In 2020, several large corporations from around the world, including Exxon Mobil (USA), Foxconn (Taiwan), Mintal (Hong Kong), Fangda (China), INTCO (Singapore), and TChuwa Busan (Japan), showed interest in the Nghi Son Economic Zone and the industrial parks in Thanh Hoa province. They conducted surveys and explored investment opportunities in the region.
However, after thorough investigations, these companies decided not to proceed with their plans in Thanh Hoa.
Missing Out on FDI Attractions
Despite its efforts to attract investors by rolling out the red carpet, Thanh Hoa only managed to attract eight FDI projects in 2021, with a total registered capital of 112.7 million USD. Additionally, there were capital adjustments for five FDI projects, amounting to 14.8 million USD.
These figures are concerning for the provincial leaders, especially when compared to neighboring regions. It is evident that Thanh Hoa is falling behind other provinces in the North Central region in terms of FDI attraction.
In 2021, Thanh Hoa also experienced a significant drop in the Provincial Competitiveness Index (PCI) rankings, falling from 28th place in 2020 to 43rd place in 2021.
The situation did not improve much in 2022, despite the province’s active investment promotion efforts. Although the provincial leaders engaged with various international organizations and large corporations, such as the Asian Development Bank, the World Bank, the Japan International Cooperation Agency, and investors from India, Thailand, and the USA, the desired level of FDI inflow was not achieved.
There were some positive signs, such as the Memorandum of Understanding signed between the People’s Committee of Thanh Hoa province and Venus Vietnam Shoe Company Limited, and the cooperation agreement with Nghi Son Biomass Fuel Company Limited for investments in the province.
However, the results of these efforts fell short of expectations. In the first nine months of 2022, Thanh Hoa only attracted four FDI projects with a total registered capital of 41 million USD, indicating that the province has one of the lowest FDI attraction rates in the North Central region.
In contrast, Nghe An province, a neighboring region, attracted more than 500 million USD in FDI in the first six months of 2022, 12 times more than Thanh Hoa. For the whole of 2022, Nghe An attracted 1.8 billion USD in FDI.
The success of Nghe An can be attributed to their administrative reforms and the quiet preparation of a large-scale “clean” land fund for major industrial park projects, such as the VISIP Nghe An and WHA Industrial Zone 1, which are invested in and built by large corporations like VISIP (Singapore) and WHA (Thailand), respectively.
On the other hand, Thanh Hoa has consistently faced a shortage of “clean” land during this period. Despite having one of the country’s key economic zones, Nghi Son, which is considered a priority for the country and the region, Thanh Hoa has struggled to keep up. Over the years, there have been 25 industrial parks established in the province, covering an area of approximately 9,057 hectares.
Additionally, the province has approved the development plan for eight more industrial parks outside the Nghi Son Economic Zone, with a total area of more than 2,000 hectares. However, as of early 2023, only seven industrial parks in the Nghi Son Economic Zone are fully occupied, and most of the other industrial parks lack infrastructure investment and “clean” land.
The Management Board of Nghi Son Economic Zone and Industrial Parks in Thanh Hoa province acknowledged that the slow progress in infrastructure development due to site clearance issues is one of the main reasons for the decline in investment attraction in the province during this period.
Multifaceted Challenges
In 2023, out of 68 large and key projects in Thanh Hoa province, 25 faced difficulties and obstacles in site clearance. These included projects such as the Duc Giang – Nghi Son Chemical Production Complex, Flamingo Linh Truong Zone A and Zone B, Long Son Cement Plant’s Line 4, ORG Company’s hotel and commercial center complex, and the new urban area in Hoằng Quang and Hoằng Long wards in Thanh Hoa city.
According to Mr. Le Phuong Nam, Deputy Director of the Department of Natural Resources and Environment of Thanh Hoa province, there are numerous difficulties and obstacles in site clearance for investment projects involving land use.
Specifically, some projects do not meet the conditions for site clearance and require adjustments or extensions of investment policies, adjustments to planning boundaries, approval from the Provincial People’s Council for land revocation (for projects where the state revokes land), approval for conversion of land use purposes for rice land and forest land, and inclusion in the annual land use plan of the district level.
Additionally, projects may encounter challenges in determining the origin, time of land use, and time of asset formation, as well as in compensating for and relocating graves. There may also be delays or lack of funding allocated for compensation and site clearance.
With the goal of making Thanh Hoa province a major center for the North Central region and the country in terms of processing and manufacturing industries, and thereby promoting economic restructuring towards industrialization and modernization, the provincial leaders and functional agencies are faced with a challenging task of addressing the shortage of “clean” land.
Stay tuned for Part 2: Thanh Hoa seeks answers to the land clearance equation: Taking action
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