Industrial park development obstacles targeted for resolution by Sumitomo, seeking a $3 billion investment
In a significant move, Sumitomo Corporation, a leading Japanese conglomerate, is investing an additional $500 million in the fourth expansion phase of Thang Long II Industrial Park in Hung Yen, Vietnam. The focus is on developing commercial and residential areas to attract more major investors. However, the expansion process is not without challenges.
The current expansion of Thang Long II Industrial Park, spanning over 545 hectares, is encountering several issues. These include the need for investment in power infrastructure, a shortage of labour, a scarcity of sand, and delays in land utilization. These challenges are not unique to Thang Long II Industrial Park but are common in Northern Vietnam, where Sumitomo Corporation is actively engaged.
To address these issues, Hung Yen Province is considering several strategies. Firstly, infrastructure development is a priority. This involves enhancing electricity and transportation infrastructure to support industrial activities, such as expanding power supply networks and improving road connectivity.
Secondly, workforce training is crucial. Hung Yen is investing in programs to upskill and reskill the local workforce, addressing the shortage of skilled labour. This could be achieved through partnerships with educational institutions and vocational training centres.
Thirdly, streamlining administrative processes is essential. Hung Yen is aiming to facilitate smoother land utilization by reducing bureaucratic delays and ensuring that licensed projects are completed on time. This could involve accelerating administrative reforms and improving the efficiency of local government processes.
Lastly, incentive policies are being considered. Offering flexible incentives such as tax breaks or rental subsidies can help attract and retain investors like Sumitomo Corporation, mitigating the challenges posed by global economic uncertainties and infrastructure limitations.
In addition to these strategies, Hung Yen is directing relevant agencies to organise job fairs and employment events to connect businesses with workers. Japanese investors, such as Kyocera, Hoya, Daikin, Panasonic, and others, who are primarily accommodated in Thang Long II Industrial Park, have a total registered investment of approximately $3 billion.
Hung Yen's leadership is committed to continuing to support Sumitomo Corporation and create favourable conditions for investment expansion. Yohei Kurisu, a member of Sumitomo Corporation's executive board, expressed gratitude for Hung Yen's leadership and improvements in Thang Long II Industrial Park.
Moreover, Sumitomo Corporation is not only investing in Thang Long II Industrial Park but also in other areas of Vietnam. For instance, it is transferring 50% of its equity interest in Van Phong Power Company Limited and investing in FPT's AI Japan facility by acquiring stakes in FPT Smart Cloud Japan.
The reinforced investments by foreign investors, including Sumitomo Corporation, in both industrial infrastructure and large-scale projects in Vietnam, underscore the country's continued attractiveness as a destination for investment. However, addressing the challenges faced by industrial parks like Thang Long II Industrial Park is crucial to maintaining this attractiveness and ensuring sustainable growth.
In a separate development, Elliott, a prominent investment firm, has issued a statement regarding Sumitomo Realty & Development's strategy, urging stronger governance and value creation for long-term shareholders. Meanwhile, Sumitomo Corporation and SBI Holdings are launching battery-swap taxis in Phuket, aiming to revolutionise green transport in Southeast Asia, through a partnership with U Power and Sumitomo Mitsui.
These developments highlight the dynamic and diverse investment activities of Sumitomo Corporation across various sectors and regions, demonstrating its commitment to sustainable growth and innovation.
The investments by Sumitomo Corporation, amounting to an additional $500 million in the energy sector through the fourth expansion phase of Thang Long II Industrial Park, are not limited to industrial infrastructure. The corporation is also investing in finance by acquiring stakes in FPT Smart Cloud Japan and transferring 50% of its equity interest in Van Phong Power Company Limited.
The strategies being considered by Hung Yen Province, such as infrastructure development, workforce training, streamlining administrative processes, and offering incentive policies, aim to address the challenges in the industry and energy sectors, particularly those faced by Thang Long II Industrial Park.
