VietNamNet Bridge – The number of foreign-direct invested (FDI) enterprises based in HCM City and southern Dong Nai Province that have suspended operations has increased in the last few months, leaving thousands of local workers jobless and creating a loss of tax revenue for the State.

llustrative image. (Photo: Internet)

In late November, a glove manufacturing plant operated by the 100 per cent Malaysian-invested APL at the Go Dau Industrial Park in Dong Nai became empty when the Malaysian bosses ran away.

Another company, K Y Seritech VN, which makes electronic components, silently moved all its machinery and equipment out of the Amata Industrial Park in Dong Nai Province, leaving unpaid salaries and tax arrears of more than VND620 million.

The 17 FDI enterprises that had their licences revoked by Dong Nai authorities left unpaid taxes and workers' salaries, while the bosses and managers returned to their countries without performing corporate disintegration formalities.

Meanwhile, HCM City Department of Planning and Investment said they were looking at a list of FDI enterprises that were still operating but whose owners had fled the country. The department plans to revoke the licenses that had been granted to the companies.

Doan Thi Phi Van, deputy head of the FDI Goods Management Division under HCM City's Customs Bureau, said that in the product-processing sector alone, 128 foreign-invested enterprises had disappeared from their registered addresses, leaving many contracts unliquidated and VND400 billion ($19.1 million) in tax arrears.

The 100 per cent Korean-invested Silver Star VN had a tax arrears of nearly VND30 billion ($1.43 million) when the owners fled.

When customs officers visited the company in November, they found that all of the machinery and equipment had been moved out of the plant.

In another case, the investor of the FDI enterprise Magnicon VN has returned to Taiwan, leaving an empty facility at 281/2 on National Highway No. 1A in District 12's Tan Chanh Hiep District, plus tax arrears of over VND5 billion.

The boss and managers of Hae Kwang Vina as well have returned to South Korea, leaving VND23 billion in tax arrears and more than 200 local workers unemployed.

Van, from the FDI Goods Management Division under HCM City Customs Bureau, said that the owners of hundreds of FDI enterprises had disappeared.

"No one knew where they were," she told Tuoi Tre (Youth) newspaper.

To help resolve the situation, the Ministry of Planning and Investment has once again asked provincial and city authorities to withdraw licences granted to investors who fail to carry out their projects within a 12-month period after being licensed.

The MPI has also asked provinces to hand over land that had been taken back from company owners who had fled the country.

Luxury cars keep coming

Despite global economic turmoil, luxury cars continue to be imported in high numbers to Viet Nam. A total of Rolls Royce and Maybach cars have been imported into Viet Nam.

Michael Behrens, general director and CEO of Mercedes-Benz Viet Nam (MBV), who serves as the maintenance agency for Maybach cars in the country, said that as of mid-November, there were 20 super-luxury cars in Viet Nam.

The representative of MBV said Viet Nam was one of the major markets for Maybach cars in Southeast Asia.
All Maybach cars currently running on streets in the country are second-hand and Viet Nam has imported the 57, 57S, 62, 62S series (which sell for US$460,000 each in the US) and the Zeppelin series (priced at $670,000 each in the US), according to a report in Tuoi Tre (Youth) newspaper.

Meanwhile, a representative of Euro Auto, the maintenance agency for Rolls Royce cars in Viet Nam, said 32 luxury Rolls Royce cars in Viet Nam had been registered for maintenance services at the company.

However, an expert in this area said the figure represented 40 per cent to 50 per cent of imported Rolls Royce cars.
A representative of Rolls Royce said in 2012 the company has manufacturered only 33 special edition Dragon Phantom cars priced at VND35 billion ($1.7 million) each.

As of May, four Dragon Phantom Rolls Royce cars had been imported, including the first and second of the 33 Dragon Phantoms first manufactured by Rolls Royce.

Tra fish industry in crisis

The local tra fish industry has encountered major difficulties in breeding, processing and export markets, according to a report released by the Viet Nam Association of Seafood Processors and Exporters (VASEP) at a recent meeting with the Minister of Agriculture and Rural Development.

Exports of tra fish products reached US$1.45 billion in the first 10 months of this year, down 2.2 per cent compared with the same period last year, the report says.

Difficult access to new markets is one of the major difficulties that hinders the growth of the tra fish sector. There is growing demand in the US market for Vietnamese tra fish products, while other traditional markets in Europe and Brazil has declined.

"Vietnamese businesses have launched unfair competitions against each other, causing difficulties to the tra fish sector," said Cao Duc Phat, Minister of Agriculture and Rural Development.

The dumping of tra fish products by several local businesses has led to the forcing down of tra fish prices from foreign importers, said Phat.

Capital shortage is the biggest problem facing the tra fish sector, according to Duong Ngoc Minh, deputy chairman of VASEP.

"The breeders owe the feed sellers, the feed sellers owe the feed manufacturers, and the manufacturers owe the fish sellers," said Minh.

In 2012, the sector's debts have amounted to VND20.8 trillion, a year-on-year increase of 14.03 per cent. The figure accounts for 62 per cent of the loans provided by agricultural banks to 5,962 households and 282 businesses in the farming sector.

"Banks are now reluctant to provide new loans to the sector because the debts in arrears are very large," said a bank manager who declined to be named.

The 70 per cent farmers and 30 per cent processors of the tra fish breeding industry has now reversed to 30/70.

Nguyen Huu Dung, chairman of VASEP, said there should be a new credit mechanism for the tra fish sector, and at the same time management of conditions for businesses that export products to major markets such as EU and the US should be strengthened.

The confidence in these markets must be consolidated by rejecting tra fish enterprises that do not have processing plants for their products, according to Dung.

The Ministry of Agriculture and Rural Development will soon issue a circular on combating dumping of tra fish products, aiming to stabilise the local tra fish market.

Source: VNS