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Thirsty for capital, export companies miserable
“We are facing out greatest-ever difficulty in accessing capital,” stated Intimex General Director Do Ha Nam, whose opinion is shared by most export companies at the export forum held on March 11.
Deputy Minister of Industry and Trade Nguyen Thanh Bien, who attended the forum, also confirmed that the biggest obstacle for export companies is the lack of capital.
Farm produce and seafood producers dejected
Economic analysts report that the stock and real estate markets have always attracted capital and the removal of the interest rate ceiling may make capital flow to these markets instead of production companies. As a result, the capital shortage for production may become more serious.
General Director of Intimex Do Ha Nam claims that: “Coffee is now on red alert.” While coffee output decreased by 30 percent compared with 2009 due to crop failures, the sale of Vietnam’s coffee has also decreased sharply -by 44 percent - and continues to slide.
Secretary General of the Vietnam Cashew Association Dang Hoang Giang estimated that cashew processing enterprises need some 14,820 billion dong to collect 40,000 tons of raw materials in 2010 from domestic sources and import 250,000 tons of necessary raw materials.
Yet they are virtually unable to access commercial bank loans that set very low credit limits and high interest rates. Meanwhile, the Vietnam Development Bank (VDB) has not disbursed loans.
Cashew nut exporters also face difficulties. While the export price is low, collection is very high at $1100-1150 per ton. With such prices, Nam explained, Vietnamese enterprises have, in essence, become salaried workers for foreign partners. Production costs have also increased by 20 percent in comparison with the same period of 2009.
Nam observed that, while domestic companies do not have capital to collect domestic materials, foreign enterprises have jumped to collect materials in Vietnam’s home market. Due to the lack of capital, many enterprises have lost lucrative contracts to foreign companies.
Settling difficulties
Bien from the Ministry of Industry and Trade said that they have joined forces with the Ministry of Agriculture and Rural Development to develop policies to help consume farm produce and seafood products which aim to ensure the food security and help increase income of farmers.
As requested by the Vietnam Coffee and Cocoa Association, the Government has assigned relevant ministries to consider promulgating the interest rate subsidy policy that allows storage of 200,000 tons of coffee to keep coffee prices stable.
The Government has extended the interest rate subsidy program for medium and long-term loans until the end of 2010 and also agreed to extend corporation income tax payments for three months for small and medium enterprises.
However, businesses maintain that not every complaint can be addressed.
Giang has urged the Vietnam Development Bank to make disbursements soon and allocate the 2000 billion dong loan funds to cashew enterprises so that they can collect materials from March to July 2010.
Giang has also asked the bank to reserve preferential loans worth 1500 billion dong in order to help enterprises to upgrade workshops and invest in new processing equipment.
VietNamNet, TP
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