The fifth Vietnam-Singapore Industrial Park (VSIP) - the latest symbol of close bilateral ties - was launched in Quang Ngai on Friday by the prime ministers of both countries.

Singapore's Prime Minister Lee Hsien Loong and his Vietnamese counterpart, Mr Nguyen Tan Dung, agreed to elevate the two nations' 40-year-old relationship into a strategic partnership.

The $337m investment is a joint venture between Sembcorp Development and a Vietnamese state-owned enterprise. It is also the first of its kind in central Vietnam: a 600-hectare industrial project, to be complemented by a 520-hectare commercial and residential development nearby.

In his speech at the groundbreaking, PM Lee noted that the first four VSIPs have brought in US$6 million of investments per hectare - almost double Vietnam's national average. Some 500 companies have signed up since the first park was launched in 1996, employing about 140,000 workers.

"The VSIPs are concrete symbols of the excellent economic cooperation between Singapore and Vietnam," he said. "They bring together Vietnam's vast industrial land and manpower resources, and Singapore's experience with industrial park management and integrated urban infrastructure solutions."

The VSIPs "fit within the larger context of Singapore's broader relationship with Vietnam", he added, and coincide with the 40th anniversary of diplomatic ties between the two countries.

PM Lee was wrapping up his three-day official visit to Vietnam, where he also formally launched a strategic partnership agreement between the two Asean members.