One-fifth of firms eye expansion

Ban Mai

Of the 700 corporate respondents, 66.7% said they would maintain their scale, 22% might expand operations, 10.9% would reduce scale and 0.3% would likely suspend operations, said the institute under the Vietnam Chamber of Commerce and Industry (VCCI).

Some 28.1% of the firms said business expansion was aimed at catching the opportunities from the recovery of exports. A respective 20.7% and 18.3% said they wanted to make good use of tax incentives and business support programs.

About 18% of respondents said they found the economic outlook getting brighter and thus wanted to expand their business.

Pham Minh Dong, director of Asia Door, said many construction projects had been put on hold due to economic difficulties, leading to a decline in his company’s wooden door sales. This year, the company decides to diversify its products and upgrade its services to cater to civil works.

“We intend to make plastic doors, with machines and equipment imported from Germany. With this production line, our company will focus on individual customers,” said Dong. He expected the new products would be launched into the market later this year.

Explaining the decision to build a new factory in the current difficult context, Dong said the individual customer segment had recorded the strongest growth in recent years despite the crisis. “Under this decision, we will serve a wider range of customers, from high- to low-end, with various incomes,” he said.

Ngo Duc Hoa, chairman of Thang Loi International Garment JSC, said importers had shifted their orders from China and India to Vietnam because prices in those two foreign countries increased sharply in the early months. Thang Loi is operating at full capacity to fulfill the rising order volume.

“This time last year, we were struggling to find new orders. Now, we have to turn down small orders, which is such a waste. Therefore, we have decided to invest in new workshops,” said Hoa.

Thang Loi has decided to borrow VND10 billion to expand its operations after carefully considering the market growth prospect, the production capacity of the company and the lending rates.