Less than one-third of enterprises are confident in the competitiveness of their products, whereas a majority of others are feeling the pinch of rising imports, heard a meeting between HCMC leaders and local business executives on March 7.

Nguyen Minh Huong, CEO of Golden Communication Group, speaks at a meeting between HCMC leaders and local business executives on March 7

Speaking at the meeting, Chu Tien Dung, chairman of the HCMC Union of Business Associations, said the entrepreneurial spirit in the city had improved but most enterprises said in a recent survey they are less confident in their competitiveness.

The business prospect was positive last year as local firms were more competitive and the morale of entrepreneurs got a boost, evident in the record rise in startups. The HCMC business community, however, is struggling with difficulties, Dung said.

The increase in newly-established enterprises in 2016 shows an improvement in business confidence but business scale, capacity and competitiveness remained limited. In addition, due to high costs and old technology, only 35% of enterprises in the city were profitable and paid taxes.

“Businesses are under pressure from foreign products right on the home market. A survey shows only 32% of businesses are confident in their competitiveness at home while over 40% are concerned about their competitiveness and the rest are pessimistic,” Dung said at the meeting.

Enormous pressure

Kieu Huynh Son, director of Co Steel Co., said mechanical engineering firms still had difficulty gaining access to support for technology innovation, while small enterprises could hardly enter industrial parks.

There are now small workshops for lease in industrial parks but with high rentals. Supporting policies for workshop construction and equipment renovation have not reached enterprises.

Therefore, Son proposed the municipal government draw up a policy to help small-scale factories relocate to industrial parks. From there, specialized industrial clusters and sub-zones should be formed, with workshops in the sub-zones for supporting industries, where enterprises shall be granted certificates as a legal basis to borrow from banks.

Le Thi Thanh Lam, deputy general director of Saigon Food JSC, said on behalf of the Food and Foodstuff Association of HCMC that last year a couple of supermarket chains changed hands and their new foreign owners demanded higher discounts from local suppliers.

But Diep Dung, general director of Saigon Co.op, the owner of the country’s leading store chain Co.opmart, said the presence of more foreign retailers in Vietnam would lead to an army of local suppliers being created along the way.

Practical effects needed

Regarding access to supporting policies, Nguyen Minh Huong, CEO of Golden Communication Group, deemed it necessary to have a portal for enterprises to refer to when needed.

“If possible, the entire business support program should be integrated in a portal where businesses can obtain all information, instead of going to one agency after another to gather information,” she suggested.

HCMC vice chairman Tran Vinh Tuyen said there were now 245,000 household businesses citywide, which were contributing only 2% to the city’s budget revenue. A survey shows up to 14,000 household businesses can be transformed into enterprises for the city to achieve the number of 500,000 active firms by 2020.

Le Thanh Liem, standing vice chairman of HCMC, said more than 36,000 enterprises were set up in 2016, a rise of 13% over 2015. This year, it is forecast that some 40,000 new firms would be established and 20,000 household businesses converted into enterprises.

The goal is not to run after the number, but the quality of businesses. This month, HCMC will launch a stimulus package with separate policies for supporting industries, Liem said at the meeting on March 7.

SGT