Glass is half full for many enterprises

February 26, 2013 | 15:13
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Scores of Vietnam-based enterprises in a variety of business sectors have expressed optimistic outlooks for their performance in 2013 despite stubborn economic troubles.

This is reflected in a business survey just released by the Ministry of Planning and Investment.
Among the garment and textile companies in Vietnam that earned big money last year and expect bigger returns this year was locally-owned yarn maker Damsan Yarntex Joint Stock Company in northern Thai Binh province. 

The company said it earned total revenue of VND1.1 trillion ($53 million), including $32 million from exports, last year and expects to increase those figures to VND1.5 trillion ($72 million) and $45 million respectively  for 2013.

In another case, Ho Chi Minh City-based cosmetics maker My Hao Cosmetic Chemical Joint Stock Company reported a 10 per cent year-on-year revenue growth in 2012 and is forecasting 15-20 per cent this year thanks to local big consumption. “My Hao is continuing its bigger investment and production in Vietnam,” said company general director Luong Van Vinh.

Optimism can also be found in the agro-forestry sector at Hanoi-based, Indian-invested plywood producer Vietdutch International Joint Stock Company.

“We have been in Vietnam for two years. We are quite optimistic about its investment and economic climate and expecting to rake in export turnover of $12 million for 2013, when our factory will have expanded capacity,” said Vietdutch managing director Ajay Bhagat. “This figure will be doubled from our export turnover of $6 million last year.”

“Vietnam boasts big raw materials and preferential incentives for exporting high-quality wood products. Meanwhile, the world’s demand for this product is increasing strongly,” he said.

The examples from these enterprises show that many Vietnam-based enterprises’ optimism about the country’s business and economic picture remains strong. In another typical example, the Ministry of Planning and Investment early this month issued a report surveying business confidence conducted in late 2012 over 910 local and foreign enterprises engaging in manufacturing and commercial and service sectors in northern Bac Giang province, Hanoi, Danang city and Ho Chi Minh City.

Under this report, enterprises are quite upbeat about their business outlook in the coming time in Vietnam. Specifically, 75 per cent of commercial and service enterprises said they would have long-term stable performance in Vietnam, while the rate is 80 per cent for manufacturing enterprises.

Commercial and service enterprises’ confidence index on Vietnam’s economic situation sat at 19 points in last year’s fourth quarter, when their business confidence index stood at 18 points.
Meanwhile, manufacturing enterprises saw in last year’s fourth quarter high confidence indexes on the economic situation (34 points), business performance (43 points), goods output (44 points) and revenue (44). These point levels are considered to be quite high, because those points below zero are considered to be bad, according to the report.  “Enterprises are showing their vehement confidence to the government’s policies to stabilise the macroeconomy in the coming time, and to the economic recovery of Vietnam and the world.

“This will improve their financial health and ability in access to bank credits. And their confidence to bigger consumption of products, bigger orders, bigger selling prices and bigger revenue and profits will also significantly improve,” said the report.

Bloomberg Markets Magazine in its March edition ranks Vietnam first among the world’s top 25 frontier markets, or pre-emerging markets, for investors.

Vietnam scores a total of 76.9 points and is forecast to gain an accumulative gross domestic product (GDP) growth rate of 33.8 per cent in the 2013-2017 period, maintain an annual inflation rate of 5.3 per cent and keep government debt at 50.4 per cent of total GDP.

By Khoi Nguyen

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