Surrounded by difficulties, Vinatex Hong Linh lost 30 billion VND

Production costs are "escalating", product prices have not shown signs of recovery, inventories are large... in more than 9 months of 2023, Vinatex Hong Linh (Ha Tinh) suffered a loss of 30 billion VND.

Vinatex Hong Linh Joint Stock Company (Nam Hong Industrial Park, Hong Linh Town) is a unit specializing in the production and export of yarn. Over the past 10 months, more than 300 workers have been focusing on producing 600 tons of yarn to export to the Japanese and Korean markets and serve domestic consumption needs.

Maintaining production lines in the face of rising costs is a major disadvantage for businesses at the moment.

In 2023, Vinatex Hong Linh faces many difficulties.

Mr. Pham Anh Tuan - Chief Accountant of Vinatex Hong Linh Joint Stock Company said: "Businesses have never been as difficult as they are now. The company's market is mainly export and imported raw materials, so the tension between Russia and Ukraine along with the impact of the global economic recession has negatively affected the production and business situation of the enterprise. Specifically, the price of imported cotton from the US, Australia, Brazil... has increased by 8% from June 2022 to present while the price of yarn has decreased for more than a year (down 1 USD/1 kg of yarn) and has not shown any signs of recovery. Along with that, transportation costs increased by more than 20%, electricity prices increased by 3% and USD lending interest rates increased (currently 5.5%/year while the same period in 2022 was 3.2%/year), so businesses have to "incur" many additional costs."

It is known that in the first 9 months of 2023, Vinatex Hong Linh Joint Stock Company produced and consumed 4,800 tons of yarn, with revenue reaching 350 billion VND, and a loss of 30 billion VND. This is a record loss period for Vinatex Hong Linh. Not only that, orders have decreased, so the company currently has a large inventory of about 600 tons of yarn.

Despite operating in a challenging environment, Vinatex Hong Linh Joint Stock Company has been making efforts to seek domestic and foreign markets, maintaining a stable production chain to create regular jobs for more than 300 workers. In the export market, in addition to its main partner Japan, the company has tried to seek, negotiate and sign consumption contracts with new businesses in Egypt, Bangladesh, Thailand, Korea, etc.

For the domestic market, Vinatex Hong Linh strives to participate in the production chain of Vinatex International Toms Company in Quang Tri, Da Nang, Ha Dong (Hanoi)... Although it is a new partner, with its reputation and product quality, Vintex Hong Linh has strived to win many orders and become a stable partner of these units.

Surrounded by difficulties, Vinatex Hong Linh lost 30 billion VND

In the first 9 months of 2023, Vinatex Hong Linh Joint Stock Company produced and consumed 4,800 tons of yarn.

According to Ms. Nguyen Thi Thu (worker at Vinatex Hong Linh Joint Stock Company), while many fiber manufacturing enterprises across the country, especially in the southern provinces, have had to temporarily close and stop production due to the impact of the COVID-19 pandemic and the global economic recession, Vinatex Hong Linh still strives to ensure jobs and timely pay insurance benefits, helping workers stabilize their lives.

Mr. Pham Anh Tuan - Chief Accountant of Vinatex Hong Linh Joint Stock Company added: "In 2023, the company sets a revenue target of approximately 500 billion VND and a profit of 10 billion VND. Therefore, despite many difficulties, the company still strives to not break the production and business chain. Accordingly, on average, the company tries to produce and consume 600 tons of yarn per month.

To achieve the set goals, the unit continues to maintain a stable production chain; promote the search for new customers and new suppliers, maintain and develop old customers; continue to invest in upgrading equipment and technology to improve product quality; automate the production line, improve business efficiency, and meet the increasing needs of customers.

Mr. Pham Anh Tuan hopes that, in the context of many costs arising, Vinatex Hong Linh requests credit institutions in the area to continue supporting solutions and accompanying businesses such as: increasing credit limits, restructuring debts and extending debt repayment periods... Thereby, creating conditions for businesses to recover, develop, ensure jobs for workers as well as social security regimes in the area.

Thao Hien

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