Bac Ninh: Small businesses "thirsty" for industrial clusters

BAC NINH - Developing the private economy is not only an economic need but also a political imperative to enhance national competitiveness and adaptability in a volatile global context. In fact, this economic sector in our country in general and Bac Ninh province in particular is mainly small and medium enterprises. To develop commensurately, along with the need for capital, these enterprises are in dire need of space to expand production.

Demand for concentrated industrial production clusters is large.

HTS Technology Joint Stock Company, a company specializing in the production of all kinds of JIGs (jigs, plastic components, precision mechanical products...) produces about 200 sets of steel molds for plastic casting, 500-700 sets of semi-automatic jigs and hundreds of thousands of plastic products each year; revenue is about 35 billion VND and pays nearly 4 billion VND in state tax, creating jobs and income for 35 workers. The company's products meet the diverse needs of customers, currently many FDI enterprises have signed production contracts to buy products but the company cannot meet them because it is difficult to expand production.

According to Mr. Tran Thanh Hai, Director of HTS Technology Joint Stock Company, since its establishment (October 2020) until now, his company still has to set up headquarters and rent premises and factories from Bac Giang Plastic Joint Stock Company (in Da Mai ward) in the form of production cooperation. The company is contacting the infrastructure owners of some industrial clusters in the province with favorable locations, but these units only lease areas of 10,000 ^m2 or more.

Mr. Tran Thanh Hai (far left), Director of HTS Technology Joint Stock Company, and customers inspect mechanical products manufactured by his company.

Not only HTS Technology Joint Stock Company, many other enterprises also have the need to expand production and wish to enter the industrial parks and clusters of the province. Researching at Thanh Phat Precision Mechanical Company Limited, Bac Giang Ward, it is known that the enterprise also produces plastic molding equipment, with high quality products so orders are increasing day by day. However, currently, the Company's factory is located in a residential area, the area is narrow (about 300 ^m2 ) so it cannot work overtime because the noise affects the surrounding households. The unit's wish is to rent land in industrial clusters for production but does not have enough resources, so the Company is looking for partners to share an investment in the industrial cluster.

According to the report of the Department of Finance, up to now, the whole province has 45.37 thousand enterprises. Of which, about 2.58 thousand are foreign-invested enterprises (FDI), the rest are mostly domestic enterprises of small and medium scale. Under the impact of the globalization process and the trend of shifting international investment capital, it has created opportunities for enterprises in the province and the country to develop, expand production, and proactively participate in the global supply chain. In order to meet the criteria of international standard products, many enterprises wish to rent land in industrial clusters for production. Because when entering the industrial cluster, enterprises are fully provided with infrastructure and many other incentives to feel secure in production, and at the same time have space to invest in technological equipment, improve the quality and competitiveness of products.

Facilitate access to industrial land for small and medium enterprises

Bac Ninh has 96 industrial clusters approved by the Prime Minister with a total area of over 3,670 hectares. Of these, 65 industrial clusters are invested and operated by enterprises. The remaining industrial clusters are invested by the People's Committees at district and commune levels and the Industrial Management Board (formerly).

The province has 64/96 industrial clusters with technical infrastructure invested and put into operation, with a total area of over 2,170 hectares; the industrial land area leased is over 1,050 hectares, attracting 869 investment projects, of which 716 projects are in operation. The occupancy rate of industrial clusters in operation is about 72.5%. These figures show that the number of enterprises entering industrial clusters for production is not large.

According to Mr. Ha Ngoc Hoa, Deputy Director of Bac Giang Import-Export Joint Stock Company (the investor of Viet Nhat Industrial Park, Xuan Cam Commune), the reason why small enterprises find it difficult to invest in the industrial park is: The land rental price of Viet Nhat Industrial Park is 130 USD/ ^m2 /49 years (some other industrial parks in the province have land rental prices ranging from 150-170 USD/ ^m2 /49 years - PV). The unit prioritizes receiving secondary investors to rent premises with an area of 1,000 ^m2 or more. The enterprise investing in the smallest area of premises in Viet Nhat Industrial Park is 2,000 ^m2 . However, if investing in building a factory according to regulations (including a standard fire prevention and fighting system), secondary investors must spend about 7 billion VND/1,000 ^m2 , so not all small enterprises are able to invest in production.

In order to facilitate access to land for small and medium enterprises, in recent times, both Bac Giang and Bac Ninh provinces (old) have introduced attractive policies. Bac Ninh province (old) issued regulations on the management of industrial clusters in the area, stipulating the minimum area of land for building factories and warehouses is 1,000 ^m2 ; the minimum area of land for building factories and warehouses in craft village industrial clusters is 500 ^{m2. The People's Council of Bac Giang province issued a project, along with a number of policies to support small and medium enterprises in the province for the period 2021-2025. Including support for production premises (in Resolution No. 37/2020/NQ-HDND dated December 9} , 2020 of the People's Council of Bac Giang province, promulgating a number of policies to support small and medium enterprises in Bac Giang province for the period 2021-2025). However, up to this point, no business has received support. According to Mr. Vu Van Cuong, Deputy Director of the Bac Ninh Department of Finance, the reason is that these support policies are not consistent with Decree No. 80/2021-ND-CP dated August 26, 2021 detailing and guiding the implementation of the Law on Support for Small and Medium Enterprises, so they have been abolished.

Faced with the above reality, Mr. Nguyen Van Hung, Vice Chairman of Lang Giang Business Association, proposed that the province and the State should have new policies, such as: Requiring owners of industrial cluster infrastructure to "set aside" about 20% of the total land area of the industrial cluster for local small and medium enterprises whose land has been recovered to rent at preferential prices. Through discussion, this proposal not only received the agreement of small enterprises, but also of investors in industrial cluster infrastructure. However, with the condition that localities need to register before industrial clusters start building infrastructure and local small and medium enterprises must have demand.

The desire of small and medium enterprises to enter industrial production clusters is completely legitimate. However, to make it a reality, policy makers, authorities at all levels and relevant sectors need to have practical solutions and put them into practice soon. On the part of business owners, it is necessary to proactively access capital sources; proactively form joint ventures and partnerships with entities that have available premises, in accordance with current support policies to expand production.

Article and photos: Dai La

Source: https://baobacninhtv.vn/bac-ninh-doanh-nghiep-nho-khat-cum-cong-nghiep-postid422140.bbg