After more than 10 years of persistence, dynamism and creativity to overcome difficulties, the Chu Lai Open Economic Zone has today confidently grown to be an attractive business destination for any investor and become one of the most effective economic zones in Vietnam. Half of budget revenue of Quang Nam province comes from this economic zone. The following is an excerpt of an interview on the success story of the economic zone granted by Mr Do Xuan Dien, Director of Chu Lai Open Economic Zone Management Board. My Chau reports.
Could you talk more about the successes of Chu Lai Open Economic Zone?
The greatest success of the economic zone is its perseverance to live through difficulties to transform a previously arid sandy land into an industrial hub with many factories and tourist resorts. Investment projects here have positively contributed to the development of Quang Nam province, evidenced by key industrial products such as automobile, construction glass and electronic products; indicators of industrial production value, export turnover and budget payment; employment generation; positive economic restructuring; and higher livelihoods for local people.
As of October 2014, the Chu Lai Open Economic Zone had a total of 92 projects, including many large-scaled projects like Chu Lai Float Glass Plant, Chu Lai Soda Factory, Golden Sands Resort and Chu Lai Resort. Particularly, an automobile complex invested by Truong Hai Auto Group (Thaco) has nearly 21 factories which employ some 4,000 workers. Besides, many big names have made presence in the Chu Lai Open Economic Zone like Huu Toan Power Generator, Minh Duong Furniture and Son Ha Stainless Steel.
Companies in the economic zone have turned out key industrial products such as automobiles, construction glass and electronic products, thus helping restructure the local economy. The robust development of automobile manufacturing and assembly sector has significantly contributed to the overall development of Vietnamese automobile engineering industry and to the deeper integration of this potential economic sector into global value chains. Especially, with the development of the Chu Lai Open Economic Zone, many infrastructure projects in Quang Nam have been invested, like Ky Ha Port, roads to Chu Lai Airport, coastal roads, Cua Dai Bridge, power grids, water supply systems, communication systems, resettlement areas, urban areas, hospitals and vocational schools. This development not only helps leverage the local economic development and enhances the attractiveness of the investment environment but also increases incomes and livelihoods for local people.
With its high efficiency in production and business activities, the Chu Lai Open Economic Zone contributed 50.87 percent to the total provincial budget (about VND8,896 billion) in the 2006-2011 period. The value reached VND3,295 billion in 2012 and VND3,026 billion in 2013, enabling Quang Nam province to cover a half of its spending. More importantly, the open economic zone is providing 11,000 jobs for local people, hence helping guarantee social and political stability.
From its performance results, on August 19, 2012, the Prime Minister decided to choose the Chu Lai Open Economic Zone as one of five key coastal economic zones in the country, which have prioritised infrastructure investment through 2015. This is an important and strategic policy of the Government with the aim of making major breakthroughs for economic zones and shows the high role of economic zones in general and the Chu Lai Open Economic Zone in particular in the cause of national industrialisation and modernisation.
Currently, the Chu Lai Open Economic Zone is considered to have a relatively favourable investment and business climate. How has the province reformed administrative procedures and improved investment environment to further support enterprises to do business in the province?
In the past years, under the leadership of the Quang Nam Provincial People's Committee, the Chu Lai Open Economic Zone Management Board has always focused on transparency and simplicity of procedures and applied the single-window mechanism to administrative procedures to reduce by a third the required time, compared with general timing regulations, hence helping investors to save costs and time.
In addition, the Management Board has actively assisted investors to deal emerging difficulties when they carry out their projects. In case of beyond its jurisdiction, the board has accompanied with them to work with the Government and central agencies. This effort of the Management Board has built up investor confidence in the Chu Lai Open Economic Zone.
To lure more investors to the Chu Lai Open Economic Zone, the most important issue is transport system and infrastructure planning, construction and development. How about this work at the Chu Lai Open Economic Zone?
As known, synchronous infrastructure planning and construction at the Chu Lai Open Economic Zone is vital and suitable to policies of the province and the Management Board. Since its inception, the Chu Lai Open Economic Zone was designed very meticulously to attract infrastructure developers and tenants.
Together with planning, the Provincial People's Committee directed the Management Board to coordinate with concerned agencies to make substantial investments for key infrastructure projects like Cua Dai Bridge, coastal roads from Hoi An Town to Chu Lai, passageways at Ky Ha Port (for ships of 20,000 DWT) and Tam Hiep Port (for ships of 10,000 DWT), roads to Chu Lai Airport, roads from Tam Hiep Port to highways, power grids, water supply systems, communications systems, and Tam Hiep and Cho Tram resettlement areas. Remarkably, the province completed infrastructure systems in Tam Hiep and North Chu Lai industrial parks, with a total area of over 500 ha, where more than 90 percent of rentable areas have been leased.
In addition, we are focusing all resources to handle environmental pollution in industrial zones. Currently, we are actively working with the German Reconstruction Bank to borrow ODA loans for wastewater treatment plants in Tam Hiep Industrial Zone to ask the Prime Minister of Vietnam to add the project into the list of ODA projects. This will be the only ODA-funded project in industrial parks and economic zones in Vietnam.
As known, the Quang Nam Provincial People's Committee recently issued a preference and support policy for new investment projects in the Chu Lai Open Economic Zone. Would you mind telling us key points of this policy as well as its roles and importance in investment attraction into this economic zone in the coming time?
The Provincial People's Committee of Quang Nam issued the Decision 08/2014/UBND dated April 21, 2014 on investment incentives and investment supports for domestic and foreign investors in the Chu Lai Open Economic Zone. Accordingly, tenants will be granted a 70-year extendable land lease term, free land area and full support for site clearance and compensation for worker house construction, corporate income tax of 10 percent in 15 years staring from the year of operation, four-year tax exemption from the year with taxable incomes and a 50-percent reduction in next nine years. In addition, large-scale and important projects may be offered special treatments approved by the Government.
Could you talk more about investment attraction orientations of the Chu Lai Open Economic Zone in the coming time?
From its successes, the Chu Lai Open Economic Zone will continue to follow its general economic zone model. Its key industries will be post-engineering, automobile engineering, garment and textile supporting industries, construction materials, and electronics. It will also develop such services as conferencing, sporting, international trade, and entertainment for foreigners.