29-8-2023 (SINGAPORE) Sembcorp Development, a wholly-owned subsidiary of Singapore-listed energy and urban solutions provider Sembcorp Industries, has unveiled plans to add four new Vietnam-Singapore industrial parks (VSIPs) to its portfolio. This strategic move signifies a promising development for companies operating in both Singapore and Vietnam, as the number of VSIPs continues to rise steadily, reaching a total of 17.
The announcement was made at an event attended by Prime Minister Lee Hsien Loong of Singapore and his Vietnamese counterpart Pham Minh Chinh in the capital of Vietnam, Hanoi. During the event, memorandums of understanding were presented for an additional 10 prospective parks.
VSIPs, initially established in 1996, are a vital component of the economic partnership between Singapore and Vietnam. These industrial parks, located in various regions across Vietnam, have thus far attracted over US$18.4 billion (S$25 billion) in investments and have contributed to the creation of approximately 300,000 job opportunities. More than 900 tenants currently call these industrial parks their home.
In his speech at the event, Prime Minister Lee highlighted the continuous evolution and innovation of VSIPs. He underscored the transformation of the first VSIP in Binh Duong province into a hub for light manufacturing, followed by the second VSIP in the same province, which introduced modern logistics facilities. He also introduced the forthcoming Binh Duong III, set to become a smart and environmentally friendly industrial park featuring an on-site solar farm and integrating smart technologies in its operations to meet Singapore’s Green Mark for industrial districts.
Prime Minister Lee expressed his hope that VSIP projects would remain integral to Vietnam’s economic development and industrial transformation.
Mr. Chinh, the Vietnamese Prime Minister, expressed his aspiration for the new VSIPs to be versatile, serving as industrial parks, service centers, residential centers, and high-tech hubs. He emphasized the Vietnam-Singapore Industrial Park as a symbol of cooperation and economic development between the two nations.
Providing more insights into the four upcoming VSIPs, Sembcorp disclosed that they had received an investment license to develop the 600-hectare VSIP Lang Son in northern Vietnam, in partnership with Vietnam’s state-owned developer Becamex IDC Corp. In addition, they obtained in-principle approvals from Mr. Chinh for the development of new VSIPs in Thai Binh province in northern Vietnam, Binh Thuan province near Ho Chi Minh City in the south, and Ha Tinh province in north-central Vietnam.
With these additions, there will be a total of 17 VSIPs distributed across 13 locations in Vietnam. Additionally, leaders of ten provinces across Vietnam will collaborate with Sembcorp and Becamex on feasibility studies for more VSIPs.
These provinces span the country, including Binh Phuoc and Tay Ninh in the south, Khanh Hoa, Thua Thien Hue, and Quang Ngai II in central Vietnam, Thanh Hoa in north-central Vietnam, and Nam Dinh, Ninh Binh, Hai Duong II, and Hai Phong II in the north.
During the event, Prime Minister Lee and Mr. Chinh participated in a virtual ground-breaking ceremony for three previously announced VSIPs: VSIP Can Tho in the Mekong Delta, Bac Ninh II in the Red River Delta, and Nghe An II on the north-central coast. These projects mark the beginning of land development for handover to customers, scheduled to commence in 2024.
Wong Kim Yin, Group President and Chief Executive of Sembcorp Industries, articulated the vision for the new generation of VSIPs to be smart and sustainable. He emphasized the application of cutting-edge technologies and solutions to enhance safety, reliability, and efficiency for tenants and employees while aligning with sustainability goals.
During a visit by Mr. Chinh to Singapore in February, Sembcorp had already outlined plans for the upcoming VSIPs to have low carbon footprints, incorporating features like rooftop solar systems and solar farms where feasible. These new parks will also employ real-time tracking devices to remotely monitor and manage energy, water, waste, traffic, and security.
Sembcorp clarified that these latest partnerships are not expected to have a significant impact on its earnings or net tangible assets per share for the financial year ending December 31, 2023.
Kow Juan Tiang, the Executive Director for South-east Asia at trade agency Enterprise Singapore, highlighted the strong demand for infrastructure development to support the growing manufacturing and industrial sectors in Vietnam. He underscored Vietnam’s attractiveness as a manufacturing hub in Asia due to competitive operational costs, proximity to source and demand markets, and well-connected transport routes. This growth in manufacturing offers promising opportunities for Singaporean companies to expand into Vietnam, diversify their production base, attract new customers, and reduce production costs.
Prime Minister Lee acknowledged that many Singaporean companies had been early investors in Vietnam, venturing into sectors ranging from urban development to logistics, lifestyle, and consumer products. He emphasized the potential for further collaboration, especially in emerging areas such as the green economy and the digital economy, as Vietnam’s economy progresses up the value chain and transitions toward a net-zero future.
