70% off orders! These factories are urgently turned to the United States!
On March 18, according to a Vietnamese media vnexpress report: Some factories in Vietnam need to find a niche market, manufacture low-priced but high-volume goods, arrange labor to increase production capacity...to help factories stand firm against the drop in orders The "storm".
70% reduction in European orders.
Vietnamese shoe factory urgently turns to the United States.
Chang Shuen Footwear Company, located in Tan Dong Hiep Industrial Park (Binh Duong), has urgently recruited 250 temporary workers to meet the order schedule. After orders to Europe fell by 70%, the board quickly turned to the United States, a market where companies hadn't cooperated for nearly a decade.
According to Mr. Doan Sy Loi, CEO of Chang Shuen, the unit price in the US is always at least 15% lower than in Europe for the same product. When processing for European customers, the factory only needs to produce 5,000 pairs of shoes per day to make a huge profit. Now when changing the market, the production capacity must be increased to 6,000-6,500 pairs, which means an increase of 25-30% output.
Mr Loi said that in difficult times, one has to accept doing more orders to make a profit. The advantage of US orders is the large quantity. Previously, orders from Europe were up to 10,000 pairs of shoes! Now when receiving large-volume orders from the United States, all workers must switch to a new production mode.
The order volume in the United States may be 5-10 times higher than that in Europe, but the unit price is low. Workers must accept this large-scale order mode, know how to arrange production, and maintain profits.
According to Mr Loi, there are many challenges in accepting new markets and orders are now full. The jobs of more than 1,000 workers are stable, and overtime work ensures income.
Similarly, Dhoni International Joint Stock Company (Ho Chi Minh City), which operates in the apparel industry, had stable orders until the end of September, up 120 percent from last year. Immediately after Tet, the company recruited more workers to ensure production progress.
Mr. Pham Quang Anh, director of Dony, said that since late last year, he traveled to the Middle East to meet a partner of a large wholesale supplier. After understanding the customer market, he learned a lot.
Before July, the overall orders of Vietnamese shoe factories were very difficult.
In the past, due to small orders and high unit prices, but short delivery times, factories would be very passive. Many times have to buy expensive raw materials. To keep up with order deliveries, workers have to work overtime, leading to higher labor costs or recruiting seasonal workers with poor skills, often destroying goods. Therefore, at present, although the unit price is low, the quantity is large, and the factory will be more proactive, saving costs and turning them into profits.
Chang Shuen, May Dony is the factory that managed to find new orders in many ways, making up for the shortage caused by the overall recession. Mr. Pham Xuan Hong, Chairman of Ho Chi Minh City Embroidery Association, said that many businesses are also looking for new niche markets and partners to create jobs for workers.
Many companies develop more green and sustainable production, researching fabrics from recycled materials, targeting the high-end segment of the market, discerning customers. If the business is "destined" to find new customers, the order book will improve.
According to Nguyen Van Lam, deputy director of Ho Chi Minh City's Department of Labour, Disabled and Social Affairs, through the association's statistical survey, until July, the overall situation of production orders was difficult.
However, there are still some factories that have managed to find orders to keep workers in jobs. This is extremely valuable for the labor industry as it helps to stabilize labor relations and reduce unemployment and job shortages in the region. The City Employment Service Center is working with the association to bring in human resources when factories have orders.
