IP investors to enjoy increased incentives

Monday, Dec 02, 2013 10:06

Vietnam Singapore Industrial Park.— File Photo

By Le Hung Vong

New incentives to attract investment into industrial parks nationwide were announced by the Ministry of Planning and Investment at a seminar held by Viet Nam Chamber of Commerce and Industry in Ha Noi on Friday.

Under the amended Corporate Income Tax Law, new tenants in the country's IPs (excluding special IPs in inner districts of big cities) will enjoy corporate income tax exemption for two years, and will only have to pay 50 per cent of this tax for the following four year.

Vu Dai Thang, Chief of MPI's Economic Management Department, said that 212 new IPs covering 120,000 – 130,000ha would be established by 2020.

As of November 2013, Viet Nam had 289 industrial parks covering 81,500ha.

However, to ensure that the new IPs operate effectively, the Government issued Circular 164/2013 on 12 November 2013 under which provinces planning to develop new parks must have at least 60 per cent occupation in existing ones.

The new circular also stipulates the responsibility of related agencies in developing accommodation for workers in IPs, economic zones, and in creating favourable conditions for IP workers to enjoy health and cultural services in their respective localities.

It requires IP developers to add housing development plans.

IPs facing difficulties in developing accommodation for workers are allowed to adjust their zoning plans to use plots within the park for the purpose.

The ministry also has incentives to encourage manufacturers in existing IPs increase capital for expanding their facilities, according to Tran Duy Dong, deputy chief of the Economic Management Department.

Dong said Viet Nam's IPs were more competitive than other countries in the region in terms of workers salaries, and water and electricity fees.

In Ha Noi, a worker's salary was between US$145 – $148 per month, which was more competitive than Thailand, Dong was quoted by the Tuoi Tre (Youth) newspaper as saying.

However, office and factory rentals were increasing in Viet Nam, exceeding those in the Philippines, Cambodia and Myanmar.

Dong said Viet Nam would further liberalise its investment environment and promote selective investment for development.

Local farmers run out of paddy as prices increase

After Viet Nam won the contract to export 500,000 tonnes of rice to the Philippines, local exporters now have to be careful about signing other export contracts as local farmers do not have much paddy in reserve.

Viet Nam Food Association (VFA) Chairman Truong Thanh Phong said on Thursday that rice prices had been on the rise in the local market, with 5 per cent broken rice priced at VND8,750 (US$4,14) per kilo.

Farmers from the Mekong provinces of An Giang, Kien Giang and Soc Trang were selling dried paddy from the current autumn – winter at VND5,500 to VND6,000 per kg compared with less than VND5,000 per kg in the last winter-spring and summer-autumn crops.

Despite the higher prices, most farmers in the delta had very little autumn-winter paddy to sell.

Phong was quoted by Sai Gon Tiep Thi (Sai Gon Marketing) news magazine as saying "rice inventory levels are low."

Under the government-to-government agreement signed with the Philippines, Viet Nam will deliver 20,000 to 30,000 tonnes of rice to Filipino warehouses by 15 December 2013, followed by some 120,000 tonnes to reach the country between December 15 and 31.

These volumes will help the Filipino Government provide relief to over four million citizens affected by super storm Haiyan.

According to the Viet Nam Food Association (VFA), the remaining volume of rice under the contract will be shipped to the Philippines in next year's first quarter. Given the volume contracted earlier, the shipment to the Philippines will be 700,000 tonnes, far exceeding the amount shipped to this buyer in this year's first quarter.

Phong said the export price (of the contract for the Philippines) was "good."

Viet Nam had beaten Thailand in a competitive bidding round organised by the Philippines on November 26 to win the deal. Cambodia, the other competitor, dropped its bid at the last minute.

Customs data show that Viet Nam shipped 362,000 tonnes of rice worth US$160 million to the Philippines from January until October. It also exported 128,500 tonnes of the grain worth $75 million to Indonesia and over 400,000 tonnes worth $201 million to Malaysia.

VFA says on its website that Viet Nam has shipped 5.93 million tonnes of rice to foreign buyers with a total value of $2.55 billion.

Last year, Indonesia imported 930,000 tonnes of rice from Viet Nam, while the Philippines bought 1.1 million tonnes and Malaysia nearly 765,000 tonnes.

These three countries used to be the biggest buyers of Vietnamese rice before being overtaken by China, which imported nearly 2.1 million tonnes of rice from Viet Nam in 2012.

VFA estimates that the country will export 6.6-6.7 million tonnes of rice under official contracts this year. With an estimated 1.5 million tonnes sold to China under border trade (without customs declarations) Viet Nam's rice exports would exceed 8 million tonnes in 2013.

These figures back assertions that rice supply in the local market is nearly exhausted, experts say.

Illegal foreign factories damage local environment

Local residents in the Cuu Long (Mekong) Delta have stepped up complaints about environmental problems caused by factories illegally built by foreign enterprises in the region.

Authorities in Ben Tre say at least 10 foreign investors have rented over 82ha of land illegally in the province. A report prepared by the Ben Tre Province People's Committee says three of the 10 foreign-invested enterprises are specialised in aquaculture and the other seven in coconut production and processing.

Ca Mau Province is facing the same problem.

Residents of Khanh Hoi Commune in the province's U Minh District have complained about the problems caused by the factory built by a 100 per cent Chinese-invested enterprise Hoi Nguyen Thang.

Residents living near Khanh Hoi Commune Market have to suffer bad odour and fishy smell from the seafood processing factory, owned by Chinese businessman Chen Zi Sheng.

Le Thi Ut, a commune resident, said the bad odour has caused many residents to suffer from rhinitis.

Nguyen Thi Hoang, another commune resident, said the smell suffocates her, especially at night.

The smoke and dust from the factory have also polluted the environment in the region, Hoang said.

Huynh Van Tieng, Deputy Head of U Minh District's Resources and Environment Division, said the owner of Hoi Nguyen Thang factory has paid fines of VND14 million for violations. He has been asked to deal with and settle the problems caused by the plant, including building a wastewater treatment system for it.

Vo Minh A, chief of the Cooperation and Investment Division under the Ca Mau Department of Planning and Investment, told Tuoi Tre (Youth) newspaper that Chen Zi Sheng had signed a contract to lease 2,300 sq.m of agricultural land owned by local resident Bui Kim Xuyen and built the Hoi Nguyen Thang factory on it.

However, an official from the provincial investigation agency said the contract was illegal.

He said only provincial authorities were allowed to sign land-leasing contracts with a 100 per cent foreign-owned business. — VNS

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