Enterprises return to "race track" but have not been able to speed up

Workers of Ho Chi Minh City Hi-Tech Park get vaccines against Covid-19 on June 19, 2021.

Good signals from the high-tech zone

The production recovery of enterprises is most evident in industrial parks and export processing zones. Ho Chi Minh City Hi-Tech Park (SHTP) is one of the pilot units to restore production in Ho Chi Minh City, almost all enterprises in SHTP have restarted work.

According to Ms. Le Bich Loan, Deputy Head of SHTP Management Board, among these, 50% of enterprises are working with only 50% capacity, the rest recovered at 75%. According to the roadmap of enterprises, it was expected that by the end of November, 100% of production capacity would be restored.

The impact of the pandemic has caused many enterprises to lose about 20% of export orders in the global supply chain. Enterprises said that restoring 100% of production was very important, helping them to solve the backlog of orders. At the same time, receive new orders to accelerate exports at the end of the year, as well as in the first quarter of 2022.

Facing the complicated development of the pandemic, the SHTP Management Board said that in the remaining months of 2021, enterprises would still face many difficulties. In that context, SHTP continues to implement measures to support enterprises to operate stably, ensuring that the production value for the whole year in the area is reduced to a minimum, about 10 to 15% compared to the plan, but still keep the production value reaching US$22.5 billion.

Currently, large corporations at SHTP, such as Samsung, Intel, Nidec Sankyo, are closely connected with the management board as well as related units urgently completing pandemic prevention plans in the factory to quickly recover. It is expected that by the end of November, the units will increase production capacity to 100%. This is a very good signal from the main export enterprises of Ho Chi Minh City.

Adjusting the plan

According to Ho Chi Minh City's statistics, the index of labor working at processing and manufacturing enterprises in September decreased by 0.4% compared to the previous month and decreased by 63.3% compared to the same period in 2021. In 9 months, the labor force decreased by 22.1% over the same period last year. Industries with a decrease of labor over the same period such as: beverage production decreased by 44.3%; production of leather and related products decreased by 32.9%; motor vehicle production decreased by 31.3%; production of prefabricated metal products (except for machinery and equipment) decreased by 26.8%.

Mr. Pham Van Viet, Vice Chairman of Ho Chi Minh City Textile, Embroidery and Knitting Association, Chairman of the Board of Directors of Viet Thang Jean Co., Ltd. said that Ho Chi Minh City had a total of more than 4.7 million employees, including over 3.2 million employees in the production and business sector; more than 50% of these were workers from other provinces.

From July 2021, Ho Chi Minh City has coordinated with localities to bring over 33,000 people to 34 provinces and cities. Not to mention those who have returned to their hometowns have not been counted, making enterprises reduce productivity, cause supply chain disruptions due to a lack of labor.

From the above fact, the enterprises had to adjust plans accordingly. For most enterprises, short-term production business plans are usually planned at least 6 months in advance. However, continued outbreaks of Covid-19 have changed this.

According to Mr. Le Thanh Liem, CEO of Vinamilk Finance, this situation forced enterprises to flexibly change, from a 6-month to 1-year plan to a less than 3-month plan. Leaders must closely monitor and regularly update the market situation in order to make timely decisions.

According to the analysis of Ms. Le Hang, Deputy Director of VASEP.PRO, seafood production and export in the second half of September 2021 showed signs of recovery. With this signal, enterprises are expecting that from October, exports will be better when "opening" in Ho Chi Minh City with policies to support production recovery.

Although production has been restored, enterprises have not been able to speed up immediately due to lack of labor, financial resources, raw materials. According to VASEP's forecast, in the case that Covid-19 will still be complicated in the key seafood producing localities, in October, seafood exports will continue to decrease by at least 25% over the same period.