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Businesses are busy producing orders until the end of the year

Summary

The Covid-19 pandemic in Vietnam has disrupted the supply chain, but many manufacturing industries are still seeing high growth momentum. As a result, they still have an abundant amount of orders, even more than before the pandemic.

Updated on : 06-09-2021

Increase higher than before the pandemic

 

As market demand improves as the pandemic is controlled, the prices of Vietnam's export goods also increase. For example, in textile and garments, the Vietnam Textile and Apparel Association (VITAS) said in the European Union (EU), the value of 100 kg of cotton T-shirts produced in Bangladesh in 2020 will decrease by 1% compared to 2019, down to 1,091.5 euros, while products of the same category made in Vietnam increased by 3%, reaching 2,157.9 euros. In agricultural products, the price of rice increased by 18.6%, reaching US$547 per tonne (at the beginning of April 2021); coffee increased by 6.8%, reaching an average of US$1,801 tonne; rubber increased by 14.1%, reaching an average of US$1,660/tonne; pepper price increased by 31.5%, reaching an average of US$2,879 per tonne.

Rising prices and abundant orders have helped businesses recover and continue to serve the growth target of the economy.

Sharing about the reason for the increase in orders, Than Duc Viet, General Director of Garment 10 Joint Stock Company, said that in 2020, many experts predicted that the order situation in 2021 may not be good, but the reality has been completely different. In contrast, the business had orders until the end of the third quarter. This is partly due to the firm having a strategy to import orders from the fourth quarter of 2020 for 2021 at reasonable prices. The business also accepts orders for non-traditional products, because May 10's main products are shirts and vests, but currently, vests have not recovered as before, so the company has received orders to make other products. In particular, competitive markets such as Myanmar, Cambodia, Bangladesh and India are currently suffering political instability or have no effective anti-pandemic measures, so customers have moved orders to Vietnam in the short term.

Similarly, with the wood industry, a representative of the HCM City Handicraft and Woodworking Association (HAWA) said many member enterprises have had orders until the third quarter, a few have reached the end of the year, and many businesses said the growth rate was better than before the pandemic.

In the industrial field, Lilama18 Joint Stock Company said it has exported many large orders to countries around the world. In 2020, many projects had to be postponed due to the pandemic, but in 2021, the economy gradually recovered, so Lilama18 restarted many projects such as the project of manufacturing cranes for export to India by customer KOCKS ARDELT and the project of manufacturing cranes for export to Hungary. Lilama18 also negotiated and signed a number of orders, notably an order to process blast furnace shells shipped to Ukraine.

Take advantage of opportunities from FTA

The fact that businesses have an abundance of export orders is a good sign for the economic recovery, but how to maintain and continue to promote is an issue that needs some focus in the time to come.

According to Mac Quoc Anh, Vice President and General Secretary of the Hanoi Association of Small and Medium Enterprises, businesses that have ensured the standards set in the international supply chain will still receive orders from partners. But to ensure this volume of orders in the long term, they have to focus on investing in machinery, personnel, and training to meet international standards. When enterprises achieve that standard, not only in the domestic market but also abroad, it is much more convenient to participate in the supply chain of foreign enterprises and corporations.

According to experts, businesses need to take advantage of opportunities from FTAs. According to Do Thi Thu Huong, Vietnam Trade Counselor in Canada, Vietnam has emerged as a bright spot for Canadian businesses when sourcing goods and production locations, especially after the CPTPP came into force. Joining the CPTPP also makes Canadian businesses more confident in Vietnamese goods as the two countries follow the same principles. Therefore, Huong said that Vietnamese businesses need to be more proactive in grasping incentives within the framework of the CPTPP, especially import tax incentives.

However, the risk of the pandemic is always present and can have a strong impact on the goods purchase and sale situation of Vietnamese enterprises. In early June, the Purchasing Managers' Index (PMI) report for Vietnam's manufacturing industry released by IHS Markit showed the latest Covid-19 outbreak in Vietnam has reduced the PMI to 53.1 points in May 2021, from 54.7 points the previous month.

Despite many difficulties, the prosperity in business and export of goods still makes the business community more confident in economic recovery. It is important that authorities also accompany businesses, not only supporting measures, but also setting long-term solutions, creating a foundation for the development of the manufacturing industries and attracting partners.

By Minh Chi/Kieu Oanh