The relocation of enterprises from Bien Hoa 1 Industrial Park in the southern province of Dong Nai will be completed in December 2025, said local authorities.
Established in 1963, Bien Hoa 1 is the oldest industrial park in Vietnam. Together with Ho Chi Minh City and Binh Duong province, Dong Nai is a manufacturing hub in southern Vietnam.
The Dong Nai Department of Planning and Investment has notified the businesses that a plan to convert the IP into an environmentally-friendly commercial-service-urban area has been approved by the provincial administration.
The relocation of businesses from the park is set to happen in two phases.
In the first phase, 14 companies located in Zone 1 (about 75.1 hectares), south of the Bien Hoa 1 Industrial Park, will have to relocate before December 2024.
The second phase will see businesses in the remaining areas relocate by December 2025.
The provincial People’s Committee will submit a compensation and support plans to the provincial People's Council for approval in the second quarter of 2024, the department said.
Difficult move
According to the department, 76 businesses have leased land and infrastructure at Bien Hoa 1 Industrial Park - six FDI firms and 70 state-owned enterprises.
The industrial park employs more than 21,000 workers: over 6,000 for FDI enterprises and 15,000 for Vietnamese firms.
The department acknowledged that the relocation process will have a great impact on relocating businesses and workers. Specifically, businesses will face difficulties in recruiting and training new workers if current employees cannot move to new places and choose to quit.
Enterprises will have to pay severance allowance for workers who cannot continue to work and another amount for those who have to stop working during the relocation process.
The majority of workers have worked for a long time and live in Bien Hoa town so most of them cannot move to much farther places. It would also become very difficult for them to find new jobs because of their relatively advanced ages.
The department has proposed that businesses relocate to Giang Dien Industrial Park in Trang Bom district or other facilities in the province per their convenience.
However, this is not as simple a solution as it sounds because industrial parks with low occupancy rates in Dong Nai are few and far between. In addition, production investment in the new location will have to be consistent with the scale, capital source and products of the enterprise.
The department has said that the province will introduce many policies to support businesses and workers including corporate income tax incentives; preferential land use fees; incentives in value added tax and import tax; preferential credit; and support for workers to stabilize their lives.