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Dong Nai’s enterprises cry for help as export orders slump
Dong Nai Province, seen as the manufacturing hub of the country, may serve as the barometer to gauge how the global economic turbulence is giving a hard bite to the local economy as many enterprises on Tuesday cried foul of shrinking orders and mounting stockpiles.
Foreign trade in the southern province falls either way, while sizeable companies there are struggling to find outlets for products, they said at a meeting on Tuesday between the Ministry of Industry and Trade and the provincial government to look for solutions.
All eight companies sending representatives to the meeting related how they had to grapple with increasing stockpiles and falling revenue. This situation could be typical of the provincial economy, which saw export revenue falling by 14% to some US$1.2 billion in the first quarter, while the import bill shrank even a sharper 57% to some US$1 billion in the same period, said Le Van Danh, director of the province’s Department of Industry and Trade.
“Beside the eight large companies having huge inventories that attend the meeting here, the province has many other smaller companies that have not reported their stocks to the department since early this year,” Danh told the meeting presided over by deputy minister of industry and trade Nguyen Thanh Bien.
The companies who attended the meeting to cry for help included Donafoods, Dong Nai Bee - Honey JS Company, Tan Mai Woods JS Company, Dong Nai Garment JS Company and Dong Nai Export Products Processing JS Company among others. The eight companies are said to currently stockpile processed food and consumer goods worth at least VND500 billion, or nearly US$30 million.
Donafoods, or Dong Nai Import-Export Processing Agricultural Products and Foods Company, told the meeting that it is keeping in stock nearly 4,500 tons of cashew nuts worth some VND150 billion. Nguyen Thai Hoc, general director of Donafoods, said that many clients of the company from North America and Europe were reducing orders in the first three months.
“Beside the difficulty of selling our cashew nuts, the export price of the nuts also has been on fast reduction, from US$5,500 a ton in 2008 to only some US$4,200 a ton in March, and it could fall further to only US$3,800 in the second quarter,” said Hoc, who also serves as chairman of the Vietnam Cashew Association.
Dong Nai Bee - Honey JS Company is also having some 800 tons of honey in stock, while Bien Hoa Sugar Joint Stock Company is having some 150 tons of refined sugar unsold.
Many other key export products of the province including rubber, garment, coffee, woods and handicrafts also faced the same situation in the first quarter of the year.
Nguyen Viet Binh, director of Viet Thanh Pottery Joint Stock Company and chairman of Dong Nai Pottery Association, said that the number of export orders at his company had fallen by 30% in the first quarter.
“It’s a threatening sign for the pottery industry of the province when haft of the association members have stopped production due to export stagnation, and many still in operation said they could maintain production until May this year only,” Binh said. The association used to have some 70 members.
VietNamNet, SGT
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