The end of the year is considered peak time for Da Nang businesses, especially foreign direct investment (FDI) enterprises, to ramp up production in order to ensure timely delivery of contract products for their domestic and foreign customers. In particular, many FDI enterprises operating in Da Nang have received orders from their customers until the end of the first quarter and the middle of the second quarter of 2022.

Many FDI enterprises in Da Nang are ramping up production to in order to ensure timely delivery of contract products for their domestic and foreign customers. The picture is taken at the Scavi Hue Company in Da Nang located in the Industrial Park, Son Tra District. Photo: KHANH HOA

The recovery is gaining momentum

According to the Authority of the Da Nang Hi-Tech Park and Industrial Parks, dozens of companies operating in local industrial parks have recruited new workers to expand production for exports over the past two months.

Mr. Nguyen Quan Hoang, the Director General of the Foster Electric (Da Nang) Company Limited located in Hoa Cam Industrial Park, Cam Le Districtl, said that despite being strongly affected by the COVID-19 crisis, the company has yielded positive outcomes in over the past ten months. The value of exports from the company amounted to US$ over 18 million, while imports to the company amounted to US$ 7.1 million.

The company’s recovery from the COVID-19 pandemic is showing momentum. Hence, the company now believes to surpass its production target set for 2021, as well as to ensure timely delivery of contract products for its customers. The company is planning to hire more employees to expand production in 2022.

Mr. Hiroyuki Ishi, the Director General of Midori Safety Footwear Vietnam Company, and Vice Chairman of Japanese Business Association in Da Nang, said that all members of the association have safely restored their full production as the resumption of the travel and circulation of goods between countries around the world and localities across Viet Nam allow businesses to operate more conveniently. Many Japanese businesses in Da Nang have received orders until the middle of next year.

According to the municipal Department of Industry and Trade, FDI companies operating in Da Nang mainly involve in the manufacture of computers, electronics, components, machinery and equipment, spare parts, and more. These businesses have recovered fairly quickly from COVID-19 after resuming their production.

The value of exports from FDI companies accounted for 53.07% of the total value of exports from the whole city in the 2016- 2020 period. Between January and October of 2021, Da Nang’s total exports reached an estimated US$ 1.425 billion, a rise of 12.2% compared to the same period of last year. In detail, exports from FDI businesses reached an estimated US$ 770 million, up 12.4% from the same period in 2020 while that from domestic businesses were estimated at US$ 655 million USD, up 11.9%.

Paying significant contributions to the city’s budget

Mr Huynh Lien Phuong, the Director of the municipal Investment Promotion Agency, said that the FDI businesses have paid significant contributions to Da Nang budget, helping the city attract even more FDI inflows, thereby driving the city’s economic growth.

In the 2016-2020 period, FDI businesses contributed 9.4% of Da Nang’s GDP, and accounted for 11.6% of the city’s GDP growth rate. Besides, FDI enterprises have continuously increased their contribution to the city budget year after year.

During the period, the city's overall tax revenues were estimated at VND 118,180 billion, of which, 21,921 billion VND were paid by FDI businesses and VND 23,197 billion came from the non –state sector.

In addition, FDI businesses played an important role in creating job opportunities for people in Da Nang and its neighbours.

A combined total of over 1,238 million jobs have been created across economic sectors in Da Nang, of which, more than 91,000 were offered by non-state enterprises, accounting for 73.5% of total employment in the city while more than 19,000 were created by FDI enterprises, accounting for 15.37%.

In particular, FDI enterprises significantly contributed to promoting export diversification and growth in Da Nang. Exports from these companies accounted for 53.07% of the city’s overall export value.

Many FDI enterprises also played a vital role in helping the city boost its global integration and promote its images to other domestic and foreign localities, establish bilateral relations with them. For the rest of 2021, FDI businesses will continue their efforts to overcome difficulties and challenges triggered by the COVID-19 pandemic, seek solutions to increase sales and profit from existing customers, as well as break into new markets. With the active support from the Da Nang government to overcome difficulties and challenges posed by the COVID-19 crisis, the FDI businesses are expected to continue gaining even more success in the coming time.

Reporting by KHANH HOA – translating by H.L