Friday, August 18, 2017 - 21:47:06

Business earnings fall in Hanoi

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Enterprise revenues in Hanoi in the first four months decreased 5-15 percent against the same period last year, said the city's Department of Industry and Trade, which met with about 100 business representatives.

The business performance of the firms was down due to lower consumption caused by the global economic crisis, the department said.

The total turnover from agricultural products went down 31.4 percent over the same time last year, owing to lower prices of the products.

The combined turnover of other goods such as plastic products, steel and iron, minerals, construction materials, fertiliser, chemicals, pulp, wood and wooden furniture, toys and construction glasses was down 8.7 percent.

A series of small and medium enterprises had to close doors or reduce scale, the department said. Some large trade centres had to reduce the space they were renting by 10-30 percent.

Other trade centres, like Hang Da and Cua Nam , did not have customers and shop owners had to sub-let their premises.

Many enterprises had been landed with large inventories. Two examples were the Ha Tay September 2 Co Ltd which had an inventory valued at 25 billion VND (1.19 million USD) and the Agricultural Investment and Development Co Ltd which had about 4 billion VND (190,476 USD).

Many businesses said they faced biggest difficulties in the areas of capital resources, taxes and labour.

Bui Thanh Nam , director of the Hanoi Plastics Joint-stock Co, said: "Most companies faced problems in the first quarter of the year and are expecting to face more in the second quarter.

"Besides rising prices of raw materials, it has not been easy to access capital resources and we also face problems with human resources."

Import-Export and Feed Processing Co management chairman Doan Trong Ly said: "Enterprises need a specific remedy rather than a tonic. Deposit interest rates dropped quickly while borrowing rates went down slowly. It is so difficult for the firms to access commercial loans."


Deputy director of the State Bank of Vietnam's branch in Hanoi Hoang Viet Trung said credit organisations had lent a total outstanding loan at 59 trillion VND (2.81 billion USD), whereas bad debts accounted for 5 percent in the first four months compared to a bad debt rate of 2 percent for the whole of last year.

The outlook was likely to worsen, so bad debts might increase, Trung said.

With its careful and tightened policy on credit, the Government and State Bank had reduced lending interest rates, he said.

"With the current rate at 15 percent for loans, enterprises could only hope to maintain production, let alone make a profit.

The Department of Industry and Trade has collected enterprises' comment to submit to the municipal People's Committee for consideration before the official meeting.-VNA
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