Impressions of processed industrial goods
According to the latest assessment of the Ministry of Industry and Trade, in March 2022, the export turnover of goods recorded a strong recovery, estimated at 34.06 billion USD, up 45.5% compared to the previous month and up 14.8% compared to the same period last year.
From the beginning of the year to the end of March 2022, export turnover of goods was estimated at 88.6 billion USD, up 12.9% over the same period last year, of which the domestic business sector increased significantly (up 22%) compared with the FDI sector (increasing by 10%). "This result shows that the efforts of domestic enterprises in restoring production and business and resuming the supply chain in the context of the pandemic are still complicated," said Deputy Minister of Industry and Trade Do Thang Hai.
In the first quarter of 2022, in the group of processed industrial products, phones and components have the largest export value, reaching 14.23 billion USD, accounting for 16% of total export turnover, down 0.9% over the same period last year. Computers, electronic products and components reached 13.05 billion USD up 9.2%. Machinery, equipment, tools and spare parts reached 9.9 billion USD up 8.8%. Textiles and garments reached $8.84 billion up 22.5%. Footwear reached $5.29 billion, up 10.1%. Wood and wood products reached 4.04 billion USD up 5.6%. Iron and steel of all kinds reached 2.16 billion USD, up 7.1%. In which, a number of commodities increased sharply compared to the first quarter of 2021 such as: fertilizers of all kinds increased by 183% (due to high fertilizer prices and sudden increase in demand). Chemicals increased by 67%. precious stones and precious metals increased by 55.7%. Rattan, bamboo, sedge and carpet increased by 34.4%. Plastic products increased by 30.2%. Animal feed and raw materials up 29.7%…
In-depth analysis of export products also shows many positive signals. In first quarter of 2022, the export turnover of processed industrial products continued to make an important contribution to the overall growth rate of export activities with a turnover of USD 76.18 billion, up 11.6% compared to the first quarter of 2021 and account for 86% of the total export turnover. In general, the export turnover of most of the products in the group grew higher than in the first quarter of 2021, in which textiles and garments were the items with a strong export growth rate of 22.5%, earning 5 .29 billion USD.
Excitedly sharing with a reporter of Customs Magazine, Mr. Than Duc Viet, General Director of Garment 10 Corporation, said that usually after the Lunar New Year is the off-season time of the garment industry. Before the Covid-19 pandemic, this was usually a time of little work, but this year is a year of many things. Currently, the market situation is better than 2020, 2021. All traditional products of Garment 10 Corporation are fully booked until the end of June 2022. Even some products such as veston, after about 15 consecutive months from 2020 to 2021, with few orders, only 30% of production capacity, this year, there are closed applications until the end of September 2022. Production capacity of enterprises was completely restored, even orders increased beyond production capacity.
The Ministry of Industry and Trade forecasts that in the coming time, exports will continue to prosper. The reason is that the recovery of the world economy and the implementation of Vietnam's FTAs are fully implemented with more preferential tariffs and commitments on facilitating and reducing barriers. Besides, the wave of investment shift to restructure the supply chain of foreign corporations with large production scale and wide customer network will be a new driving force for import-export activities.
“In addition, the economic recovery package with supporting policies including taxes and fees will help the business community, especially those industries heavily affected by the pandemic, quickly recover production and business activities. ", Mr. Do Thang Hai added.
Motivation from FTAs
Regarding the reasons for exporting goods from the beginning of the year until now, especially the group of processed industrial products achieved positive results, trade expert Pham Tat Thang said that one of the important factors Vietnam has taken advantage of the benefits brought from FTAs. In addition to FTAs such as the Vietnam-EU FTA (EVFTA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Vietnam-UK FTA (UKVFTA), etc., in 2022 there will be more agreements. The Regional Comprehensive Economic Partnership (RCEP) comes into force. Taking advantage of the advantages and incentives of FTAs is a matter of interest to the central, local as well as enterprises, creating good momentum for exports.
Sharing more about this issue, Mr. Than Duc Viet emphasized: Currently, Garment 10 Corporation is focusing on taking advantage of 2 main FTAs, CPTPP and EVFTA. In these two FTAs, it is easier to take advantage of the EVFTA because the proportion of Vietnam's garment exports to Europe is currently very low compared to its potential. With the EVFTA, it is certain that this year and the following years, the growth of exports to the European market will be very high.
Notably, over the past time, Garment 10 Corporation has expanded its production capacity in Thai Binh, Thanh Hoa, and Quang Binh. This year, they aim to recruit 3,000-5,000 employees for 3 big projects in the 3 localities above to expand production capacity, not only for export orders that recover but also for orders that increase. market share in FTAs such as EVFTA or CPTPP.
“So far, the main export markets of Garment 10 Corporation have been the US, Europe and Japan. Garment 10 Corporation always balance the 3 markets mentioned above. For example, the US market accounts for about 40-45%; Europe about 30-35%; Japan about 10-15%; The rest are other markets. However, in 2020 and 2021, the US market has times up to 65%. In 2022, after the pandemic is controlled and the European market also recovers, the structure of Garment 10 Corporation's export markets will be balanced again. It is expected that the European market will regain the old rate of about 30-35% of the total export revenue of Garment 10", Mr. Viet said.
For the whole year of 2022, Deputy Minister of Industry and Trade Tran Quoc Khanh said that FTAs, especially new generation FTAs, have passed the initial implementation stage, businesses have gradually adapted to the FTA's commitments along with the roadmap. The import tax program of partners continues to be eliminated or reduced. This creates more competitive advantages for Vietnamese goods to penetrate markets, promote advantages with preferential tariffs, and promote strong export growth.
Ms. Nguyen Cam Trang, Deputy Director of the Import-Export Department (Ministry of Industry and Trade) expressed her opinion: "The Government, ministries and sectors have made efforts to sign FTAs, opening up opportunities in terms of tariffs for businesses when exporting. The necessary condition is the efforts of enterprises in self-innovating and improving their competitiveness to create products that meet the requirements of the import market, thereby taking advantage of incentives from FTAs.
In the following quarters, the Ministry of Industry and Trade determines that it will focus on supporting businesses in market information, export promotion, taking advantage of commitments in signed FTAs and through global value chains to find find new markets; closely monitor changes in the international situation, proactively assess the impacts of such events on production, import and export of Vietnam in order to promptly make appropriate adjustments and responses, strengthen communication information and support for associations and businesses.
"Besides, the Ministry also reviewed and assessed domestic demand for strategic commodities such as fertilizers, petrol, coal, etc. to take appropriate management measures for export and import activities that have just been exhausted. can take advantage of price opportunities to export and ensure sufficient supply for domestic consumption and production needs, especially in case the price of raw materials increases too high," said Mr. Do Thang Hai.
