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After a hard time fighting Covid-19 pandemic, enterprises have relatively well recovered and now are showing efforts heading to new growth targets in 2021.

Production is on-going at Minh Long I Corporation

Keep to market pace

By our investigation, production and exportation enterprises in the province have well recovered while the local pandemic prevention and the good news of successful tests of vaccines against Covid-19 have significantly promoted import-export activities of local enterprises.

Up to date, majority of woodwork enterprises have signed new exportation contracts which are event to the end of Q2 of 2021. They are making great efforts of investing into technologies for production development by getting better than themselves with great expectation for high rising production, importation and exportation activities. At a recent interview with Binh Duong Newspaper, Huynh Quang Thanh, Deputy Chairman of Vietnamese Woodwork and Forestry Products asserted that the wood industry is expected to get to higher position in 2021 from the projection.

As for computer and electronic products and components industry, which are accounted for 3.7% of local exportation revenue, strong growth and momentum preservation have been proven from previous term as the obstacle of material resources has been resolved. In the meantime, their exportation revenue in 2020 was estimated to be 28% higher from previous term at about USD 1.049 billion and producers have started their production for 2021.

Ly Ngoc Bach, Chairman of Binh Duong Ceremic Association, was pessimistic for 2020 as the industry after overcoming challenges and hardship has strongly grown at 15% on the average.

“The problem is that they (enterprises) should try hard to develop their technologies and improve product quality for stronger competitiveness and maintenance of supplies to domestic and foreign markets,” Ly Ngoc Bach stressed on saying.

Garment-making enterprises, as heavily affected victims of the pandemic, have tried to connect, seek out market, and transform their production formality to match the demands. It has been feasible for them to work out with FOB producers (design and finished products) in new markets.

For the long run

In contrast to the currently great challenge for garment producers, the signing of Vietnam and Korea as two members of EVFTA on joint material origins has been good news for enterprises of garment-making in their hibernation days.

Talking to us, an unnamed leader of Binh Duong provincial Textile and Apparel Association, said that when EVFTA was signed, what most Vietnamese textile enterprises worried about was the rule on fabric origin as at present, the source of fabric production is still stuck in Vietnam for many reasons. The above-mentioned agreement is of particular importance to help Vietnamese enterprises take advantage of high-quality textile materials from Korea and the problem of the origin of fabric materials has been resolved to be eligible for garment exports to the EU market as Korea has also signed the same trade agreement with EU. This is very advantageous for Vietnamese textiles to enjoy preferential tariffs on exports to the EU.  Vietnamese textile and apparel enterprises will consider using more fabrics from Korea in addition to the amount of fabric produced in Vietnam to produce for EU as they have now met the rules on origin of fabrics.  It is expected that the agreement will help Vietnam's garment and textile have a localization rate of 50% and open to EU market.

Furniture exporters of Binh Duong are also well aware of challenges proposed by the markets as they have been through tremendous fluctuation. Although the US-China trade tensions provide opportunities for the industry to grow in export turnover, trade remedies investigations are increasing in countries that are major markets of Vietnam, especially petitions from the US market.  Currently, plywood products exported from Vietnam to Korea and the US are being investigated by the governments of these countries in terms of trade protection. The investigations are based on signs of trade fraud by a number of companies, mainly from China, operating in Vietnam exported their products to the US.

Dien Quang Hiep, Chairman of the Binh Duong Furniture Association (BIFA), said that the risk of applying trade restrictions on Vietnamese wood products to these markets is very high, especially when many businesses have no experience in meeting the requirements of the investigation agencies. Enterprises' knowledge and experience in dealing with the request of the investigation agencies play an important role in limiting negative impacts. BIFA is trying to coordinate with functional sectors to help and propagate to enterprises the principles of trade defense, regulations and experience from markets to take a long-term step.

Reported by Tieu My - Translated by Vi Bao