Enterprises in support industries seize opportunities from pandemic

Hanoi (VNA) - The COVID-19 pandemic has disrupted global supply chains and exposed many large foreign investors in Vietnam to material shortages, and in response a number of domestic firms in support industries have taken the opportunity to become important “links” within those chains.

Do Phuoc Tong, Chairman of the HCM City Association of Mechanical-Electrical Enterprises, said a host of manufacturers have encountered disruptions in the supply of equipment from China, which has been hit hard by COVID-19. This prompted them to switch to local suppliers to obtain alternative inputs, especially mechanical-electrical equipment and moulds.

Many domestic companies in support industries have received more orders and are operating at full capacity, he noted.

To meet partners’ standards, they have reorganised production and view this as a chance to assure partners, particularly major foreign enterprises, of their product quality and gain a foothold in the market.

The HCM City-based mould producer the Lap Phuc Co. Ltd has posted an increase of 10-20 percent in orders, most of which are from foreign enterprises with factories in Vietnam.

Meanwhile, the An Phat Industrial Technology Co. Ltd in southern Dong Nai province has also accelerated production and introduced overtime as orders have increased 20-30 percent.

Le Tri Minh, head of the Dong Nai association of enterprises in support industries, said a number of members have received 30-40 percent more orders year-on-year, primarily from foreign enterprises.

He noted that manufacturers are short of materials normally imported from China, so have sought local suppliers.

Vietnamese companies in support industries, however, are also concerned about a shortage of input materials such as iron and steel, especially those in the machinery industry, and certain types of steel must still be imported even though local providers have already ensured a relatively large supply.

Tong suggested that, in the long term, enterprises in support industries should ensure product quality, competitive prices, and punctual delivery to maintain their newly-found partners.

They also need to connect with each other, since many products from one company may be input materials for another. This would help them boost domestic supplies and reduce dependence on imports, he added./.