More foreign firms are discovering the central region’s enormous investment potential. Photo VIR

However, European Aeronatic Defence and Space Company (EADS), the mother company of Airbus, recently announced it had decided to build a manufacturing base in Vietnam’s key central economic region. EADS will cooperate with Korean Aerospace Industries Ltd and Vietnam Airlines to invest in an aerospace industrial park in Da Nang to produce airplane components.

The manufacturing base could also have the capacity to produce helicopters.

Currently, EADS and its partners are preparing investment procedures for submitting to Vietnamese authorities and it expects to start the construction of the project within next year.

EADS’ investment decision is strongly signaling that the investment climate in the key central economic region is growing attractive to investors. Da Nang’s leaders expect EADS’s project to be a driving force to lure more satellite projects to the city.

Home to four provinces and one city - Thua Thien-Hue, Da Nang city, Quang Nam, Quang Ngai and Binh Dinh, the key economic central economic region used to be considered as one of the poorest regions in the country and unattractive to domestic and foreign investors.

But, things have changed in recent years as many domestic and foreign investors flock to the region. Till now, foreign investors have registered to invest in 204 investment projects in these five localities of the central with total registered capital of $14.1 billion.

According to the annual Provincial Competitiveness Index 2009, conducted by Vietnam Chamber of Commerce and Industry and United States Agency for International Development, which reflects quality of provincial investment and business climate, these five localities ranked high amongst 63 cities and provinces of the country. For example, Da Nang, Binh Dinh, Thua Thien-Hue and Quang Nam ranked at first, seventh, 14 and 25 positions respectively.

The highest annual Provincial Competitiveness Index position implies that most enterprises operating in this region feel comfortable with the business climate.

Some of leading international investors like Korea’s Doosan Group and Canada’s Rio Tinto Alcan already built manufacturing factories in Thua Thien-Hue and Quang Ngai provinces.

The Doosan Vina plant, worth $300 million, produces major components and equipment for Doosan Heavy Industries & Construction’s flagship power and water businesses, including boilers, heat-recovery steam generators, seawater desalination evaporators and material handling equipment.

“One of main reasons deterring investors from investing in the central region is underdeveloped infrastructure system. But infrastructure is being improved rapidly and investors have changed their opinions about this region,” said Nguyen Ba An, deputy director at Development Strategy Institute.

An said the region was a promising land for investments. Provincial authorities of the five city and provinces said that the number of investors seeking investment opportunities had been rising sharply in recent years.

Russia’s ALT Group and its Vietnamese partners early this year also underscored its investment commitment of building an oil refinery project in the Binh Dinh province’s Nhon Hoi Economic Zone by signing a memorandum of understanding with the local government.

In fact, the key economic central region has received lots of support from the government over the past years. Since 2003, the government has established four economic zones to attract investments to this region - Chan May-Lang Co, Chu Lai, Dung Quat and Nhon Hoi. Apart from that, this region has 21 industrial parks offering investors perfect infrastructures and tax incentives.

Based on the geographical position, many investors see the key economic central region as a gateway for the whole central and Central Highlands, and even for Laos and northeast Thailand.

To improve infrastructure systems serving manufacturing operations, a series of ports have been built in the regions. Tien Sa and Chan May ports can now receive up to 50,000 dead weight tonnage vessels. Other ports such as Ky Ha in the Chu Lai Economic Zone, Dung Quat port in the Dung Quat Economic Zone and Quy Nhon port in Binh Dinh will also be expanded.

• Source: VIR