Opportunity for Hai Duong enterprises to restructure export and production markets

When the US temporarily suspends reciprocal taxes, workers and employees of TBT Garment Company Limited feel more secure in production (photo provided by the facility)

Reduce anxiety

A representative of TBT Garment Company Limited in Thanh Ha said that each year the company produces about 1 million products, of which 80-90% of the products serve export needs. The US market accounts for about 40% of the company's export market structure. The US's application of a 46% reciprocal tax rate on some Vietnamese goods exported to this market makes businesses worried because this is too high a tax rate, leading to high selling prices, reducing the company's price competitiveness. However, in the early morning of April 10, the US announced a 90-day postponement of the reciprocal tax and reduced it to 10%, temporarily removing concerns, and employees can work with peace of mind. TBT Garment Company Limited currently has 250 employees, with an average income of 8-9 million VND/month.

Ms. Nguyen Thi Thanh, a worker at TBT Garment Company Limited, said she was very worried when she heard the news that the US would impose a 46% tax on many Vietnamese goods exported to the US market because her company's orders to the US could decrease, negatively affecting the jobs of workers. "After hearing the news that the US would postpone the imposition of reciprocal taxes, we were very excited and felt secure in our work," Ms. Thanh said.

Tinh Loi Garment Company Limited is a member of Crystal International Group. Mr. Pham Dinh Hoa, Chairman of the Trade Union of Tinh Loi Garment Company Limited, said that on average, the company produces about 20 million products per month. The US is one of the company's major export markets, accounting for 35%. The company has 21,000 workers and employees at 3 factories. The company pays great attention to the origin of raw materials and accessories for production. "Tracing the origin of raw materials and accessories for production does not make the company too worried because currently, the company's production is a closed cycle, raw materials and accessories are produced in Vietnam and not imported from other countries," Mr. Hoa affirmed.

Control the origin of raw material supply

Ngoc Hung Shoe Company Limited will restructure its production activities, complete its participation in appropriate value chains and proactively adapt to US reciprocal taxes.

Many businesses are less worried that after the US postpones the imposition of reciprocal tariffs, they will not have to bear additional costs and their production and business plans will not be immediately disrupted. However, businesses are aware that “postponement” does not mean complete “abolition”. Therefore, businesses are taking advantage of the 90-day period to make adjustments in their production and business strategies. In particular, businesses are focusing on controlling the origin of raw materials for production.

A representative of TBT Garment Company Limited said that in the coming time, the company will shift its export market to ASEAN and Europe to diversify the market. For Tinh Loi Garment Company Limited, in order to maintain its competitive position, in the long term, the company must have appropriate strategies to increase production efficiency, shift production structure with increased automation, thereby reducing production costs.

According to a representative of Ngoc Hung Shoe Company Limited (Luong Dien Industrial Park, Cam Giang), in addition to market issues, to increase competitiveness, businesses need to restructure production activities and improve their participation in appropriate value chains.

The company focuses on applying new technologies and automated machines to increase production efficiency. The application of automated machines also helps to significantly solve the difficulties caused by labor shortages, while increasing productivity and reducing production costs.

Hai Duong currently has more than 200 large FDI enterprises operating in key export industries employing tens of thousands of workers. Many factories have large labor scale such as LLCs: Tinh Loi Garment, Shints BVT, Ngoc Hung Shoes, Brother Vietnam Industry, Hyundai Kefico Vietnam...

In order for Hai Duong enterprises to export goods sustainably, enterprises need to be more proactive in updating market information. Standardizing and making the supply chain transparent to demonstrate legality, validity and clear domestic origin, ensuring compliance with the rules of origin in free trade agreements (FTAs)...

JACKIE LONG - XUAN TRANG

Source: https://baohaiduong.vn/co-hoi-de-doanh-nghiep-hai-duong-tai-co-cau-thi-truong-xuat-khau-san-xuat-409125.html