Enterprises return to "home turf", solving difficulties

In the face of existing difficulties, domestic orders are the salvation of enterprises. Although the quantity of domestic orders is not large, it is enough for enterprises to sustain production, maintain jobs and income of workers, overcoming the current difficult economic period.

Making up for shortfall

In the first quarter of 2023, the processing and manufacturing industry no longer played the role of a driving force in the province's growth with the decline of many key industries. This has been forcing enterprises to find a way to overcome difficulties.

Production activities at Duc Thanh Wood Company  in Tan Uyen city

Starting from small businesses, after many years of development, Binh Duong's wood processing industry now has large-scale wood processing enterprises with export revenue of billions of dollars per year. These factors have contributed to the wood industry's impressive growth over the past two decades. However, from the end of 2022 to the beginning of 2023, the export of wood was not very favorable when many enterprises had a decrease in orders in traditional markets. In the first quarter of 2023, the province’s wood industry saw a 41% decrease in orders. In that context, many enterprises have chosen to return home because the domestic market is considered as a potential land.

A typical enterprise for this trend is Duc Thanh Wood Processing Joint Stock Company in Tan Uyen city. According to Le Hai Lieu, CEO of the company, during the difficult period of export, the domestic market has also supported enterprises to offset revenue. If in previous years, the export proportion of Duc Thanh wood usually accounted for about 85%-86%, sometimes even 88% of total revenue, now the company sets a goal of increasing by 20% in the domestic proportion in the next year. To do this, the company is currently investing in designing, making marketing, promoting its brand name and taking care of domestic customers. “During this period, the domestic market has helped keep jobs for workers. This year, the company’s proportion of exports will decrease and its domestic rate will be enhanced", said Mrs. Lieu.

However, enterprises’ return to the domestic market has encountered many barriers. Although they have paid more attention to the domestic market, domestic products have not yet competed with the imported ones in the retail segment, especially in the common segment, but only in the high-mid class segment, or in some companies, construction works, projects, schools, etc. In fact, for a long time, only small enterprises have engaged in the production of furniture on a small scale while large-scale wood enterprises often only pay attention to export.

According to Dien Quang Hiep, CEO of Mifaco Company, the linkage of many parties is needed to to be able to participate in the chain of trading in products that are suitable to them. This will also bring many opportunities to product consumption and enterprises have bravely invested in production lines and factories, prioritizing production for the domestic market with small orders.

Grasping tastes

In the current context, footwear enterprises are also trying to overcome difficulties. For example, Nam Binh Shoes Co., Ltd. in Di An city also fell into a situation of scarcity of orders. In the face of the situation, the company has decided to change its operational direction. Instead of receiving foreign orders for production, the company has made their own products to serve the domestic market. Nguyen Quang Vu, Director of the company said: “Currently, the company makes more than 40,000 pairs of shoes every month for domestic customers, maintaining stable jobs with high wages for 230 workers. If working hard to learn and grasp the tastes of domestic customers, enterprises will succeed."

For textile and garment enterprises, they have faced supply chain disruptions, protectionism on increase, changes on goods buying trends of major garment importers in the world such as the US, Europe and Japan with priority to the selection of a supply chain capable of producing multiple stages, being concentrated in one location while being transparent about the entire production process from raw materials to finished products. In addition, importers are also interested in reducing the use of chemicals and saving raw materials by increasing the use of renewable energy. To meet these requirements, province-based enterprises need to increase linkage and cooperation with each other so that in addition to consuming each other's products, they also create overall strength and are capable of receiving larger orders, thereby participating in the supply chains of foreign enterprises and large ones.

Reported by Tieu My-Translated by Kim Tin