HaiDuong Department Of Planning And Investment

Investment Certificate granting and adjusting: a Investment Certificate granting: Up to now 31/12/2012, Hai Duong province has 241 valid projects with total investment capital of 5.665,1

DEPARTMENT OF PLANNING &

INVESTMENT

Independence - Freedom - Happiness

No: 1606/BC-KHDT-KTDN Hai Duong, December 21th, 2012

REPORT ON HAI DUONG’S FDI OF THE YEAR 2012 AND PLANNING

OF THE YEAR 2013

1 Investment Certificate granting:

1.1 Investment Certificate granting and adjusting:

a) Investment Certificate granting:

Up to now (31/12/2012), Hai Duong province has 241 valid projects with

total investment capital of 5.665,14 million USD (in which there are 115 projects inside Industrial Zones with total investment capital of 1.882,6 million USD; there are 126 projects outside Industrial Zones with total investment capital of 3.779,54 million USD)

In 2012, granted Investment Certificate for 20 newly projects with total

investment capital of 52,11 million USD (in which 08 projects inside Industrial Zones with total investment capital of 24,26 million USD; 12 projects outside Industrial Zones with total investment capital of 27,85 million USD).

b) Evaluation:

Generally, those newly projects in 2012 have small scale, average 2 million USD per project The investment projects concentrated on some fields as: manufacturing, mechanism, assemble and good distribution etc Investors are mainly from Japan and Korea The number of newly projects in 2012 were decreased, accounted for 71,4% compare to that of 2011

Investment Certificate adjusting:

a) Investment Certificate adjusting

In 2012, there were 89 projects were adjusted, in which 14 projects

increased investment capital with total capital increased of 91,2 million USD (06 projects outside Industrial Zones with total capital of 25,5 million USD, 08 projects inside Industrial Zones with total capital of 65,7 million USD)

Those projects were mainly in the fied of: bussiness added, investment capital increased, fixed capital increased, or legal representative changed etc The additional capital accounted for 17,9% compare to that of 2011

In general, both newly granting and adjusting, Hai Duong attracted 143,3 million USD, accounted for 4,7% compare to that of 2011

3 Projects withdrawing and ending of operation:

In 2012, Hai Duong withdrew 5 FDI projects with total investment capital

of 52,8 million USD (in which there were 3 projects outside Industrial Zones and

02 projects inside Industrial Zones) including 01 projects changed into new center (Hai Duong - Vieng Chan join venture center) and 04 projects did not implement the project

The non and slow implemented are still exist, especially projects which were issued from 2007 and 2008 The reasons mainly due to investors are in financial’s difficulties Besides, there are some projects which had come into operation but due to facing with difficulties in seeking consumming market, lack

of production capital so that they had to stop operating and up to now, there are still not have enough ability to operate again At present, local authorities still continue to examine and consider to withdraw before expiry date some projects which have not operated

2 Project implementing:

2.1 Capital implementing:

a) Implemeting situation in the year 2012:

Total investment capital in the year 2012 of FDI’s enterprises reached 464,8 million USD, increased 23,8% compare to that of the year 2011 (375,2

million USD), therefore, total investment capital implement in the local reached 2.455,9 million USD, accounted for 43,3% of the total registered investment capital of 5.662,14 million USD

a) Evaluation:

The difficulties and challenges of the global and domestic economy has great impacted on project implementation speed Beside some investors were difficulties in capital so that they had to adjusted time schedule or called for investment cooperation, some other investors did not have enough ability to carry out project so the investment capital disbursement were low Some big projects such as: Hai Duong power plant, Pacific textile are rather slow

However, many projects which were issued previous years still continue to

be implemented, some projects implement rather quick and have large implement capital such as: Kien Hoa Dat Viet Co., Ltd, Hitachi Cable Co., Ltd

FDI’s investment capital implement in the local increase thoughout the year, however, they are still slow compare to the fluctuation of the registered capital and newly issued project The investment capital disbursement of FDI’s projects in the local reached 42,9% compare to the total registered investment capital

2.2 Manufacturing situation:

a) Turnover, export, budget’s collection and labour in the year 2012:

- The turnover in the year 2012 reached: 2.852,8 million USD

- Export value reached: 2.115,8 million USD

- State’s budget collection reached: 97,5 million USD

- Labour’s attracted: 5.800 person

b) Evaluation:

Up to now, there are 189 enterprises of 241 FDI valid projects in the local are in operation In the context of the global’s economy is in difficulty, FDI’s

enterprises in the local still maintain their business production, play a driving force for the provincial economic development

FDI’s enterprises turnover in 2012 increased 17,9% compared to that of

2011 (2.419,2 million USD); export value increased 24,7% compared to that of

2011 (1.695,9 million USD); tax and state budget collection reduced, accounted for 76,6% compared to that of 2011 (127,3 million USD0, attracted 5800 workers, therefore the number of workers in FDI’s enterprises is over 110.300 workers

In the context of the domestic economy is in difficult which has big impacted to enterprises business production in the local, especially enterprises which are restrained of financial and management ability Some enterprises have

to work perfunctorily or stop their business manufacturing Some big enterprises has large scale such as Phuc Son cement company and Ford Co., Ltd are also meet a lot of difficulties in consuming their products due to consumer purchasing power reduced therefore influenced to the provincial state budget’s collection

Some enterprises in the field of garment and breeding are in better condition, many enterprises expanding their business production, changing advance technonoly, improving product’s quality and business production effectively and improving their compatitive ability such as: Makalot, Shints BVT, Hoa Ky breeding food, Namjang Delta ect

2.3 Difficulties and challenges:

- At present, some FDI’s enterprises does not carry out their projects, investors ran away to their hometown and could not contact to them lead to difficulty in withdrawing Investment Certificate and dissolving projects It’s difficult to solve those cases due to unclear regulations of the Law

- The abide by the Law about making report of enterprises in the local are still remain restrain, influence to the tasks of synthesis and manage enterprise’s implementation of Hai Duong’s DPI

II PLANNING IN THE YEAR 2013.

1 Orientation:

- Focus on encouraging foreign investors; take part in building socio-economic infrastructure, especially transportation, hospital, electric and water supply, school, career training, entertainment places, urban ect

- Attracting projects with high technology, source technology, increase in the export, develop supplementary industry which has comparative advatage to increase product’s value added, improve the comparatively power and the effectively in economic integration; Focus on projects from multinational coporation which has big finance ability, high technology, clean technology, bring large amount turnover to the state’s budget collection

- Develop new products which use advance technology entitled with environment protection, develop process manufacturing industry in argriculture, forestry and fishery

- Limit and refuse projects which have small scale and investment capital, backward techonogy etc to encourage and create opportunities for domestic investment, restrain the lack of agriculture land and make sure food security

- Create favor condition for projects to carry out effectively, encourage to expand investment scale, techonology innovation, diversification the investment’s objective suitable with the regulations of the Law on foreign investment, branch and product developing planning

- Speed up human resources training, especially high quality sources, satisfy the demand of enterprises and socio Strongly implement education socialization Research on building High quality career training Center for area

2 Tasks and solutions:

- Continue to build and develop comprehensive infrastructure: transportation, electric, water, telecommunication, supplememtary industry and socio, services infrastructure to satisfy enterprise’s demand Organize projects according to the land planning as well as branch planning; During the period of building planning Industrial and Cluster Zones, we need to focus on environment issues, water supply and drainage etc, improve investment environment in all towns, districts and rural areas

- Develop electric and water supply network for industry, make sure to supply electric and water stability for business manufacturing of enterprises

- Continue to implement administrative reform, especially administrative procedure, and staff’s responsibility in solving administrative procedures, land rental, construction, import-export, labour resources, environment etc, to create favour condition for investors in their business production, create close connection between local authorities and enterprises, reinforce investors’s reliable to implement their business production in the local

- Consistence in provincial FDI’s attracting policy; authorities in the local need to carry out effectively projects which were issued Investment Certificate, especially ground clearance and allocate land to investors Increase monitoring land using of FDI’s enterprises, concurrently speed up investment according to issued projects, increase implement investment capital, contribute to increase socio investment and economic growth

- Frequently examine, evaluate and timely solve all troubles of FDI projects

to create favour condition for enterprises to speed up project’s implementation, especially large scale projects Decisively withdrawing land of the projects which are not carry out as regulation

- Decisively refuse projects which using backward technogy, having low socio - economic effectively and projects which containminate to the environment Priority to attract FDI’s projects from countries which have large potential of capital, technology and management’s ability

- Well organize investment promotion activities, focus on great investors, areas and territories which has big potential such as the United State,EU etc; learning experiences in attracting FDI’s capital of others provinces in the country Beside using mass medias, we continue to use leaflets, journal and video CDs to introduce about provincial investment oppotunities

- Continue to examine, update the lists of projects calling for investment which suitable with investor’s demand and develop planning of the local, branch and products

3 Proposals:

Government need to consider to adjust Decree No 108/2006/NDD-CP dated 22 June 2006 of the Government regulated and guided some articles of Investment Law Some contents need to regulate more clearly:

- Giving conditions, procedures and sanctions to solve some cases which investor does not carry out their projects and runaway to their country For projects which have not implemented and have financial responsibility, we need

to regulate clearly about the orders, procedures to withdraw investment certificate It’s neccessary to have cooperation mechanism between State management authorities and diplomatic mission abroad to verify about investors For projects which were in operation and had financial’s responsibility emerged and now stop operating, investors did not do liquidation procedure on time or could not contact need to assign a specific organs to solve those problems

- Regulate more specific about investor and enterprise’s responsibility in making report on project’s implementation, concurrently regulate clearly about the sanctions of solvement and competence of invesment management organs to enterprises that are not implement report mechanism as regulation

This is report on provincial’s FDI situation in 2012 and planning in the year 2013, Hai Duong’s DPI hope continue to receive the consideration and guidance from Ministry of Planning and Investment./

Receivers:

- As above;

- HD People Committee (to report);

- Board management of IZs;

- Administrative office,

Foreign relation Bureau

DIRECTOR (Signed and Sealed)

Vuong Duc Sang