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Dong Nai's supporting industry overcomes difficulties

Since the beginning of the year, the supporting industry of the province has faced many difficulties due to the increase in input material prices. However, two thirds of industries that still maintain high export turnover are iron and steel products; equipment, tools and spare parts.

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Manufacturing machinery components at Friwo Vietnam Co., Ltd in Amata Industrial Park (Bien Hoa City)


According to Dong Nai Statistics Office, in the 9 months of 2022, exports of 3 industries include: textile fiber; iron and steel products; machinery, equipment, tools and spare parts account for more than 20% of the province's total export turnover. In which, machinery, equipment, tools and spare parts are more than USD 2 billion; textile fiber more than USD 1.1 billion; iron and steel products about USD 800 million.

*Find a solution to stabilize production

 In the first 9 months of this year, enterprises in the province faced many difficulties due to strong fluctuations in the price of raw materials on the world market, high input costs, affecting product prices. In the above context, there are businesses that must reduce production, but there are also businesses that have found a solution to stabilize production and export. In the field of supporting industries, a number of key production industries of the province have actively overcome difficulties, expanding consumption in the domestic and export markets.

Mr. Nguyen Van Tam, Managing Director of Kaneko Vietnam Co., Ltd in Nhon Trach 3 Industrial Park Phase 2 (Nhon Trach District) said: “Kaneko specializes in manufacturing valves for industrial machines, oil refining systems, ships, aircraft, space.. and raw materials purchased in the domestic market. However, the price of input materials has now increased by 31-42% compared to the same period last year, so the cost of the product is pushed up, the company is forced to negotiate with customers to increase the product price, but the increase only about 5-10%, so the company's profit is shrinking". According to Mr. Tam, to overcome this difficulty, the company has restructured production by shortening working time, increasing productivity to reduce labor costs. At the same time, research out new products to meet customers' needs and continue to expand production.


For products made from iron and steel, it is also difficult because of high input materials. Therefore, pre-signed contracts with partners encountered many obstacles and had to be renegotiated, including customers who accepted to increase product prices at a level corresponding to input materials, but also customers only agree to increase slightly. Raw materials imported from China and many other countries often do not guarantee on-time delivery, making it difficult for many enterprises to actively produce.


Mr. Tran Tan Phat, Head of Administration - Human Resources Department of SeAH Vietnam Steel Co., Ltd said: "The company wants to find a domestic raw material supplier, but very few businesses can meet it, so it is forced to import raw materials for production. Recently, the Covid-19 epidemic and the war between Russia - Ukraine greatly affected the supply chain, the price of raw materials increased and there was a time of scarcity. However, the company tries to overcome it by finding materials from many countries to replace it and finding ways to keep product prices from rising too high, so it can still keep production and output stable.

 * Enterprises overcome difficulties

According to enterprises, the possibility of difficulties in the last months of the year in terms of raw materials and input prices, and the cost of transportation services will not be much improved. Enterprises continue to face a series of difficulties, in their production and business plans, they have to recalculate and find ways to save at some stages to keep product prices from rising too high.

General Director of Junmay Label Textile Co., Ltd. Quach Thuan Duc commented: “Orders in the last months of the year showed signs of slowing down because some traditional customers reduced production due to shrinking output. Junmay must at the same time overcome the obstacles of finding enough raw material supply, rearranging the production process to reduce product costs and opening more consumption markets to ensure operations and income for employees. ".

According to economic experts, the Covid-19 epidemic is still complicated, some countries still have very strict controls affecting production, import and export in the country and partner countries. For example, China is the leading country in exporting raw materials for the world's industry, recently, due to the epidemic, many areas of the country have been closed, leading to a sharp reduction in the supply of raw materials, greatly affecting the supply chain. China is Dong Nai's largest raw material import market, so it is heavily affected. In order to reduce dependence on this market, Dong Nai enterprises increased their source of raw materials from other countries, such as Korea, India, Japan, and Europe.





Author: Vi Quan

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