Enterprises actively reserve raw materials for production

​Enterprises in the province imported nearly US$9.7 billion in the first 6 months of 2021, accounting for about 5% of the country's import turnover and increasing by nearly 42% over the same period last year. Most of Dong Nai's imported products are input materials for industrial production.

Dong Nai Garment Corporation Joint Stock Company has imported reserve materials from different sources for its production

* Purchase materials from many sources

Since the beginning of the year, Dong Nai enterprises have received more orders than in 2020, but because of the complicated situation of the Covid-19 epidemic, enterprises are forced to actively find more different sources of raw materials both at home and abroad to ensure their production. Previously, most businesses only focused on buying raw materials from China, Taiwan, India, and Korea, but now they have expanded to countries in the ASEAN region, the United Arab Emirates, Europe, the United States, etc. In addition, many enterprises can find input products in the domestic market.

Mr. Bui The Kich, Chairman of the Board of Directors, General Director of Dong Nai Garment Corporation said: “Previously, the company mainly bought raw materials in China, Taiwan and Korea. But in early 2020, when the Covid-19 epidemic occurred, the supply of input products was scarce, the company found more partners to supply raw materials from the United States, Australia, Japan, and Germany. Therefore, since the beginning of the year, garment orders have increased, but the company does not worry much about the input materials." According to Mr. Kich, the company is looking for more suppliers of fabrics and accessories for garment from domestic enterprises. There are export shipments, raw materials purchased domestically reach 50-60%.

Many enterprises in other fields such as textile fibers, electronics, mechanics, wood products, etc. also increased their stock of raw materials for production to be proactive when the market had great fluctuations. In the first 7 months of this year, input materials for production continued to increase and increased by 30-80% compared to the previous year and showed no sign of decreasing, so raw material reserves will help businesses feel secure with the orders they already signed.

*Avoid depending on the limited markets

The global Covid-19 pandemic has not been controlled, the number of infections in many countries is still increasing, and industrial production has been severely affected. In addition to disease prevention, companies carefully reorganized their production and business plans. Specifically, from the orders signed, the companies have diversified their partners to supply domestic and foreign input products to avoid dependence on a few markets, when unforeseen events occur, they can't cope with them. The above problem is not only for businesses in Dong Nai, but businesses across the country and many other countries have also encountered in 2020.

Over the past time, many large corporations in the world have sat down to calculate the reallocation of supply chains to avoid being too dependent on a few markets, when natural disasters or epidemics occur in countries on the supply chain that are easy to interrupted, affecting a series of other manufacturing plants around the world.

Mr. Nguyen Duc Thuan, Chairman of the Vietnam Leather, Footwear and Handbag Association shared: “Supplies for Vietnam's footwear and handbag industry are mainly imported from China, so in February 2020, the Covid-19 epidemic outbreak in this country, many factories had to suspend operations, leading to many footwear and handbag enterprises in Vietnam suffering from a lack of production materials. After that, enterprises in the footwear and handbag industry in Vietnam managed to source materials from many different countries.

However, in a short period of time, it is not easy to find materials from other markets to replace, enterprises have to wait for another 2-4 months. Besides, the price of materials purchased from other markets is often higher than that of China, but businesses still accept to implement the orders signed.

About 1.5 years ago, many industries fell into shortage of raw materials, so it was necessary to diversify supply sources such as: textiles, footwear, wood products, machinery and equipment, tools and spare parts, computers, etc. electronic components, plastics, chemicals, etc. Therefore, businesses have also found more markets to supply other input products.

Vi Quan