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Firms forced to cut costs to remain afloat

Update: May, 17/2012 - 09:04

HA NOI — As many as 83 major companies and four banks in the country have registered to cut operational costs by some VND13 trillion (US$624 million) in a bid to stay afloat in the economic downturn, the Ministry of Finance said.

The companies have announced their intent to cut management costs by VND3 trillion ($144 million) and other input costs like raw materials and energy by VND9.4 trillion ($451 million), accounting for 24.7 and 75.3 per cent of the total savings, respectively.

Four leading banks, Vietcombank, Vietinbank, Agribank and BIDV will cut a combined VND735 billion ($35 million) of their operational costs. Mekong Housing bank (MHB) has also pledged to cut costs, but has not revealed a figure yet, according to the ministry.

The Government in January asked most State-owned companies and corporations to cut down on costs and lower product prices to improve their competitiveness in the economic downturn.

BaoViet Insurance Group in February was the first firm to register to cut costs by VND145 billion ($6.8 million), while still maintaining its planned annual revenue. Other firms followed such as Viet Nam National Textile and Garment Group (Vinatex) with VND1.1 trillion, Electricity of Viet Nam (EVN) with VND1.8 trillion, House and Urban Development (HUD) with VND125 billion and Viet Nam National Shipping Lines (Vinalines) with VND105 billion. The State Bank of Viet Nam last month ordered five major banks in the country to cut costs by 5 to 10 per cent in order to bring interest rates down. — VNS

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