Industrial enterprises wait for more opportunities in the second half of the year

	Industrial enterprises face many difficulties in the second half of the year
	Heavy industrial enterprises are worried about rising gasoline prices
	Paving the way for development of processing and manufacturing industry

The price of input materials and the pandemic are the difficulties in the second half of 2022 for industrial enterprises. Source: Internet.

Profit distribution in the first half of the year

In the textile and garment sector, TNG Investment and Trading Joint Stock Company recorded a revenue of VND3,242 billion in the first six months of the year, profit after tax of VND125.3 billion, up 36.8% and 50.8% respectively over the same period in 2021.

The company said the reason for the growth in profit was the investment in additional automatic machinery and the application of self-developed software to control production on an hourly basis for each person to boost labor productivity and reduce production costs.

Besides, the demand for goods and the scarcity of containers improved. Exported goods are no longer congested at the port, helping to increase revenue.

At Binh Minh Plastic Joint Stock Company, in the first half of the year, consolidated revenue reached VND2,911 billion and pre-tax profit of VND341 billion, up 11.5% and double the same period last year, respectively. Company leaders said that the reason the profit growth rate was higher than revenue was that the price of plastic raw materials decreased but the selling price remained the same and did not increase the discount, so the profit margin was better.

Thanks to the development of the digital communication system and the appropriate expansion of e-commerce, Rang Dong Light Bulb and Thermos Joint Stock Company recorded a revenue increase of 16.9% to VND3,128 billion, profit before tax increased by 14, 3% to VND274.7 billion in the first 6 months of 2022.

But in the opposite direction, for steel enterprises, due to the deep drop in steel prices, many businesses reported a sharp fall in profits in the first 6 months of 2022, and even some businesses reported losses.

For example, Thu Duc Steel Joint Stock Company - VNSTEEL has just recorded the third loss in the last four quarters, when in the second quarter of 2022, this business recorded net revenue of VND358 billion, down more than 45% compared to the same period, causing a gross loss of nearly VND2.5 billion. According to the company, the output price has decreased continuously from the beginning of the second quarter until now, along with the decrease in steel consumption causing the company to stop production, high inventory steel prices from previous months affected the cost of goods.

This situation is in stark contrast to the second quarter of 2021 when supply chain disruptions and strong demand created conditions for steel prices to rise.

Thai Nguyen Iron and Steel Joint Stock Company (Tisco) recorded Q2/2022 revenue of VND3,189 billion, profit after tax of VND5.8 billion, down 10% and 90% respectively over the same period last year. Accumulated in 6 months, TISCO's profit after tax reached VND34.9 billion, down 66.1% over the same period in 2021. According to Tisco's explanation, the decrease in the company's profit in the second quarter was due to the price of input materials into a sharp increase.

What opportunities for the second half of the year?

With the business results in the first half of the year, businesses said that more efforts are still needed to achieve the full-year plan set out. The good news is that by making use of opportunities and overcoming difficulties, many enterprises in the electronics, textile, footwear and other industrial sectors continuously receive good news with closed export orders until the end of the fourth quarter of 2022 and also into 2023.

According to experts, enterprises have exploited markets with Free Trade Agreements (FTAs) of many key export industries, especially new-generation FTAs, to promote exports. Businesses are trying to control all costs to minimize the impact on businesses, as well as invest in machinery and technology, and green transformation to adapt to the requirements of brands.

In addition, industrial enterprises are waiting for more opportunities from expanding and attracting FDI. In the first six months of 2022, according to data from the Foreign Investment Agency, FDI invested in the processing and manufacturing industry reached nearly US$8.84 billion, accounting for 63% of total FDI. According to businesses, this FDI attraction will create opportunities and conditions for domestic industrial enterprises to participate in the global supply chain by supplying products and components to large corporations in the world investors are investing in Vietnam.

Therefore, many businesses are also preparing to "pave the way" for these upcoming opportunities.

Recently, N&G Vietnam Group and Japan's Onaga Company have cooperated to establish Vietnam Supporting Industry Development - Investment - Consulting Co., Ltd (IDS) to provide production certificates, consulting support on management experience for businesses wishing to participate in the supply of supporting industry products into the global production chain.

However, according to experts, businesses need more reforms, including improving the skills of the workforce and improving the quality of infrastructure, to be able to seize many opportunities from FDI. At the same time, the authorities also have to be selective in licensing FDI projects, and need to choose projects that are pervasive and support domestic enterprises to participate in production and business.