Thai tycoon unveils strategy for largest industrial park in Vietnam

By Dang Hoa - Nov 05, 2018 | 04:19 PM GMT+7

TheLEADERWhile leading investors in the world are looking to industrial hot spots such as Dong Nai and Quang Ninh, Thailand based WHA Industrial Development Group chose Nghe An province, the northern central area of Vietnam, as its first overseas destination.

Thai tycoon unveils strategy for largest industrial park in Vietnam
WHA leaders are putting great expectations on the project in Nghe An province.

Graduating from the faculty of International Relations at a university in Ho Chi Minh City, Ngoc, a girl from Nghe An province, decided to work for a foreign company in the South of Vietnam because she knew that it was difficult for her to develop her career path in her hometown.

Five years later, having decided to return to her homeland, Ngoc applied for a post at Nghe An Department of Foreign Affairs and spent seven months of probation there. For Nghe An province People’s Committee, attracting foreign investment has been the top priority. Recruiting high-skilled officers of this field became an important target of the province.

Despite having outperformed many candidates and become a full-time officer, she decided to quit the job just after three months later to join WHA Group. 

Earlier, during the seven months of probation at Nghe An Department of Foreign Affairs, Ngoc was assigned to support the pre-feasibility study for the WHA Industrial Park project, which was invested by WHA Industrial Development, Thailand’s Leading Industrial Estates Developer, Utilities and Power, and Property Solution.

After 30 years of development in Thailand, WHA Industrial Development has extended their business internationally. They chose Nghe An province of Vietnam for their first international project. With a scale of 3,200 hectares, WHA Industrial Zone, Nghe An is expected to be the largest and most modern industrial park in the North Central part of Vietnam.

Thai tycoon unveils strategy for largest industrial park in North Central Vietnam
WHA Corporation PLC’s Vice President of the Board of Director David Nardone.

Speaking to TheLEADER, David Nardone, WHA Industrial Development PLC’s Group Executive- Industrial & International, and WHA Corporation PLC’s Vice President of the Board of Director, said that the investment policy in the first phase of the WHA Industrial Zone 1, Nghe An project had been approved by the Prime Minister.

This phase has the total investment of $92.2 million on an area of 498 hectares with the aim of developing infrastructure to attract secondary domestic and foreign investors.

It is one of the seven phases of the WHA IZ 1, Nghe An project, carried out on an area of 3,200 ha in the Dong Nam Economic Zone (Nghe An). The project beginning in 2017 and scheduled to be completed in 2038 has the total investment of about $1 billion.

So far, two Thai enterprises have decided to invest in WHA IZ 1, Nghe An. It is expected to start building and operating factories in 2019.

The reasons behind Nghe An

The presence of WHA in a land with harsh natural conditions like Nghe An has raised a big question because when mentioning industrial zones in Vietnam, people are still only referring to Quang Ninh, Hai Phong, and Dong Nai.

Anchalee Prasertchand, WHA's Director of Industrial Building Customer Development and International, said that before choosing Nghe An, the group had surveyed other locations.

Anchalee commented that Vietnam's relatively low labor cost and improving human resource quality made Vietnam an appeal to foreign businesses.

However, as the higher the demand for new investment and production expansion is, the more severe the competitiveness becomes. The cost of land rent has increased rapidly. Even more, as production expands, the demand for labor swells. Enterprises may have to reach for resources from other regions, labor costs are then not as low as before.

According to WHA leaders, those increasing costs are the reasons why the group had not chosen the traditional hot spots for investment in Vietnam.

Meanwhile, as the province with the fourth largest population in Vietnam, Nghe An has strategic strengths in attracting investment and production.

At the deep sea ports of Nghe An, despite some investors had come, the proportion of industrial production is not high, so the goods are still mainly exported in bulk cargo. Leaders of Nghe An province expects WHA IZ 1, Nghe An will help increase the volume of containerized industrial goods through Cua Lo port.

The province also has high-quality national roads linking it with important ports and major cities as well as Laos, in which the North-South Expressway, expected to be completed by 2022, runs across the WHA Industrial Zone 1, Nghe An and links Vinh to Hanoi as well as major ports.

Thai tycoon unveils strategy for largest industrial park in North Central Vietnam 1
The perspective of WHA's project in Nghe An province.

Alongside this extensive infrastructure, there is a growing educated working-age population.

Over 24,000 new graduates are drawn from seven universities, six colleges, 4 professional schools and 61 vocational training schools in Nghe An, not to mention the high-quality ones trained at major universities in other provinces of Vietnam.

"However, Nghe An has to export their labor because when they graduate, it is impossible for them to land an expected job at their homeland," said Anchalee.

Besides, according to the WHA leaders, while Formosa IP of Ha Tinh and Nghi Son factory of Thanh Hoa, which are close to Nghe An, are both about heavy industry, WHA IZ 1, Nghe An will only attract light industries such as textiles, electronics, automobile, food processing, building materials, consumer goods, logistics, etc. This vision is to aim at sustainable development and environmental protection.

Accordingly, listening and interacting with local people would be one of the prioritized policies here, as Anchalee said. Giving them opportunities but destroying their environment, businesses will soon be in trouble.

Strategy to attract secondary investors

Anchalee said that the first phase of the project would be prioritized so that utilities like electricity, water, wastewater treatment and telecommunications systems for the factories will be completed first. 

Thai tycoon unveils strategy for largest industrial park in North Central Vietnam 2
WHA's Director of Industrial Building Customer Development and International Anchalee Prasertchand.

The factories will be finished with high-quality and optimal design on the area of 500 to 10,000 square meters. They are ready to serve investors who want to minimize the cost and time of investment.

Also, David said that WHA now has more than 700 customers in Thailand, 30 - 40 per cent of which are operating in the automobile and ancillary industry including Ford, Suzuki, GM, Isuzu, Chevrolet, Ford, Mazda, etc. In the future, Vietnam is likely to be an attractive destination for them if they seek international production expansion.

Anchalee stated that the main target customer groups of WHA are South Korean, Thai and Japanese companies. Also, when Chinese and foreign companies operating want to move out of China, Vietnam, a neighboring country, would be the top option due to the similarities in the market and the low costs.

She hopes that the WHA Industrial Zone, Nghe An will create jobs for the workforce of Nghe An and surrounding areas.