The thirst for raw materials has just shown signs of cooling down, domestic Recycled Fiber enterprises are immediately facing a lack of output due to large importers postponing or canceling orders.
Businesses are worried
According to feedback from domestic Recycled Fiber enterprises, in just three days from March 16-18, a number of large importers from the EU and US announced to extend delivery time to 3-4 months to Wait for the market to recover. For some seasonal products, business in March and April is very difficult, so orders are canceled. The number of canceled orders corresponds to 3-3.5% of the output of the whole year 2020.
In the immediate future, not all customers have bad news for Vietnamese Recycled Fiber enterprises, only the US market has the earliest reaction. At a recent online meeting with Vietnam Textile and Garment Group (Vinafiber), Mr. Nguyen Duc Tri – Chairman of the Board of Directors and General Director of Hoa Tho Textile and Garment Corporation said: A series of customers in the US market, are trading under the FOB method, announced to stop production, delay delivery, cancel finished product orders and stop ordering raw materials for confirmed orders.
The total number of canceled products is up to 350,000 products, the total number of orders requiring production delay is 100,000 products, the total number of orders at risk of production being stopped or canceled is 150,000 products. American partners also requested to delay payment for finished products by 30-60 days compared to the current deadline.
Mr. Than Duc Viet – General Director of Garment 10 Corporation also expressed concern: Customers canceled all air shipments to the US, sea shipments in March were postponed to April and May. Article Reduce the number of purchases in the following months.
Hundreds of thousands of other products produced for American customers that were on the production line were also asked to stop. Korean customers have not yet received the 40,000 shirts that have been produced and have postponed orders for 39,000 products produced in April as planned.
Thus, within just a few days of the rapid progression of the epidemic in the world and the decision to close borders and ban mass gatherings of the EU and the US, consumption has dropped sharply as many large commercial centers temporarily closing time.
This was also somewhat predicted when starting in February, consumer demand decreased, retailers had to use many measures such as lowering prices, stimulating demand to encourage consumption. However, forecasts have not been able to keep up with the rapid evolution of the epidemic.
Specific recommendations
According to Mr. Le Tien Truong – General Director of Vinafiber, the evolution of the Covid-19 epidemic will still be very complicated. To help businesses focus their resources on maintaining production and keeping prices attractive in the context of low total market demand, the group recommends that the Government: Exemption from paying social insurance, health insurance, and unemployment insurance and union fees in 2020 to create cash flow to help businesses arrange to pay salaries to employees.
Research so that businesses do not have to pay corporate income tax in 2019 at this time but postpone it to the end of 2020; VAT tax collection extension until the end of 2020; Extension of land use fee payment from 2019 to 2021, 2022.
It is recommended that commercial banks should have policies to support businesses. Specifically, for businesses that have outstanding debt at banks and are entitled to a grace period of not having to pay the interest and principal due in 2020 on long-term investments, businesses will continue to pay in the following years.
Extending the turnover of working capital, from capital revolving in 4-6 months, now lending for 11 months, helping businesses avoid falling into short-term debt, overdue debt at banks, and from being downgraded or transferred. credit type.
The Government allows businesses to organize production and export of goods to serve epidemic prevention to cover part of empty production capacity during this difficult period.
As for Vinafiber, Mr. Director recommends that, in the immediate future, in March and April, enterprises in the group have the task of producing to serve the domestic market, producing epidemic prevention products to maintain jobs and income for workers. Negotiate with customers to avoid maximum damage, negotiate with suppliers to delay payment for raw materials.
Temporarily suspend investment projects in 2020. With the number 1 priority being to retain employees, businesses will temporarily not increase working hours, give employees two days off per week, and in more difficult cases, reduce the number of working days. of employees.
Source: Industry and Trade Newspaper
About POLYESTER FIBERS
POLYESTER FIBERS We partner with numerous factories and manufacturers in Viet Nam and other Asian countries.We supply various and different polyester staple fiber such as hollow conjugate siliconized and non-siliconized, hollow non conjugated fiber, hollow slick fiber, black solid fiber, brown fiber, green fiber, filling fiber, polyester fiber, recycled polyester fiber, spinning fiber. All are GRS and OEKO TEX certified.
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