Difficult output - businesses produce at a moderate pace

(Baonghean) - Normally, the fourth quarter of each year is the time when businesses accelerate to prepare for the year-end production and business season. However, by mid-November, most businesses in the province were only producing and trading at a moderate pace, because output was still difficult...

Through practical research, many businesses said that in 2013, thanks to the reduction in loan costs from the lowering of interest rates by banks, production and business were "easier" than in previous years. However, due to the amount of goods produced at the time that had not been sold, there was still a lot of inventory, so they were both producing and waiting for the market. At Song Thang Private Enterprise (Nghi Phu Industrial Park), the warehouse of this enterprise was full of goods, mainly exported wooden flooring.

Production of export flooring at Song Thang private enterprise (Nghi Phu Industrial Park - Vinh City)

Mr. Nguyen Thai Son - Deputy Director of the enterprise said: The main products of the enterprise are wooden furniture, flooring for export and domestic consumption. This year, the purchasing power of the market is low, the enterprise is under the pressure of competition from cheap products, the market share is decreasing. There are still many raw materials in stock from previous years, so production mainly maintains jobs for more than 80 workers. Due to the large amount of inventory, in the last 3 months of 2013, the enterprise produced according to orders, not daring to boost production because of concerns about deadlocked output. In previous years, large agencies and enterprises placed many orders, especially large hotels, but now the number has decreased significantly. Currently, we mainly sell furniture to families, but purchasing power is also small. For furniture, the expected sales in the last 3 months of the year are about 1 billion VND. The enterprise's revenue is mainly from exporting flooring, but it depends on the market, which is unpredictable. Input materials must be imported from Laos, wood is increasingly scarce, increasing in price, difficult to buy, while businesses have signed sales contracts with Japanese partners at stable prices since the beginning of the year. In the context of slow consumption of goods, it is expected that in the remaining 3 months of 2013, sales will decrease by 30% - 40% compared to the same period of previous years.

Also at Nghi Phu Industrial Park, Duc Phong Company Limited is urgently preparing year-end orders to meet the progress of contracts signed with partners from Germany, Denmark, Sweden, China... with about more than 200,000 rattan and bamboo products of all kinds, with an estimated value of nearly 4 billion VND. However, the current difficulty of the enterprise is the lack of raw materials and labor for production. Mr. Thai Dai Phong - Director of the company said: "Because there is no sunshine this season, drying raw materials is very difficult, we try to take advantage of dry weather days to dry raw materials to supply to producers. Moreover, the concern of the enterprise is the production human resources in craft villages in the province, needing more than 3,000 workers to work regularly to meet the needs of customers. The lack of production force, combined with low labor quality (because the young people do not want to do rattan weaving, currently this job is mainly done by the elderly with limited skills), makes us lack human resources and production materials".

In the construction materials sector, the fourth quarter is usually considered the peak season due to a series of projects being rushed to complete for acceptance and final settlement, and a series of new renovation projects to welcome the New Year, which will create a large demand. But in reality, in general, manufacturing and trading enterprises in this sector are still in a state of stagnant supply of goods. The leader of Trung Do Granite Factory (Bac Vinh Industrial Park) shared: “By the beginning of November, the factory still had 600,000m2 of tiles and roofing tiles of all kinds in stock, equivalent to 60 billion VND, with difficult output, and the amount of goods consumed decreased by 15% compared to 2012. Therefore, in the last 3 months of the year, the factory only produced enough goods to sell, not boosting the supply of goods because there was still a lot of inventory, worrying about the output being stuck. During this time, we have to review and reorganize our staff, save on all aspects, and at the same time reduce product prices to stimulate purchasing power.”

With the business of manufacturing, processing steel structures and constructing industrial works, the Central Mechanical and Construction Joint Stock Company (Truong Thach Industrial Park, Nghi Loc District) has achieved a total annual revenue of 35 - 45 billion VND, but this year, due to the general difficulties of the economy, the company's operations have decreased significantly. Mr. Nguyen Duc Hoi - Director of the Central Mechanical and Construction Joint Stock Company shared: "Due to the general difficulties, many projects have had to stop construction due to lack of capital. Some units signed construction contracts with the company but the construction was unfinished and had to stop due to lack of capital, causing difficulties for us". At the same time in previous years, construction projects were pushed up to the end of the year, the company's workers could not finish their work, but this year there was a serious shortage of work. In the last 3 months of the year, the company switched to exploiting the Lao market, sending workers to Laos to work, hoping to maintain production and stabilize the lives of workers.

According to economic experts, to promote effective production and business activities in the last months of 2013, in addition to removing obstacles and difficulties in handling inventory, it is necessary to seek markets and focus on increasing export opportunities abroad. In particular, it is necessary to focus on business development support programs as well as appropriate tax policies to create conditions for businesses to reduce difficulties and have good competitive potential in the market.

Gia Trang