Domestic businesses seek ways to adapt to Russia-Ukraine conflict

At a workshop, entitled "Adaptive solutions for import and export activities in the context of the Russia-Ukraine crisis" organised by the Vietnam International Arbitration Centre (VIAC) in collaboration with the Ho Chi Minh City International Integration Support Centre (CIIS) on April 20, VIAC Chairman Vu Tien Loc said the Russia-Ukraine conflict are considered as one of the hot spots causing direct impacts on the economies of many countries.

As Vietnam's important trading partners in the Eurasian region, import and export activities between Vietnam and Russia as well as Ukraine have also experienced significant changes. Businesses have not only faced disruption in the supply of raw materials and fuels but also affected the delivery of goods and increase transportation costs, he said.

Pham Binh An, Deputy Director of the HCM City Institute for Development Studies, said Vietnam's two-way trade with Russia and Ukraine reached about US$7.6 billion last year, accounting for 1.2% of the country's total import and export turnover.

The Russia-Ukraine conflict has thus both directly and indirectly affected Vietnam's economy, he said.

Vietnamese enterprises have not only had difficulties in the direct import of some products from Russia and interruption in exporting products to Russia and Ukraine, they also have to face competition in purchasing raw materials from other markets, An said.

The disruption of the supply chain in the Russia and Ukraine markets has greatly affected seafood enterprises in Vietnam as well as other countries when most of the raw materials are imported from Russia, Truong Dinh Hoe, General Secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP) said, adding that orders have been continuously delayed and canceled, resulting in congestion and losses for bussinesses. 

To deal with the above-mentioned problems, Loc suggested that businesses should have long-term strategies to cope with the fluctuations in the market. It was necessary for them to be equipped with solutions on risk management and handling disputes to be more resilient and resume business operations quickly in the near future, he said.

An agreed, saying that enterprises should actively diversify markets and supply as well as payment methods. He added that it is a must for them to study the incentives that free trade agreements, which have become effective, brought about to reduce costs and improve competitiveness.

Meanwhile, Hoe said, in response to the Russia – Ukraine conflict, seafood enterprises have adjusted business activities in a timely manner. Accordingly, enterprises have proactively carried out quick payment measures through channels from foreign banks and private banks.

Seafood enterprises are actively looking for opportunities to increase the market share of pangasius as there is a shortage of white fish supply in Europe, he said.