have low investment capital.

A report from Hepza shows that in 2014 alone, 19 out of 29 new foreign investors leased ready-made workshops in Cat Lai IZ and Tan Thuan EPZ.

Cat Lai and Tan Thuan are two favorite destinations for foreign investors, because they are located near HCM City’s center which connects new highways in the city – including HCM City – Long Thanh and Nguyen Van Linh Road, with favorable port and transport systems.

The IZs and EPZs in the city reportedly attracted $752.39 million worth of investment in 2014, including $347.5 million in foreign direct investment (FDI).

The figure is expected to rise to $700 million this year with projects in production fields that are not labor-intensive.

Thanh Mai