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The food and foodstuff processing industry recovers robustly. (Photo: SGGP) |
The IIP in 2022 is estimated to rise by 17.3 percent over the same period last year. The four key industry groups were estimated to grow by 19.92 percent over the same period, 2.6 percentage points higher than the general growth rate of the whole industry. The index of industrial production (IIP) increased again, showing a clearer and clearer recovery trend in the economy.
Powerful recovery
Mr. Bui Ta Hoang Vu, Director of the Department of Industry and Trade of HCMC, said that the strongest recovery was recorded in the food and beverage processing industry. The IIP index in 2022 is estimated to surge by 28.2 percent, while it decreased by 14.2 percent in the same period. The resumption of social activities from the beginning of the year, such as outdoor entertainment, restaurants, and hotels, has created favorable conditions for the food, foodstuff, and beverage processing industries to grow spectacularly.
The chemical, pharmaceutical, rubber, and plastic industry also posted a high growth of 26.5 percent. Previously, the growth rate of this industry decreased by 4.3 percent in the same period. It comes from the fact that the need for health care after the pandemic and social care increases. As for the mechanical engineering and electronic manufacturing industry, although the growth rate is lower than that of the two above industries, by 11.3 percent and 5.8 percent, respectively, it has partly shown that enterprises have made great efforts to stop the decline and gradually restore production, contributing to promoting the overall economic growth of HCMC, in particular, and Vietnam, in general.
Ms. Ly Kim Chi, Chairwoman of the Food and Foodstuff Association of HCMC, said that HCMC is the place where food and foodstuff processing enterprises gather the most in the country. Enterprises not only meet the consumption needs of the city but also serve the national market, as well as export. From March to now, the cumulative production index of the food, foodstuff, and beverage industry has regained its growth momentum compared to the same period in 2021. Specifically, the growth rate only reached 3.2 percent in the first three months of this year, then surged to 7 percent in the first six months and hit 28.2 percent in the first nine months. The growth rate is expected to exceed 30 percent by the end of the year.
Joining hands to keep the growth momentum
The advantages of new-generation free trade agreements, such as CPTPP and EVFTA, in parallel with the strategy of diversifying consumption markets, are helping many Vietnamese companies speed up production.
Mr. Nguyen Phuong Dong, General Director of Saigon Industry Corporation (CNS), shared that CNS's member companies were renegotiating supply orders for 2023. In general, companies are quite optimistic about the demand for orders from the US, European, and Asian markets. The case of Ben Thanh Rubber Joint Stock Company is a typical example. Currently, technical rubber product lines serving the automotive, glass, and floor mat manufacturing industries are relatively popular in the US, China, Japan, Indonesia, Malaysia, and Egypt. Most recently, the company’s Board of Directors went to the US to negotiate export orders to this market. It is expected that this will be a huge order in 2023. In the next 2-3 years, the company will invest more in factories, production lines, and conveyors to increase capacity associated with diversifying the product size that the conveyor system can handle.
According to Mr. Phan Minh Thong, General Director of Phuc Sinh Joint Stock Company, to be able to maintain the growth momentum, maintain, and increase export market share, enterprises need to update new information, guide and train their staff on how to approach and utilize the FTA to the fullest. In addition, they need to be ready to improve their products and production processes to meet the regulations of international markets and qualify to benefit from trade agreements. More importantly, it is necessary to closely follow information and guidance from agencies and sectors to proactively respond to changes in international trade.
On the other hand, the impressive recovery of industrial production also comes from the city's effective and timely support policies. Specifically, the city approved 32 investment projects of 28 supporting industry enterprises, with a total investment of nearly VND2.34 trillion. In which, the loan amount supported by the State budget is more than VND1.3 trillion. The average investment capital for a project is VND73 billion, and the average loan amount supported by the State budget for a project is VND41.02 billion. The level of loan interest support for projects in the supporting industry is 100 percent for a maximum period of seven years.
In addition, the city has implemented solutions to support enterprises to develop in quantity and quality, improve production capacity and participate more and more deeply in the global production chain. Specifically, the city aids supporting industry enterprises in development and investment, market expansion, and product supply and demand connection; applies a management system that meets the requirements of global production chains in corporate governance and production management; organizes training to improve the quality of human resources to meet the requirements of industries producing supporting industry products; solves the needs of production space for supporting industry enterprises; builds and operates the supporting industry portal of the city.
In general, the industrial industry is entering the post-pandemic recovery phase. Although there are still many difficulties and challenges, the production and business situation of enterprises in the area has stabilized. Production facilities and enterprises have changed positively, boosting production to meet the demand of domestic and export markets. “However, gasoline prices tend to move upward, causing production costs and input materials to increase, putting great pressure on production and business activities of enterprises. Therefore, along with the efforts of enterprises, the timely support from the city will be the foundation for businesses and city authorities to overcome difficulties and maintain the growth momentum in the coming time," Mr. Bui Ta Hoang Vu emphasized.
