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Export orders from many sectors are recovering in the first half of 2024. Photo: Provided by the enterprise

Maintaining growth pillars from exports

In the first half of 2024, reports from the HCM City Union Business Association (HUBA) indicated that the activities of most businesses in the area were stabilizing. Many industries showed positive signs, such as the textile industry, which has started to receive orders again until the end of the year due to efforts to find new markets, digital transformation, green transition, and competitive pricing.

Notably, businesses have seen significant increases in major export sectors such as textiles and electronics. The processing and export of agricultural products, such as rice, seafood, and fruits, have grown relatively well due to the booming Chinese market and changing consumer preferences. The food processing sector, benefiting from favorable market conditions, has achieved remarkable results.

The export turnover of food and beverage products in the first five months of 2024 exceeded US$2 billion, a nearly 70% increase compared to the same period in 2023, accounting for nearly 20% of HCM City's total export turnover. Domestic enterprises dominate this sector (93.5%) compared to FDI enterprises, with export turnover reaching US$1.29 billion. The industrial production index of the food processing sector grew by over 3.4% compared to 2023.

Sharing with the Customs News, Pham Van Viet, Chairman of Viet Thang Jean Company, said that since the beginning of the year, export orders at his company have recovered and grown well compared to the same period last year. Orders in the second quarter recovered by about 20% compared to the first quarter of 2024.

According to Viet, not only Viet Thang Jean but also other textile enterprises have seen an increase in export orders. This is because markets have recovered, and the stock levels of buyers have fallen below the minimum, leading them to start ordering again. As a result, purchasing power in Vietnam's four traditional textile markets has increased.

Nguyen Hoai Bao, Vice President of the HCM City Fine Arts and Wood Processing Association (HAWA), said that export orders in the wood export sector have increased quite positively. Compared to the same period last year, the increase over six months was about 22-25%. Traditional markets such as the US and the EU have recovered. Additionally, new markets explored by businesses in the post-pandemic years, such as India and the Middle East, although not large in total orders, showed significant potential for development and expansion.

Adapting to market pressures

According to experts, the increase in exports is largely thanks to market expansion and production technology improvements. However, to maintain this growth momentum, businesses need to continue their efforts and adapt to global market changes.

Ly Kim Chi, President of the HCM City Food Association, stated that in the current global context, order stoppages could occur at any time, so businesses could not be complacent. Additionally, Vietnam faces trade defense measures from countries where its goods are exported, such as the US and the EU. Businesses must produce under green conditions and a circular economy. Therefore, businesses need to prepare now to adapt to global market conditions.

Moreover, experts noted that the significant increase in cheap consumer goods from other countries has created substantial pressure for Vietnamese businesses. They are "struggling" with the doubling of sea freight costs: the cost of a 40-foot container to Europe has risen from over US$2,000 to US$5,000. This reality has pushed businesses into the risk of increasing export turnover but still suffering revenue losses.

Nguyen Anh Duc, President of the Vietnam Retailers Association, assessed that transitioning to market-oriented production was no longer an option but a mandatory requirement. Businesses need to solve the "green" production problem, meeting many criteria such as standard waste treatment, energy-saving production, and recycling solutions.

Furthermore, to enhance market position, manufacturing enterprises in particular, and Vietnamese brands in general, need to invest in research and development, innovate technology, and improve production processes following the trends of a green, circular economy. They must focus on building and protecting their brands, enhancing management capabilities, and developing effective distribution channels.

Government support and policy mechanisms to promote cooperation, investment in infrastructure, and enhance trade defense capabilities play a crucial role in promoting sustainable development and increasing the "health" of manufacturing enterprises and Vietnamese brands both domestically and internationally.

Additionally, to minimize legal risks in import-export activities, businesses need to understand the nature and characteristics of foreign trade contracts, the regulatory framework governing the contracts, and potential political and cultural risks. They should also review and assess the capacity of contracting parties, transaction conditions, and the legal regulations of the host country to proactively address risks that may arise during contract execution, emphasized Nguyen Huu Nam, Deputy Director of the Vietnam Chamber of Commerce and Industry branch in HCM City.