Industrial Parks and Investment Capital in the Mekong Delta

Industrial Parks (IPs) represent demarcated areas of land, used for industrial development. Such areas are generally located at the periphery of big cities, with good access to transport and logistic facilities (highways, airports and rivers / harbors). The development of Industrial Parks in Vietnam is closely related to the Doi Moi reforms of the late 1980´s: the provision of attractive business locations should encourage private entrepreneurship and attract FDI (foreign direct investment), an important driver of national and local economic growth.

The establishment of Industrial Parks basically started in the big cities of Vietnam, especially in Hanoi and Ho Chi Minh City (HCMC). These cities already had a good infrastructure and an important number of labor force. In the case of Ho Chi Minh City most of the IPs were established between 1991 and 1997, while the first IP in the Mekong Delta opened in 1997. However, within a relatively short period of time, an important number of parks has been developed in the region and today, the Mekong Delta represents the third largest industrial center of the country (ADB 2007).

Moreover, the landscape of IPs also differs in terms of its key industries. While IPs in Ho Chi Minh City are mainly dominated by light industries, mechanical engineering and, increasingly, High-Tech companies, the Mekong Delta’s IPs mainly accommodate food production and processing firms. Other agriculture related industries in the Delta produce fertilizers and pesticides, whereas textile and light industries are also important.

In 2008, HCMC had 15 Industrial Parks with an overall size of 3411 ha and an aggregated investment capital of 883,6 million US $. At the same time, the Mekong Delta counted 14 IPs with an overall size of 2869 ha, and an investment capital (1) of 157,8 million US $. Therefore it can be clearly said that, despite continuous efforts of local industrial development, investments in the Delta are still far behind those registered at Ho Chi Minh City. Within the Mekong Delta, Can Tho City represents the center of industrial development: 48 % of all the regional IPs are located there.

References

ADB (2007): Socialist Republic of Viet Nam: Preparing the Central Mekong Delta Region Connectivity Project.
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GSO (2008): Industrial Parks Vietnam

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(1) For some Industrial Parks data on investment capital was not available.