Timely removal of obstacles for export businesses.

Unloading goods at Cua Lo port. Photo: Thu Huyen

Many difficulties

The complex pandemic situation continues to have a significant impact on socio-economic development, but with the efforts of the business community and the guidance of all levels of government, in 2021,export turnoverNghe An's trade volume reached a remarkable 2.43 billion USD, a 60.77% increase compared to 2020. Of this, goods exports reached 2.11 billion USD, a 76.04% increase, exceeding the annual plan by 132.2%.

In the first quarter of 2022, merchandise exports continued to show positive growth, reaching US$544.8 million, a 28.1% increase compared to the same period last year. However, businesses continued to face many disadvantages. Notably, these included new regulations from China on tightening measures to combat the Covid-19 pandemic; increased supervision and strict enforcement of regulations on business operations.Import of agricultural and aquatic productsThe situation along the land border has created many difficulties for businesses in transporting, clearing customs, and exporting agricultural products to China. In addition, the tense conflict between Russia and Ukraine has led to supply shortages for many businesses, and export activities to Russia face many risks in terms of transportation, payment, and increased costs.

KiDo Vinh Co., Ltd. has abundant orders, ensuring employment for workers. Photo: Thu Huyen

Ms. Ho Thi Thu, Head of Import-Export Department at Kido Vinh Co., Ltd., stated that Kido Vinh is a 100% South Korean-owned enterprise. Currently, the company needs 1,200 workers but cannot recruit enough due to competition from other garment businesses in the area. Therefore, we have to hire external laborers to process goods, especially during peak periods.

"Like many other export businesses, we are facing difficulties due to the prolonged pandemic affecting production and business, especially with sea and air freight rates constantly reaching record highs, leading to increased costs. Furthermore, the excessively long tax refund process is causing difficulties for businesses..." - Ms. Thu stated.

Meanwhile, at Asia Hoa Son Company in Anh Son, last year the company produced 35,000 tons of cassava starch, 13,600 tons of glucose, generating revenue of 590 billion VND and an average income of 10 million VND per person per month. However, the company is facing some difficulties in its export activities.

Currently, import and export activities at border crossings in the North between Vietnam and China are temporarily closed. Some crossings have reopened (Kim Thanh border gate, Lao Cai), but the volume of goods exported through these crossings is very slow and the associated costs have increased. Official exports mainly go by sea through several major Vietnamese ports such as Hai Phong port and Quy Nhon port. Furthermore, due to tightened border trade policies, companies are focusing on official exports, resulting in insufficient container supply for export goods.

Mr. Nguyen Van Giang – Deputy General Director of Asia Hoa Son Company - Anh Son

Discussing solutions to boost exports.

Currently, many difficulties exist in import and export activities, such as labor recruitment, port infrastructure, freight rates, inadequacies in customs procedures, and tax refund documentation. Businesses have also submitted proposals to relevant authorities to address these difficulties and boost import and export.

Production of spoons for export at Hong Son Production and Trading Co., Ltd., Do Lang Industrial Cluster, Nghi Lam commune (Nghi Loc district). Photo: Thu Huyen.

Ms. Nguyen Thi Thanh Ha, representative of Vilaconic Company, suggested strengthening trade promotion and import-export activities. International trade fairs are a channel for connecting businesses, with booths for Nghe An businesses to promote products, and should be implemented immediately after the pandemic. At the same time, it is necessary to improve port infrastructure and facilitate trade at the Thanh Thuy border gate to connect with the Lao market, thereby boosting trade between Southwest China and Vietnam.

"To empower businesses to confidently venture into the global market, following the principle of 'if you want to go fast, go alone; if you want to go far, go together,' we hope the Department of Industry and Trade will act as a central hub connecting import-export business clubs to exchange experiences and avoid risks; and at the same time, organize training sessions to enhance import-export knowledge for businesses," Ms. Ha shared.

Regarding tax policy recommendations, Mr. Nguyen Van Giang – Deputy General Director of Asia Hoa Son Company – stated that the VAT policy is hindering businesses from exporting to the Chinese market. Businesses are facing numerous difficulties: They are not receiving input VAT refunds, risk having refunded taxes reclaimed, and are unable to export goods, leading to capital shortages and tied-up funds for production, business operations, and bank loan repayments. We propose that the Nghe An Department of Industry and Trade provide input to the Tax authorities to resolve the difficulties faced by the cassava starch processing industry in the import and export tax refund process.

Canned fish production for export at Royal Food Factory, Nam Cam Industrial Park. Photo: Thu Huyen.

To achieve the export target of 2.35 billion USD in 2022, the Ministry of Industry and Trade has proposed five groups of solutions: creating sources of export goods, improving the effectiveness of export promotion, enhancing the competitiveness of export enterprises, developing infrastructure and services to support exports, and improving the effectiveness and efficiency of state management in the import and export sector.

In response to the complex fluctuations in the export market, the Standing Vice Chairman of the Provincial People's Committee, Le Hong Vinh, directed and requested relevant departments, agencies, and localities to coordinate with the Department of Industry and Trade to promptly grasp the situation in order to resolve difficulties and support export businesses.

Due to the impact of the pandemic, shipping containers have become scarce and expensive, affecting export activities. Photo: Thu Huyen

Permanent Vice Chairman of the Provincial People's Committee Le Hong Vinh requested that departments, agencies, districts, cities, towns, and relevant businesses continue to implement comprehensive solutions to promote investment and attract domestic and foreign investors to Nghe An to invest in the production of export goods.Developing export marketsThrough activities connecting export supply and demand, participating in international trade fairs and exhibitions, organizing trade delegations, etc., the province aims to seek and diversify markets for its export products, avoiding dependence on a single market to minimize risks. It encourages small-scale export businesses to switch to formal export channels; and conducts market research to advise on the production of goods that meet global market demands.

The Standing Vice Chairman of the Provincial People's Committee also requested relevant departments such as Tax, Customs, and Transport to coordinate and create favorable conditions for the production, circulation, and distribution of goods within the province and the country, as well as for the import and export of goods to foreign markets in the coming time; the Tax Department should soon provide guidance to businesses participating in export activities on payment methods and recommend measures to prevent payment risks when concluding contracts.

Nghe An has exported more than 50 product categories/groups of products to countries around the world. Many items have seen significant export growth, such as: corrugated iron, various types of steel, cement, textiles, electronic components, etc. The export market is diverse, covering more than 125 countries and territories worldwide. Some new export markets this year include: East Timor, Sierra Leone, Burundi, Marshall Islands, and Luxembourg. The number of exporting enterprises has increased to 270 enterprises in the province, including 188 local enterprises and 82 enterprises from outside the province participating in exporting goods from Nghe An province.