Workers of Minh Phu Seafood Joint Stock Co sort shrimp for export.
Dang Van Thanh, chairman of Sacombank:
The tightened monetary policy starting in the middle of last year, as well as the global financial turmoil, affected Vietnamese enterprises, and Sacombank in particular. On behalf of Sacombank’s management, I must say that Sacombank business performance did not meet my expectations.
To deal with challenges last year, Sacombank prioritised safety [over risk]. We had to restructure loans and assets, improve our ways of dealing with bad debt, ensure liquidity and manage risks…. We also tried to create favourable conditions for staff to improve their professional skills and conducted seminars and workshops to discuss and solve challenges and develop new products.
Entering 2009, Sacombank will continue to prioritise a safe and effective business. We are determined to maintain an average growth rate of 25-30 per cent per year. We will try our best to strengthen our business foundations, improve corporate governance, and become more versatile.
Sacombank has been cautiously preparing its risk management plan to deal with unexpected changes or impacts from exchange rates and monetary policies, consumer prices, and the property and stock markets.
At the same time, we will try to ensure our prominent presence in the local market and enhance our existing branches in Laos and Cambodia, with a plan to convert these branches into subsidiary banks, which we expected will help us penetrate other potential markets in the region.
Huynh Van Ro, CEO of Sai Gon Paper Co
The economic downturn globally and domestically has affected the Sai Gon Paper Corporation’s packaging business, one of its main lines of business. With the demand for export goods down, demand for packaging materials is also down.
But tissue, another main line of business, is an essential product, so the economic crisis has had little effect on demand for this product. So the corporation estimates it met 70 per cent of its total production goals for last year.
This year, we expects to increase production by 10 per cent over 2008, although we expect economic difficulties to continue through the second or third quarter of 2009. We plan to increase our sales volume by attracting more customers for industrial paper products from provinces and cities besides HCM City.
The corporation has a US$100 million plant to produce tissue and industrial paper which will begin construction at the end of this year.
Under our five-year plan, we also plan to build a plant in the city of Hai Phong and a distribution centre in Bac Ninh Province to expand business in the northern region.
Le Van Diep, deputy general director of Minh Phu Seafood
2008 was an especially difficult year for the seafood industry generally, as well as for Minh Phu Seafood Corporation.
The global downturn made purchasing power weaker worldwide. Tighter credit and unforeseeable fluctuations in foreign exchange rates created many difficulties for seafood exporters. The extended economic crisis brought about an escalation of raw material prices as well as higher international shipping and service costs. It will be difficult for domestic seafood exporters to compete with strong neighbours like Thailand and Indonesia if the Government lacks flexible foreign exchange policies.
With the shrinking of many potential export markets, Minh Phu shifted its strategic plan and was still able to earn revenue of $156 million from exports in 2008, higher than the $144 million we earned in 2007.
This year will continue to be difficult for the domestic fisheries industry, however, especially for processors. Together with other exporters, Minh Phu will face a shortage of shrimp for processing.
Minh Phu will concentrate its human and financial resources this year on its main line of business, shrimp processing and export, to lay a foundation for growth next year. Meanwhile, we will streamline production to minimise costs and improve our competitive capacity.
Le Quoc Khanh, director of Nahavi Joint Stock Co:
Where there are risks, there are opportunities. The domestic enterprises which have established strong trademarks and distribution channels as well as good domestic and foreign partnerships continued to have good business performance this year.
The context of the current difficulties will open up many opportunities for enterprises to recruit high-level personnel as many skilled workers, including foreigners, have lost their jobs in the global economic downturn.
Meanwhile, the opening of Viet Nam’s retail distribution market this year will create a great opportunity for domestic retailers due to their better understanding of the local market. As a supplier of engineering equipment, Nahavi is ready to compete with foreign firms in this sector. Our company plans to ensure its revenue growth this year after tripling our revenues in 2008.
Tran Do Thanh, deputy general director of T&T
I am not an overly optimistic person, and I think that we should acknowledge the challenges we will have to face this year. That will help us to overcome these difficulties and ensure our business development and growth.
Viet Nam has advantages over other regional countries due to its stable political situation and plentiful labour resources. Domestic and foreign enterprises including our company have enjoyed a more transparent business environment, and domestic firms have enjoyed greater opportunities to access global markets.
In addition to real estate development, T&T will continue to pump investment into the industrial sector. We clearly define investment as not for the short-term. Since the global crisis will end sooner or later, we have to be far-sighted.
Vu Duy Thai, chairman of the Ha Noi Industry
The Government stimulus plan has created a big opportunity for enterprises. I think we should not be overly optimistic or pessimistic about the economic situation in 2009. The stimulus plan will generate jobs, and banks will give enterprises and customers greater access to credit, creating opportunities to boost investment, production and consumption.
The relations between banks and enterprises has a way to go. They need to sit down together to share opinions in a constructive spirit. The Ha Noi Industry and Trade Association is seeking to connect these partners together as it already has done before with good results.
The State Bank of Viet Nam needs to reduce the discount rate, lower the refinancing rate to below 1 per cent, and widen autonomy of commercial banks. Commercials banks should also streamline to minimise overhead and widen their commercial activities to “compensate” for poor credit performance, making sure enterprises have access to affordable credit to finance investment projects.
Huynh Du An, general director of Euro Auto:
Without a doubt, the economic downturn worldwide has already been affecting Viet Nam’s automobile market. But, I see it as a positive time, a challenge to improve our operations and prepare our next move
The Viet Nam automobile market in 2009 will probably experience two periods, with the first dominant by pressure from suppliers who need clear inventories while demand is slow.
The market will probably develop gradually in the second period, but this will depend quite heavily on general economic development and government policies.
In the slowed economy, businesses should concentrate on their core products and services, developing personnel and processes so they are ready for the next economic growth wave.