Jan 1, 2013

Vietnam - Businesses still concerned about uncertainty

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VietNamNet Bridge – In addition to the daily concerns about the market and sales decline, businesses are also worried that the uncertainties of the business environment and the volatility of macroeconomic policies will affect their operations in 2013.

Expectation of stable macroeconomic policies

Huynh Van Minh, chairman of the HCMC Business Association (Huba), said the difficulties of 2012 would greatly affect business operations next year.

In the year to the start of the fourth quarter, more than 200,000 enterprises had dissolved, gone bust or ceased operations. In August alone, the number of dissolved and inactive firms reached over 35,000, or 18% of the annual average of the past 12 years.

“I think 2013 will be another difficult year for the business community,” said Minh at a 2012 Trade and Investment Promotion Forum held by Huba in collaboration with the HCMC Union of Friendship Organizations, Department of Trade and Industry and Department of Planning and Investment in HCMC last week.

To remove the difficulties for enterprises, the State should stabilize the macroeconomic policies to make it easier for enterprises to draw up their business plans for 2013, he said.

High inventories, sluggish market and low supply are among the concerns of businesses during the final days of 2012.

According to Vietnam Report Co., a survey of 500 leading firms in Vietnam on market recovery outlook in 2012 brings quite pessimistic results.

Up to 55% of respondents said the economy would not improve much in 2013. Many businesses voiced their concern over the business environment uncertainties, changes in management policies and credit capital access next year.

High hopes on 2013

Despite the economic woes, enterprises hope they will be able to overcome difficulties next year.

Vo Van Thanh Nghia, CEO of Thien Long Group, is quite optimistic about the business performance in 2012. In an interview with the Daily, Nghia said that by the end of the third quarter, the after-tax profit of the company had exceeded the target.

“In 2012, we will certainly fulfill our commitments to shareholders on profits and ensure jobs and income for all staff members,” he said.

He added 2013 would be an important year for the company to expand the market share of stationery products at home and abroad.

During the tough times, enterprises have to minimize production costs while maintaining product quality, he noted.

Thien Long optimizes work efficiency and minimizes costs by modern technology and management methods. At some point, the company has to minimize profits to make sure their products are affordable.

The director of a wood export company in HCMC said his company had recently completed an order for bedroom furniture export to the European market worth over US$3 million.

“The customer is quite satisfied. Our company has also received orders from Europe for the first quarter of 2013. I believe that if able to maintain quality and reduce costs, we can develop well in 2013,” he said.

Speaking at the forum, Tran Du Lich, deputy head of the HCMC delegation to the National Assembly, said polices had been changed constantly since 2008, making it more difficult to do business.

However, the Government is trying to offer a general solution package to timely solve the problem of bad debt. The State policies on property demand stimulus via interest rate cuts and many other solutions are producing an effect, he noted.

“Vietnam has begun market restructuring through a variety of important policies. I hope the economy will soon recover,” said Lich.

Huba chairman Huynh Van Minh said his association would make proposals to relevant agencies, seeking appropriate policies to create a favorable legal corridor for business activities. In 2013, Huba will hold many forums to help businesses find more customers.

Source: SGT

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