Haiphong has battle on its hands

Vietnam Chamber of Commerce and Industry (VCCI) Haiphong office statistics show that city-based textile and garment firms saw a decline of 20-30 per cent in export orders to Europe in 2011 against 2010. This dire practice forced some big firms to revise production and even temporarily stop some production sections.

“Signing new garment orders so far this year was not better, making it hard for firms to shape up their long-term production plans,” said VCCI Haiphong’s Legislation Department head Pham Thi Thu Nga.

An executive at footwear-maker Dinh Vang Haiphong Company said besides difficulties in sourcing orders, the firm was under big pressures from local and foreign output markets.

“We face mounting competition from other markets like Myanmar and Cambodia since our rivals in these markets are favoured by more tax incentives and lower input costs,” said the executive.

Shipyard enterprises housed in Haiphong are even in a more critical state on the back of capital distress and material shortages. Some firms have paused production like Tam Bac and Thanh Long shipbuilding industry companies.

“The profit rate in the shipbuilding industry is low. Long production plus a long time for capital circulation presents challenges for capital recouping as well as attracting quality labour,” said Tam Bac Company director Vu Quoc Hung.

Hung hoped bank rates would go down in 2012 and the state as well as Haiphong authorities would support firms to weather the storm through rendering more tax or customs incentives.

In search of a way-out, city enterprises proposed management authorities devise a suitable land rent hike roadmap and keep the rent stable for at least five years, in the meantime ramp up dialogues with firms to help them settle arising problems in a timely and efficient manner.