Between 60 and 70 percent of equipment and technologies used at exportprocessing and industrial zones is outdated, resulting in products withlow added value, the Ho Chi Minh City People's Committee has said.
The committee has asked the HCM City Export Processing and IndustrialZone Authority (HEPZA) to restructure business operations of industrialzones, most of which have been operating for about 20 years.
The city asked HEPZA to examine enterprises' capital, technology,products, land-use efficiency, and employees' professional skills.
The city said that Freetrend Company in Thu Duc District's Linh TrungProcessing Zone, for example, did not operate efficiently.
It has a 110,000 sq m plant and 21,000 workers to process footwear formany international brand names. Its turnover is 1.4 trillion VND (67million USD) a year but the company only contributes 22 million VND(1,000 USD) in tax.
At least 100 companies in the city are operating with a similar low economic efficiency, the committee said.
According to HEPZA's management board, most foreign projects arelabour-intensive with low added value, especially in electronicassembling, footwear, and textiles and garments.
Seventy-three percent of enterprises in HEPZAs are small enterprises with capital under 5 million USD.
Very few of them produce high added value products. When theindustrial zones first opened, the focus was simply on creating newjobs. There were few standards applied to technology, capital ormanagement skills.
In 2013, only 1 percent of enterprises had modern technology, while 51 percent used outdated technology.
Links between foreign and local enterprises were also poor as most foreign companies imported equipment and raw materials.
To implement business restructuring, the city plans to focus ontechnology investment, shifting from processing to manufacturingtechnology to increase value addition and enhance competitiveness.
The city will invite only investors with high added value productionand green technology, and it will focus on support industry and servicesto industry.
Labour-intensive companies and low-and medium –level technology enterprises will receive support torestructure their business.
Product design and manufacturing capability and ISO quality management application will also be speeded up.
"Four key industries, including: engineering, electricity-electronics,pharmaceutical chemistry and food processing have attracted workersfrom intensive-labour industries," Vu Van Hoa, head of the HEPZA'smanagement board was quoted as saying in Sai Gon Giai Phong (LiberatedSai Gon) newspaper.
The number of workers in theengineering industry has increased by 15.6 percent,electricity-electronics 9 percent, pharmaceutical chemistry 14.6 percentand food processing 21.6 percent, compared to the same period lastyear.
"There are 7,000 excellent workers being sentto train in developed countries like Japan, the Republic of Korea,Singapore and Thailand," Hoa said.
He said thatseven low-technology and labour-intensive projects in Linh TrungProcessing Zone and eight others in Tan Thuan Processing Zone had movedto the Mekong Delta provinces of Ben Tre and Tra Vinh.
"The infrastructure on the empty land will be upgraded, and we'll look for high-technology projects," he said.-VNA
The committee has asked the HCM City Export Processing and IndustrialZone Authority (HEPZA) to restructure business operations of industrialzones, most of which have been operating for about 20 years.
The city asked HEPZA to examine enterprises' capital, technology,products, land-use efficiency, and employees' professional skills.
The city said that Freetrend Company in Thu Duc District's Linh TrungProcessing Zone, for example, did not operate efficiently.
It has a 110,000 sq m plant and 21,000 workers to process footwear formany international brand names. Its turnover is 1.4 trillion VND (67million USD) a year but the company only contributes 22 million VND(1,000 USD) in tax.
At least 100 companies in the city are operating with a similar low economic efficiency, the committee said.
According to HEPZA's management board, most foreign projects arelabour-intensive with low added value, especially in electronicassembling, footwear, and textiles and garments.
Seventy-three percent of enterprises in HEPZAs are small enterprises with capital under 5 million USD.
Very few of them produce high added value products. When theindustrial zones first opened, the focus was simply on creating newjobs. There were few standards applied to technology, capital ormanagement skills.
In 2013, only 1 percent of enterprises had modern technology, while 51 percent used outdated technology.
Links between foreign and local enterprises were also poor as most foreign companies imported equipment and raw materials.
To implement business restructuring, the city plans to focus ontechnology investment, shifting from processing to manufacturingtechnology to increase value addition and enhance competitiveness.
The city will invite only investors with high added value productionand green technology, and it will focus on support industry and servicesto industry.
Labour-intensive companies and low-and medium –level technology enterprises will receive support torestructure their business.
Product design and manufacturing capability and ISO quality management application will also be speeded up.
"Four key industries, including: engineering, electricity-electronics,pharmaceutical chemistry and food processing have attracted workersfrom intensive-labour industries," Vu Van Hoa, head of the HEPZA'smanagement board was quoted as saying in Sai Gon Giai Phong (LiberatedSai Gon) newspaper.
The number of workers in theengineering industry has increased by 15.6 percent,electricity-electronics 9 percent, pharmaceutical chemistry 14.6 percentand food processing 21.6 percent, compared to the same period lastyear.
"There are 7,000 excellent workers being sentto train in developed countries like Japan, the Republic of Korea,Singapore and Thailand," Hoa said.
He said thatseven low-technology and labour-intensive projects in Linh TrungProcessing Zone and eight others in Tan Thuan Processing Zone had movedto the Mekong Delta provinces of Ben Tre and Tra Vinh.
"The infrastructure on the empty land will be upgraded, and we'll look for high-technology projects," he said.-VNA
