Difficulties facing industrial sector

Published: January 11, 2018

Da Nang’s industrial production value hit 50,248 billion VND in total last year, up 8.8 % against 2016.  The municipal Department of Industry and Trade, however, noted that these figures were really lower-than-expected results in the industrial sector.

Inside the Tan Long Factory owned by the A Chau Architecture and Trading Co Ltd
The Tan Long Factory owned by the A Chau Architecture and Trading Co Ltd (Photo: Khanh Hoa)

It was reported that some of the city’s key industries recorded significant growth last year against the same period of the previous year. 

In particular, the processing and manufacturing industry increased by 9%, electricity production and distribution 11.8%, mining 25.5%, and water supply and garbage treatment 10.4%.

Certain other manufacturing industries, however, saw a significant drop in their productivity due to unfavourable consumer markets. 

In detail, footwear decreased by 11%, papermaking 6.7%, printing activities 4.2%,  textiles 2.5%, construction materials 2.1%, and the manufacture of other items (excluding   automobile parts) 0.27 %.

The A Chau Architecture and Trading Co Ltd, which has 20 years’ experience in the papermaking and packaging industry, is now facing some tough challenges in its production activities.  The main reasons were thought that there was a rise in the costs of raw materials whilst the selling price of the company's products has not yet been adjusted. 

Mr Ha Ngoc Thong, the company’s Director, said his business is focusing on upgrading its machinery system in a bid to boost its competitiveness and gain even more success this year, especially in the current context of deeper global integration.

Mr Le Duc Hoai, the Director of the Huynh Duc Trading Service & Manufacturing Co Ltd, pointed out to the fact that a current shortage of support industries and preferential investment attraction policies have been still amongst the barriers to the growth of  the city’s industry sector over recent years.

In reality, some of the local industrial businesses are small-scale and spontaneous, and they are now encountering some difficulties relating to their production and business premises, their investment capital and other related matters. 

Another issue is that the city's land lease fees and its labour costs are still higher than those of other Vietnamese localities.

Meanwhile, the city has yet to attract well-known global brands which, in turn, will help to inspire more foreign investors to pour their money into the industrial sector.

According to the latest statistics from the municipal Department of Industry and Trade, since the start of this year, the industrial and hi-tech parks have together attracted a total of 32 projects with a total registered investment of 1,700 billion VND, of which 11 are FDI ones totalling over 1,021 billion VND.

In an attempt to offer new business premises for investors from both home and aboard, the city leaders have already asked for permission from the national government to develop 3 new industrial parks (IPs) covering a total area of over 1,000ha.  They are the Hoa Nhon and Hoa Ninh IPs in Hoa Vang District, and the 2nd stage of Hoa Cam IP in Cam Le District.

Apart from the development of the land resources for business and production purposes, the city will enhance its administrative reforms, especially its land-related procedures. 

Furthermore, importance will be attached to issuing even more industrial support policies regarding the development of brand names, support industries, and technological innovation.