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Businesses getting more cautious when expanding business scale
Only when the interest rates go down, paving the way for enterprises to access bank loans, will they consider expanding the production scale.
The long lasting uncertainties in Europe and North America, plus the high interest rates and high inflation all have forced businesses to delay their investment plans.
In late 2011, Dong Duong Steel set up a goal of putting out 70,000 tons of products in 2012 and obtaining 1 trillion dong in turnover. In order to fulfill the plan, the company planned to open three more branches and run some more projects.
However, Khong Manh Hung, Director of Dong Duong Steel, has said on Dau tu that the bank loan inaccessibility has forced the company to delay some big projects, which means that the previously set up goal may be unattainable.
Nguyen Tuan Anh from the Phu My Fertilizer Company said that though Phu My has become a well known brand, the company still has to keep cautious with its plan to expand the distribution network.
The urea supply has been forecast to exceed the demand from 2012, while manufacturers will have to compete fiercely to sell their products in the domestic market. Meanwhile, under the WTO commitments, Vietnam will have to open its market to foreign fertilizer distributors, which would have big impacts on the domestic market.
The enterprises, which had to delay their projects due to the economic recession, also keep cautious when asked about the plan to resume the investment.
Nguyen Tan Vu, Deputy General Director of Thien Nam Elevator Company, said that Thien Nam has spent money on a project covering an area of 27,000 square meters in the Duc Hoa Industrial zone in Long An province since 2009. It also planned to build a new factory in 2010. However, the plan has been delayed due to the market fall.
“We are still awaiting the credit policy to be loosened. Only by that time, will we be able to kick off new projects,” Vu said, adding that Thien Nam plans to set up a new factory by the end of 2012 with the moderate investment.
In general, businesses all make diffident moves in expanding their business scale. Dien dan doanh nghiep newspaper has cited the latest online survey conducted by Nielsen as saying that 66 percent of business managers think the business conditions have got worse.
Meanwhile, when asked about the business prospect in the next 6-12 months, 30 percent of businesses said the situation would get worse, and 36 percent said the business conditions would be the same.
Thoi bao Kinh te Vietnam has quoted Deputy Director of the Hanoi Planning and Investment Department as saying that by February 22, the number of businesses his department had granted business registration certificates had decreased by 2.6 percent in comparison with the same period of the last year, while the registered investment capital had decreased by 36 percent.
Tu said that the figures showed that investors now keep very cautious with new business ideas.
The department also witnessed the dissolution of 169 businesses during that time, an increase of 4.3 percent over the same period of the last year.
“In general, businesses refrain from declaring the dissolution after Tet, when the new year begins. Therefore, the high number of dissolved businesses shows that Vietnamese businesses are in big difficulties,” Tu commented.
Vo Sy, the counterpart of Tu in HCM City, said that the number of dissolved businesses in HCM City had reached 327 by February.
As such, Hanoi and HCM City alone have had 500 businesses dissolved in the last two months. Meanwhile, Sy believes that the actual number of dissolved businesses is much higher.
vietnamnet
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