Developing Key Industrial Products

6:19:12 PM | 9/12/2011

The key industrial product development programme is a development assistance activity of Da Nang City launched since 2005. After more than 5 years of enforcement, producers of key industrial products have witnessed significant growth. To date, the programme has met all requirements recommended by the municipal authorities.
Mr Le Viet Tuoi, Deputy Director of Da Nang Department of Industry and Trade, said: The scientific basis of the key industrial product development programme is the law of industry-specific or locality-specific economic system development. The overall economy usually makes breakthroughs after some industries and products of highly competitive advantage are invested and developed. The programme was also created from the request of using development assistance capital effectively. It is unadvisable to scatter money into all economic components, but focus on some products or industries with highly local competitiveness and comparative advantages. After more than five years, the programme basically achieved all objectives. At present, eight companies are involved in the programme and they will be offered incentives and preferences concerning credits, labour training, and consulting costs.
In the past over five years, participatory enterprises have witnessed growth rates and made positive contribution to the local State Budget. Typical examples include Da Nang Rubber Joint Stock Company, Thuan Phuoc Seafood and Trading Company, Hoa Tho Garment and Textile Joint Stock Company; Vinatex Da Nang; and Central Seafood Export Import Joint Stock Company.
These companies have gradually shifted from simple subcontractors to direct exporters. Up to 60 - 80 percent of Vietnamese apparel and footwear are exported on FOB basis. Therefore, the structure of product prices, higher contributions of domestic resources bring in bigger profits. They will have capital for equipment investment to boost performance results.
Given the limited internal resources and adverse impacts of global economic crisis, the programme is evidence of the concern of municipal leaders as they enable companies to reduce costs and lower prices to ship more to the US, the EU and Japan. It also supports technology transfer and deployment of technological management system application. In addition, the programme encourages local producers to develop products that may become key industrial products in the future, encourages them protect brand names, improve efficiency of production and business activities in a professional and sustainable manner, enhance quality and competitiveness of products.
Notably, the biggest success of this programme is that, through the development of key industrial product companies, it has created a driving force for the development of other businesses. Nonetheless, the programme has certain limitations: Participants must have their products certified as key industrial products. This requirement narrows the scope of selection of participants and limits its ripple effect. The amount of support remains too small in relation to what the company has used. Mr Tuoi stressed: "In the coming time, if the programme is continued, we will propose the city government adjust some contents, especially relating to participation, content and level of support. Then, the programme will produce better effects on the city.”
Thanh Tan