With more than two months left until the end of 2022, Da Nang-based enterprises are struggling to overcome their current difficulties to accelerate production activities.

Bank interest rates rise in the last months of the year causes many difficulties for Da Nang-based businesses. IN PHOTO: Workers are seen working at the Da Nang Forest Products Export JSC. Photo: Q.TRANG

The Bich Hanh Technology JSC located in Hoa Nhon Commune, Hoa Vang District, specializing in manufacturing electrical panels and electrical equipment is a typical example. 80% of the company's business market share is in the domestic market, whilst the remaining 20% ​​is in some Southeast Asian countries.

To meet the long-term development strategy, the company focuses on investing in new machinery to increase capacity and modernize products in addition to expanding domestic and export markets.

However the company's revenue in the fourth quarter of the year dropped by 30-40% over the same period due to the adverse effects from the market.

Director of the company Huynh Ngoc Trung said that the company's main material source is electronic chip components imported from France and Italy. In the context that the whole of Europe is struggling with rising inflation, most of businesses are facing rising prices and scare supply of imported raw materials.

Although the company has taken a number of solutions to reduce intermediaries, optimize production costs and applies technology, it has still witnessed a sharp decline in consumer demand for goods. Therefore, the company is trying to complete the signed orders in the year, and it has no new orders for the first quarter of 2023.

Besides the consumption of the market, the working capital flow-related problem is always a major headache for many city-based businesses.

A representative of an enterprise specializing in wood exports said that he had to work hard to recover old debts. The wood industry has a large initial cost, so in the context of competition and reduced demand, certain incentives must be given to customers, but the debt accumulated at the end of the year makes cash flow very difficult for businesses. In addition, high bank interest rates make businesses difficult in cash flow.

Mr. Ha Ngoc Thong, Director of the Tan Long Packaging Paper Factory located on No. 10 Street in the Hoa Khanh Industrial Park, Lien Chieu District, shared the main products of the factory are papers and carton packaging, whilst the main partners of the factory are export enterprises involving textiles, footwear and seafood.

“Over the past 10 months, the world economy has had many fluctuations, negatively affecting the source of imported materials for production. Also, the supply chain of the global market was affected, and the market demand decreased. All make the number of our partners decreases significantly” added he.

Workers at the Ha Giang Phuoc Tuong Mechanical JSC. Photo: Q.TRANG

Director Thong remarked, in order to solve the problem, his factory attached the importance to seeking new customers and expanding the consumption market. Especially, the factory focused on the high-end paper segment - a potential market that has been left open for a long time. In the immediate future, although there are only 2 months left until the end of the year, the factory has already received a few large orders to increase revenue by 30%.

Meanwhile, over 100 workers of the Ha Giang Phuoc Tuong Mechanical JSC based in Hoa Cam Industrial Park, Cam Le District, have been busy completing their orders.

The company's main products are steel structures, workshops for factories, steel structures for sports and cultural works, and hydro mechanical equipment for hydroelectric projects. The consumption market is the central and highlands provinces.

“This year, the company sees an over 60% year-on-year increase in contracted sales. The company has signed contracts for 50% of next year’s output, so employees feel secure to work,” said Company Director Ha Duc Hung.

Reporting by QUYNH TRANG - Translating by M.DUNG