Choosing the location of an industrial factory is a strategic decision that affects operating costs, market accessibility, and the competitive capacity of a business. Why is the location of a factory so important?
Because it is not just a place to house machinery, but a crucial link connecting production with customers, workforce, and the supply chain. In this article, KTG Industrial will help you explore the core factors that create an ideal factory location — the foundation for sustainable business growth.
Is the location of a factory important?
The location of a factory is not only a foundational element in operational models but also plays a decisive role in the speed of growth and expansion capability of a business.
In an increasingly competitive market, selecting the right location goes beyond geographic convenience; it involves optimizing cash flow, workforce, supply chain, and customer access. Therefore, evaluating a factory’s location must be conducted systematically, based on multiple specific criteria.
Benefits of a favorable factory location
Attracting a large customer base
Positioning a factory in the right location helps reduce costs associated with reaching and attracting target customers, especially when situated near dynamic economic zones, convenient transportation networks, or densely populated areas. This facilitates building strong connections with partners and consumers in the region.
With efficient transportation and quick goods handling, business activities operate more effectively. Furthermore, proximity to consumption markets enhances competitiveness, allows flexible response to customer demands, and significantly reduces operating costs.
Gaining from modern and stable technical infrastructure
Infrastructure factors such as transportation systems, telecommunications, access to seaports, and wastewater treatment capabilities directly impact production efficiency and operational control across the supply chain. Investment in synchronized, modern infrastructure enables businesses to optimize operational time and contributes to maintaining stability in daily activities.
Beyond technical aspects, the safety of the factory location must also be carefully considered. Areas less prone to natural disasters such as floods or earthquakes create favorable conditions for production continuity and better protection for personnel.
The advantage of selecting a safe location is fostering employee peace of mind, which enhances productivity and helps retain a stable workforce. However, safe areas often come with higher rental costs or limited options in terms of available space, so businesses need to balance initial investment costs with long-term benefits to make an informed decision.
Access to a diverse labor force
Choosing a factory location near densely populated areas and convenient transportation routes enables businesses to easily reach a diverse and abundant labor pool.
A favorable location not only facilitates easy commuting for employees but also broadens the recruitment scope, helping companies build a stable workforce with suitable skills.
A diverse labor force helps maintain continuous production operations and minimizes challenges related to recruiting and training new employees. Moreover, a convenient working environment boosts employee morale and engagement, contributing to improved productivity and work quality over the long term.
Reducing production costs
According to information from the Government Portal, the Vietnamese government has set a goal to reduce at least 30% of administrative procedure costs and processing time by 2025 [1].
This effort is part of a broader initiative to cut business costs, including logistics expenses and administrative procedures, thereby easing the financial burden on enterprises and accelerating project implementation timelines.
Additionally, the application of technology and digital transformation plays a critical role in reducing production costs. The Government Portal reports that digital transformation has helped many businesses optimize production processes, reduce labor and material costs, and simultaneously improve labor productivity [2].
Beyond direct operational cost benefits, businesses also gain indirect advantages from regional coordination policies and investment incentives linked to regional development promoted by the government.
According to the action program implementing Resolution No. 30 of the Party Central Committee, local authorities are permitted to use budgets to invest in regional projects, including infrastructure connectivity, energy, and logistics, creating more favorable conditions for manufacturing enterprises.
Promoting public-private partnerships (PPP), attracting foreign direct investment (FDI), and utilizing Official Development Assistance (ODA) capital for regional infrastructure development also help alleviate the infrastructure investment burden for individual companies [3].
In the context of the government strongly advancing regional coordination and linkage programs, selecting factory locations within industrial zones that effectively connect regions will provide superior competitive advantages.
The Prime Minister emphasizes that regional linkage is not only an inevitable trend but also a driving force for connecting and guiding development among localities through key sectors such as planning, transportation infrastructure, investment promotion, and intra-regional environmental management.
Therefore, placing factories in industrial zones located in dynamic regions or along major highway corridors will enable businesses to capitalize early on long-term benefits from public investment, ODA capital, and regional preferential mechanisms [3].
Ready-built factories in prime locations in Vietnam
Dong Nai
KTG Industrial Nhon Trach 2 Phase 3
Located in the dynamic development area of Dong Nai province, KTG Industrial Nhon Trach 2 Phase 3 has become a prominent destination for many FDI enterprises seeking modern, environmentally friendly production spaces.
The project is developed on an 18.69-hectare land bank and has completed the first two phases with an almost full occupancy rate.
The area benefits from a labor force of over 2.1 million people in Nhon Trach and neighboring areas such as District 2, District 9, Thu Duc (Ho Chi Minh City), and Bien Hoa, which is a significant advantage for investors.
Convenient connectivity:
- 40 minutes to Ho Chi Minh City center
- 50 minutes to Tan Son Nhat International Airport
- 35 minutes to Cat Lai Port and Saigon High-Tech Park
- 25 minutes to the future Long Thanh International Airport
Key technical specifications:
- Factory area: from 960 to 7,462 m²
- Ceiling height: 8.7 m; floor load capacity: 2 tons/m²
- 3-phase electrical system with a capacity of 100 W/m²
- Reinforced concrete flooring treated for dust and crack resistance
- Fully equipped with international standard fire prevention and fighting systems
With a vision to develop green factories, the project integrates ESG standards in its design and operation, helping businesses reduce emissions, optimize energy use, and enhance sustainability in production activities.
KTG Industrial Nhon Trach 2 Phase 3
KTG Industrial Nhon Trach 2 Phase 4
Building on the success of previous phases, KTG Industrial Nhon Trach 2 Phase 4 continues to offer ideal factory leasing options for enterprises prioritizing sustainable development and ESG orientation.
Featuring a flexible two-story design, this is among the most land-efficient models available in the Vietnamese industrial real estate market today.
Strategic location:
- 35 km (approximately 40 minutes) from Ho Chi Minh City
- 27 km to District 2, 33 km to Saigon High-Tech Park
- 29 km to Cat Lai Port and 40 km to Cai Mep – Thi Vai Port
- 25 km to the future Long Thanh International Airport
Key factory features:
- Modern two-story design: ground floor area ranging from 3,035 to 13,800 m²; second floor from 1,577 to 14,041 m²
- Ceiling height: 8 m on the first floor, 7 m on the second floor
- Floor load capacity of 2 tons/m², reinforced concrete flooring treated for dust and crack resistance
- 3-phase electrical system with capacity of 100 W/m²
- Fully equipped with fire alarm system, sprinklers, and smoke extraction
KTG Industrial places special emphasis on green factory development, aiming to minimize environmental impact while supporting enterprises in raising operational standards according to global ESG frameworks.
This project represents an ideal choice for investors seeking flexible, efficient, and sustainable production spaces in Southern Vietnam.
KTG Industrial Nhon Trach 2 Phase 4
Bac Ninh
KTG Industrial Yen Phong IIC (Phase 2)
When it comes to strategically located ready-built factories in Northern Vietnam, KTG Industrial Yen Phong IIC (Phase 2) stands out as a prime destination.
Situated adjacent to National Highway 18 and the Hanoi–Thai Nguyen expressway, this industrial park offers convenient connectivity to Hanoi’s center (only 40 km away) and is just 22 km from Noi Bai International Airport — a significant advantage for enterprises engaged in logistics or import-export activities.
Ready-built factories at KTG Industrial Yen Phong IIC — a green and sustainable choice in Bac Ninh
KTG Industrial Yen Phong IIC provides brand-new ready-built factories and warehouses, with factory sizes ranging from 878 m² to 10,507 m², and a net leasable area of 46,643 m², suitable for various manufacturing and commercial operations.
The project is designed with an ESG orientation, utilizing sustainable materials and integrating modern fire prevention systems, including fire hydrants, sprinklers, and international-standard smoke extraction systems.
Notable technical specifications of KTG Industrial Yen Phong IIC factories:
- Clear height: 8.7 m, optimized for diverse machinery and production lines
- Floor height: 0.3 m
- Floor load capacity: 2 tons/m², high-quality concrete floors with dust and crack resistant coatings
- Stable power supply: 100 W/m²
- Comprehensive infrastructure supporting operations and connectivity with local authorities
Convenient distances to key points:
- 22 minutes to Noi Bai International Airport
- 10 minutes to VSIP Bac Ninh Industrial Park
- 45 minutes to Hanoi city center
- 60 minutes to Cai Lan Port
- 120 minutes to Cat Bi International Airport (Hai Phong)
- 170 minutes to the Vietnam-China border gate
KTG Industrial Yen Phong IIC (Phase 2) site map
Thanks to strong collaboration between the developer and government agencies, KTG Yen Phong IIC not only serves as an industrial location but also provides a foundation for FDI enterprises to grow sustainably in a production environment that is efficient, environmentally friendly, and aligned with global ESG standards.
KTG Industrial Yen Phong IIC (Phase 2)
KTG Industrial Yen Phong IIC (Phase 1)
Key technical specifications:
- Height: 8.3 m (factory), 10 m (warehouse) — ideal for production lines and storage
- Floor height: 0.3 m
- Floor load capacity: 2 tons/m², surface reinforced with hardening agents, ensuring superior durability and flatness
- Power supply: 100 W/m² — suitable for high-intensity industrial production
- Fire protection system: Fully equipped with fire hydrants, sprinklers, smoke detectors, and international-standard smoke extraction systems
KTG Industrial Yen Phong IIC (Phase 1)
More than just an ideal manufacturing location, KTG Industrial Yen Phong IIC (Phase 1) is developed with an ESG orientation, emphasizing environmental considerations and energy efficiency.
The developer prioritizes eco-friendly construction materials, natural lighting design, and supports enterprises in implementing energy-saving solutions during operations.
Additionally, KTG maintains close cooperation with local authorities, providing comprehensive support to tenants in legal procedures, environmental compliance, and actual production needs.
Key connectivity distances:
- 22 km to Noi Bai International Airport (30 minutes)
- 6 km to VSIP Bac Ninh (10 minutes)
- 40 km to Hanoi city center (45 minutes)
- 50 km to Cai Lan Port (60 minutes)
- 144 km to Cat Bi Airport, Hai Phong (120 minutes)
- 120 km to Vietnam-China border gate (170 minutes)
With complete infrastructure, flexible scale, and a sustainable development approach, KTG Yen Phong IIC Phase 1 is an ideal choice for FDI enterprises, electronics manufacturing, logistics, and supporting industries seeking modern operational facilities in Bac Ninh.
Conclusion
Location of the factory directly impacts logistics costs, operational efficiency, market accessibility, and the competitive capacity of a business. A strategic location helps shorten transportation time, optimize connectivity, and facilitate easy access to major partners.
In the context of intense competition and the constantly shifting global supply chain, choosing the right factory location is a crucial step toward sustainable growth. This is not merely a site selection — it is a long-term investment strategy.
References
[1 ]Hoang Hanh (2025). Giam 30% chi phi, thoi gian lam thu tuc: Hai dieu doanh nghiep can nhat. Bao Dien tu Chinh phu. Retrieved May 25, 2025 from https://baochinhphu.vn/giam-30-chi-phi-thoi-gian-lam-thu-tuc-hai-dieu-doanh-nghiep-can-nhat-102250318110627569.htm
[2] Dieu Anh (2023). Doanh nghiep toi uu chi phi nho chuyen doi so. Bao Dien tu Chinh phu. Retrieved May 25, 2025 from https://thanglong.baochinhphu.vn/doanh-nghiep-toi-uu-chi-phi-nho-chuyen-doi-so-103230908153450919.htm
[3] Nhi, A. (2023, July 20). Coi lien ket vung la dong luc ket noi va dan dat su phat trien cua cac dia phuong trong vung. Tap Chi Kinh Te va Du Bao – Bo Ke Hoach va Dau Tu. Retrieved May 25, 2025 from https://kinhtevadubao.vn/coi-lien-ket-vung-la-dong-luc-ket-noi-va-dan-dat-su-phat-trien-cua-cac-dia-phuong-trong-vung-26542.html
