M&E industry after Covid-19 pandemic - Challenges and opportunities

Difficulties of the "Post-Covid" era
Increasing pressure on competition and purification combined with the economic shock caused by Covid-19 has made many businesses "wobble". Enterprises that are directly affected such as tourism, aviation, restaurants, hotels, education, have fallen into a state of "hibernation" in the past 3 months. The revenue of enterprises in the first quarter of 2020 and the year 2020 forecast for the whole year is expected to plummet, even lose money. Activities of trade promotion and investment were delayed, affecting business operations in the following quarters and years. Many businesses had to suspend operations, reduce production, especially small and medium enterprises.

According to a survey of nearly 130,000 enterprises conducted by the Ministry of Planning and Investment in April, it was found that: About 86% of enterprises were negatively affected by the Covid-19 epidemic. The larger the size of the business, the higher the rate of negative impacts from Covid-19. Turnover in the first quarter of 2020 of businesses fell sharply to 74.1% over the same period last year. Although revenue fell sharply compared to the plan, businesses still have to bear daily expenses such as salary payments and related expenses for employees, interest expenses… Difficulties in the market, revenue, cash flow have forced many businesses to use labor-related measures: nearly 30% of businesses apply labor reduction; Over 21% of businesses give workers unpaid leave and nearly 19% of businesses reduce their labor wages.
 

Many enterprises are cutting labor costs after Covid-19 pandemic
 

With the increasingly complicated developments of the Covid-19 epidemic and the resonance effects from other factors, the number of newly-established enterprises in the first four months of 2020 has decreased for the first time compared to the first 4 months of the year in the period 2015-2020 (a decrease of 13.2% compared to the same period in 2019). The average registered capital per enterprise in the first 4 months of 2020 reached 11.8 billion (down 17.9% over the same period in 2019); the business size is narrowed; the number of enterprises registered to suspend business with a definite period increased sharply (up 33.6% over the same period in 2019).

Although at present, the disease situation in the country has begun to show positive signs, in the world, the epidemic is still progressing in a very complicated and prolonged period, especially in countries that are important market partners of Vietnam such as the US, Japan, Europe, ... Therefore, supply chain and value chain failures that cannot be overcome immediately in the near future will continue to have a great impact on businesses, especially those with dependent inputs and outputs international market, deeply participate in production networks, global value chains such as textiles, footwear, travel, aviation, restaurants, hotels, logistics ... At the same time, due to the influence of the Covid-19 epidemic, countries are seeking to reduce their dependence on one market, leading to changes in global trade flows, depleting emerging markets that depend on imports and exports. After the epidemic, many great FDI enterprises tend to restructure the business system supplying raw materials to be more active, choosing a new investment location that satisfies conditions of science and technology, ecological environment and safe medical services.

In addition, if the epidemic continues to develop complicatedly in the world, the phenomenon of mergers and acquisitions in the coming time will take place stronger, the risk of potential Vietnamese enterprises (medium and large-sized enterprises, which already have a certain market share, play a leading role in some important economic sectors) may be acquired by foreign investors at low prices.

Opportunities for the M&E industry to recover operations and develop in the coming time
For many industries, in general, and the M&E industry, in particular, although it is affected by epidemics, this is also an opportunity for businesses to renew themselves, find new directions in accordance with market demand to survive and develop stronger, because risks always come with opportunities. Sensitive businesses will transition from "freezing" to immediately seizing new opportunities for development. This is the basis to promote capacity building of the economy, as a premise for more sustainable development.

Experiencing a difficult period when a series of projects in Da Nang - the heart of the beloved Central suffered the consequences of the epidemic, right after the order was relaxed, Sigma - the pioneer in the M&E field of installation and construction has quickly returned to work and achieved progress as committed with the investor.

 

Sigma engineers at Da Nang firmly overcome the challenges

During that difficult time, the Sigma employees and engineers promoted the spirit of overcoming difficulties, self-reliance, and proactively had creative solutions. Initiatives have been put in place to overcome the negative effects of the epidemic, such as applying flexible working hours; reduce production costs; checking and searching for sources of alternative raw materials; actively looking for markets for products, especially exploiting the domestic market, quickly seizing new business opportunities; applying digital technology in production and business ... These are the bases to believe that Vietnam's economy in general and M&E businesses, in particular, will have strong recovery steps in the coming time.

Sources: http://tapchitaichinh.vn/tai-chinh-kinh-doanh/boi-canh-kho-khan-va-no-luc-thich-ung-cua-cong-dong-doanh-nghiep-322734.html

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