Top reasons why to build a factory in Phu Tho - Delco Construction

Top reasons why to build a factory in Phu Tho

Not only BYD (Apple’s iPad tablet manufacturing supplier) but many investors have also chosen Phu Tho to be the location of their factory and take advantage of the province’s potential and investment policy.

Building a factory in Phu Tho – Making use of its potential

1. Geological location – The administrative boundaries of the province is adjacent to

– Tuyen Quang Province in the North;

– Hoa Binh Province in the South;

– Vinh Phuc Province in the East;

– Hanoi city in the South East;

– Son La Province, Yen Bai Province to the West.

Phu Tho is located in the “development triangle” between the Northeast, the Red River Delta and the Northwest, it poses an important role as the gateway between the West – East – North regions. It lies about 80km north of Hanoi, and more than 60km from Noi Bai International Airport.

In addition to having important transport routes going through it, Phu Tho province also provides benefits from the waterway that starts in China, goes through a number of provinces in the West of North East Vietnam and Phu Tho province before reaching Hanoi, Hai Phong and surrounding areas. 

Acting as “confluence of rivers” – Phu Tho province is the intersection of Red River, Da River and Lo River; it is the Western gateway of Hanoi Capital. Therefore, Phu Tho acts as a hub for transporting and exchanging goods connecting many localities in the Northern Delta region with some mountainous provinces in Northern Vietnam and two provinces of Guangxi, Yunnan and China.. 

2. Transportation network

Phu Tho is a major trade gateway in road, railway, waterway of Northern Vietnam; a freight link between the Northwest, Northeast and Red River Delta regions, contributing to the industrialization of the locality and the region.

– Road: 

  • Noi Bai – Lao Cai expressway (maximum speed 120 km/h) enables to shorten travel time compared to the old route which pass through 5 provinces of Hanoi, Vinh Phuc, Phu Tho, Yen Bai and Lao Cai. The highway spans up to 60km, going through 5 major locations including: Viet Tri city, Phu Ninh district, Cam Khe district, Ha Hoa district and Phu Tho town. It is located on the Kunming – Hai Phong road corridor, bringing great potentials and socio-economic advantages.
  • National Route 2 (AH.14 Asia Road No. 14) travels from Yunnan (China) to Hanoi, passing through major destinations such as Ha Giang, Tuyen Quang, Phu Tho, and Noi Bai International Airport. Located on that road, there are National Route 5, National Route 1A, National Route 18, all pass through major trading points such as Hai Phong, Tan Thanh border gate (Lang Son) and Cai Lan seaport – Quang Ninh.
  • National Route 32 from Hanoi to Lao PDR must also pass through Phu Tho. Phu Tho is the point connecting National Highway 32C with routes to Lao Cai and then to China, cutting through Ho Chi Minh road which connects all 3 regions of Vietnam.

– Railroad: 

  • The trans-Asian railway from Yunnan (China) must run through Phu Tho province to reach Hanoi to connect with the Hanoi – Hai Phong, Hanoi – Ho Chi Minh City railways. Viet Tri station and Phu Tho station is the 2 largest of the 8 stations in Phu Tho province, facilitating the transportation of passengers and bulk goods.

– Waterways: Viet Tri is the “confluence city” where the 3 major rivers in the North: the Red River, Lo River and Da River meet. The total length of river transport of the province is 235km, of which the Red River takes up to 130km, 63km belongs to Lo River, and 42km of the Da River; all running from China through the Western provinces of the Northeast Vietnam, converging in Phu Tho and then radiates to Hanoi, Hai Phong and other provinces. Viet Tri River Port is one of 3 major ports in the North with a traffic/cargo capacity of 1.0 million tons/year.

In addition to the available advantages, the leadership of Phu Tho province is also actively implementing key traffic projects such as Tuyen Quang – Phu Tho expressway; inter-regional road connecting Ho Chi Minh road with National Highway 70B, National Highway 32C of Phu Tho province to Yen Bai province, Vinh Phu bridge; building roads to connect national key traffic routes with trunk roads to industrial zones, industrial clusters, residential areas, concentrated commodity production areas.

The aforementioned geographical location and transportation significance are the requirements for industrial, commercial and logistics development that investors can exploit when choosing Phu Tho as a location to build a factory.

3. Natural resources – the main attractions for technology and heavy industry factories

The resources of Phu Tho province have allowed the province to meet the production needs of investors for construction materials. In addition to having reserves of good quality metal minerals (kaolin, ceramic lightning …), Phu Tho province also has a fairly rare mineral source (Parit, gold, iron …): 

  • Gold mine (excluding unexplored mines): 17,000g – a good conductor of electricity, material for producing memory chips, motherboards in the computer industry;
  • Iron ore (content 20-30%): 29 million tons – the main raw material in iron and steel production; 
  • Limestone: 38 million tons – used in producing lime, cement; as aggregates for concrete; paving of automobile roads, railway lines and irrigation works; material for paving panels and some architectural components; 
  • Construction stone: 8.2 million m3 – concrete aggregate, embankment, foundation, wall, pavement, roadway; 
  • Clay (ceramic raw materials): 200 million tons – used in the production of paper, cement, ceramics, chemical filters and waterproofing materials in sewer systems, dams; 
  • Kaolin, feldspar: 20 million tons – used in industries of ceramics, paper, paint, rubber, fiberglass, plastics, building materials, refractory bricks, catalyzing oil refining technology …; 
  • Construction sand and gravel: 100 million m3; 

Accordingly, choosing to build a factory in Phu Tho is not a difficult choice for investors in industries such as heavy technology, electronics, clean energy and IOT applications.

4. Human Resources

In order to improve the quality of labor training and attract investors, Phu Tho province has synchronized educational and training institutions and program by merging and dissolving training institutions. The merger helps optimize enrollment and teaching, improve the quality of lecturers as well as curriculum and facilities. In addition, the government has established beneficial conditions for schools to implement linkages with each other and major industries to increase practical opportunities. Phu Tho province will continue to promulgate training policies tailored to the needs of society and businesses, create dialogue between training centers and businesses, promote labor training according to the needs of enterprises. Simultaneously, the province wants to attract and encourage investors, enterprises to engage in labor resource training. All to pave the way for the journey to improve the ability to train high-quality human resources for the province, minimizing the disruption of human resources for local factories and factories.

Mr. Ho Dai Dung, Vice Chairman of the Provincial People’s Committee emphasized that Phu Tho will continue to promote the development of high-quality human resources and labor in the processing and manufacturing , applied science and technology industry.

The percentage of employed workers after vocational training reached 85%, of which about 46.3 thousand workers were working in industrial zones and industrial clusters in the province. 

Read more: 5 Characteristics of Vietnamese workers at work

5. Investment Incentives

Currently, there are 250 establishments and enterprises operating in the field of supporting industries in the province.The main industry groups are mechanical engineering; production, repair, maintenance and installation of machinery, equipment and means of transport; production of products from rubber and plastic; Textile; shoe leather; chemicals – fertilizers; electrical and electronic equipment; food and beverage processing; processing agricultural products; wood processing – paper; …

Director of Phu Tho Department of Planning and Investment Trinh The Truyen said that in recent years, the province has many important policies in attracting investment, promoting socio-economic development, focusing on building factories, infrastructure, completing and implementing provincial planning in the period of 2021-2030, vision to 2050

  • Review and abolish a number of unnecessary related administrative procedures, shorten the time for implementation of investment procedures; 
  • Planning of infrastructure construction for industrial parks & industrial clusters, consists of seven industrial zones with an area of more than 2,336ha and 26 industrial clusters with an area of more than 1,120ha,…
  • Create a clean land fund, clear land and fully plan land resources;
  • Strengthen dialogue with businesses, capture the needs of investors to optimize the project implementation process as well as adjust labor training directions; 
  • Focus on implementing e-government and developing the digital economy, expanding and accelerating the way public services are provided;
  • Mobilizing resources for infrastructure investment, synchronizing and modernizing the transport network.

The immediate short-term vision of Phu Tho province to 2025 is to prioritize and facilitate the development of 6 industrial sectors as follows:

  • Manufacturing precise mechanical products, molds, spare parts, machinery and equipment components
  • Supporting industries in electronics – informatics – telecommunications
  • Industry supporting the production of clean energy, high-tech products and new materials
  • The field of packaging and packaging production 
  • Supporting industries of textiles, leather and footwear
  • Production of supporting industry products for tourism, services, furniture and household appliances

VSUN’s $ 200 million solar panel production  factory built in Phu Tho

Read more: How to set up a company in Vietnam for foreign investors

List of key industrial zones

I Industrial zones in operation

1. Thuy Van Industrial Park (Viet Tri City)

– Area: 369 ha

– Investor: Industrial Park Infrastructure Development Company

– Investment incentives when building factories here: Land rental price, preferential infrastructure usage fee prescribed by the Provincial People’s Committee. Projects that belong to the high technology and supporting industry category can get tax-exemption for 4 years and reduce 50% of the tax payable in the next 9 years. The Provincial People’s Committee decides the level of support for projects of great significance to the socio-economic development of the province, after approval of the Standing Committee of the Provincial People’s Council.

2. Phu Ha Industrial Park (Phu Tho Town)

–  Area: 450ha

– Investor: Viglacera Corporation – Joint Stock Company.

– Investment incentives: 

  • Projects investing in industrial zones with a tax rate of 20% for a period of 10 years, from January 1, 2016, apply a tax rate of 17%.
  • 2-year tax exemption and 50% reduction in tax payable in the next 4 years. `

3. Cam Khe Industrial Park (Cam Khe district)

–  Area: 450ha

–  Investor: Ao Vua Joint Stock Company and Duc Anh Construction Joint Stock Company.

–  Investment incentives: 

  • Corporate Income Tax (CIT): 17% in the first 10 years; 
  • 2-year tax exemption and 50% reduction in tax payable in the next 4 years. 

4. Trung Ha Industrial Park (Tam Nong district)

 Area: 82,63ha.

 Investor: Trung Ha Industrial Park Infrastructure Development Company

 Investment incentives: 

  • The Provincial People’s Committee will stipulate a preferential rate in land rents and infrastructure use fees..
  • Investment projects in industrial zones with a tax rate of 20% for a period of 10 years, from January 1, 2016, apply a tax rate of 17%. 
  • Tax exemption for 2 years and 50% reduction of tax payable in the next 4 years.
  • Exemption from import duties on imported goods.
  • Support tax exemption for 4 years and reduce 50% of tax payable in the next 9 years for projects in the high technology and industry projects category.

II Approved IPs

1. Phu Ninh Industrial Park (Phu Ninh district)

–  Area: 100ha

–  Investor: Vietnam – Korea Joint Stock Company

–  Investment incentives: 

  • Corporate Income Tax (CIT): 17% in the first 10 years; 2-year tax exemption and 50% reduction in tax payable in the next 4 years. 
  • For projects on the list of investment incentives, they are entitled to 10% CIT for 15 years and 4-year CIT exemption and 50% reduction in tax payable in the next 9 years..

2. Tam Nong Industrial Park (Tam Nong district)

 Area: 350 ha

 Investor: Management Board of Industrial Parks of Phu Tho Province

 Investment incentives when building factories and factories in Tam Nong: 

  • Investment projects in industrial zones with a tax rate of 20% for a period of 10 years; from January 1, 2016, apply a tax rate of 17%. 2-year tax exemption and 50% reduction in tax payable in the next 4 years.
  • Exemption from land rent during the period of basic construction, with an additional 18 years of exemption after basic construction for investment projects on construction and business of industrial park infrastructure..

3. Ha Hoa Industrial Park (Ha Hoa district)

–  Area: 242ha

– Investor: 

– Investment incentives when building factories in Ha Hoa Industrial Park in Phu Tho province: 

  • Tax rate of 20% for 10 years, from January 1, 2016 applies a tax rate of 17%.
  • Tax exemption for 2 years and 50% reduction of tax payable in the next 4 years.
  • Support tax exemption for 4 years and reduce 50% of tax payable in the next 9 years for projects in the high technology and industry category.
  • The Provincial People’s Committee shall decide on its level of support for projects of great significance to the socio-economic development of the province, after approving the Standing Committee of the Provincial People’s Council. 
  • Exemption from import duties on imported goods 
  • Exemption from land rent during the period of basic construction.

Read more: Factors affecting investors’ decision to rent a factory or construct a new factory

 

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