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New business openings rise in February

Update: March, 02/2012 - 10:22

 

Lao Cai-based Hai Yen Co Ltd is just one of many companies that has received bank loans to sustain production. Although there were greater worries about difficulties in accessing loans, the number of new businesses rose 10 per cent in February over the previous month. — VNA/VNS Photo Tran Viet
HA NOI — New businesses brought VND30.66 trillion (US$1.46 billion) in registered capital to the nation in February, up 69 per cent in value and 10 per cent in volume over January, according to the General Statistics Office (GSO).

Last month's addition of 4,500 enterprises boosted the number of newly-established firms in the first two months of the year up to 8,699, with capital totalling more than VND49.2 trillion ($2.34 billion).

In the same period, however, a significant number of businesses dissolved in the country's two economic hubs, Ha Noi and HCM City.

In the capital, 169 enterprises dissolved, marking a 4.3-fold rise against the same period last year, deputy director of the municipal Department of Planning and Investment Nguyen Van Tu told a conference on Tuesday.

A few enterprises typically applied to dissolve their businesses after the Tet holiday, but a significant increase in company closures in the first two months of this year showed that enterprises had encountered many challenges, Tu said.

HCM City's Department of Planning and Investment reported 327 dead enterprises over the period, announced its deputy director Vo Sy.

Department reports showed that approximately 500 businesses had closed in the two cities, but the real figure could reach thousands, Vy said.

Currently, concerns over product outputs seemed to be growing among domestic businesses besides great worries about high interest rates or difficulties in accessing loans.

The country's total revenue from retail trade and services hit only VND186.5 trillion ($8.85 billion) in February, down 2.4 per cent from January, according to the Ministry of Planning and Investment.

Total retail revenue reached VND380.2 trillion ($18 billion) in the two months, surging 22 per cent against the same time of last year. However when excluding inflation, the revenue saw a modest year-on-year increase of 4.4 per cent, the ministry said.

Meanwhile, many key export items, which typically enjoyed a strong growth rate of 20 per cent annually, experienced similar growth in January and February in comparison with last year's corresponding period, it said.

During a meeting with the HCM City People's Committee last week, many groups and large corporations addressed a variety of difficulties they had encountered in the period and said they were worried that they had yet to fulfil their plans for this year, Sy said.

In other gloomy news, the Ministry of Industry and Trade recently announced their prediction about rising world petroleum prices, stagnant export prices for most items, and the possibility that the trade deficit could continue to increase in the time ahead due to growing imports.

Enterprises were now worried and anxious, said director of the ministry's Department of National Economy Bui Ha.

Despite a 1-2 per cent reduction, the current high lending interest rate of 17-18 per cent was still causing headaches for local firms, he said.

Sharing the view, Tu said many enterprises had told him that with such high interest rates, halting all kinds of business and investment activities seemed to be the best choice.

He called for sufficient support policies for enterprises concurrent with a suspension in the issuance of new policies that could have a negative influence on both input and output for enterprises. For example, electricity and fuel price hikes could raise the prices of many other goods, Tu said. — VNS

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