Strengthening manufacturing and processing industry

Wednesday, 2019-05-08 16:31:01
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The development index of industries in the first quarter this year has basically followed the growth scenario. (Photo: VNA)
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NDO - According to the Ministry of Industry and Trade, the development index of industries in the first three months of the year has basically followed the growth scenario that has been built. In particular, the mining industry’s output decreased by 2.1%, while the target was a 4% reduction, mainly because of the 6.3% decrease in the exploitation of crude oil and natural gas.

The electricity industry has produced and operated in a safe and flexible manner, reaching 9.4% of the growth rate (the set target was 9.5%). Although the manufacturing and processing industry recorded a lower growth rate compared to the same period last year, it is still considered a bright spot, contributing mainly to the overall growth of the industrial sector and the whole economy.

Notably, the growth of the manufacturing and processing industry in the first months of the year largely came from industries produced by domestic enterprises such as motor vehicles, coke coal and refined oil, among others. In particular, a number of industries grew at a very high rate such as metal production (a 37.3% increase) and motor vehicles production (20.8%).

The main reason for the lower growth of the manufacturing and processing industry group was attributed to the fact that certain large projects, such as Nghi Son oil refinery, had electrical problems in February and Samsung was in a cycle of product conversion, resulting in output and exports only growing slightly (roughly 1.02%), much lower than the same period in 2018. However, with the launch of a new S10 smartphone, Samsung’s production and exports are expected to increase sharply in the coming months, whilst the Nghi Son oil refinery has resumed its operation since April.

Besides, it is expected that from now until the end of the year, several large projects that were completed in 2018 and 2019 will start to contribute to the growth of the industry. For example, the Hoa Phat Dung Quat Iron and Steel Production Complex are expected to begin production this year, with the largest capacity of two million tonnes of steel. Vinfast began its production in April and is expected to produce several tens of thousands of cars depending on the market.

The industrial sector, with manufacturing and processing industry as the core, has continued to play a key driving force in the country’s economic growth. However, industrial production in the remaining months of 2019 is also facing many challenges including signs of slow growth in manufacturing and processing industry and mining industry.

In order to remove difficulties for production and promote economic growth in the remaining months of 2019, it is necessary to focus on reviewing and understanding the causes to devise appropriate and timely solutions to improve production capacity and expand production and business scale.

On the other hand, it is necessary to put industrial production projects, especially the large ones, into operation soon, while devising measures to remove difficulties in mechanisms and policies to reach full capacity, contributing to the sustainable growth of the industrial sector and the whole economy in the future.