A recent report said that the industrial estate market grew in the first quarter of 2020 despite the challenges of the Covid-19 pandemic. What would you attribute this to?
The report shows a positive and optimistic outlook in this sector despite the difficulties of the Covid-19 pandemic. The main reason for this is the increased demand for renting ready-built factory and warehouse spaces. Besides, some manufacturers already operating in Vietnam are still seeking expansion opportunities.
On the other hand, it is also true that many industries are considering postponing investment plans and the market for various products has dropped significantly. Such impacts on the manufacturing industry have not yet appeared prominently in the first half of the year, and the critical moment is going to be in the next six months when the market changes drastically due to the pandemic situation.
We understand that this situation will definitely cause FDI delays for Vietnam in the short term, but a positive factor is that the production transfer from China will accelerate over the middle and long term, and Vietnam will be a more attractive destination than other countries. We at AMATA is focused on such future demand and is preparing to land and facilities via new industrial park projects in Long Thanh District of Dong Nai Province in the south, and Quang Yen Town in Quang Ninh Province in the north.
Yes, several experts said that there will be a new wave of FDI companies moving from China to Vietnam after the pandemic. It has also been predicted that the new wave will come from IT, high technology, electronics, e-commerce, logistics, consumer goods, and retail sectors. Would you agree?
Definitely. Yes, we think so, too. For several reasons.
Firstly, Vietnam has controlled the Covid-19 pandemic very well. This reputation will help to attract more FDI companies coming to Vietnam in the post-pandemic situation.
Secondly, Vietnam has concluded 17 FTAs with 60 countries around the world and this is quite meaningful for the manufacturing industry in terms of trading costs, which will help drive exports to those countries.
And finally, some countries are already supporting the transfer of manufacturing to ASEAN in order to reduce dependence on a single production base and supply chain, and Vietnam is the most attractive destination with its well-balanced investment environment, including the number of workers, competitive labor costs and infrastructure development.
With the rapid infrastructure development of recent years, Vietnam is considered a good destination for attracting high-tech industries. We have predicted this situation 10 years ago and prepared a high-tech industrial park project in Dong Nai Province's Long Thanh District.
We also anticipate that the purchasing power in Vietnam will increase as GDP per capita approaches nearly US$3,000, and retail sectors, e-commerce and warehousing will grow significantly. This new wave of FDI companies is also our target as we expanding in both the south and the north of Vietnam.
As the leading industrial estate developer from Thailand, what preparations has AMATA take to accommodate the next wave of foreign investors?
As I noted earlier, with a view to meeting future demand, we are preparing new projects in both the north and south of Vietnam. We expect that many firms among the new wave of investors will prefer and choose high standard industrial parks operated by experienced foreign developers for their new production home.
We are confident that our new project, Amata City Long Thanh in Dong Nai Province, which has been approved as a high-tech industrial park, can contribute to the country by attracting high-tech companies. In addition, Amata City HaLong which is our first project in the north of the country is being developed in Quang Ninh Province, the fastest growing region in Vietnam, to attract a wide range of industries.
With high-quality service and infrastructure, we stand ready to welcome the new wave of investors from all sectors and to meet increasing demand from FDI businesses.
|Somhatai Panichewa, CEO of AMATA VN PCL|
Could you tell us more about your first foray into the north of Vietnam in Quang Ninh Province's Song Khoai Industrial Park?
AMATA was granted the investment certificate of Song Khoai Industrial Park by the People's Committee of Quang Ninh in the presence of the Prime Ministers of Vietnam and Thailand in March 2018.
The 714-ha industrial park is a part of the new mega project "Amata City HaLong," containing both industrial and commercial development zones. The first phase is currently under development and is already ready to welcome initial customers to construct their factories.
Amata City HaLong is located along the new Hai Phong – Ha Long expressway and promises the best access to key infrastructure facilities like major cities, deep seaports, and international airports.
Moreover, this project is inside the boundary of the upcoming Quang Yen Economic Zone, and it is expected all tenants of Amata City HaLong will be subject to the highest tax incentives in the near future.
AMATA has more than three decades of experience in industrial estate development, including developing smart and eco-industrial cities in Thailand and Vietnam. Will this "smart and eco-industrial city" concept be the focus of AMATA's development strategy in the near future?
AMATA's long-term goal is to have the Smart City adapt to rapid changes in the information technology era and the new vision to keep pace with Industry 4.0.
A Smart City includes 10 sub-projects, which are: Smart Energy; Smart Mobility; Smart Community; Smart Environment; Smart Education; Smart Manufacturing; Smart Aerospace; Smart Innovation; Smart Economy and Smart Governance.
AMATA has a clear vision to develop the Smart City concept and the new approach into our real estate projects, both inside and outside Thailand, including Vietnam.
How do you assess the development of industrial estate in Vietnam in the coming years?
In terms of industrial park development in Vietnam, we understand that 2021 will be the most important year due to the increased demand. In recent years, there has been a shortage of industrial land with the location which is suitable for investment and we are the one who can supply solid infrastructure both in the north and the south of Vietnam which are the biggest market in this country, and probably a limited number of developers can do the same.
Does AMATA plan to expand more with new projects in Vietnam in the years to come? After the first project in Quang Ninh Province, will AMATA continue to choose the north of Vietnam as the ideal location to expand in the near future?
We keep looking for a suitable location and projects in the north of Vietnam as Quang Ninh Province is one of the most attractive markets as a second-tier region for the industrial sector in Vietnam. However, we understand that the market in the Southern region, especially in Dong Nai Province, is also one of the biggest magnets for FDI to come to Vietnam and we focus on developing in this market as well. Moreover, AMATA always considers our investment strategy with a long-term perspective, and our development in Vietnam should not be limited only within the current market and demand. We keep looking for opportunities to contribute to the Vietnamese economy with various options to create our projects in this country.
Will the ASEAN Economic Community (AEC) help bring more investors from Southeast Asia to Vietnam? Do you think Vietnam will remain an attractive destination for Thai investors in the years to come?
AEC is a unique economic community of all countries in Southeast Asia and provides more opportunities to expand business in all sectors. With political stability, strong growth of the domestic markets and many other advantages, Vietnam will be the most attractive country to invest in.
As many major Thai companies have already made huge investments in Vietnam, we believe that such investments are likely to increase in both manufacturing and service industries in the future; and AMATA, with our real estate developments, is one that can support such Thai enterprises to come and invest in the country.
Having been in Vietnam for more than 25 years, how would you share AMATA's experience here and what message would you give to new Thai investors for successfully investing and doing business in Vietnam?
AMATA has operated in Vietnam since 1994. We have always been committed to doing business alongside contributing to the country as well as local communities. That is the most important success factor for operating and managing the business overseas. Furthermore, a long-term strategy is another key success factor, irrespective of the business you are in
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