Tuesday, 03 August 2021 06:43

Despite the effects of the Covid pandemic, Vietnam's processing and manufacturing industry still keeps growing up. It can be seen as a good signal for Vietnam's business during this difficult time. 

The processing and manufacturing industry has shown its importance in the process of industrialization and economic development. The processing and manufacturing industry plays a key role, creating the largest added value in the industrial sector. In 2020, the growth rate of the added value of the industry is 3.36% compared to the previous year, contributing 1.12 percentage points to the growth rate of the total added value of the whole economy, in which, value-added of the processing industry, manufacturing increases 5.82%, contributing 1.25 percentage points. As of December 31, 2020, the total number of operating processing and manufacturing enterprises is 122,338, accounting for 87.9% of industrial enterprises and 15.1% of total enterprises in the whole country. In 2020, despite being affected by the Covid-19 epidemic, the number of processing and manufacturing enterprises still increased by 5.9% compared to that in 2019.

In the first 6 months of 2021, there are 8,665 newly-established enterprises in the field of processing and manufacturing with a registered capital of 145.2 trillion VND, an increase of 9.6% in the number of enterprises, and an increase of 74. 2% of registered capital compared to that in the first 6 months of 2020. The average registered capital of a newly established enterprise in the processing and manufacturing industry in 6 months is 16.8 billion VND, an increase of 59% compared to the same period last year. (while the average registered capital per enterprise is VND 14.1 billion, up 24.2%). This industry is the one that has a large number of newly-established enterprises (accounting for 12.9%) in 6 months of the whole country. Besides that, the wholesale, retail, automobile, and motorbike repair and construction industry also have a high number of newly-established enterprises (accounting for 33.5% and 12.5% respectively).

Also in the first 6 months of this year, the processing and manufacturing industry is the industry with the largest number of enterprises returning to the operation of 3,240 enterprises, accounting for 12.4% of the total number of enterprises returning to work for the whole country, up 3.3% over the same period last year. This positive signal shows that production and business activities in the first 6 months of 2021 have recovered quite strongly compared to the same period in 2020.

Although the Vietnam Government and the Prime Minister have given many directions in maintaining and stabilizing production and business activities, not letting the supply chain break, due to the complicated development of the epidemic, the number of processing and manufacturing enterprises exit from the market continued to increase. Generally, in the first 6 months of 2021, the number of processing and manufacturing enterprises temporarily suspending business is 4,225 enterprises, an increase of 18.5% over the same period in 2020; processing and manufacturing enterprises that completed the dissolution procedures were 1,138 enterprises, an increase of 29.8%. However, comparing the number of enterprises suspending business with the number of enterprises returning to work in the field of processing and manufacturing shows a strong purge is taking place, most enterprises suspending business has short operating time with small capital scale.

processing-and-manufacturing-in-vietnam-2021

It could be seen that despite the complicated development of the Vietnam Covid epidemic, processing, and manufacturing enterprises have adjusted their production and business plans to adapt to the real situation, so they still maintain and develop the production, contribute to creating a good growth rate in the first 6 months of 2021. The added value of the processing and manufacturing industry in the first six months of 2021 was estimated to increase by 11.42% over the same period last year, contributing 2.9 percentage points to the growth rate of the total added value of the whole country. Effective anti-epidemic solutions and positive changes in the macro-economic situation have affected the production and business results of processing and manufacturing enterprises. In the last 6 months of 2021[1], the number of new orders is estimated to be more positive with 83.1% of processing and manufacturing enterprises forecast that it would increase and stay the same compared to the last 6 months of 2020. The increase in the number of new orders is an important factor leading to the increase in the production volume of enterprises, 82.8% of processing and manufacturing enterprises forecast a stable and increased production volume.


[1] Results of the business trend of processing and manufacturing industry enterprises survey in the second quarter of 2021

Reference: Vietnam General statistic office

 
 

Download Brochure