Regional Spotlight: Red River Delta (Hanoi)

Posted by Reading Time: 5 minutes

HanoiMay 7 – The Red River Delta constitutes the industrial heart of Vietnam and is one of the richest and most developed regions in the country.

Hanoi, Vietnam’s capital city, dominates in terms of foreign investment and gross industrial output. It is also home to many manufacturing plants for big international names like GM, Nokia and Yamaha. The industrial parks and economic zones in the region are strengthened by their “corridor to the sea” via the Hai Phong Port, one of Vietnam’s largest ports.

Professional Service_CB icons_2015RELATED: Dezan Shira & Associates’ Pre-Investment, Market Entry Strategy Advisory Services

Geography

The Red River Delta region faces the Tonkin Gulf in the east. The area consists mainly of flood plains, and the highest elevation levels in the area measure just 300 and 400 meters in the Tien Du and Que Vo provinces, respectively.

Industries

Unlike Northern Vietnam, the Red River Delta region lacks a diversity of mineral resources, though a select few can be found in huge quantities. There are large deposits of coal, bauxite, kaolin, limestone, sandstone and smaller deposits of clay.

In addition, a large natural gas reserve has been discovered recently in Thai Binh with an annual output potential of 10 million cubic meters.

Though forestry is not a key industry, there are some forests that offer high quality wood in the region.

In addition, marine resources are of great importance as the region has about 400 km of coastline.

Power Production

The Red River Delta region is highly industrialized, resulting in a high demand for electricity. However, the region has an energy deficit since it consumes more than it produces, which has led to the region needing to import energy from other regions.

The region mainly relies on coal fired thermal power plants for the production of electricity. Notable sources include the Pha Lai Power Plan, Hai Phong Power Plant and Pacific Power Center.

The Pha Lai Power Plant, one of the largest coal-fired plants in Vietnam, was constructed by Electricity of Vietnam (EVN). The 600 MW plant is located roughly 65 km Northeast of Hanoi and cost around US$540 million to build.

The Hai Phong Power Plant will eventually operate four 300 MW turbines. The first unit is already in operation and currently supplies 1.8 billion kWh of electricity a year to the national grid, using 3.5 million tons of coal per year from Hon Gai and Cam Pha ore (from the Quang Ninh province).

The Pacific Power Center at My Loc (Thai Thuy District), with an investment of US$2.1 billion and an area of 254 hectares, includes projects with a capacity of 1800 MW. The first power plant, known as Thai Binh 1 (600 MW), started construction in 2012 and is expected to be completed by 2014. The second plant, Thai Binh 2 (1200 MW), is still under construction, and it is expected that the first turbine will be put into commercial operation in 2015 with the second one set to commence operations in 2016. Both turbines will combine for an annual output of about 6.7 billion kWh.

Thai Binh 1 was invested in by EVN; Thai Binh 2 was invested in by PetroVietnam-PVN.

Infrastructure

The region’s road system is in excellent condition, and there are numerous plans to build new highways and bridges to further improve the network. The Cau Gie–Ninh Binh expressway was completed in 2010, and the first phase of the Noi Bai–Lao Cai expressway (spanning 245 km) – which connects Hanoi to the Chinese border – was just completed this past April.

Hai Phong Port is the largest port in the northern part of the country and is an important gateway to the coast.

Navigable rivers are distributed evenly throughout the region, and goods are usually brought by ship to the delta area of the river and stored in the seaport before being exported to various destinations throughout the world.

The Luoc River, the distributaries of the Red River, the Red River itself, the Tra Ly River, the Duong River and other waterways carry a high volume of goods and passengers.

There are two international airports in the region, Noi Bai and Cat Bi. A new airport, Tien Lang International Airport, which will be the largest in Northern Vietnam, has been proposed and capital has already been secured.

Noi Bai International Airport is the largest airport in the north of the country, located just 45 km from downtown Hanoi.

Cat Bi International Airport is close to Hai Phong. While relatively small, Cat Bi International Airport is very important for the region as it alleviates congestion from the Hanoi airport.

Finally, the proposed Tien Lang International Airport will be located in the Vinh Quang Commune (Tien Lang district) with an area of about 4,500 hectares worth a total expected investment amount of over US$8 billion. Construction is set to be completed by 2030.

Material for this article was taken from the May 2012 issue of Vietnam Briefing Magazine, titled “Vietnam’s Provinces, Regions, and Key Economic Zones,” which is available as a PDF download on the Asia Briefing Bookstore. In this issue, we discuss the industries and economy of Vietnam’s three levels of geographic divisions from the perspective of a potential foreign investor.

Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.

For further details or to contact the firm, please email vietnam@dezshira.com, visit www.dezshira.com, or download the company brochure.

You can stay up to date with the latest business and investment trends across Vietnam by subscribing to Asia Briefing’s complimentary update service featuring news, commentary, guides, and multimedia resources.

Related Reading

City Guide – Hanoi
Lying on the right bank of the Red River in northern Vietnam, approximately 85 miles inland from the South China Sea, is the charming capital city of Hanoi. Hanoi is Vietnam’s old imperial capital and its modern center of politics and culture.

Leave a Reply

Your email address will not be published. Required fields are marked *