Challenges for industrial production

Challenges imminent

Small and medium-sized enterprises (SMEs) are not the only entities under pressure. Leading economic groups are also taking great pains to empty inventories and access bank loans for production expansion.

Vietnam National Oil and Gas Group (PVN) Director General Do Van Hau says boosting sales is currently one of the group’s key tasks.

Although the government encourages the use of biofuel (E5), the environmentally-friendly product has yet to be wholeheartedly embraced by the distribution network of the Vietnam National Petroleum Group (Petrolimex) which holds 70 percent of the domestic petrol and oil market share, Hau says.

He also reveals that PVN needs large amounts of capital for oil and gas exploration, oil refinery, and power projects to get off the ground in Vietnam and overseas in 2013.

He explains that the National Assembly has permitted PVN to reserve VND5.1 trillion of its profits in 2012 and 2013 for new projects. Yet, the total sum is just a drop in the ocean compared to the group’s actual investment need.

The Dinh Vu fibre factory in the northern port city of Haiphong has begun its 2013 commercial operations, but its products have similarly failed to earn domestic textile companies’ acceptance.

Meanwhile, Electricity of Vietnam (EVN) is running short of capital to fund the development of new power projects. EVN chief executive Hoang Quoc Vuong says that despite the recent price adjustment, EVN is facing difficulties mobilizing approximately VND106 trillion needed for new projects this year.

Solutions

Minister of Industry and Trade Vu Huy Hoang says 2013’s trade policies will ease business difficulties, assisting rural development and agro-forestry-fishery production, and supporting the processing industry.

The industrial sector is seeking methods of developing highly competitive industrial products, and supporting the important consumer goods processing and mechanical engineering industries.

It is accelerating the equitisation of SOEs, improving economic group’s and State corporations’ competitive capacity and operational efficiency.

The government will work with ministries and agencies on defining technical specifications for imports into Vietnam, thereby preventing lower-quality and cheaper-priced goods from impacting the market.

Localities across the country are uniting with the government to assist businesses.  

HCM City has pledged to address business concerns in terms of tax, bank loans, interest rates, and administrative procedure simplifications to facilitate business operations.

Nguyen Thi Hong, Vice Chairwoman of the HCM City People’s Committee, says all 24 districts and towns will foster bank-business links to make it easier for businesses to access loans at reasonable rates.

The city will encourage commercial banks to take part in the ongoing price stabilisation programme for daily necessities. It will also establish a channel of dialogue between municipal leaders and businesses to promptly remove any identified obstacles.