Dong Nai Rubber Enterprise, a subsidiary of Southern Vietnam Rubber Industry Corporation (Casumina), has been operating in Bien Hoa 1 Industrial Park for over 20 years. The company has two workshops specializing in the production of light truck tires. Recently, Dong Nai province approved a plan to convert this industrial park into a riverside commercial and service urban area. According to the plan, the company must relocate by the end of next year.
Workers at Dong Nai Rubber Enterprise during production hours on the afternoon of March 1. Photo: An Phuong |
Mr. Pham Hong Phu, Director General of Casumina, said that one of the company’s workshops, which covers an area of 2 hectares and generates annual revenue of VND 600 billion, has to be relocated. “We are quite confused because the relocation deadline has been set, but the local government has not provided a clear support plan for businesses,” Mr. Phu said.
According to Casumina’s management, the company is facing many difficulties in its relocation. Firstly, there are more than 200 workers currently employed, most of whom are elderly and have settled lives in Bien Hoa, making it difficult for them to move with the company to the new location. However, if they stay, they will have difficulty finding new jobs due to their age and the specific nature of the rubber industry. On the other hand, if the company cannot bring the labor force along, it will have to establish a new management system, which will take a lot of time to recruit and train new employees.
Another challenge that the company has to face is the cost of relocation and constructing new workshops. According to Mr. Phu, when the factory was established in Bien Hoa 1 Industrial Park, the company made long-term commitments by investing in machinery and equipment. After depreciation, with more than 20 years left on the land lease, the factory was expected to be profitable, but now it has to be relocated.
The company needs to prepare billions of VND to build a new workshop in the new location. Currently, the rental price per square meter of land within a 50-year period in neighboring industrial parks is USD 190, excluding management fees. To invest in a new workshop, the company would need 10 hectares of land. Thus, the rental cost alone would be around USD 20 million, equivalent to VND 400 billion, and an additional VND 600 billion would be required for the installation of machinery, equipment, and fire prevention facilities.
“The plan to convert the industrial park has been approved, and the company has to move out. The local authorities need to provide fair support measures,” Mr. Phu said.
 Biên Hòa 1 Industrial Park is located along the Dong Nai River. Photo: Phuoc Tuan |
Not far from Dong Nai Rubber Enterprise, Donagamex Joint Stock Company also faces many difficulties in the conversion of Bien Hoa 1 Industrial Park. The company has had its factory here since 1974, which is 50 years. The factory covers an area of 32,000 square meters and currently employs over 200 workers, most of whom are over 40 years old.
Ms. Doan Thi Thu Thuy, Chairman of Donagamex Trade Union, said that the information about the conversion of the industrial park into a commercial and service urban area has been around for over 10 years, and during this time, the company has been struggling. The factory cannot recruit new workers as no one wants to join a place that is about to be relocated. The existing workshop cannot be renovated or invested in, so potential partners are discouraged and do not want to place orders.
“The conversion plan has been approved, but where is the money to go when the province has not provided a clear support plan?” Ms. Thuy said. Due to limited funds, the board of directors has had to “decentralize the company” by moving some departments to certain existing factories and facilities.
According to Ms. Thuy, the production block has to be relocated to Dau Giay, over 35 km away from Bien Hoa, and it is impossible for the workers to follow. However, even if they stay, their future will be uncertain as they will have difficulty finding new jobs due to their age. Moreover, the factory has large textile workshops and moving them is not a simple task.
“In recent years, the losses incurred by the factory cannot be fully accounted for,” Ms. Thuy said. She suggested that, since the plan has been approved, the local authorities should implement it quickly and provide compensation or proper support in finding a new location and covering the costs so that the company can stabilize as soon as possible.
Donagamex and Dong Nai Rubber Enterprise are among the 76 companies that have to relocate as Bien Hoa 1 Industrial Park undergoes conversion. This will affect more than 21,000 workers currently employed here.
Trace of Bien Hoa 1 Industrial Park at Lam Son Park. Photo: Phuoc Tuan |
Established in 1963 under the name Bien Hoa Vocational Park, which was later changed to Bien Hoa 1 Industrial Park after 1975, this is considered Vietnam’s first industrial park with an area of 324 hectares, located in An Binh Ward, Bien Hoa City. However, after more than half a century of operation, the industrial park has revealed many limitations, including the risk of environmental pollution in the Dong Nai River. The provincial authorities approved the plan to convert it into a commercial and service urban area after it was accepted by the government.
According to the conversion plan, as the industrial park has been around for a long time, most of the labor force has been firmly rooted here for many years and currently has stable lives in Bien Hoa or nearby areas. Therefore, when companies move to new locations (often far from Bien Hoa 1 Industrial Park), the majority of the labor force cannot follow due to difficulties in transportation and housing. In the case of resignation, workers also face challenges in finding new employment opportunities due to their age.
In addition to the challenges faced by the labor force, companies also encounter difficulties in terms of recruitment costs and training new labor force when existing workers resign. Furthermore, companies have to bear significant expenses for severance pay for workers who do not continue employment at the new location.
For workers who continue to work, companies have to pay compensation for the period when they are not working during the relocation process. At the same time, to retain workers, companies need to provide additional support, such as housing and transportation, to attract the labor force.
With the aforementioned difficulties, as stated in the recently approved plan, the People’s Committee of Dong Nai province has determined that approximately VND 1,270 billion is needed to support the livelihoods of workers, stabilize production, and cover the costs of labor force training for companies.
Representatives of the Industrial Park Trade Unions said that the information about the conversion of Bien Hoa 1 Industrial Park has been known for many years. Some companies have proactively moved to other industrial parks like Giang Dien, Nhon Trach, Trang Bom, or to other provinces and cities. Some factories have closed down, and a few are still waiting for support measures. Trade unions at all levels always monitor and supervise the implementation of policies for workers, such as wages and job loss allowances, during the relocation of factories.
Phuoc Tuan – Le Tuyet
