Number of new enterprises decline 4.7% in H1

The number of newly-registered enterprises in the first six months of 2011 fell 4.7% to 39,500 and the registered capital volume also declined 5.4% against one year earlier to 232 trillion dong, the Ministry of Planning and Investment reported.
In 2010, the country had 42,000 new enterprises with total registered capital of 250.6 trillion dong, up 0.25% and 27.8% respectively compared with 2009.

The ministry attributed the falls in number of newly established firms and registered capital to high inflation and interest rates which made input costs increase rapidly, high intermediary fees pulled down profits of many enterprises. Meanwhile, some losers had to reduce business production, or suspend new investments.

Nguyen Xuan Qua, General Director of Bao Ngoc Bakery Co (Hanoi) confirmed it cut 50% of cake products, stop launching new products at this time due to difficulties in forecasting market prices.

Also, the monetary tightening policy is closing the door of accessing bank loans for enterprises, affecting directly to new business plans. In this context, only big-sized companies with high prestige are able to access banks’ credit source. However, actually the lending rates have surpassed the affordability of enterprises, at 22-25% a year.

“While the macro-economy is undergoing complex movements, reducing intermediary costs, for enterprises, is the essential measure to ease difficulties”, Nguyen Bich Lam, Vice Head of General Statistics Office proposed. – Vietbiz24

Tags: Vietnam companies, Vietnam enterprises

Posted by VBN on Jun 30 2011. Filed under Enterprises. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry