Nghi Son Economic Zone - Thanh Hoa

Overview of Nghi Son Economic Zone – Thanh Hoa:

The Nghi Son Economic Zone in Thanh Hoa Province was established in 2006 with an area of 18,611.8 hectares by the Prime Minister’s decision. The Nghi Son Economic Zone is located in the southern part of Tinh Gia District, comprising 12 communes. In 2015, it was further expanded to 106,000 hectares.

It includes 66,498 hectares of land and islands and 39,502 hectares of water surface. The exploitation period extends until 2076, with the Nghi Son Economic Zone Management Board as the investor and manager.

To date, the Nghi Son Economic Zone has attracted 265 domestic direct investment projects with a total registered capital of 149,090 billion VND and 23 foreign direct investment projects with a total registered capital of 12,809 million USD.

Several large investment projects with significant spillover effects are being implemented, such as:

• The Nghi Son Refinery and Petrochemical Complex with a capacity of 10 million tons of crude oil per year.
• Nghi Son Thermal Power Plant I with a capacity of 600 MW.
• Nghi Son Thermal Power Plant II with a capacity of 1,200 MW.
• Nghi Son Cement Plant with a capacity of 4.3 million tons per year.

Geographical location:

The Nghi Son Economic Zone includes the entire area of Tinh Gia District (now Nghi Son Town) and six communes in Nong Cong and Nhu Thanh Districts, Thanh Hoa Province.
The specific boundaries are as follows:

• The northern boundary borders Quang Xuong District.
• The southern boundary borders Nghe An Province.
• The eastern boundary borders the East Sea.
• Tuong Van, Tuong Linh, Tuong Son, Cong Liem Communes (in Nong Cong District), Ben En National Park, and Phuc Duong Commune (in Nhu Thanh District) form the western boundary.

The Nghi Son Economic Zone is strategically located on the north-south axis of the country. It serves as a bridge connecting the northern, central, northwest, and southern regions, as well as the markets of southern Laos and northeastern Thailand.

The goal is to develop it into a multi-sector, multi-field comprehensive economic zone. The focus is on heavy industry, basic industry, urban development, and tourism linked to the efficient operation of the Nghi Son Seaport.

Planning for functional areas in the Nghi Son Economic Zone – Thanh Hoa:

As a comprehensive multi-sector economic zone, it was selected by the Vietnamese Government as one of the eight key coastal economic zones with the most attractive investment incentives in the country.

Nghi Son Port:

• With a total area of 741.2 hectares, it includes a riverport area of 6.2 hectares in the northeast and a seaport area of 735 hectares.
• It has general-purpose, container, and specialized berths.
• A combined transshipment terminal and a dry port logistics center will be built on 125 hectares.
• It has the capacity to accommodate vessels up to 70,000 DWT and handle millions of tons of cargo annually.
• The port is already in operation, with two berths for vessels over 80,000 DWT and two berths for serving Nghi Son Thermal Power Plant 2, capable of handling vessels up to 210,000 DWT.

Industrial Parks:

• With a total area of 9,057.9 hectares, the industrial parks currently encompass the Nghi Son Economic Zone.
• However, there are plans to expand industrial land by an additional 3,000 hectares towards the northwest along the Tho Xuan Airport – Nghi Son Economic Zone axis after 2035.

Residential Areas:

• The residential areas have a total area of 6,012.7 hectares, including the Tinh Gia urban area with 5,573 hectares and the Yen My urban area with 439.7 hectares.

Seaside and Ecotourism Areas:

• The seaside and ecotourism areas cover a total area of 6,665.9 hectares, consisting of 432.1 hectares for seaside tourism and 6,233.8 hectares for ecotourism.
• There are also various small-scale tourist destinations.

Infrastructure of the Nghi Son Economic Zone – Thanh Hoa:

Transportation System:

Roads:

• National Highway 1A and the North-South National Expressway.
• Coastal roads connecting the North Central and Central Coastal economic regions.
• Nghi Son – Bai Tranh Road connects to Ho Chi Minh Road.
• Nghi Son – Tho Xuan Airport Road.
• Internal transportation network connecting the Nghi Son port with industrial parks and urban areas.

Railways:

• The national railway runs through the Nghi Son Economic Zone, spanning over 30 kilometers.
• Railway system connecting cargo stations at Nghi Son port with transshipment stations.
• Passenger station to meet transportation needs within the Nghi Son Economic Zone.

Waterways:

• They have constructed the Nghi Son port, which can accommodate ships with a capacity of up to 70,000 DWT.
• The current handling capacity is 30 million tons per year. In addition, there are several comprehensive ports, specialized ports, container terminals, and a logistics system.
• The ongoing development of the port coordinates with all the plans.
• Currently, the CMA-CGM shipping line operates international container transportation routes from Nghi Son to Singapore, Europe, the West Coast of the United States, and Africa through the transshipment port in Singapore.

Air Transportation:

• Tho Xuan Airport is located 60 kilometers from the Nghi Son Economic Zone. It currently operates domestic flights and is planned to become an international airport.

Internal Transportation within Industrial Parks:

• The internal transportation system is divided into main roads and branch roads.
• Main roads are 60-90 meters wide, and branch roads are 17.5-27 meters wide.

Power Supply System:

• The utilization of the national power grid includes the use of the 500kV North-South power line and the 220kV Thanh Hoa – Nghe An power line.
• There is also a system of 220/110/22kV-250MVA substations to ensure sufficient electricity supply for production and daily activities.

Water Supply System:

• Currently, there are two water supply plants for industrial parks.
• Anh Phat Company has completed the water supply system, which has a raw water capacity of 90,000 m3/day and a clean water capacity of 30,000 m3/day.
• Binh Minh Company is investing in another clean water plant with a capacity of 90,000 m3/day.

Wastewater and Stormwater Treatment:

• The arrangement of wastewater and stormwater systems along the roads and centralization to treatment stations in the industrial parks.

Waste Treatment:

• Nghi Son Environmental Joint Stock Company manages the waste treatment system in the Nghi Son Economic Zone.
• One considers this system as one of the modern waste treatment facilities in the northern region.
• The United States, Japan, and the Federal Republic of Germany import the automated waste treatment system.
• It has a capacity to incinerate 80 tons of household waste and 200 tons of industrial waste per day.
• Phase I with a capacity of 250 tons/day has been completed.

Wastewater Treatment:

• Constructing 6 wastewater treatment stations to handle the total wastewater generated in different phases.
• By 2015, the amount of wastewater generated was 58,806 m3/day and night.
• By 2025, the expected volume is approximately 85,140 m3/day.
• The centralized wastewater treatment station of the Industrial Zone will carry out the secondary treatment.
• Before discharging into the external environment, the wastewater needs to meet the Class B standards according to TCVN 5945-2005.

Communication Information System:

• Nghi Son Economic Zone (Nghi Son EZ) is equipped with a 1,907km optical fiber network, 38 fixed telephone exchange stations, and 170 broadband Internet access stations, ensuring sufficient operational needs. It is projected that by 2025, NSEZ will have 115,000 subscribers, achieving a subscriber density of 50 lines per 100 people.

Social Infrastructure:

• The comprehensive planning of the education system, hospitals, commercial services, hotels, and tourism has been implemented. Some ongoing projects include the North Nui Xuoc Public Service Complex, the Hop Luc International General Hospital in the Nghi Son Area, Vietkids Preschool Branch 2, worker housing, commercial banks, insurance services, etc.
• These projects will fundamentally meet the housing, educational, and recreational needs of experts and the people in the Nghi Son Economic Zone.

Investment-attracting Industries in Nghi Son Economic Zone – Thanh Hoa:

NSEZ is a comprehensive and multi-sector economic zone, with a focus on heavy industry and basic industry. Priority industries include oil refining, advanced steel manufacturing, mechanical engineering, electricity, construction materials production, consumer goods manufacturing, and export processing. These industries are closely linked to the efficient construction and operation of Nghi Son Seaport, with the aim of producing high-quality and competitive products. They emphasize high-end services, promoting exports, and expanding into regional and global markets.

Investment Incentive Policies in Nghi Son Economic Zone – Thanh Hoa:

The Vietnamese government has granted the highest level of incentives to investors in NSEZ.

Land and water surface rental fees:

• The rental fees follow the price framework set by the People’s Committee of Thanh Hoa Province and remain stable for many years.
• The maximum lease term is 70 years, with the possibility of extension upon the investor’s request.

Exemption from land and water surface rental fees (except for industrial zones with infrastructure investors):

• Exemption from land and water surface rental fees during the basic construction period, but not exceeding 3 years from the date of the land and water surface lease agreement. Exemption ranges from 11 to 15 years from the project’s operational start, depending on the sector and industry of the project.
• Exemption from land and water surface rental fees throughout the project implementation period for projects in specially incentivized investment sectors according to government regulations.

Corporate income tax:

• New investment projects are eligible for a preferential tax rate of 10% for 15 years, with a tax exemption for 4 years and a 50% reduction in tax payment for the following 9 years.
• The tax exemption and reduction period for additional income from investment expansion corresponds to the tax exemption and reduction period applied to new investment projects.

Import tax:

• Exemption from import tax on goods used for fixed assets, specialized transportation means in the technological chain serving investment projects, and transportation means for workers.
• Exemption from import tax for a period of 5 years from the start of production for raw materials, supplies, components, and finished goods that Vietnam has not yet produced or does not meet the quality standards.

Economic development during the 2016-2020 period in Nghi Son Economic Zone – Thanh Hoa:

Attracted 106 new projects, including 91 domestic investment projects and 15 foreign investment projects. The total registered investment capital was 40,792 billion VND and 3,082 million USD.

• The value of industrial and commercial service production in the Nghi Son Economic Zone reached 412,838 billion VND (99.6%).
• Trade and services reached 20,187 billion VND.
• The value of exports reached 4,024 million USD (an increase of 11.1%).
• Budget revenue reached 50,428 billion VND (63.8%).
• Created jobs for 31,000 workers.
• The total budget capital invested in infrastructure development in the economic zone exceeded 13,000 billion VND.
• As of the end of August 2021, Nghi Son Economic Zone attracted 270 projects. It has provided stable employment for 33,000 workers.

Some targets for the 2021-2025 period:

• The value of industrial and commercial service production is expected to reach 1,218,000 billion VND, with industry accounting for 1,148,000 billion VND and trade and services accounting for 70,000 billion VND.
• The economic zone expects the value of exports to reach 17,250 million USD.
• The projection is for budget revenue to reach 120,800 billion VND, which will create additional employment for 40,000 people.
• A total investment capital of 505,400 billion VND is expected, with an allocation of 2,000 hectares for infrastructure investment in industrial zones within the economic zone.
• The expectation is to attract new investments worth 17 billion USD for foreign investment and 250,000 billion VND for domestic investment.

Labor supply and cost of Nghi Son Economic Zone – Thanh Hoa:

Abundant labor force:

• Thanh Hoa is the third most populous province in Vietnam, with a population of nearly 3.7 million people, of which 2.4 million are of working age.
• Nghi Son Economic Zone has a population of 260 thousand people, with a labor force of 148 thousand people.
• Furthermore, the local residents have a tradition of diligence and a desire for learning. This is a significant competitive advantage in attracting investors.

Low labor costs:

• Nghi Son Economic Zone applies the minimum wage level of Region III, minimizing personnel costs for investors.