Over the past few months, Vietnam-Taiwan joint venture Tam Viet Garment Co., Ltd. in Hanoi has been seeing a 12 per cent climb in export orders from Europe, which accounted for half of its export value in 2021.
“Many countries in Europe have opened the markets and we are negotiating more export deals with them,” said vice director Nguyen Hoang Huong. “We have been recruiting more workers in order to fulfil the contracts on time, and are expecting a double-digit export turnover for the entire 2022.”
Bulgaria’s Sharkov Inkom Co. Ltd. is increasing its exploration of Vietnamese partners who can supply it with garments and textiles, and assorted machinery, tools, and equipment in unlimited volumes.
“Vietnam is becoming a good market in which we can seek supplies,” said a company representative. “We are in need of help from the Vietnam Trade Office in Bulgaria to find partners in Vietnam.”
Sharkov Inkom, which distributes products manufactured by more than 300 producers and importers in Bulgaria, is now importing goods regularly from China, Turkey, and Europe.
In another case, Yiftach Broner, area manager of Israel’s A.B.I. Co., Ltd., said that since early this year, the company has fetched about $400,000 from selling its products in Vietnam. Their products include air and check valves, hydraulic control valves, unmeasured flow reducers, and software system analyses for surge and air valve sizing and placement.
“Vietnam’s agricultural sector is changing rapidly, and we are considering plans on how to raise our sales there. Vietnam will be our key market in Southeast Asia,” Broner said. “It is expected that the sales will increase 8 per cent this year in the country.”
Patricia Cazzaniga, export sales manager of Israel’s Irritech, said the company currently has a distributor in Vietnam and is cooperating with some local companies. “We will expand our distribution network in Vietnam, where we know farmers have a tendency towards applying modern technologies in their production,” she said. “It is expected that our sales for the whole of 2022 will rise about 10 per cent. The rate in the first four months sits at an estimated rate of 9 per cent on-year.”
According to the Ministry of Industry and Trade, in the first four months of 2022, export-import activities have taken place vividly, with businesses increasing their exports thanks to foreign markets’ growing demands, and expanding imports to serve their domestic production.
After witnessing a trade deficit of $1.96 billion in February and $581 million in the first two months, Vietnam enjoyed a trade surplus of $2.05 billion in March and $1.46 billion in Q1, then also a trade surplus of $1.07 billion in April and $2.53 billion in the first four months – in which Vietnamese companies have a trade deficit of $9.2 billion and foreign-invested enterprises (FIEs) are seeing a trade surplus of $11.73 billion, including crude oil exports.
The economy’s total import turnover is estimated to be $119.83 billion, up 15.7 per cent on-year. Vietnamese companies raked in $40.9 billion, up 14.3 per cent; while FIEs reported $78.8 billion, up 16.7 per cent.
About 89 per cent or $106.6 billion of the total import turnover in the first four months is for items used for domestic production, an on-year rise of 16.8 per cent. These items include pit coal (up 123 per cent), assorted fuel (146.9 per cent), crude oil (63.7 per cent), liquefied gas (62.7 per cent), and chemicals (29.3 per cent).
In terms of exports, the total turnover is estimated to be $122.36 billion, up 16.4 per cent on-year. Vietnamese companies attained $31.77 billion, up 21.6 per cent, while FIEs fetched $90.59 billion (including crude oil exports), up 14.7 per cent.
“The increase in the export turnover of domestic businesses is higher than that of FIEs. This means great efforts by domestic businesses in business and production recovery and resumption of supply chains,” said the General Statistics Office (GSO) in its 4-month socioeconomic report.
In the first four months of 2022, the economy also saw positive exports in the group of manufacturing and processing items, with the total turnover of $105 billion, up 16.1 per cent on-year and accounting for 86 per cent of the economy’s total export value.
According to a GSO survey of over nearly 5,500 manufacturing and processing enterprises nationwide in the first quarter of this year, about 47 and 37 per cent respectively forecasted that their new orders in Q2 will “climb” or “remain the same” as in Q1. Only 16 per cent predicted a reduction. About 65.6 per cent of the surveyed enterprises forecasted that their new export orders in Q2 will “climb” from and “remain the same” as in Q1.
When it comes to production volume, 50 and 34 per cent of respondents forecast Q2 will see a “rise” or “remain the same” as in Q1, while only around 15 per cent predicted a reduction.
The Asian Development Bank (ADB) said that it remains upbeat about Vietnam’s trade picture this year, saying that the fast recovery of Vietnam’s key foreign markets, particularly Europe, China, and the United States, will support exports, especially for textiles, garments and footwear, electronics, and mobile phones.
“External trade will remain robust this year. The Regional Comprehensive Economic Partnership is expected to accelerate trade and the recovery once the pandemic passes by forming stable and long-term export markets for Vietnam and creating a legally binding foundation for expanding trade,” said an ADB report on Vietnam’s economic outlook. “Merchandise exports are forecast to rise by 8-10 per cent this year. Imports will rise on increased demand for capital goods and manufacturing inputs, and rebounding domestic consumption.”
The ADB projected that Vietnam’s economy will rebound to 6.5 per cent this year and further expand to 6.7 per cent in 2023, due to the high vaccination rate, trade expansion, and continued accommodative monetary and fiscal policies.
But in a more cautious view, the World Bank said that Vietnam’s manufacturing exports are expected to grow at a slower pace, mirroring moderating growth in Vietnam’s main export markets.
In the first four months of this year, Vietnam’s export turnover from the US, China, and the EU reached $35.6 billion, $19 billion, and $15.5 billion – up 19, 17, and 20 per cent, respectively.
“However, the outlook is subject to heightened risks to the downside. Slowing growth in major trading partners and terms-of-trade shock due to the Russia-Ukraine conflict and associated sanctions may affect recovery. This could be compounded by new pandemic variants,” the World Bank said.
Vietnam’s GDP is expected by the World Bank to grow by 5.3 per cent in 2022 and thereafter to stabilise at around 6.5 per cent in a scenario with eased mobility restrictions domestically and internationally.
The GSO has demonstrated its optimism over the export landscape over the next months, which is now painted with bright colours in the first four months – seen in almost all economic sectors of the economy, such as fertilisers (192 per cent), chemicals (72 per cent), cameras and their spare parts (47 per cent), metals (36 per cent), and garments and textiles (22 per cent).
“Many garment companies in Vietnam have raked in big profits in 2021 and Q1/2022. Statistics from the Vietnam Textile and Apparel Association showed that the majority of enterprises have obtained export orders until the end of Q3,” said the Ministry of Planning and Investment’s Department for Industrial Economy in a report on the performance of some Vietnamese big groups. “The garment and textile industry has set an export target of $38-43 billion for 2022.”
Meanwhile, Huong from Tam Viet Garment, also said that in 2022 and 2023, import tariffs on some garment and textile raw materials will be phased out in South Korea, Japan, Indonesia, and Malaysia under agreements clinched between the countries or under ASEAN Economic Community commitments. “This will bring many opportunities for local businesses. With new workers at the new facilities currently under construction, we are expanding production and seeking new partners,” Huong said.