Hundreds of small and medium sized enterprises (SMEs) in Da Nang now find it very hard to access business premises in industrial parks (IPs) in order to expand their production activities.

Mr Nguyen Xuan Son, the Director of the Huong Que Production-Processing-Import Export Trading Company Limited, said, in 2015, his company was set up with only 4 employees working in a 125m² house in a residential area in Lien Chieu District’s Hoa Khanh Nam Ward.

To date, the total number of Mr Son’s employees has increased to over 100; hence, it must rent additional 4 houses nearby to meet the growing demand for business expansion.

“If the company has a more spacious business premise, it can employ more than 300 people in the next 2 or 3 years, thereby making more contributions to the city budget”, said Mr Son.

Mr Son also complained that he has repeatedly asked for permission from the city authorities to rent 2ha of land in Dai La Village, Hoa Son Commune, Hoa Vang District for the purpose of expanding production activities, but, until now, no final decision from the municipal government has yet to be issued.

The businesses’ production activities have been adversely affected by the current rapid urbanisation in the city, and the site clearance work to implement the city’s urban development projects. 

Manufacturing establishments in residential areas can cause noise and harmful air effluents, which negatively affect the health and daily lives of the local residents. For this reason, the owners of these businesses have become aware of the need to relocate their production facilities far away from the residential areas to expand their production. But, how they can access business premises for production activities is still an aching issue. 

Encountering the same trouble with Mr Son, Mr Nguyen Trong Khai, the owner of a Cam Le District-based mechanic company, said due to the little chance to access land in local IPs; so, his company has to rent a land area owned by the city-based military forces to construct a factory. However, it is the fact that once the leased land is suddenly taken back by its owner, his company would be on the verge of production suspension, and face worse issues.

In Cam Le District alone, there are over 200 businesses operating there are in desperate need of land for production activities. In reality, many of them each cover only a few hundred square metres of the district’s residential areas. 

According to Mr Nguyen Van Ly, the Standing Vice Chairman of the city’s Small and Medium-sized Enterprises Association (DANASME), a total of about 21,000 businesses now operate across the city, of which 97% are medium or small in size.

However, these types of enterprises have yet to benefit from the city-issued support policies. Many SMEs find it very difficult to rent land in the IPs because they are required to rent too large areas, and pay lease fees as a one-off for a 50-year term.

Da Nang is now home to 6 dedicated industrial parks (IPs) covering a total area of over 1,066ha. They are the Hoa Khanh, expanded Hoa Khanh, Da Nang, Lien Chieu, Hoa Cam and Da Nang Seafood Services IPs. The majority of rentable space at these IPs and a local industrial cluster (IC) have been leased by investors.

According to Mr Tran Van Son, the Director of the municipal Department of Planning and Investment, in line with the city’s project for making adjustments to the development of local IPs by 2020, the city is planning to 4 more IPs, namely the 2^nd phase of the Hoa Cam IP, the Hoa Nhon IP, the Hoa Ninh IP, and the Hoa Son IP.

Apart from the 4 new IPs, the city authorities have already completed related procedures to establish new ICs in Hoa Vang and Lien Chieu districts for small and very small-sized businesses in the near future, including the Cam Le and the Hoa Nhon ICs.