Advantages of Northern industrial parks in Vietnam

Apr 24, 2023
According to the development orientation of the State, Vietnam is gradually promoting its development into an industrialized country. The formation of industrial parks in Vietnam in key areas is one of the important factors contributing to the country’s industrialization and the national GDP. After the impact of the Covid epidemic, foreign enterprises tend to move their production plants to Vietnam, aiming at industrial parks in the North as a FDI investment destination. 

Arterial transportation system

Northern industrial parks in Vietnam are mainly concentrated in satellite provinces around Hanoi including Bac Ninh (5 Industrial Parks - IPs), Hai Duong (11 IPs), Hung Yen (5 IPs), Vinh Phuc (5 IPs), etc. In addition, Hai Phong and Quang Ninh are two busy port cities, which are considered as the key centers of the northern industrial cluster.

Hanoi - Hai Phong expressway system was inaugurated, shortening the circulation from Hai Phong port to the provinces, creating favorable conditions for the circulation of goods serving production. Northern industrial parks in Vietnam are built adjacent to highways, and national highways account for 11%. If separately calculated by distance to large cities, this number can increase to 18% (according to Vietnam construction newspaper). This is one of the very attractive factors when investing in industrial projects in the North.

Despite the geographical location of many Northern provinces that are landlocked (except Hai Phong and Quang Ninh with large seaports), up to 91.74% of the total industrial parks are bordered by highways. In addition, the North has a favorable geographical position for importing components from China, through major road border gates such as Mong Cai - Quang Ninh, Huu Nghi - Lang Son.

In addition, the major seaports serving important trade are Hai Phong port and Van Don port, with hundreds of thousands of import and export goods each year. The seaports are connected to the Northern provinces through the Hanoi - Hai Phong highway, significantly shortening the time of cargo transportation.

In general, Northern industrial parks in Vietnam are located right at the arterial traffic location. This is an important factor to promote the development of this area in the future.

Availability of supply chain and ecosystem

Industrial parks are fully invested in infrastructure and supply chain   

Thanks to the geographical location of bordering China, the import of low-priced fuels and components is effectively supported. Taking this advantage, Northern industrial parks in Vietnam are targeted by many FDI enterprises in the fields of high technology and logistics for investment. Typical examples can be mentioned as Samsung’s factory in Thai Nguyen, with an investment of more than USD 2 billion  (According to VN Express). This is considered the factory with the largest foreign investment at the moment. Or recently, LG has invested and built an LCD panel assembly factory in Hai Phong.

With the strength of high-tech industries invested by many large companies in the world over the years, it has gradually built up supply chains of materials for the electronics and component assembly industry in the North. Besides, the development of the field of warehousing and supply chains meets the huge storage needs of giant factories and companies. This is a firm foundation for developing supply chain networks and ecosystems in Northern industrial parks in Vietnam, led by companies with large FDI capital.

Thanks to the existing ecosystems, the investment and development of new factories in the field of civil and high-tech electronics have been rapidly upgraded. In the future, Northern industrial parks in Vietnam are predicted to become one of the largest “workshops” in the region.

Many advantages in terms of human resources and infrastructure

Industrial parks in Vietnam have many advantages in terms of human resources

The infrastructure of industrial parks in Vietnam has been planned and developed by the Government. Many projects have been invested in the past 15 years and put into operation, creating jobs for millions of local workers and neighboring provinces.

In addition to the development of plant and factory infrastructure, the use of the adjacent land fund for urban and residential development is also being implemented. For example, Bac Ninh is a province with many industrial parks in Vietnam among the top brands such as Nokia, Samsung, Pepsi, etc. This province is aiming to build an industrial - urban – service complex or eco-industrial parks; providing jobs for employees and aiming for sustainable development.

The Vinfast factory in Hai Phong is a symbol of the country. To be able to put the production lines worth tens of millions of dollars into operation, the whole Hai Phong province has been planned and developed to serve the operation of the first automobile factory in Vietnam. Taking advantage of local high-quality human resources and prepared infrastructure, Vinfast has been one of the leading economic entities in the North and has contributed to the formation of the automobile industry ecosystem.

Through this article, WHA hopes that you will have a clearer overview of the development of Northern industrial parks in Vietnam. In fact, the potential of this area has been clearly seen by many big investors. This is a good sign, showing that Vietnam will have more outstanding development steps in the future in the industry group.

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