Businesses are still facing the challenge of raw material supply.

Export businesses face challenges related to raw materials and labor.

At the Vietnam Textile and Garment Group (Vinatex)'s nine-month review conference on Party building work held on September 28th, Vinatex representatives reported that in the first nine months of 2024, the consolidated revenue of the Vietnam Textile and Garment Group (Vinatex, ticker VGT) was estimated at VND 13,036 billion and pre-tax profit at VND 490 billion, representing growth of nearly 1% and 70% respectively compared to the same period in 2023. Export turnover reached USD 1,448 million, an increase of 7%. Thus, compared to the 2024 plan, Vinatex had completed 72.8% of its revenue target and 89% of its profit target in the first nine months.

Textile and garment exports in the first nine months of 2024 reached US$1,448 million, an increase of 7%. (Photo: Hai Linh)

Vinatex assesses that in the first nine months of 2024, the global economy is trending towards continued recovery, with major economies showing signs of improvement, although the pace remains slow. Global demand for textiles and garments in 2024 is still expected to decrease by approximately 3-5% compared to 2023. In Vietnam, economic, social, and business activities are beginning to recover, with positive GDP growth in the second quarter. In the first eight months of the year, Vietnam exported $28.6 billion worth of textiles and garments, an increase of 7.2% compared to the same period last year.

In the garment industry, orders are abundant due to the shift of orders from China, Bangladesh, and Myanmar to Vietnam, making production arrangements more favorable compared to 2023. While the yarn industry has recovered significantly, it still faces many difficulties as the price of raw cotton is heavily affected by speculation and logistics, leading to sudden and unpredictable fluctuations, and the main export markets, China and South Korea, have seen continuously falling prices with no signs of recovery. Overall, in the past nine months, the biggest and most common difficulty for Vietnamese textile and garment businesses has been the labor shortage.

In the construction industry, while export orders have been maintained, domestic production is facing many difficulties. According to Mr. Ta Dinh Lan, General Director of CIE1 Construction and Industrial Equipment Joint Stock Company, the export market is stable and remains at the same level as last year. However, the difficulty businesses are facing is the supply of raw materials. Due to the impact of the fluctuating global economic situation, suppliers are not stocking up on goods, so businesses have to place orders in advance, pay in advance, and wait for delivery. In addition, businesses are also facing the challenge of competing for labor, especially in the heavy machinery sector.

According to Mr. Nguyen Ngoc Hoa, Chairman of the Ho Chi Minh City Business Association (HUBA), businesses in the city are facing a situation where they have orders but are being pressured on price, while in a position of "needing work to maintain production." Along with that, new technical barriers are increasing, mainly revolving around green criteria, i.e., the ability of businesses to meet sustainable development requirements. Furthermore, a deeper analysis of the structure reveals that orders mainly come from FDI companies, leaving Vietnamese businesses struggling to make ends meet.

The Ministry of Industry and Trade continues to support businesses.

The latest preliminary statistics from the General Department of Customs show that the total value of Vietnam's import and export of goods in the first half of September 2024 (from September 1st to September 15th, 2024) reached US$28.55 billion, a decrease of 24.9% (equivalent to a decrease of US$9.47 billion) compared to the results achieved in the second half of August 2024. The results achieved in the first half of September 2024 brought the total import and export value of the whole country up to September 15th, 2024 to US$540.72 billion, an increase of 15.9%, equivalent to an absolute increase of US$74.26 billion compared to the same period in 2023.

The total value of Vietnam's exports in the first half of September 2024 reached US$14 billion, a decrease of 32.5% (equivalent to a decrease of US$6.73 billion in absolute terms) compared to the second half of August 2024. Thus, as of September 15, 2024, the total value of Vietnam's exports reached US$279.38 billion, an increase of 14.8% (equivalent to an increase of US$35.98 billion) compared to the same period in 2023.

The total value of goods imported into Vietnam in the first half of September 2024 reached US$14.55 billion, a decrease of 15.8% (equivalent to a decrease of US$2.74 billion in absolute terms) compared to the results achieved in the second half of August 2024. Thus, as of September 15, 2024, the total import value of the whole country reached US$261.34 billion, an increase of 17.2% (equivalent to an increase of US$38.28 billion) compared to the same period in 2023.

To support the business community in export activities, the Ministry of Industry and Trade stated that it will continue to closely monitor developments in markets and import-export policies of various countries to promptly inform associations and businesses. The focus will be on: the Russia-Ukraine conflict; escalating conflicts in the Gaza Strip and the Red Sea; developments in the China-EU trade conflict; trends in sustainable development and greening in EU industries; and new regulations in assessing supply chains in EU countries for export goods.

In addition, we will continue to leverage and strengthen cooperation between Vietnam and member countries of sub-regional cooperation mechanisms to secure aid and assistance from development partners and open new markets for Vietnamese goods.

Focus on boosting export promotion activities for key markets, especially maximizing the benefits offered by FTAs ​​such as CPTPP, EVFTA, RCEP… Accelerate negotiations, signing, and ratification of new FTAs ​​and economic linkages, initially with Israel and the UAE, to diversify markets, supply chains, and boost exports. Support businesses in carrying out trade promotion activities in new and potential markets that individual businesses have not yet had the opportunity to directly penetrate.

Rapidly shift towards official export channels; coordinate with domestic agencies and localities to strengthen exchanges with Chinese agencies and localities to improve efficiency and regulate the speed of customs clearance of import and export goods at border gates between Vietnam and China, especially for seasonal agricultural and aquatic products; implement measures to promote cooperation with China on border trade infrastructure and promote the construction of border trade infrastructure in northern border localities.

At the same time, we will strengthen early warning systems for foreign trade defense cases against Vietnamese export goods; combat evasion of trade defense measures and origin fraud; and continue to support businesses in responding to trade defense cases that foreign countries have investigated or are investigating.

Source: https://congthuong.vn/xuat-khau-hang-hoa-doanh-nghiep-van-doi-mat-voi-bai-toan-nguon-nguyen-lieu-349713.html