Along with more positive demand from global markets, export production at construction sites, factories, and enterprises in Vietnam has been looking up since the Lunar New Year break concluded.

At Dai Dung Metallic Manufacture Construction and Trade Corporation, an order was signed until the end of 2024 with a production output of over 150,000 tonnes of steel components, an increase of more than half compared to 2023. In the first days of the year, workers in the factories worked three shifts per day, even throughout the recent holiday, to meet the delivery schedule.

“We set a growth target of 15-30 per cent and believe we can achieve it because we have already had many orders, specifically from overseas markets like supplying high-rise buildings in Japan and Australia, gas plants, as well as hydrogen separation plants in the United States,” said Trinh Tien Dung, chairman of Dai Dung Metallic Manufacture Construction and Trade Corporation.

Despite slow-paced recovery, consumption in such key markets as the US, and EU is creating a chain boost to export orders of Vietnam’s major items like textiles, wood and furniture, footwear, and electronics.

According to the General Statistics Office (GSO), in the first month of the year, footwear exports reached $1.85 billion, up 35 per cent on-year, and it is $3.27 billion in the first two months, up 18.3 per cent on-year. Businesses said post-holiday orders were currently relatively stable with partners from five main markets the US, EU, Japan, South Korea, and China.

Footwear manufacturer Gia Dinh Group has enough orders until the end of the second quarter, so workers have to work overtime five days per week, 1.5 hours a day. Producing footwear at average or higher quality, and higher difficulty, is an advantage that allows businesses to get more orders at the beginning of the year.

“We have made changes by expanding to small and new markets, diversifying markets and products, reducing dependence on orders from previous traditional customers,” said Nguyen Chi Trung, chairman of Gia Dinh Group.

​At plastic bag manufacturer AAB Harvest Packaging Company, 400 workers went back to work after the Lunar New Year holiday to accomplish the orders that have to be sent next month. The production line operates continuously for 14-16 hours per day and raw materials have also been prepared to enable seamless production without affecting long holidays.

“At present, we have enough output for the orders that will be exported in March and April,” Nguyen Anh Vu, deputy director general at AAB Harvest said.

Many businesses have also proactively invested in, upgraded tank systems, and warehouses and applied incentive strategies for customers to place orders early to proactively plan production and supply.

At the end of 2023, Duc Giang Corporation (Dugarco) founded Dugarco Creative, covering the entire process of design, raw materials, sewing, marketing, connection, and training, to better serve customers. This pushes Dugarco to transform to original design manufacturing and original brand manufacturing, while outsourcing is declining.

Chairman Hoang Ve Dung said, “With order requirements in the new context, research and development of sample products is an extremely essential and important issue.”

In Ho Chi Minh City, industrial production sees numerous positive changes. Exports in the first month of the year were estimated at $3.8 billion, up nearly 20 per cent on year. Associations reported to Ho Chi Minh City Department of Industry and Trade that most businesses have orders after Lunar New Year, and textile and footwear manufacturers have orders until the end of June, or even the end of 2024.

“This is very different from 2023. The purchasing power of the world market has been warming since very early of the year and production in Ho Chi Minh City market sees positive signs. We hope that the first quarter of 2024 will have more positive growth than last year,” said Bui Ta Hoang Vu, director of the department. “We have worked with and supported associations and industries to have more promotion programmes in overseas and niche markets, in addition to exploiting free trade agreements that Vietnam has signed.”

The economy had a very successful beginning to the new year, as exports have recovered with impressive growth at 42 per cent on year in January, and up 19.2 per cent in the first two months, while industrial production also increased to 18.3 per cent in January and up 5.7 per cent in the first two months, after months of negative growth last year, in which the top role is exporting computers and electronic products with a growth rate of almost 34 per cent on year as of end-February, according to the GSO.

Analysing the factors contributing to exports, VinaCapital said that the export turnover of computer and electronic products increased by nearly 60 per cent on year, the main reason for the high growth in the month.

After a sharp decline over the previous two years, global computer industry revenue grew again by the end of 2023, global smartphone revenue also raised once more by the end of 2023, although the recovery was not as clear as in the computer segment.

This growth momentum had a major contribution from all kinds of phones and components, which export turnover in the first month was about $5.8 billion, an increase of 56.3 per cent on month because Samsung just launched the Galaxy S24 in mid-January. And its export value in the first two months is nearly $9.6 billion, a rise of 4.1 per cent on year.

“We see a strong growth in export orders, buyers in the international market are offering more products from Vietnam, especially electronic products, then spreading to many other products and industries such as textiles, garments, and footwear, their orders also returned. Despite not being too much, the export recovery is a very positive,” said Brook Taylor, CEO at Asset Management of VinaCapital.

Some foreign financial institutions in Vietnam such as HSBC, VinaCapital, and UOB believe that the number of export orders in Vietnam will continue to increase in the next months, especially from the US market with the Fed’s interest rates reduction, and Chinese economic recovery.

Vietnam’s economic recovery and growth on a large scale will have the contributions of both production, export, and especially domestic consumption. With this start, the possibility of exceeding the economic growth target of 6.5 per cent this year could be feasible.

“Vietnam’s economic status in 2024 will be more positive. In addition to external impacts, many solutions are being implemented and we expect more to support domestic economic activities, demand, and domestic consumption,” said Suan Teck Kin, executive director at UOB Global Economics and Market Research.

Vietnam Investment Review