Enterprises strive to keep production and export

Producing machinery components for export at Boss Industrial Co., Ltd. Song May Industrial Park (Trang Bom District)

According to the Department of Industry and Trade, the industrial production index in the third quarter of 2022 decreased by nearly 0.4% compared to the second quarter of 2022. The reason is that the supply of raw materials has decreased sharply, the price of raw materials has increased, many enterprises do not have production orders. 

*Reduce export orders

Footwear; textile; computers, electronic products and components; textile fiber; wooden product; rubber; cashew nuts are products whose production and exports decreased in the third quarter of 2022. The main reason is due to the war between Russia and Ukraine, which has caused oil prices to rise, leading to a series of escalation in raw materials and transportation. At the same time, the Covid-19 epidemic still directly affects many countries, causing factories to close, reduce capacity, and disrupt the supply chain of raw materials.

Mr. Luu Chau Bang, Administration and Human Resources Director of Vietnam Center Power Tech Co., Ltd in Nhon Trach 2 Industrial Park (Nhon Trach District) said: “Over a month now, the company's orders received are only 2/3 compared to the first months of this year. In which, orders decreased the most were in Europe, India, and the United States. The company has reduced working hours for workers and is trying to find new orders from other markets." According to Mr. Bang, the company's products are batteries and accumulators and have been exported to difficult markets such as Europe and the United States, Therefore, when finding other markets to compensate, it is not difficult to meet the quality and design requirements of partners. However, businesses changing to a new market also require time to understand needs, offers, plan production ...

 Economic difficulties textiles, wood products, shoes, computers, electronic products and components are not the top priority items for procurement. Therefore, many consumers in Europe, the United States and some countries have cut back on spending and shopping. In addition, in 2021, many retailers around the world, concerned that the supply chain would be broken, causing scarcity of goods, have ordered in large quantities, currently having a lot of inventory, so they cut orders.

 Mr. Le Van Danh, Deputy Head of the Dong Nai Industrial Zones Authority said: " Enterprises in the wood, footwear and textile industries, their orders are reduced by up to 30%, so they have to reduce their factory capacity. Underemployed workers must take unpaid leave, vacation, Saturday and Sunday off. This has a significant impact on economic recovery and development in 2022."

*Expanding export market

In 2022, global GDP may grow only 3.2% and in 2023 it is likely to only reach 2.9%. The reason is due to the impact of two large economies, the United States and China, with low growth rates. In 2022, the US economy may grow only 2.3% and in 2023, 1%. Similarly, China's 2022 GDP growth forecast is down to 3.3%, due to the Covid-19 outbreak that has led to many major cities in the country having to blockade, causing disruptions to the world supply chain. .

The United States is Dong Nai's largest export market, accounting for about 30% of the province's total export turnover. Therefore, the decline of this market will greatly affect the production and export of enterprises in the province. China is currently the largest import market of raw materials for production in the province, so fluctuations in the above market will greatly affect the province's production. Currently, the Covid-19 epidemic is still complicated, if China continues to blockade the affected provinces, it will greatly affect the supply of raw materials for production of Dong Nai as well as the whole country.

 Mr. Le Duc Vinh, Human Resources Administration Director of FICT Vietnam Co., Ltd in Bien Hoa 2 Industrial Park shared: “Over the past time, China imposed a blockade of a number of provinces and cities, making the goods of many factories unable to ship, leading to many factories in Vietnam lacking input materials for production.. FICT Company was also hit hard. Currently, the above situation has been improved, but the delivery time is not guaranteed, making it difficult for businesses to fulfill orders.

According to enterprises, the production situation of the last months of 2022 and 2023, continues to face difficulties in sourcing input materials for production and output for products. Therefore, businesses must be flexible in sourcing raw materials in the country and other countries outside China to compensate, and at the same time must make efforts to connect with foreign trade counselors to meet foreign businesses to find more orders.