Businesses in Vietnam are facing new challenges brought by the Russia – Ukraine conflict in addition to lingering COVID-19 problems.
|An export-oriented fish processing plant in HCM City. Vietnamese businesses face numerous challenges, residual from COVID and the ongoing Russia – Ukraine conflict. (Photo: nld.com.vn)|
Many have difficulty in exporting to Russia, Ukraine and Belarus, face rising transportation costs and several Russian banks have been cut off from SWIFT, the leading international payment system.
Wood processing businesses importing materials such as timber from the two warring countries are finding it difficult.
Many businesses are also still dealing with the supply chain disruption caused by COVID.
Nguyen Dang Hien, general director of beverage producer Tan Quang Minh Manufacture and Trading Co., Ltd., said his company is recovering but still struggling with supply chain problems such as foreign partners closing down during the pandemic and raw material imports taking longer than before.
This is driving up production costs, but businesses could not raise their prices much, he said.
Truong Chi Thien, general director of Vinh Thanh Dat Foodstuff JSC, said with the rising production costs, even products under HCM City’s price stabilisation programme for essential goods would have to have their prices increased after March.
“We have asked HCM City’s Department of Finance to allow us to raise our prices from April.”
The company is working with raw material suppliers, distributors and retailers to overcome its challenges, he said.
It also has to defer growth plans and research into new products and cut down on all unnecessary costs, only focusing on production and exploring new opportunities, he said.
Pham Duc Binh, director of pork retailer Thanh Binh Co., Ltd., said considering the recent challenges businesses should try to maintain its production and wait for the economy to recover, and meanwhile cut down on unnecessary costs and investments.
Costs of materials sourced domestically are still stable, as are interest rates, he pointed out.
Hien said his company has been sourcing some of its raw materials domestically, and they have not been affected much by the global supply chain disruption.
“Businesses need help in accessing information about markets and potential foreign partners since many of our partners have reduced production or closed down.”
Pham Phu Ngoc Trai, chairman of Global Integration Business Consultants, said: “Businesses should not be panic too much over the Russia – Ukraine conflict or the rising petrol prices. We need to recognise that Vietnam is deeply integrated with the global economy, and there will always be risks.”
Huynh Quang Thanh, general director of Hiep Long Wood Processing Co., Ltd., said businesses struggling to import timber from Russia and Ukraine should look at other markets and generally avoid relying too much on any one market.
The Russia-Ukraine conflict is tormenting agricultural exporters who have managed to seek out solutions to shun and limit risks caused by disruptions resulting from the escalating situation.