Orders are not lacking, why are businesses still considering?

Date posted: 05/04/2022

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At Nha Be Garment Corporation (NBC), the order that this business (DN) has is currently until the end of the third quarter of 2022. In the context of a shortage of human resources in Ho Chi Minh City, to meet the delivery time for partners, over the past time, NBC has accelerated production expansion in 10 provinces in the West, Central and Central Highlands regions. .

Not happy despite the many orders!

Although this helps NBC increase production capacity to complete export orders, the logistics cost team is still a difficult problem. Especially in the context of high fuel prices, while the traffic at enterprises' production facilities in some localities is not convenient, far from ports and airports...

Although export orders in the second and third quarters of 2022 are not lacking, many domestic enterprises are still considering when receiving new orders.

Like NBC, many textile and garment enterprises have had orders until the third quarter of 2022, but they are still hesitant because they cannot predict what the market will be like in the near future, especially in terms of logistics costs.

According to current assessment, logistics costs account for 9.3% of the cost of textile products. Especially, transportation costs are 3 times higher than the average in the past 5 years. Not only that, the labor imbalance is also a problem that many textile and garment enterprises face. Typically, enterprises in the South still have a labor shortage, while this region accounts for about 40% of the total export turnover of the entire textile and garment industry.

In the wood industry, many wood exporters recently said that they not only closed orders until the third quarter but also closed orders until the end of the year. However, along with the Covid-19 epidemic, fluctuations in world geopolitics are causing significant disturbances to the supply chain, raw material supply and especially logistics costs.

This is what makes wood industry enterprises unhappy even though they have many orders. Because logistics costs are increasing rapidly, so the cost of products increases, many orders are closed before the fluctuation of raw material prices, making businesses lose money.

Next week, the Handicraft and Woodworking Association of Ho Chi Minh City (Hawa) will coordinate with the Vietnam Logisics Association (VLA) to organize a conference in Ho Chi Minh City to discuss logistics trends in the new situation. Especially forecasting the trend of fluctuations in logistics costs, domestic and international freight charges in import and export activities to help wood businesses adapt to the new situation.

According to experts, with export orders as high as today amid the logistics cost team, wood furniture enterprises still face the pressure of fluctuations in input material prices. The reason is that raw materials account for a very large proportion of the product's cost. Depending on the type of materials used and the line of furniture products, the proportion can account for 40% - 70% of the cost of wood products.

Unpredictable volatility

From the textile industry to the wood industry, it is also necessary to refer to recent data from the General Statistics Office through the results of surveying business trends of processing and manufacturing enterprises.

Accordingly, 85.4% of enterprises forecast that the number of new export orders in the second quarter of 2022 would increase and remain the same compared to the first quarter of 2022 (40.3% forecast to increase, 45.1% to remain unchanged); only 14.6% of businesses forecast a decrease.

However, 91.5% of enterprises forecast that in the second quarter of 2022 compared to the first quarter of 2022, the cost of production per product unit will increase and remain the same (38.1% increase, 53.4% ​​remain the same). . Only 8.5% of enterprises forecast a decrease in the cost of production per unit of product.

In addition, 93.4% of enterprises forecast that the average selling price of a product unit in the second quarter of 2022 would increase and remain the same (30.5% increase, 62.9% unchanged) compared to the first quarter of 2022; only 6.6% of businesses forecast a decrease.

From the survey mentioned above, through the records of VnBusiness with a number of domestic manufacturing enterprises for export, what they are worried about at this time is not foreseeing the risks of fluctuations in the world.

For example, with the Russian-Ukrainian conflict. As reflected by many businesses, they were completely passive from the knock-on effects of this situation, leading to continued suffering in freight traffic congestion and rising freight charges.

Not only that, the Russia-Ukraine conflict is one of the main reasons for increasing prices in the market for some fuels and raw materials for production, leading to higher logistics costs. And to say a simile like sharing from the business side is "buffaloes butts each other, flies and mosquitoes die".

Besides, after 2 consecutive years of fighting the Covid-19 pandemic, many domestic enterprises lack capital to increase capacity, unable to stockpile enough raw materials to meet new orders.

That is why businesses still consider when receiving new orders. Especially, the risk of loss is still waiting if enterprises sign large orders for a long time while the price of raw materials and logistics costs continue to increase.

In the coming time, to be able to become more confident with new orders, what domestic enterprises expect is that the management agencies need to continue to have effective solutions to "cool down" the price of raw materials. inputs, reducing logistics costs. On the other hand, it is advisable to create better conditions for domestic exporters to access capital more easily through more convenient and faster bank loan procedures.

The Vinh

https://vnbusiness.vn/viet-nam/don-hang-khong-thieu-vi-sao-doanh-nghiep-con-can-nhac-1084636.html

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