Rich pool of investors discovered

Quang Trung Software City Development Company (QTSC) director Chu Tien Dung has learned there were many opportunities for the Software City to receive new investors due to its competitive costs in its eighth year of operation.

What lessons from the trip have you learnt that you want to use this year in the Quang Trung Software City?

Through the trip to Germany, Denmark and France, we understood that foreign investors do not have accurate information about software industry in Vietnam and no information about the QTSC. Therefore, what we need right now is to update them new information about us and companies in the software city. We also had chances to discuss future cooperation opportunities with them.

Vietnam has commercial counselors at embassies to promote trade and investment in Vietnam. However, software industry information is short and this trip enabled us to further study what we should do to promote business and understand that the opportunities are available.

At the exhibition, companies talked with us about their willingness to become outsourcing partners with us that has bases of more than 100 software companies.

Accordingly, we will focus on uploading more information about QTSC on our website, www.quangtrungsoft.com.vn, and will provide further leaflets, brochures and other information to Vietnamese commercial counsellors for dissemination. Most importantly, we will get QTSC foreign companies to share their experiences with other foreign enterprises communities so that they can easily get information about us.

How is QTSC supporting enterprises in the city this year?

Economists warned that it would take a few years for economies to recover from the global economic crisis and local enterprises will face difficulties.
This year, we set a priority to focus on providing incentives for companies in QTSC to help them recover from the crisis and the second priority is to find new tenants.

QTSC has just run a stimulus package to support enterprises by offering incentives with support values at VND550 million ($32,300) for a software and digital content enterprise which is either running a business in the QTSC or to place their office in the QTSC. Of which, the support will come via infrastructure fees including internet connections, office rentals, fixed telephone installation fees, server and hosting fees during March and October this year.

For new enterprises in QTSC, they will enjoy two or five months free office rent, internet connections and fixed telephone line installation fees. This support can help them save a third of total fees for setting up a new office in comparison with opening new office downtown.

QTSC will also support enterprises in export and administrative procedures as well as joins with Ho Chi Minh City Computer Association to help enterprises showcase and market their products and solutions and create business matching.

Through the award dubbed “The Top Enterprises of the Year of QTSC” to 12 enterprises this year, we and municipal authorities recognised their contributions and their business success. Of which, enterprises must have increasing revenue which must be around VND10 billion ($588,000) and rent 1,000sqm in QTSC. Universities submitting for the award must have at least 1,000 students and have tuition revenues of VND17 billion ($1 million).

How will these changes create differences to QTSC’s performance?

Looking back to 2000, with 430,000sqm it seemed hard for us to call for investors to come. There were 104 enterprises by the end of 2008 and the number kept increasing as there are large-scale software companies still doing well during this economic crisis. The result showed that we had made the right decision and need to prepare for a longer-term future including allocating areas for the software city to expand.

We plan to prepare infrastructure construction for the next 3,000sqm that District 12 authorities will give us this year along with another 7,000sqm from Quan Tre radio station to be developed as new QTSC area.

We estimate that the QTSC will be filled by tenants in the next five years and we have still competitive advantages in terms of cost in comparison with other parks to be built in Ho Chi Minh City. Once the metro routes linking downtown and QTSC are completed, the journey to downtown will not be a concern for investors.
For those who do business abroad, traffic is not a concern. There were some enterprises last year which quit QTSC due to economic difficulties and most of them were newly established and what we need are long-term tenants or investors.

What makes us competitive is the Incremental Capital Output Ratio or ICOR of QTSC, which is around two, assessed by Doctor Nguyen Thi Anh Thu from Ho Chi Minh City Polytechnic University. This figure shows that the investment and added value of business in the QTSC is bringing profits and high added value.

What are QTSC’s preparations for leaping ahead in the future?

Infrastructure upgrades in QTSC this year will focus on providing basic life services such as fitness centre, exhibition and convention centre and apartments for employees in QTSC.

QTSC will also construct a building with around 10 levels for employees working in the city along with a current high-quality building for experts. The data centre will also receive further investment capital to cater for e-government programs including e-mail systems and cityweb data and servers. The data centre’s basic construction is around 2,000sqm and will initially cater for government agencies.