Recently, the price of raw materials and fuels of many industrial production sectors has increased and remained high, which is one of the reasons why enterprises are facing difficulties in production. This has been and is greatly affecting the industrial production situation of the province.
With the determination in leadership and direction of authorities at all levels and departments and branches; the proactiveness and flexibility of enterprises, production and business activities are still maintained and help stabilize the lives of workers.
However, in reality, the impacts of rising input costs and falling orders have put pressure on many businesses to proactively reduce production levels, especially for businesses producing goods for export.
According to reports from relevant agencies, this is the fourth consecutive month that the industrial production index (IIP) in the province has decreased sharply, leading to a 2.69% decrease in the cumulative IIP index for the first 9 months of 2023 over the same period; the industrial production value in September 2023 reached VND 8,133.8 billion, down 0.7% over the same period; the cumulative value in the first 9 months of 2023 reached VND 73,138.8 billion, up 1% over the same period, reaching 66.6% of the 2023 plan.
Information from the Provincial Industrial Park Management Board shows that although some raw materials for fertilizer production have "cooled down" compared to the same period, raw materials for production in the construction materials and fertilizer industry have increased or remained at high prices, so production of enterprises is facing difficulties.
For example, at Vissai Group, the biggest difficulty for businesses today is production materials, especially the high prices of supplies and raw materials, for example: coal prices are likely to continue to increase in 2023 due to the risk of coal shortage for domestic production. The Group has 8 production lines nationwide, and has had to stop 4 production lines (in other provinces) because the price of coal dust has increased too high to 5.5 million VND/ton, the price of gasoline and oil has increased, the price of gypsum has increased by 50%.... In addition, from January 1, 2023, the Government will impose an export tax on Clinke, leading to some businesses being restricted from exporting.
This is not only a problem for Vissai Group but also a common problem for cement, nitrogen, fertilizer, and float glass manufacturing enterprises. For example, the current coal price that Ninh Binh Nitrogen Fertilizer Plant buys from Vietnam National Coal and Mineral Industries Group is 43% higher than at the beginning of 2022. On the contrary, the selling price of nitrogen fertilizer and urea has decreased sharply, and the consumption market is facing many difficulties. In addition, fertilizer is also included in the list of non-VAT objects, increasing the production cost of the Nitrogen Plant in 2023 by more than 300 billion VND because input VAT must be calculated into production costs and cannot be deducted from the selling price.
For glass manufacturing companies, due to the continuous increase in raw materials, fuel and supplies for float glass production from 15% to 40%, the import time is also longer than before, this greatly affects the capital turnover of enterprises, thus pushing up the total production cost a lot, many enterprises such as Trang An Glass, Khanh Phu Investment and Trading Company have had to stop production...
It can be said that the garment industry has never faced as many difficulties as it does now, and currently nearly 80% of garment enterprises in the province have seen a reduction in orders. Not only that, the price of raw materials for the garment industry from 2022 to now has increased by 10% to 15% compared to previous years. Therefore, garment enterprises are facing more difficulties.
A representative of NienHsing Company Limited (Khanh Phu Industrial Park) said: Due to the impact of inflation, from 2022 to now, the source of raw materials as well as accessories for production has increased. Meanwhile, the price of the Company's exported finished products remains the same, and many items have even been discounted by the Company to stimulate consumer demand, leading to low profits.
To overcome difficulties and promote industrial production development, the Provincial People's Committee has directed the Provincial Industrial Park Management Board and the Department of Industry and Trade to coordinate with relevant sectors to effectively implement mechanisms and policies to support enterprises in production and business activities, while promoting investment in building infrastructure for industrial parks and clusters. In particular, effectively implementing the supporting industry development program, paying attention to solutions on consulting, training human resources, supporting the construction and operation of smart factory models, digital transformation, green and clean production, contributing to helping enterprises participate deeply in the global value chain.
At the same time, the province pays special attention to creating favorable conditions to put large industrial projects of important roles into operation, especially projects related to the processing and manufacturing industry. Along with that, departments and branches continue to support businesses in finding import markets suitable for production.
Article and photos: Nguyen Thom
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