ASEAN KEY DESTINATIONS
Local firms adopt sustainable practices
The difficulties they faced in production and business during the economic downturn have encouraged domestic enterprises to follow sustainable development practices now and in the future, according to experts.
The Viet Nam Chamber of Commerce and Industry (VCCI) reports that Viet Nam has 485,265 enterprises, but their numbers have increased slowly and their structure has developed well.
The economic difficulties in recent years have had strong impact on the production and business of these enterprises, VCCI says. In the first nine months of this year, the nation had 53,192 newly established enterprises and 11,872 enterprises that resumed work after suspending their operations temporarily.
Meanwhile, 48,330 enterprises which faced difficulties in production and business stopped operations or were dissolved in the first nine months of this year.
The VCCI says the fall in the number of newly registered enterprises and the large number of enterprises that stopped operations or were dissolved show that the local business environment is still facing difficulties, reports the Tin tuc (News) newspaper.
However, the chamber says that the difficulties in production and business have forced the existing enterprises to improve their quality.
Efficiency in production and business has increased and many enterprises have expanded business during the economic downturn.
The percentage of enterprises making pre-tax profit has increased from 29.7 per cent in the first quarter to 32.9 per cent in the second quarter, according to the VCCI's report on enterprises in the first half of this year.
The confidence of the local business environment has improved and is expected to be even better in the second half of this year and later, as against the first half of this year and last year, the report says.
"There was a period when the number of local enterprises exceeded 700,000 units. Now that number has fallen, but the quality of the enterprises has improved sharply," says Cao Sy Kiem, Chairman of the Small and Medium-sized Enterprises Association.
"The enterprises have adjusted business strategies and paid attention to management, especially risk management, to strengthen the foundation of a more sustainable development," he adds.
The state has completed the legal system for enterprises to create transparency and synchronisation in the business environment, Kiem says, adding that it is the key target of the government to resolve the difficulties for the local enterprises.
"Enterprises expect amendment of the laws on Enterprise and on Investment to create breakthroughs in their management and in the opportunities to develop business and reduce costs," says Nguyen Thi Nguyet Huong, Chairwoman of the Viet Nam Investment and Development Group.
The Law on Enterprise will help enterprises expand their business and reduce the cost of setting up businesses and operating them, Kiem says.
Additionally, the state should have specific policies to support enterprises in establishment and development, including giving them preference in credit, provide training for a high-quality workforce and ensure a fairer business environment among economic enterprises, he says.
Nguyen Huu Toan, director of the Toan Thien An Furniture Co Ltd, says that most small and medium-sized enterprises have neither had much knowledge about support policies, nor taken advantage of them or of the state incentive capital.
In the near future, Viet Nam will sign many free-trade agreements, including of TPP and the ASEAN Economic Community. So it will be easier for enterprises to move capital, investment and workers. They will also face several challenges from the foreign companies that will enter the local market following the free-trade agreements, he says.
Therefore, the local enterprises should have specific solutions for long-term and more reasonable and efficient business strategies, says Toan, adding that they should do core business and avoid investment in non-core business to reduce risks.
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