"Vietnam’s economy is in difficulty, but it cannot be worse than in 2012," said Christopher Ong, General Director of DHL - VNPT Express Ltd, in an interview granted to the Vietnam Business Forum. Huong Ly reports.
2012 elapsed with a relatively gloomy economic picture. How did companies like DHL cope with difficulties?
One of current difficulties to businesses is a rapid rise in production costs and tightened credit policy. In 2012, a number of expenses like wages and input prices surged, thus laying huge pressures on production and business activities. In addition, Vietnamese banks’ restricted lending to small and medium-sized enterprises caused a "domino effect" on us. When our importing, exporting and trading customers meet difficulties in production and business activities, they will use DHL services less.
In 2012, many businesses withstood to difficulties by reducing costs of service processes but this move could not offset overall escalating costs. This is also the case of DHL. In the coming time, DHL will increase average cost of services by 4.9 per cent in the Vietnamese market and the new rate will be applied in January 2013.
As you said, the economic situation will be still bad in 2013?
The economy still faces many challenges in 2013 but, I think, it cannot be worse than in 2012. Why so? It is simple. I have seen a lot of investors and multinational companies invest much in Vietnam. They are big businesses with huge financial capacity and they are quickly utilising low-cost advantages in Vietnam. We see potentials of transporting machinery and components for them.
While logistics companies are placed under increased pressures, DHL continues to pour investment capital into Vietnam. Could you tell us the reason?
2012 is a tough year but we still made positive profits with a double-digit growth. Our new service, VNQuickpost - a joint business with VietnamPost, deployed in July 2012, has markedly expanded to 34 provinces and cities.
DHL has made strong investments in Vietnam, including opening five flights from Hong Kong to Ho Chi Minh City; launching Go Green Programme, adding 25 small trucks to its fleet; increasing transport capacity by 37 per cent; building 650-square mere transit hub in Da Nang.
Why did DHL increased service tariffs while it made hefty profit?
Charge rise is inevitable. Compared with inflation rate in Vietnam, the 4.9 per cent increase is relatively modest. This is the lowest rate we can afford to compensate increasing costs. This service charge change is usual. When the market changes, we must revise our service tariffs to maintain profitability. This price increase is in line with DHL Global service tariff rise.
Do you have any recommendations to the Government in order to ease economic difficulties?
I hope that the Government of Vietnam will soon have support solutions for small and medium enterprises, especially exporters, to overcome difficulties because they are the bright spots of the economy. The hardship is resolved; many other challenges of the economy will also be settled.
Thank you very much!
Vietnamese
