A number of local firms in supporting industries have been receiving more orders from foreign partners due to the coronavirus outbreak disrupting supply chains in China.

A line of yarn production at Century Synthetic Fiber Corporation. Its plants arerunning
at full capacity to fulfill a surge in new orders from its foreign partners amid
the fast-spreading coronavirus outbreak (PHOTO: CSFC)

Do Phuoc Tong, chairman of HCM City-based Duy Khanh Engineering Co., Ltd, told the Saigon Times that a European machinery manufacturer had recently made contact with his company to put in parts orders, given the supply chain disruptions in China.

He said the foreign firm had requested 10 samples of various products, which his firm delivered.

Meanwhile, Century Synthetic Fiber Corporation, whose plants are located in HCM City and neighboring Tay Ninh Province, reported that its revenue in the first two months of this year rose by some 15% from a year earlier, partly thanks to an increase in orders from partners whose supply chains were hit in China.

As a result, the plants are running at full capacity. The company’s director for strategy, Nguyen Phuong Chi, noted that it is receiving more new orders from manufacturers in Thailand, the Republic of Korea, Japan, Taiwan and the United States.

She stated that foreign direct investment firms in Vietnam, which have long been the clients of her corporation, are also increasing the number of orders placed with its plants.

Major overseas manufacturers are making direct contact with the HCM City Center of Supporting Industries Development, seeking support in finding material providers and placing orders, according to Le Nguyen Duy Oanh, the center’s deputy director.

At least two Japanese manufacturers, two Korean firms and one German firm have expressed interest, remarked Oanh.

She added that these manufacturers specialize in consumer electronics and industrial machinery, so they wish to place orders for precision engineering, electronic components and plating.

As their products will serve many overseas markets, they need to put in more orders, she explained, noting that this creates opportunities for local suppliers in supporting industries to expand their markets.

Once the COVID-19 pandemic is contained, manufacturers elsewhere in the world will likely vary their supply chains rather than rely heavily on parts supplies from China, according to industry insiders.

Given prolonged supply disruptions in China, “manufacturers should consider further diversifying their supply markets. This will benefit Vietnamese suppliers over the medium and long terms,” stated Chi of Century Synthetic Fiber Corporation.

Oanh echoed this view, pointing out that multinational companies will restructure their supply chains, allowing Vietnamese firms to engage in global supply chains.