Not easy for businesses to be self-sufficient in raw materials

The export-oriented production, while the supply of raw materials is limited, enterprises in Dong Nai in particular and the whole country in general are heavily dependent on imported materials.

For sustainable development, the feed industry needs to be more proactive about raw materials

For sustainable development, many businesses are looking for ways to proactively supply raw materials, but so far, this is still a problem with no suitable solution.

Imported materials account for the majority of input costs

On the national scale, according to the assessment of the Ministry of Industry and Trade, the ability to participate in the regional and global value chains of Vietnamese industrial products is still very limited, mainly participating in the processing and assembling stages with low added value. Major export industries such as textiles, footwear, and electronics import more than 90% of raw materials. Currently, Vietnam imports most of the input materials for export industries, so it is heavily influenced by world markets.

Enterprises in the supporting industry in the field of rubber and technical plastics, Director of An Phat Industrial Engineering Company Limited (Bien Hoa City) Nguyen Hoa An said that the Covid-19 epidemic and the world's difficulties have made importing raw materials more and more difficult. “Along with difficulties due to fluctuations in labor, the competition in purchasing raw materials in the market is increasing. If not proactive, businesses will lose out when the situation is tense," said Mr. Nguyen Hoa An.

In Dong Nai, 7 months of 2022, enterprises in the province imported more than 12 billion USD of goods, raw materials for production with high increase compared to the same period last year, such as corn, iron and steel, textile materials. garment... In which, small and medium-sized private enterprises imported more than 2.6 billion USD, up 19.37%, which is the group with the fastest growth rate. Imports from domestic enterprises increased sharply, showing that small and medium enterprises in the province are well aware of the adverse effects of the world market, so they have been somewhat proactive to respond. The increase in the import of raw materials and materials for production in order to store and prevent adverse fluctuations that may occur in the next time.

Find solutions to self-control

  Vietnamese enterprises and enterprises with foreign direct investment (FDI) are both trying to be self-sufficient in raw materials from the country, but it is not easy. As an animal feed processing enterprise headquartered in Bau Xeo Industrial Park (Trang Bom District), Woosung Vietnam Co., Ltd (100% Korean investment capital) has invested in Dong Nai for 19 years in livestock and poultry feed industry. Belonging to a small and medium-sized manufacturing enterprise with 150 employees, the company has built more than 200 product sales agents in the Southeast, Southwest and Central Highlands regions. The difficult problem of raw materials is a headache for businesses and is having to find a way to cope. The company is working with partners across the country to build raw material areas for food processing. However, getting a stable source of raw materials for production is not easy. The scale of agricultural products and corn in the country is still small, and it does not meet the standards of nutritional quality.

Similarly, Phuong Hoang Minh Co., Ltd (Long Thanh District) is an enterprise specializing in supplying raw materials for monosodium glutamate production. Mr. Hoang Minh Phuong, director of the company, shared that the process of urbanization taking place in localities in the region has reduced the area of land for raw material production. It is increasingly difficult to find raw materials, and the transportation costs are expensive from far away, making production and business efficiency limited.

Other manufacturing industries such as garment, wood processing is always in the top of high export value, but still have not solved the problem of dependence on imported materials. Dong Nai Wood and Handicraft Association as well as its member businesses are trying to coordinate with localities inside and outside the province to build sustainable raw material forests with the Sustainable Forest Product Processing and Production Project to 2025, orientation to 2030.