The province overcomes difficulties, attains high-growth exports

Despite many difficulties, the province's import and export turnover of the first quarter of 2022 recorded high growth rates compared to the same period last year, was estimated at more than US$9 billion, an increase of 9.8%.

Footwear production for export at Dai Hoa Company (Tan Uyen Town).

Processing and manufacturing industry retains the dominance

In the first quarter of 2022, despite many difficulties, businesses were active in raw material supply sources, changed approaches, launched new products, industrial production activities gradually recovered, import and export turnover grew strongly. In particular, the processing and manufacturing industry increased by 7.14% over the same period last year, signaling an optimistic prospect, while raw materials supply and transportation encountered numerous difficulties. Key industrial production sectors had a large number of export orders compared to the same period in 2021.

Being ready to adapt to the new condition after the pandemic, over the first 3 months of the year, the textile and garment industry continuously made efforts to recover and develop. Export turnover of this industry is estimated at US$703.1 million, up 6.5% year-on-year, accounting for 8.1% of total export turnover. In March 2022 alone, its export turnover was estimated at US$206.9 million, an increase of 2.8% compared to the previous month. Currently, textile and garment enterprises strengthen yarn-textile-garment linkages to increase added value and flexibility in their business model. This industry is also improving production capacity, constantly updating new and modern models, makes in-depth investment, employs automation to reduce labor and investment capital to aim at green and clean production, while developing a long-term financial strategy for the new cycle of in-depth, technological investment to create an automated textile garment industry.

The leather shoe industry is evaluated to have more favorable conditions than the garment industry, as advanced technologies into production were applied more strongly in the first quarter of 2022. Iron, Production Director of Dai Hoa Company (Tan Uyen), said that in order to diminish labor dependence, the company strived to invest in automation lines to fulfill orders. In the first quarter of 2022, the company made efforts to process large orders and gained good results.

It is expected that in 2022, the company would achieve a growth rate of 10-15% compared to 2021. So far, this company has enough orders for until the third quarter of 2022. Due to the volatile import and export situation, the company also negotiates with customers about the price of products. In terms of logistics, despite the increase in prices, the company is provided with enough containers for export. On the workers' side, the company does not increase too much overtime but focuses on improving labor productivity, preserving the health of workers for a long-term development.

With optimistic signals and resilience from the leather shoe industry, accumulated over three months, export turnover is estimated at US$491.6 million, up 1.7% over the same period last year, accounting for 5.7% of the total export turnover. In March 2022 alone, export turnover was estimated at US$150.8 million, an increase of 3.5% compared to the previous month.

In order to guarantee the supply of raw materials for production, enterprises also increased the export of raw materials. Hence import turnover over 3 months was estimated at US$5,974.7 million, up 5.7% over the same period last year. In March 2022 alone, it was estimated at US$1,985.5 million, up 4.2% from the previous month. The imported items were mainly machinery, equipment, tools, spare parts, fabrics of all kinds, textile materials, garments, leather, plastic shoe raw materials, iron and steel of all kinds.

To take advantage of free trade agreements

According to the Provincial Department of Industry and Trade, in the first quarter, important export markets, such as the US, South Korea, Japan, Taiwan, Hong Kong, had many improvements. Key export sectors strived to take advantage of opportunities from Vietnam’s free trade agreements (FTAs) to boost exports.

However, for the textile and garment industry, Phan Le Diem Trang, Vice Chairwoman of the Provincial Textile and Garment Association, said that the problem of logistics cost need to be solved, currently this cost accounts for 9.3% of total product cost, transportation cost is three times higher than the average of the last 5 years. Disadvantages in exchange rates cause the competitiveness of Vietnam's textiles and garments to be lower than competitors; labor imbalances, enterprises in the South still lack labor, while this region accounts for about 40% of the total export turnover of the whole industry. Although textile garment market is flourishing, many rivals of Vietnamese textiles, such as China, Bangladesh, India..., have also accelerated and made many efforts to make up for the turnover shortfall in 2021. The textile and garment industry strives to take advantage of FTAs to expand its market.

Assoc. Prof. PhD. Pham Tat Thang (Institute of Strategic and Policy Research, Ministry of Industry and Trade) said that in the coming time, import and export activities of goods, especially exports, would face increased production costs due to fluctuations in world fuel prices. In addition, logistics costs are still anchored at a high level from the end of last year and continue to increase the costs of businesses... Therefore, in addition to making the most of the advantages from signed FTAs, enterprises need to focus on solutions to manage risks, minimize external impacts as well as develop digital economy...

Do Thang Hai, Deputy Minister of Industry and Trade: The Ministry of Industry and Trade assigned functional units to continue studying market fluctuations, thereby developing scenarios and promptly advising the Government in managing goods import and export activities. In addition, we identify that FTAs are still an important lever for export activities in the coming time, hence the Ministry of Industry and Trade is actively disseminating advantages for businesses to catch up in time and increase export turnover.

Reported by Tieu My, Cam Tu – Translated by Ngoc Huynh