Enterprises in supporting industries busy with orders during COVID-19
While other industries complain about the lack of jobs, enterprises in supporting industries have been operating at full capacity to satisfy a high number of orders.
Amid widespread job losses, hundreds of workers at An Phat Industrial Engineering Co Ltd in Dong Nai have had to work overtime to implement orders from partners.
“We have to expand production capacity to be able to deliver products on schedule,” An Phat’s CEO Nguyen Hoa An said.
An Phat is one of thousands of enterprises in the supporting industries in the eastern part of the southern region that have seen numbers of orders increasing rapidly since the epidemic outbreak.
Since FIEs cannot import components when other countries apply measures to prevent the coronavirus spread, they have had to seek domestic supply sources.
|According to the Binh Duong provincial Department of Industry and Trade, some woodwork, electromechanical and ceramic enterprises in the province have enough orders until Q2, and their input materials are large enough to maintain production until May.|
Kim Vinh Thang Co Ltd in Bien Hoa 1 Industrial Zone also reported an increase in orders.
“We just had a working session with Japanese partners and found that the demand for components from them is very high. We can expect more orders in the time to come,” said Kim Vinh Thang’s CEO Phan Van Tu.
According to the Binh Duong provincial Department of Industry and Trade, some woodwork, electromechanical and ceramic enterprises in the province have enough orders until Q2, and their input materials are large enough to maintain production until May.
Le Tri Minh, head of the Dong Nai provincial association of enterprises in supporting industries, confirmed that the number of orders has increased by 30-40 percent compared with the same period last year. Most orders are from FIEs.
Minh said FIEs lack components for manufacturing because of the restrictions in importing products from China. Meanwhile, foreign experts working for FIEs cannot come to Vietnam to supervise production. Therefore, FIEs decided to place orders with domestic enterprises.
Though more opportunities are coming, Vietnamese enterprises fear they will miss them because of the lack of input materials.
“We need to import some specific steel and iron products. It’s OK now, but if the epidemic lasts one or two more months, material supply will be short,” Tu of Kim Vinh Thang said.
Vietnam has now become more aware of the importance of domestic supplies and the need for development of domestic supporting industries.
According to Tran Duc Dan, director of Casum Shoes JSC in Bien Hoa City, previously, shoes companies had to import 80-90 percent of materials, but now they have to import 60-70 percent of materials. The localization ratio is up to two thirds for some products.
Instead of following procedures to become nvestors, foreign enterprises are preferring to ‘take a shortcut’ by taking over Vietnamese businesses, which allows them to penetrate the market more quickly.
Seeking new markets, making new products and following new business thinking are actions now being taken by Vietnam’s businesses to overcome current difficulties.