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By Ho Binh Minh and Manunphattr Dhanananphorn
HANOI/BANGKOK Oct 6 A subsidiary of Thailand's
Hemaraj Land and Development Pcl and Vietnamese construction
firm Cienco 4 have teamed up to build a $1 billion industrial
zone in Vietnam, the first country in Southeast Asia the Thai
firm has expanded into.
The venture, Hemaraj-Cienco 4 Co, signed a deal on Wednesday
with the provincial government of Nghe An, in central Vietnam,
to start building the industrial zone next year in seven phases
for completion in 2038, Cienco 4 said in a statement posted on
its website on the same day.
While Vietnam's economy has shown signs of slowing so far in
2016, manufacturing remains its biggest draw, with firms like
Samsung, LG and Panasonic using
it as an assembly base for tarriff-free exports under the
numerous free trade agreements the country has signed.
Offering manufacturers lower wages than China, textile and
shoe factories are also expanding in Vietnam to accommodate
orders for high street fashion brands.
"Vietnam is the first foreign country that we will invest in
the form of developing an industrial estate for rent," Jareeporn
Jarukornsakul, chief executive officer of WHA Corp, a
major shareholder of Hemaraj, told Reuters.
She said Hemaraj will hold 80 percent of the venture, with
the rest to be held by the Vietnamese partner, formally known as
the Civil Engineering Construction Corporation No. 4.
The project includes two industrial parks, with a combined
area of 3,000 hectares (7,400 acres) and rental contracts for 70
years, the executive said.
In the first phase, they will develop an industrial estate
on an area of about 500 hectares, which should start providing
revenue in the second half of 2017, Jareeporn said.
WHA, which completed its acquisition of Hemaraj last year,
is Thailand's market leader in building bespoke warehouses for
leases and aims to become a fully-integrated industrial estate
and logistic facilities developer.
The company operates warehouses for lease in Indonesia. It
also plans to invest in Southeast Asian neighbours including
Myanmar and Malaysia, Jareeporn said.
Manufacturing industries are Vietnam's top source for
attracting foreign direct investment (FDI), with a combined
$12.15 billion in new pledges and increased capital registered
in January-September, or 74 percent of the total FDI value in
the period, based on government data.
(Reporting by Ho Binh Minh in HANOI and Manunphattr
Dhanananphorn in BANGKOK; Additional reporting by Khettiya
Jittapong; Editing by Christian Schmollinger)