Temasek-backed Sembcorp builds Vietnam industrial park

The move comes as the Singaporean sovereign wealth fund considers restructuring itself to deploy more capital in the building of sustainable cities.

Sembcorp Development, a wholly-owned subsidiary of Singapore-listed Sembcorp, has received approval to undertake, jointly with Vietnamese developer Becamex IDC, the construction of a 150-hectare industrial park in northern Vietnam.

The VSAIP joint venture is the sixth vehicle created to undertake industrial park developments across Vietnam, the latest one being a 600-hectare park located in Son Tinh district which was paired with a 520-hectare site near downtown Quang Ngai city in 2013.

VSIP JSC will incorporate a wholly-owned subsidiary, VSIP Hai Duong Co, to undertake the project. The total investment will be funded through the combination of a $11 million equity injection from VSIP JSC and external debt. Sembcorp effectively holds 45.16 percent in VSIP JSC, according to an SEC filing. 

A spokesperson from the company confirmed that no public money will be involved in financing the project.

Sembcorp Development chief executive officer Kelvin Teo told a regional news channel that infrastructure works are ongoing, with the park expected to be ready for tenants by the end of the year.

Sembcorp’s joint venture VSIP Joint Stock Company bought the undeveloped site, then known as the Cam Dien-Luong Dien Industrial Park, from a Japanese-owned infrastructure firm Phuc Hung Co in April this year. 

At 150 hectares, VSIP Hai Duong is about a third of the size of Jurong East in Singapore, but significantly smaller than other VSIPs.

There are five other VSIPs – Bac Ninh and Haiphong in the north, Quang Ngai in central Vietnam, and two in southern province Binh Duong.

Temasek Holdings, which owns 49.5 percent of Sembcorp, announced in September last year it was engaging in talks with JTC Corporation to explore merging four of their operating subsidiaries – Ascendas Pte, JURONG International Holdings Pte, Surbana International Consultants Holdings Pte and Singbridge Group – into a combined integrated platform for sustainable urban development. 

“Apart from the trends we see with the increasing urbanisation in growth markets, we also see an emerging and keen interest in building sustainable cities, both inside and outside Asia,” said Mr Dilhan Pillay Sandrasegara, head of Temasek's Enterprise Development Group.