Despite facing numerous difficulties in the early months of the year, with the efforts of businesses and the support of Ba Ria-Vung Tau Province’s government, in October 2023, the industrial production index exceeded the targeted plan. As a result, it is expected to successfully achieve the goal set at the beginning of the year.
The industrial production index, excluding oil and gas, surpasses targets
The Khang Thinh Steel Trading and Services Limited Liability Company (An Ngai Commune, Long Dien District) specializes in consulting, designing and constructing pre-engineered steel structures, warehouses, high-rise buildings, etc., for customers within and outside the province. In the first half of 2023, the company had almost no orders. To “hold on” and maintain employment for workers, the company mainly performed processing subcontracts for partners but still faced many difficulties.
However, in recent months, Khang Thinh Steel has received four construction orders for projects both within and outside the province, with a total value of hundreds of billions of Vietnamese dong. With this workload, the company ensures employment for 80 permanent workers from now until the end of the year. “After a difficult period, having these orders demonstrates that the construction and fabrication of steel structures are thriving. This somewhat alleviates our concerns. The company is determined to continue construction to ensure quality, maintain the brand, and actively seek new orders,” said Tran Thi Thu Thuy, deputy director of the company.
In mid-September, Alpha ECC Southern Oil and Gas Construction Joint Stock Company (located in Dong Xuyen Industrial Park, Vung Tau City) commenced work on a project to manufacture equipment for recovering CO2 gas on floating storage, processing, and offloading vessels (FPSO). This equipment’s value set is estimated at approximately US$500,000 and is designed to recover and transform the amount of CO2 gas on the FPSO vessel to reduce emissions into the environment.
Vu Van Dao, chairman of the board of directors of Alpha ECC, stated that the project not only holds significance in business but also opens up opportunities for investors, designers, and manufacturers to undertake many subsequent projects, contributing to environmental protection. “In addition to this project, Alpha ECC has many contracts with partners from Europe, the U.S.,… Thanks to a stable workload, we are making efforts and have confidence to continue developing economically and socially meaningful projects in the future,” added Vu Van Dao.
According to the Department of Industry and Trade, the value of industrial production (calculated at constant 2015 prices), excluding crude oil and natural gas, in October 2023 is estimated at over VND37.6 trillion, an increase of 7.64% compared to the previous month and 13.14% year-on-year. The accumulated value for the first 10 months of 2023 is estimated at over VND318.3 trillion, an 11.24% year-on-year increase, surpassing the planned growth of 9.24% set at the beginning of the year. The Index of Industrial Production (IIP), including crude oil and natural gas, in October is estimated to increase by 10.24% compared to the previous month and 8.83% compared to the same period last year. The cumulative IIP in the first 10 months of the year is estimated to increase by 3.1% against the same period last year.
This growth has been achieved thanks to the adaptability and strong recovery of industrial businesses, with some companies in the textile and leather footwear sectors receiving orders and rehiring workers. The processing and manufacturing industry is experiencing a robust recovery. Steel companies are recovering thanks to additional orders from public investment projects and domestic customers, reducing their reliance on exports. The input prices for this industry have also decreased, alleviating the pressure on production costs.
Support for businesses
When companies in general overcome difficulties because they get new orders, in recent months, big scale factories have been put into operation to contribute to the provincial industrial index. Recently, Viglacera Corporation inaugurated a refractory brick factory using the world’s most advanced production line – Continua by Sacmi (Italy). This factory produces environmentally friendly stone with many superior advantages compared to other natural and artificial stone products. In particular, this product helps reduce the exploitation of natural resources, contributing to environmental protection.
The Long Son Petrochemical Complex in Vung Tau City, with investment capital of over US$5 billion, is currently undergoing trial operation and is scheduled to officially commence commercial operation in 2024. At that time, the project will create jobs for around 1,000 Vietnamese workers and contribute tax revenue of US$150 million per year to the province.
However, according to the Department of Industry and Trade, despite the positive signals, in the context that there are so many expected difficulties, the number and scale of industrial orders from businesses in Ba Ria-Vung Tau are not substantial, and there is low demand in foreign markets. Getting access to capital is difficult, input costs are high, and the real estate market so far has shown no signs of recovery. Industrial production is anticipated to face numerous challenges. To assist businesses to overcome those difficulties, the provincial government of Ba Ria-Vung Tau is making efforts to provide support, primarily through policies such as creating conditions for businesses to access capital, expediting the disbursement of public investment, and reviewing, reducing, and simplifying administrative procedures to create the best possible environment for production and business.
The provincial leadership and departments are actively positioning themselves as “facilitators” for the development of businesses. Recently, Nguyen Van Tho, chairman of the Provincial People’s Committee, witnessed the signing ceremony of a memorandum of understanding between the Department of Industry and Trade and the Vietnam Oil and Gas Technical Services Corporation (PTSC). The agreement states that PTSC prioritizes collaboration with steel businesses in Ba Ria-Vung Tau when implementing offshore wind power projects. PTSC has found a high-quality source for international-scale projects, providing steel businesses in Ba Ria-Vung Tau with chances to access substantial and valuable orders.
Stating at the ceremony, the chairman of the Provincial People’s Committee stressed the connectivity of the companies in the province to help create the high value manufacturing chain and improve the competitiveness of the Ba Ria-Vung Tau companies in Vietnam and overseas. In the coming time, the province will hold many events to facilitate trade connections among businesses within the province and both domestically and internationally, particularly in the industrial sector. The Ba Ria-Vung Tau government anticipates that through these activities, the province’s industrial manufacturing sector will experience a strong recovery.
