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SMEs ‘should stay flexible'
Small and medium-sized enterprises (SMEs) must diversify their business activities to overcome current economic difficulties, while experts suggest enterprises should maintain a flexible business plan for the year.
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| A worker manipulates a machine at Tien Phong Plastic Joint Stock Co. Enterprises have been told to focus on increasing consumption of their products to raise capital. |
After a year fraught with challenges to production and business, Vuong Khiem, owner of a private Ha Noi-based business, said his company must create a flexible plan to trade products to overcome the present economic situation.
Last year, his company, which specialises in components and material for industrial production lines in the cement, steel, agricultural and mining machine sectors, saw a decline in turnover at the end of last year. He must now sell part of his property to finance the company's main operations.
Ha Noi property company director Do Anh Tuan said his company would expand business to the catering and entertainment sectors in 2012.
The company would also seek to collaborate with other businesses to increase the number of property sales, Tuan said.
Meanwhile, Ben Thanh Land Company will continue branching out business activities to the trading and service sectors to create capital for its central operations during the period of reduced economic activity.
Deputy head of the Enterprises Development Department under the Ministry of Planning and Investment Nguyen Trong Hieu, said last year SMEs had a big problem with high interest rates on bank loans, which forced many to borrow money from relatives and friends.
They also faced high prices for materials, electricity, petrol, property rental and exchange rates between the Vietnamese dong and foreign currencies, Hieu said. Also, many had inexperience in corporate management and did not have long-term business plans, lacked market information and material supply sources.
Tran Du Lich, a member of the National Assembly's Financial Supervision Committee, said growth of credit this year would reach 12 per cent, which was a good sign in providing capital for enterprises, including SMEs.
Economic expert Le Dang Doanh said enterprises should have sure-fire plans in business because this year was not suitable for high-risk ventures. Businesses should have flexible business scenarios and should carefully follow the market's development and adjustment accordingly.
Truong Dinh Tuyen, member of the National Financial and Monetary Consulting Council, said enterprises should focus on increasing consumption of their products to raise capital, highlighting consumer potential in the domestic market due to the young population.
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