Da Nang has identified supporting industries as one of its three key industrial sectors creating competitive advantages to promote investment attraction of large-scale industrial projects into the city.

Therefore, over recent years, the city has issued many supportive policies regarding capital sources, interest rates, supply and demand connection and the innovation of modern machinery technology in a bid to promote the supporting industry development.

Enterprises learn about supporting industry products at a supporting industry connection conference held in Da Nang on November 4. Photo: Q.TRANG

Focus on investment and technology innovation

Currently, the city is now home to 110 enterprises operating or capable of engaging in production activities in the supporting industry, accounting for about 6.3% of the city’s total number of industrial enterprises.

Of which, there are 43 FDI enterprises, making up about 39% of the total number of supporting industry firms, whilst the remaining 67 are domestic enterprises involved in the field of mechanical engineering, accounting for nearly 61% of the total. However, the majority of them are small-size enterprises. Currently, there are only five enterprises operating in the supporting industry for the high-tech industry.

The Minh Thinh Loi Production and Trading Company Limited based in Hoa Hai Ward, Ngu Hanh Son District, is one of the suppliers of supporting industry products in the city. It specializes in designing and manufacturing molds, mechanical components and plastic products.

Director of the company Vo Van Loi remarks, thanks to the city’s support policies, his company has boldly purchased the over VND4 billion DMG 650V CNC milling machine imported from Germany. The modern machine can process molds and mechanical products with high precision and good surface quality, and it has the ability to integrate with high design software, bringing economic efficiency to the society.

The purchasing of the new machine facilitates the company to continue to expand and improve the manufacturing industry of precision mechanical products such as plastic injection molds, mechanical components, and plastic products that meet ISO 9001: 2015 standards and the requirements of domestic and international customers.

According to a report from the municipal Department of Industry and Trade, the majority of supporting industry enterprises in the FDI sector have participated in global or regional production and supply chains with diverse products involving the supporting industries of automotive, electronics, and precision mechanics.

In addition, some domestic enterprises have actively implemented technological innovation to produce supporting industry products. The rate of trained technical workers at supporting industry enterprises is about 30-40%, showing that the labor quality of these enterprises is quite good compared to the general level of about 20%.

Production activities at the Minh Thinh Loi Trading and Production Co., Ltd based in Ngu Hanh Son District. Photo: Q.TRANG

Developing supporting industry products

Despite their bright looks in the future, supporting industry activities in Da Nang still face a number of bottlenecks in investment attraction. In particular, the number of large-scale enterprises manufacturing and assembling finished products is still modest. There are no multinational companies or corporations producing finished products. Most of FDI enterprises are operating in assembly process.

In order to release its goal of developing supporting industry into one of the three prioritized industries for development, Da Nang has issued many policies to promote the supporting industry development. Included is a policy to support 100% of the costs for consulting, technical support, and the organization of foreign investment promotion transaction groups.

Director of the municipal Department of Industry and Trade Le Thi Kim Phuong underlined that many supporting industry enterprises are very interested in the city's support policies. Therefore, over the past time, the city has issued many policies to support these businesses.

In the coming time, the city’s industry and trade sector will focus on developing supporting industry products such as components, spare parts, materials, specialized supporting equipment, software and essential services to meet the needs for supporting industrial products of industries, especially priority areas for development.

Importance will be attached to attracting a number of multinational companies and corporations manufacturing finished products to invest in Da Nang to lead, transfer technology, use intermediate products and create spillover effects for the development of supporting industries.

Heed also will be on developing infrastructure at the Supporting Industrial Park serving the Da Nang Hi-tech Park, with give priority given to the formation of functional subdivisions for the development of supporting industries in new industrial parks.

The Da Nang authorities have already asked the Ministry of Industry and Trade to soon establish a technical center to support regional industrial development in Da Nang in 2022, as well as give a helping hand to the city to connect and attract investment in supporting industries, enhance the quality of human resources, and research and transfer technology in supporting industries.

Reporting by QUYNH TRANG - Translating by M.DUNG