[Infographic] Covid-19 Pandemic: The supporting industry enterprises have increasing orders
Difficulties in exports, many supporting industry businesses have diverted domestic consumption. This not only facilitates the production enterprises but also benefits them because domestic consumption can help reduce transaction time and reduce transportation costs.
It can be seen that the Covid-19 epidemic caused many industries and sectors to be severely affected, the revenue decreased by over 50%, but the supporting industry increased revenue thanks to orders.
The number of orders of supporting industry enterprises has increased sharply in recent times
Increased 40% orders
Many businesses insist that they can only keep production materials for the next 1-2 months, if the epidemic is prolonged, maybe in April onwards, many businesses have to close their factories and go bankrupt when their supply chain disrupts.
Facing this situation, enterprises desire to find ways to escape from material hunger. "In addition to expanding the import of raw materials from countries less affected by the disease, we order domestic enterprises".
Mr. Ha Quyet Thang, Director of Production and Translation Co., Ltd. Kim Long said the workers in Kim Long had to speed up production and work overtime to ensure delivery time for customers.
"The number of orders has increased more than 40% over the same period last year, especially, customers are mainly foreign direct investment (FDI) enterprises," Mr. Thang said.
The reason for the increase in orders is that these enterprises are short of production materials due to restrictions on imports from China. At the same time, foreign experts of these enterprises could not go to Vietnam to supervise, so they could not produce them and had to switch to urgent orders at domestic supporting industry enterprises.
To increase the quantity and quality of orders, businesses must invest in additional production equipment. This not only helps businesses to increase profits but also helps affirm the name and quality with FDI partners. "After this pandemic, the cooperation of supplying raw materials for FDI enterprises will continue to take place and expand more," Mr. Thang hoped.
Despite the negative effects of the Covid-19 pandemic, supporting industry enterprises continued to increase orders.
Similarly, representatives of Nam Dinh Silk Textile Joint Stock Company also said since the outbreak of the disease, due to restrictions on importing raw materials from China and South Korea, these businesses have turned to domestic production companies. As a result, the orders of Nam Dinh Silk doubled.
Another business said that before, it mainly exported cloth, but since the outbreak of Covid-19 broke out, domestic demand was high, the company turned to domestic consumption. "This will not only support domestic textile enterprises to produce more favorable but also help them benefit because domestic consumption can help reduce transaction time and reduce transportation costs," the representative said. business said.
Long-term policy needed
Although orders increased to 40%, Mr. Ha Quyet Thang could not help being worried because of the shortage of raw materials for production.
To produce supporting industrial equipment, spare parts, and components, enterprises also need to have iron and steel materials. Currently, domestic enterprises have provided a large amount of steel to the market, but some categories still have to be imported.
"If the epidemic lasts another 1-2 months, the raw materials will become scarce. Especially, if the Covid-19 epidemic lasts longer, all raw material goods will become more difficult, affecting businesses." supporting industry production ", Mr. Thang said.
The same concern, textile enterprises said, to have abundant supplies for textiles, cotton materials are supplied from domestic or imported from countries not in major epidemic areas. However, if there is a further outbreak, the domestic supply will not be enough to produce raw materials.
Long Hau Industrial Park (Long An) concentrates many enterprises operating in supporting industries
According to the statistics of the Ministry of Industry and Trade, the number of enterprises operating in the supporting industry is accounting for about 5% of the total processing and manufacturing industry enterprises. In particular, many businesses meet domestic and international needs. However, there are still some enterprises that are lacking and weak in scale and capacity, the main products are simple components, medium and low technology content, with small value in the product value structure.
Therefore, many supporting enterprises share opportunities in the immediate future, but many products are difficult to produce due to the lack of machinery and low labor skills. Therefore, in the long term, it is necessary to have solutions such as investing resources from the budget to focus on industrial development, especially supporting industries and some important basic material industries such as manufacturing steel, new fabrics, materials ... through solutions to support credit, human resources, innovation, and market development as well as tax and land incentives.