Industry: A Major Driving Force Da Nang's Economy

Central Da Nang City has attained high industrial growth rates over the past years with almost all targets being met. In the 1998-2003 period, the average annual industrial growth of the city was 20.3 per cent, a relatively high level in comparison to the average rate nationwide. Da Nang’s 2003 industrial production reached VND5,873 billion (US$374.1 million), 2.6 times higher than that in 1998. The figure accounted for 1.83 per cent of industrial outputs of the country, compared with a proportion of 1.49 per cent in 1999.

The city’s industry has posted many positive changes over recent times, with the state sector still holding a dominant role, accounting for 63.4 per cent of industrial production in 2003. The proportion of industrial output of centrally-run state enterprises rose sharply to 48.7 per cent in 2003 from 30 per cent in 1998. Foreign-invested and private sectors saw the industrial proportion decreasing slightly, however, they still obtained high industrial growth in the 1998-2003 period with respective annual growth rates of 20.9 per cent and 16.2 per cent.

The manufacturing industry affirmed its important role in the city’s industrial sector with unceasing growth in its proportion over recent years. Within the manufacturing sector, there has been an increasing proportion of fields using high technologies, such as metallurgy, electronics, chemicals, rubber and plastics. Other industries with advantages, such as fish processing, garments and textiles, footwear and construction material production continued to develop and actively contribute to the industrial growth of the city.

Export values of industrial products have always accounted for a high ratio in the total export revenues of Da Nang (58.4 per cent in 1998 and 60 per cent in 2003). The city reported an average export growth of 10.5 per cent a year in the 1998-2003 period. Da Nang’s industrial goods were exported to 29 new countries, bringing the total export markets to 69.

Development Strategy 2010

Da Nang targets to reach an average growth in terms of industrial production of 22-24 per cent per annum in the next 10 years. By 2010, total industrial production will climb to VND24.5 trillion, accounting for a major portion of the city’s gross domestic product (GDP). Employees in the industry sector will make up 38-40 per cent of the city’s labour force of around 150,000. Export values of industrial products will account for 60 per cent of total export revenues in the locality. In light of these targets, total development investment for the industry sector is estimated at around VND20 trillion in the 2005-10 period.

The garment, textile and footwear sector will intensify its usage of domestic input materials and shift to direct manufacturing from outsourcing for foreign partners. Projects that produce materials will be prioritised. Manufacturing networks of the sector will be expanded into rural areas in order to benefit from cheap labour. The average industrial production growth of the sector is expected at 21-22 per cent per annum by 2010.

The chemical, rubber and plastic sector will focus on key products including rubber tires, industrial chemicals and new plastic products in order to achieve an average annual growth of 26-38 per cent by 2010.

The engineering and metallurgy sector is encouraged to manufacture refrigeration products and electronic home appliances.

Furthermore, central Da Nang city will concentrate on developing software products, making it one of the three biggest software centres in the country with an average annual growth of over 50 per cent by 2010.

With great efforts from local authorities combined with the advantages and incentives for development of the city, Da Nang’s industry sector will strongly develop in the coming time to become the city’s major driving-force behind economic development.

• MINH KY