SINGAPORE INTERNATIONAL
Sembcorp - the pioneer in industrial parks
By CHUANG PECK MING
SINGAPORE is one of Vietnam's biggest foreign investors - the fifth largest at end-2009 with US$17.3 billion tied up in 792 projects. But Singapore is perhaps better known in Vietnam for the industrial parks its companies have built there.
And the Singapore pioneer that paved the way for other developers of industrial parks in Vietnam is Sembcorp Industrial Parks, owned by Sembcorp Industries.
Sembcorp Industrial Parks built its first park on 500 hectares - later expanded by 345 ha - in Vietnam in 1996. Fourteen years later, it has four industrial parks there on 4845 ha - two of them still being developed in the north.
The other two were built in the south and have so far attracted 380 customers with investments of US$2 billion-plus and 63,000 workers. The parks won Sembcorp Industrial Parks and its local partner - the partnership is incorporated as the Vietnam Singapore Industrial Park (VSIP) - a 'Best Industrial Developer' award among 180 industrial parks in Vietnam in a 2008 poll reported in Euromoney magazine.
'In the 1990s we had already recognised Vietnam's potential as a rising economy,' says Low Sin Leng, executive chairman of Sembcorp Industrial Parks and senior executive director of Sembcorp Industries. 'We worked with a local joint venture partner to help bring to Vietnam the industrialisation model of Singapore.'
It was tough at the start, she recalls. 'We spent a lot of time guiding the Vietnamese officials and local staff on investment-friendly measures, setting up an efficient one-stop administrative management board and reducing bureaucracy.'
VSIP has contributed much to the growth of Binh Duong, where Sembcorp's industrial parks in south Vietnam are located. 'Binh Duong has consistently been top ranked in the annual Provincial Competitiveness Index for having implemented investor-friendly measures resulting in it being a popular foreign direct investment destination,' says Ms Low.
Its success led to the development of a 4000-ha township, she says. 'We enhanced our business model from a traditional industrial park to one with commercial, residential and industrial elements, called the integrated township model.'
This model was later transplanted in north Vietnam. But there, in Hai Phong City, Sembcorp has launched a specialised cluster for manufacturing clients. 'Our VSUP Hai Phong is the first in Vietnam to offer a centralised facility for food processing,' Ms Low says.
'We have zoned 17 ha of land as the initial phase for the centralised processing of fruit, vegetables and other horticultural products. Sembcorp's industrial parks cater to three types of clients - manufacturers, commercial and residential developers. The top three manufacturing investors in VSIP are Japanese, Taiwanese and Singaporeans. Most are in the precision engineering, electronics and electrical businesses.
VSIP's tenants include Procter & Gamble and Kimberly Clark from the US, Siemens from Germany and Showa Gloves and Foster from Japan. Singaporean tenants include Gold Roast, CEI and Serrano.
'We are working with Malaysian and Singaporean developers to invest in commercial and residential projects in our townships,' says Ms Low. 'To enhance the attractiveness of our township amenities, we are also in discussion with some established brand names in the areas of education and medical care, with the aim of providing international schools and healthcare services.'
If Sembcorp had to do it all over again, Ms Low says it would still venture into Vietnam.
'When we first went into to Vietnam, we took with us the 'Singapore model' and Singapore experience. But over the years, we learned to modify and make more use of the local expertise,' she says.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
The VSIP Hai Phong project: It is the first in Vietnam to offer a centralised facility for food processing
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