Enterprises overcome difficulties, optimistically remove bottlenecks in year-end production and business

Good market prices for raw shrimp

Over the past three months, the Covid-19 epidemic impact has caused a high increase in logistics and freight costs. Enterprises in the Mekong Delta face more and more difficulties in the process of materials and products transporting in and out of the factories’ production areas.

Vo Van Phuc, Director of Vietnam Clean Seafood Joint Stock Company (Vina Cleanfood), said the cost of domestic transportation increased slightly, but those of shipping on routes to Europe and North America increased by 5 to 10 times compared to that of before the Covid-19 outbreak. On average, each 40-foot container costs more than VND200 million, not including delays and other incurred costs. Currently, businesses are facing many difficulties of the labor force due to the pandemic. Costs for pandemic prevention have increased many times while the number of workers is more and more decreasing.

Commenting on production recovery, Mr. Ho Quoc Luc, Director of Sao Ta Food Joint Stock Company, said: “Now that all costs are increasing, the world is going into inflation as a result of the disruption in global supply chain and it is now the end of the shrimp breeding season. As the Covid-19 pandemic threatens to recur, the most worry is about the spreading disease. Every time an outbreak sweeps through a commune, enterprises there will have to reduce their number of local employees due to travel restrictions or quarantine. This leads to a gradual decrease of employees afterward.”

According to Luc, enterprises that want to maintain operations at factories must ensure safety for production. “Pandemic prevention is leveled as a top priority at all times before and during production. Enterprises must strictly defend their workforce by increasing the frequency of safety inspection every 15 days or 7 days, then shortening it to 3 days. They should ensure to meet all requirements of pandemic prevention and control, timely prevent it from spreading. It is a vital factor for them to maintain and restore production for at the year-end,” he said.

Luc added that the market price of shrimp is now good. Fishery enterprises have just held a meeting and advised shrimp farmers in the Mekong Delta to feel secure to release the breeds so that can create material sources for processing plants in the new year.

Rice export enterprises said that from now until the end of the year and to 2022, the rice market is good, but there are still obstacles.

At the industrial cluster of rice milling and exporting factories along the Hau River (Thot Not District, Can Tho City), rice purchasing and processing still keep a good pace. Meanwhile, transporting rice by container truck from the production area to the port is cleared but the shipping costs are still high. Some businesses even have to suffer losses. Businesses need to export goods, but the freight rates depend on shipping lines.

However, it is forecasted the world rice market is still bright. Moreover, Vietnam's advantages in rice exports in recent years have been positive due to the restructure into high-quality rice varieties, with delicious and fragrant rice accounting for 60-70%. Prices of 5% broken rice varieties OM5451 and Dai Thom 8...have good competitiveness and stand at high levels. In 2020, Vietnamese rice exports reached USD500/ton on average. Especially, the price of the ST24 fragrant rice was sold for USD1,100/ton.

How to remove year-end bottlenecks for businesses?

Since the end of July, the Covid-19 pandemic has been complicated in the southern provinces, especially in the Mekong Delta. The social distancing has seriously effected many production and business activities in the region.

The General Statistics Office has just showed in the Mekong Delta, workers’ income in the third quarter of 2021 decreased by an average of 12% over the same period last year. The Southeast and the Mekong Delta are the two regions with the highest unemployment rate this quarter, much higher than the national average. More than 6% of working age population in these two regions are actively looking for jobs but still cannot find.

The production index in the first nine months of 2021 in some localities decreased sharply compared to the same period last year due to the impact of the Covid-19 pandemic. The decrease figure in many sectors such as food processing, manufacturing, textile, footwear, chemical, electricity and gas industries was shown as follows: Ben Tre-11.2%, Dong Thap- 9.9%, Can Thơ City-9.8%, Tra Vinh-7.3% and Vinh Long - 4.5%.

According to assessment of VCCI branch in Can Tho, the production recovery this year cannot be as good as the previous year. Enterprises are cautiously applying the recovery policy. Recently, VCCI branch in Can Tho has conducted a survey on business proposals. It found that in general, enterprises in Mekong Delta are very careful to gradually restore production capacity since human resources cannot meet all the requirements in pandemic prevention and control.

Regarding financial support, the survey mentioned a proposal to postpone and extend payment of social insurance. This is a rather large financial source that businesses may be interested in to save for their resources during the initial time of re-operation. The survey results show that most businesses only comply with relevant policies such as unemployment insurance and direct support for employees. For the large debt rescheduling related to social insurance, almost businesses have not had actively and boldly proposals.