Positive signs from orders in the beginning 2019

	Logistics companies expect "positive signals" in the last months of the year
	Signing many big contracts, shrimp prices will increase again
	Vietnam records a sharp rise in new export orders

Experts believe that businesses should sign short-term orders to ensure their profits. Photo: X.T

Enjoy the benefits from the US- China trade war

Talking with the Customs Newspaper’s reporters about the business situation in 2018 and prospects for 2019, Ms. Do Thi Thuy Huong, member of the Board of Directors of Viettronics Company, Standing member of the Executive Board of the Electronic Industries Association, said that 2018 and 2019 have brought opportunities for the Electronic Industry in the context of the US- China trade war, shifting production orders from other Southeast Asian countries to Vietnam, especially from countries having orders from China is an opportunity and a challenge for electronic businesses. Vietnam’s businesses will have more orders but the competition will be stronger because there will be more foreign businesses investing into the domestic market, so competition will be fierce right in the domestic market.

Regarding the seeking and signing of new orders for 2019, Ms. Huong said that right from October and November 2018, almost all electronic businesses had to negotiate orders for the whole year of 2019. Notably, orders have significantly fluctuated compared to 2019 in both customers and markets. “We also have to expand to a lot of new markets and do not depend on one customer channel because of the high risk. Orders for 2019 will also depend on many factors such as production costs, employee wages, revenues and profits, so far we have not yet assessed the growth of orders for 2019 compared to 2018,” Ms. Huong added.

2019 is considered as a year with many fluctuations; however, many businesses said that they will have to face some current difficulties in costs for salaries and social insurance. Specifically, Mr. Nguyen Duc Hiep, the representative of TNG Investment and Trading Joint Stock Company, said the cost for the company's expenditure on social insurance in 2018 was VND 188 billion, from 1st January 2019, the regional minimum wage rate for employees will be adjusted, so the expenditure for social insurance will increase. Also according to Mr. Hiep, this is one of the difficulties of the company, although the cost increases, the processing price does not increase, and over the past 10 years the product price has not increased. For the orders at the beginning of 2019, the company always ensures the continuous production orders throughout the year and expects to increase the number of orders in 2019.

Be careful with long-term orders

Mr. Bui Duc Anh, Director of Binh Long Seafood Processing and Exporting Co. Ltd., said that, as of 30 November 2018, the Company has received enough preliminary processing and export orders until the end of the second quarter of 2019. Notably, although the number of orders in 2019 is much higher than the same period last year, increasing by 20%, the value of orders has not increased and the price still remains comparable to 2018.

Mr. Duc Anh added that because the price of input materials has changed, and the Company has many orders from the Chinese market, so right from the middle of 2018, the Company agreed with its partner to pay entirely in USD instead of the Yuan, so the orders for 2019 will also benefit from this payment.

Vietnam records a sharp rise in new export orders The Vietnam Manufacturing Purchasing Managers' Index (PMI) rose to 53.9 in May from 52.7 in April, with ...

According to Mr. Hoang Quang Phong, Vice President of Vietnam Chamber of Commerce and Industry (VCCI), the signing of many orders in the beginning of 2019 has advantages and disadvantages. The advantages are that the businesses will be able to stabilize the production line, ensure the production speed as well as the income of the employees. But if signing long-term contracts from 2 quarters to the whole year, businesses should be careful, because the market always has fluctuations and prices can go up or down, especially for manufacturing and processing businesses that depend on raw materials, they should only sign production contracts according to each quarter, rather than signing for a long term contract to ensure their profits.