Many enterprises with foreign direct investment (FDI) in Hai Duong industrial parks (IP) have proactively looked for new consumption markets to reduce difficulties in production and business.
Many export processing enterprises in provincial industrial parks wish to access the domestic market. In the photo are workers of Vietnam Sungold Commodity Co., Ltd. packing high-class plastic products for export
Tan A Aluminum Co., Ltd. in Lai Vu IP mainly produces and exports aluminum profiles and high-grade aluminum to European countries, the US, Canada, etc.
51% of the company’s capital is FDI.
Since Covid-19 outbreaks, there have been many fluctuations in the world economy, causing a lot of difficulties for the enterprise’s export markets.
The number of export orders of Tan A Aluminum fell about 20% in 2022 alone. Its exports from the beginning of 2023 to the end of February also decreased by more than 900 tons year on year.
To overcome the difficulties, the enterprise focused on expanding the domestic market, especially development of exclusive suppliers in Southern provinces and cities.
It supplied the domestic market with more than 1,100 tons of finished aluminum in the first two months of 2023, accounting for 84% of the total output, up nearly 250 tons over the same period last year, thanks to flexible adaptation.
“We are actively improving the design and quality of products and delivery schedule to increase competitiveness,” said Nguyen Thi Huong, Head of the company’s Administration and Human Resources Department.
“We also accept bulk orders on request with many price incentives apart from traditional domestic orders.
“Besides, we have applied automation technology in production to limit costs incurred.
“Our company will strive to put more than 12,000 tons of finished aluminum of various kinds on the market this year.”
Dongtai International Corporation Ltd. in Phu Thai IP used to export around 1.2 million garment products to the UK each year, accounting for 100% of the total output.
The market experienced many fluctuations in 2020, forcing the company to proactively shift to Japan, a more potential and stable market.
90% of garment products of Dongtai International Corporation Ltd. are exported to Japan
90% of the enterprise’s output has so far been exported to Japan.
Many export processing enterprises wanting to supply products for the domestic market are facing difficulties related to legal procedures.
Some investors of IP infrastructure in the province said export processing enterprises are entitled to a lot of incentives in terms of tax and land rent. However, their products are only allowed to be exported to foreign countries.
These businesses must establish branches, apply for distribution rights, and carry out customs procedures for domestic consumption. These are great pressures on businesses’ budget in the early stages.
FDI enterprises are also trying to find new sources of raw materials instead of import from other countries. This will help them save production costs and limit negative developments of foreign markets.
Dongtai International Corporation Ltd. is importing all raw materials from China. However, the market has recently faced a lot of fluctuations, significantly affecting the company’s production and business.
The firm is looking for factories directly manufacturing and providing garment materials in Vietnam to avoid great dependence on imported materials.
This is also a way for the enterprise to reduce production costs and product prices and increase competitiveness in the market.
Nonetheless, it is not easy to find a suitable domestic supplier.