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ProjectEYE What we observed, analyzed, and accomplished

Industrial Park Project in Vietnam

Our relationship with our clients begins when contracts are concluded.(Page 1/3)

July 2010

Developing land and selling it is not the end of the story. We endeavor to ensure that our clients will be fully satisfied to have made inroads into Vietnam with our industrial park.

Along with China and India, Vietnam is a country attracting great interest as a newly developing country enjoying enormous growth. Many Japanese manufacturers hold interest in Vietnam, eyeing the country as a potential base for plants.
On the outskirts of Hanoi, the capital of Vietnam, Sumitomo Corporation has developed two significant industrial parks. One is the 274-hectare Thang Long Industrial Park (TLIP), located halfway between Hanoi City and Noi Bai International Airport. The other is Thang Long Industrial Park II (TLIP II), constructed alongside a national highway that connects Hanoi City with Hai Phong port. The former was completed in 1997 and the latter in 2009.
Within TLIP, a total of 86 companies, mainly Japanese firms involved in such fields as electronics and machinery, have taken up occupancy. Exports from TLIP make up almost 5% of Vietnam’s total annual exports in terms of value, and TLIP generates employment for about 50,000 Vietnamese workers.
Behind TLIP’s success are the members of Sumitomo Corporation, who energetically devoted themselves to not just making profit for the company, but to the good of everyone involved— the clients, their employees, and local residents.

Encountering Vietnam, a whole new world

In 1995, members of Sumitomo Corporation's Overseas Industrial Park Dept. were seeking a candidate site to build a new industrial park. At the time, an increasing number of Japanese companies were making inroads into foreign countries, given the high appreciation of the yen and domestic labor shortage. Sumitomo Corporation had just started to consider establishing a new industrial park, following the one in Indonesia which was completed in the early 1990s.

"We had several candidate countries in mind, and Vietnam was not the first one," reflects Akito Shiraishi, who now serves as the General Director of both TLIP and TLIP II. Since first setting foot in Vietnam in September 1995, Shiraishi has enjoyed a 15-year involvement with the Vietnamese industrial park business. "At that time, Vietnam was much less developed than today. Hanoi, in the northern part of Vietnam, especially lagged behind in its economic development compared with the southern region. But the Vietnamese government was keen to push industrialization and urbanization forward in Hanoi. The Japanese government was also intent on assisting Hanoi's urbanization through official development assistance (ODA) such as yen loans, and this encouraged us to make a final decision on establishing TLIP."

The rest is history—and the industrial park business in Hanoi, Vietnam was launched in 1996.

Akito Shiraishi,
General Director,
Thang Long Industrial Park
General Director,
Thang Long Industrial Park II

Aiming for the best for the villagers

The location the Vietnamese government offered for Sumitomo's industrial park was ideal—16 kilometers from both the international airport and the center of Hanoi. It was a sign of the government’s enthusiasm toward the project. "The government provided us with permission to develop the site in an area covered by rice paddies. But that was it. It was left to us to negotiate with the farmers for their land. This was tremendously hard work," Shiraishi says.
To the farmers, Shiraishi and his team were a group of complete strangers; foreigners and city-bred Vietnamese whom they had never encountered. It goes without saying that the farmers were alarmed by the sudden approach, and reluctant to even come to the negotiating table. Given this situation, Shiraishi’s team hired a man from the villlage as the company negotiator. With cooperation of this individual, as well as the village office, the team pushed forward, persuading 800 farmer households to vacate over a period of 10 months.

The site was a vast area of rice paddies prior to development.

After agreements had been reached, the Sumitomo members personally made payments to the farmers for the land, using the village's community center over several days. Tomoyasu Shimizu, now an expatriate at TLIP, reminisces about the time they acquired land for TLIP II. “We prepared dong bills in a tin box ready to hand to the farmers. When we called each farmer by their name and village, they stepped forward one by one to receive their money. I recall handing money to an old lady who was a farmer. That was when I felt strongly obliged to lead the project to success. I knew that if the land the farmers had kindly given up for us were to become a barren waste, we would all be deeply ashamed.
"Giving something back to all these farmers and living up to our promise—this is the goal we have endlessly pursued during the course of the TLIP project."

Tomoyasu Shimizu,
Thang Long Industrial Park

Column:What is an industrial park?

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Sumitomo Corporation undertakes industrial park business in Vietnam, Indonesia, the Philippines, and Thailand

An industrial park is a zoned area where a number of plants built by a wide variety of manufacturers are concentrated to allow them to efficiently use the infrastructure their operations require, such as electricity, water supply, wastewater treatment, and waste disposal. Each industrial park offers distinct features, according to manufacturers' various needs.
Industrial parks are an all-encompassing community, as all kinds of facilities and environments needed by the companies and their employees are supplied, including communications and security systems and banks. In recent years, some parks have moved to establish universities and research institutes to promote collaboration between the industry and academia.

Related Tag

  • Environment & Infrastructure
  • Vietnam
  • Real Estate
  • Transportation

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