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Producers eager about preferential loans, exporters indifferent
Companies that make products for domestic consumption are elated about the 4% interest rate subsidy programme initiated by the government. Meanwhile, most exporters are merely regarding the programme with wistful looks.
Le Viet Ha, Chairman of Hancofood, a food, dairy and drink producer, sees the interest rate subsidy policy as a good move at present to prevent a downward economic spiral. Ha said the move will help businesses, especially small-and medium-size ones, more easily access bank loans, thus maintain production.
Hancofood last year had to borrow loans from banks at the interest rate of 12% per annum. It is trying to get these debts paid off so that it can get new loans at the 4% subsidy interest rate.
Ha said that as of the second quarter of this year, when the interest rate subsidy package shows effects, the company will be able to reduce production costs. He affirmed that sale prices of his products would decrease by 2-5%.
“In the current conditions, when purchasing power is on the decrease, the interest rate subsidy proves to be a supporting hand for enterprises, especially those which make consumer products,” Ha added.
Elsewhere, Director of TBH Company Ltd Dinh Ngoc Chinh said that exporters are now signing rice export contracts.
“In one month, when farmers begin harvesting crops, enterprises will need more capital to collect rice from farmers to fulfill export orders. Therefore, the 4% interest rate subsidy decision has come out timely,” Chinh said.
Bankers believe that credit will grow rapidly this year as the demand for capital of producers of food for domestic consumption and rice exporters is great. The demand for capital from the enterprises in the fields is expected to account for 50-60% of the total demand.
Meanwhile, most other exporters say they have just ‘listened to know’ about the interest rate subsidy programme.
Director of Thanh Son Company Ltd Vu Thai Son, who is also a member of the Executive Board under the Vietnam Cashew Association, said that the biggest problem now for cashew exporters is narrowed outlets for cashew products.
The next cashew crop will not come for another month. Therefore, cashew companies are not rushing to get loans yet. Unlike rice exporters, who expect growth in rice exports, cashew exporters still cannot find export markets.
Garment and footwear producers are also indifferent to the interest rate subsidy scheme as orders have not come in yet this year.
Pham Xuan Hong, Deputy Chairman of the Vietnam Textile and Apparel Association, said that borrowing now is just a priority for companies which previously made investment in upgrading equipment but halted investment due to high loan interest rates and tightened loaning conditions. The companies now have the opportunity to restart their investment projects.
Hong said that the enterprises which cannot get orders dare not get loans at this moment, even at low interest rates.
The leader of a garment group in HCM City has estimated that only 10% of garment companies have a demand for loans at this moment.
Some companies, in order to get orders to maintain production and jobs for labourers, had to slash outsourcing unit prices by 10-15% in comparison to the end of 2008.
Meanwhile, the owner of a packaging company in Vinh Loc Industrial Zone in Binh Tan district in HCM City, said: “Enterprises need capital to push up production, but how can they get bank loans if they went through the last difficult and unprofitable year?”, explaining that banks always ask for mortgaged assets and good financial reports to decide whether to give loans.
Many enterprises have reportedly been on the verge of bankruptcy. Some enterprises say that the interest rate subsidy scheme cannot help them solve their problems.
VietNamNet, VNE
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