Business

Ministry revives key industrial industries

SGGP
The Covid-19 pandemic has been causing serious damage to the production and business activities of enterprises nationwide, especially the key industries. Most of the export sectors that bring billions of US dollars, such as garment and textile, leather and footwear, electrical and electronic products, mechanical engineering, and wooden products, have declined sharply.

The production of car tire inner tubes at Casumina Company. (Photo: SGGP)

The production of car tire inner tubes at Casumina Company. (Photo: SGGP)

According to the assessment of the Ministry of Industry and Trade (MoIT), from the beginning of the year to now, the Covid-19 pandemic has been developing complicatedly around the world. Therefore, in the first eight months of this year, the index of domestic industrial production merely increased by 2.2 percent, much lower than an increase of 9.5 percent in the same period last year, the lowest increase in many years. Complicated developments of the pandemic have caused the supply chains of raw materials to be interrupted, and the consumer market has also narrowed down significantly. The recurrence of Covid-19 in late July have affected the recovery of industrial production. Some key industrial products in the first eight months fell sharply over the same period last year. Particularly, automobile production plunged by 12.5 percent; crude iron and steel sank 7.8 percent; motorbikes dropped 7.1 percent; mobile phones went down 4.4 percent. As a result, the main industrial production in the first eight months fell by 14 percent over the same period.

Although the Government has directed the implementation of appropriate social distancing measures, maintaining production and business activities, manufacturing enterprises still face many difficulties. Some countries, which are important trading partners of Vietnam, have not fully opened their doors yet, resulting in a shortage of imported raw materials and a reducing consumer market. Although the production situation of industrial enterprises is showing signs of recovery, it has yet to regain steady growth. In Ho Chi Minh City, the index of industrial production in the past months slid by 5.5 percent over the same period. The Covid-19 pandemic has caused a shortage of imported raw materials, poor consumption, a reduction in the production scale of enterprises. Similarly, the report by the People's Committee of Binh Duong Province shows that the index of industrial production in the first eight months of this year only climbed by nearly 6.5 percent over the same period, the lowest increase in recent years of this province. Or in Dong Nai Province, the index of industrial production in the first eight months of this year also increased by just over 5.3 percent. Of which, electronics production slumped by 5.56 percent as it suffered the worst impact with many production and business contracts canceled, so some companies have to produce perfunctorily.

According to economic experts, to soon revive production and business activities, at first, it is essential to have breakthrough solutions and policies to quickly support manufacturing enterprises, especially key industries.

Besides ongoing solutions, such as credit support, debt rescheduling, interest exemption and reduction of loans, as well as supporting administrative procedures, quickly solving difficulties and problems for enterprises, it is necessary to flexibly implement specialized mechanisms, including inspecting, supervising, and changing from pre-mortem to post-mortem review, avoiding overlapping in inspection, and creating the most favorable conditions for enterprises. Provinces need to carry out programs to connect goods consumption with provinces and cities across the country to expand consumption for industrial manufacturing enterprises. At the same time, they need to support enterprises to participate in online trade promotion with foreign partners after international flights are reopened. 

‘Enterprises need assistance to promote online commerce, diversify import markets. Moreover, the encouragement of the use of domestic goods and the implementation of the campaign “Vietnamese people prioritize using Vietnamese goods" will help domestic industrial production to quickly recover and develop,’ Mr. Pham Ngoc Hung, Vice Chairman of the Ho Chi Minh City Union of Business Association, proposed.

To continue to support enterprises at a macro level, the MoIT has been collaborating with ministries to develop policies and measures to develop some priority industries with potentials and development opportunities, such as the automotive industry, garment and textile, leather and footwear, electronics, minerals, and supporting industries. It will unify resources from the central to the grassroots levels to focus on investment and development of industrial projects, especially the supporting industries and some basic material industries, consisting of hot-rolled steel, fabric manufacturing, textile dyeing, and new materials, to overcome the dependence on imported raw materials, components, and accessories. On the other hand, it will strengthen preferential policies, investment support, and attract investment shifts in manufacturing industries, including the production of components and accessories, from China and other countries to Vietnam.

By Lac Phong – Translated by Thuy Doan

Other news