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Currently, the business community in Binh Duong is recovering strongly, expanding production-business activities, overcoming difficulties to rise up.

Adaptation to pandemic, recovering production

In January 2022, province-based enterprises focused on completing their export orders with value estimated at more than US$ 3.35 billion, up 0.7% and 12.8% compared to the previous month and the same period last year, respectively. Along with exporting goods, they also increased the import of raw materials. In January, their import value was estimated at more than US$2.37 billion, up 2% and 8.5% over the previous month and the same period last year, respectively. The province’s key export industries on wood, textiles, leather shoes, ceramics…rose strongly to seize opportunities. Currently, province-based enterprises are trying to recover production and implement their plans for 2022.

Phuoc Du Long Ceramics Company is proactive to improve raw materials, solving difficulties and maintaining exports

After the Tet (Lunar New Year) festival 2022, with flexible adaptation in Covid-19 prevention and control, along with a strong recovery, the number of employees returning to work reached more than 90%. Some enterprises, namely Chi Hung Co., Ltd. in  Tan Uyen town, Shyang Hung Cheng Co., Ltd. in  Thuan An city, Pung Kook Saigon II Co., Ltd. in the Song Than Industrial Park 1, Sao Viet Co., Ltd, Lucky Star Vietnam Co., Ltd in the Song Than Industrial Park 2, Thai Binh Shoes Joint Stock Company, Yazaki Co., Ltd…need to recruit 1,000 employees and above in early 2022.

Pham Van Tuyen, Deputy Director of provincial Department of Labor - Invalids and Social Affairs (DoLISA) said that in order to stand side by side with enterprises, provincial DoLISA has strengthened activities on labor market information, grasped recruitment demand, organized job transaction sessions and promoted job consultancy and introduction activities. Especially, provincial DoLISA will further link with other localities to recruit laborers; guide and supervise enterprises so that they continue well implementing the Labor Code together with salary, bonus and welfare polices in order to keep employees and absorb more new ones.

Solving difficulties

It is known that enterprises have faced many difficulties, due to costs sharply increasing since 2021. When gasoline prices increase, many enterprises fear that they will continue encountering a wave of rising service prices in the near future. In fact, increasing gasoline prices is also causing many other services and input material prices on rise.

For example, in the field of logistics, Nguyen Quang Sang, Deputy Director of Phuong Nam Commodity Service and Trading Company in Thuan An city said that this company is providing transportation services in particular and other logistics solutions in general for partners across the country. There are agreements between the sides on the freight rates when signing contracts. Phuong Nam logistics is still applying the freight rates as announced during the cooperation process. Therefore, when gasoline prices increase, this puts great pressure on directly operating costs at the company. Fuel costs for the company’s trucks are increased by 5%-7%, forcing the company to have a plan to change prices.

Mr. Sang analyzed that in the operation of logistics enterprises, gasoline accounts for 35%-40% of freight rates. Therefore, if logistics fee is not adjusted to increase under the cost of gasoline, enterprises will lose correlatively. This means that enterprises will need to have negotiating plans with customers. “In transportation business and logistics in general, there is no obligation for enterprises to keep prices the same, but there will be adjustments in accordance with fluctuations of the petroleum market. Therefore, price adjustment is inevitable. We will try to negotiate with customers to reach a price that both sides can accept”, he shared.

Vuong Sieu Tin, Director of Phuoc Du Long Company in Tan Uyen town said that the sharp increase in gasoline prices has caused enterprises to face a lot of pressure, affecting production recovery. When the prices of gasoline increase, the costs of transporting input materials and output products will also increase. Besides, the prices of imported goods and raw materials will be adjusted in accordance with the prices of gasoline. Hence, raw materials may continue increasing compared to 2021. “We are in a difficult position. If the prices of products are not adjusted to increase, we will have to compensate for the loss. And if the prices of products are increased, they will not be able to compete. However, in order to increase prices, it is necessary for enterprises to negotiate with partbers and this cannot be done overnight”, said Mr. Tin.

In the context that it is difficult to adjust the prices of products and services "in the vertical direction", so many synchronous solutions have been put forward by enterprises to reduce costs. For example, Phuong Nam Company has applied sci-tech advancements into operation, as well as using new trucks to optimize, reduce and control costs. The company has also strengthened training on operating awareness while providing knowledge on saving fuel among staff. Whilst, Phuoc Du Long Company is proactively investing in technology to improve input materials as well as closing the value chain.

Reported by Tieu My-Translated by Kim Tin