Industrial enterprises reach the target soon

Bright picture

According to the General Statistics Office, in the increase of 9.3%, processing and manufacturing sectors continued to increase to 14.4%, contributing 10.1 percentage points to the general increase; power production and distribution increased by 9.6%, contributing 0.6 percentage points, and water supply and waste treatment sector increased by 7.7%, contributing 0.1 percentage points. Therefore, the Ministry of Industry and Trade has set the target of industrial production development in 2017 striving for an increase of 8-9%.

According to the business results in the first 9 months of 2017, many companies have recorded that results far exceeded the plan. Typically, KIDO Group recorded pretax profit of VND535 billion, exceeding 9% of the plan; Tan Dai Hung Plastic Joint Stock Company earned a profit of VND24.4 billion, surpassing 6% of the planned figure of VND23 billion. Nam Tan Uyen Industrial Park Joint Stock Company from the first half of the year and in a 9 months period, exceeded 82% of target with a net profit of over 98 billion.

Along with that, recent business results of companies also showed very positive results. For example, in the first 11 months of 2017, Phu My Fertilizer Plant achieved 777,000 tonnes of urea, equivalent to 101% of the plan in 2017, Notably, this is the 11th successive year for their completion production plan to be ahead of time. In 2018, this company’s business situation will have more motivation to develop because of the project to build NPK chemical technology plant that will officially operate in early 2018.

The representatives of Huy Hoang Production and Trading Company Limited (gas production and trading) said that to get good results in 2017, the company invested nearly 1 billion VND for the factory operating system together with the modernization of equipment. This increased the capacity to 1 million products / month, even though the gas business conditions had been removed by the Ministry of Industry and Trade. Therefore, after the completion of the 2017 business plan, the company has been promoting business activities to find more customers and get some orders for 2018, so the forecast for next year‘s plans will be positive.

Get the output

Looking at the overall picture of the whole industry, we can see the positive results from the contribution of large enterprises and foreign invested enterprises, such as business activities and export volume of Samsung Vietnam. Therefore, the trade balance of for import and export of industrial and electronic products always tends to favor FDI enterprises.

Although the results of the general business enterprises are favorable, with many small and medium sized enterprises there are many difficulties. This is due to many objective and subjective reasons. According to Nguyen Van Tan, representative of Hosiden Limited, most of the products of Vietnamese enterprises don’t meet international standards due to old technology. This leads to exports as well as participation in the Value chain having difficulties.

Le Hien Tuan, director of Tam Phat Automation and Electrical Joint Stock Company, said that the new company has achieved about 40% localization, the rest was imported from countries such as China and Japan. These are all components that domestic enterprises have not produced, so businesses have to accept higher prices of products sold to them, making it difficult to compete with FDI enterprises. Therefore, Mr Tuan hoped that the State would have an investment strategy for enterprises using hi-tech to product, so that enterprises could have access to more domestic products, raise the localization rate and reduce production costs.

Obviously, these weaknesses can restrain small and medium enterprises to develop policies that enable them to connect with large enterprises and FDI enterprises. The domestic business environment has changed positively to support businesses to develop, such as with favorable conditions for enterprises to access land, eliminating unfavourable business conditions, and providing human resource training. Promoting businesses, finding partners, and finding "output" is are very necessary for enterprises. Therefore, the flourishing business results are a good signal and businesses can expect optimum results when support schemes are set up and implemented.