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Administrative reforms help firms in HauGiang

28 September 2017

Vietnam Investment Review

Alongside the application of a multitude of regulated investment incentives, HauGiang province in the Mekong Delta is pushing administrative reforms to support businesses.

Top five in attracting FDI to the Mekong Delta region

Despite being a ‘young’ location still facing many difficulties in socio-economic development, HauGiang currently ranks among the top five locations in the Mekong Delta region for attracting foreign direct investment (FDI), according to the HauGiang Department of Planning and Investment.

Currently, the province is home to 29 FDI projects valued at $808.5 million in total committed capital, including 16 wholly foreign-owned enterprises valued at $642.6 million and 13 joint ventures worth $165.8 million in total registered capital.

Each investment project averages $28 million in terms of committed capital, higher than the Mekong Delta region’s average of more than $14 million. FDI projects in the province come from 10 different countries and territories, such as the US, Canada, Japan, South Korea, China, and Australia, providing jobs for more than 10,000 labourers.

The province expects to see breakthroughs in FDI attraction in the near future, as it has recently received two large-scale FDI projects in the energy sector, with combined investment capital surpassing $3.6 billion.

The first is Jinko Solar Vietnam, a solar energy plant invested by Hong Kong’s Jinko Solar Co., Ltd. in PhungHieu district’s Hoa An commune. According to JinkoSolar’s project director James Gia Co, the group is set to expedite the project in HauGiang later this year on an area of roughly 50 hectares with a designed capacity of 40 megawatts (MW).

With total estimated capital of $70 million, the project is expected to come online next year.

The second project is the Song Hau 3 thermal power plant by Viet Lao Energy Investment Development JSC, which is a consortium consisting of DeoCa Investment JSC, Viet Lao Energy Investment Development JSC, and Laos-based Phongsubthavy Road and Bridge Construction Co., Ltd.

The investor wants to deploy the project on a site belonging to Song Hau Power Centre in Chau Thanh district’s PhuHuu A commune. The plan entails building a large-scale thermal power plant to connect to the national power grid, thus meeting the ever-increasing electricity demands of the region.

The plant’s designed capacity comes to around 2,000MW (consisting of three 660MW turbines), with a total annual power production output of 13 billion kilowatt-hours. With an estimated VND81 trillion ($3.68 billion) in total investment capital, the project is to cover an area of 117ha.

As for domestic investment, HauGiang is now home to 490 projects valued at VND123 trillion ($5.6 billion) in total registered capital. A number of leading players have made forays into the province.

Local consumer goods giant Masan Group operates Masan Brewery HG in the province under the White Lion brand. The brewery reported an initial designed capacity of 100 million litres per year, and is valued at more than VND1.6 trillion ($72.7 million).

Major beverage firm Tan HiepPhat Group is racing to complete the project Number One HauGiang, which is expected to be the largest beverage plant in the southwestern region, worth VND4 trillion ($181 million) in total investment capital.

AquaOneHauGiang JSC is set to build a water refinery in the province to serve Song Hau Industrial Park and neighbouring locations, with first-phase production capacity reaching 100,000 cubic metres per day – valued at VND1.9 trillion ($86.3 million).

Businesses in the province have been consistently growing in number, strength, and professionalism. The province is currently home to 4,200 businesses, valued at over VND45 trillion ($2.04 billion) in total committed capital.

In the first half of this year, the registered capital amount rose 2.4-fold compared to one year ago, with the average capital size of each business reaching VND6.13 billion ($278,600) – compared to VND2.07 billion ($94,000) last year.

Administrative reforms with an innovative mindset

In the past, HauGiang has focused on improving the local investment climate, with priority given to accelerating the pace of administrative reform and business support.

The single-window, one-stop shop mechanism has been applied across business fields, aiming to build an effective interface between businesses and the public administration. The licensing process can now be done online, and is constantly modernised to boost state management efficiency in diverse fields such as taxation, land-use rights registration, and business administration.

According to director of the HauGiang Department of Planning and Investment Nguyen HuuNghia, the procedural administrative processing time in the province has been significantly shortened.

For instance, the time to obtain a business registration certificate now averages only 1.5 days, and changing the content of a business registration can be done in half a day.

The time to review an investment proposal now averages 15 days – against a regulated 32 days – while investment certificates will be granted after two days on average (compared to the regulated five days).

In industry and trade, certificates for food safety and petrol businesses require an average of three days against a regulated 15 days.

“HauGiang is concentrating efforts into pushing administrative reforms, investment promotion, and planning activities in an attempt to attract effective investment projects to the province. Investors will enjoy a multitude of investment incentives and support activities when doing business in the province, such as tax reductions and exemptions as well as post-licensing support,” said Dong Van Thanh, Deputy Chairman of the HauGiang People’s Committee.

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