FDI Enterprises in Dong Nai Province: Endeavours to Diminish Troubles

 

Results of a rapid survey on impacts of global economic recession on business operations conducted by the Dong Nai Industrial Zones Authority partially reflected the difficulty facing FDI enterprises. According to several companies, their business activities are in trouble because the crisis may not end until the end of 2009. The clearest victims of the economic crisis are exporters relying on the European and American markets. For business plans set for 2009, 71 per cent of surveyed enterprises reported to maintain the current production, 19 per cent planned to reduce workforce and narrow production on lack of export orders and only 10 per cent revealed plans for expansion. More FDI companies asked for slowdown in implementing their projects as markets are sinking.

 

An official of Two J Vina Company, a producer of towels and clothes for export in Long Khanh Town, said his company’s orders plunged and 600 workers are facing layoffs. Fortunately, the company received hat export orders. However, in the business licence, the company was not allowed to manufacture and export hats. The company expects to add the new product to the business licence to continue production.

Splendour Company in Nhon Trach 1 Industrial Park expressed its hopes to borrow interest rate-subsidised loans to pay salaries for its employees. Unfortunately, the firm is not in the list of target borrowers because it has 1,300 workers and a chartered capital of over VND10 billion. For the time being, the firm is in an extremely difficult situation and wants to borrow VND4 - 5 billion of soft loans of the stimulus programme to pay salaries for its workers.

 

According to the Taiwan Business Association in Dong Nai, like other foreign investors, Taiwanese companies are operating beyond their capacities on falling orders and shrinking markets. As many as 260 enterprises in the association reported 20 - 60 per cent declines in orders. Wood processors are the most seriously hit by the crisis. Besides, some 20 per cent of member enterprises had to downsize production and 20 per cent of staffs in foreign-led firms have been laid off.

 

The Japan Business Association in Dong Nai said it has 50 members and most of them are in operating troubles. Automobile assembling and electronic parts companies are the worst affected by the economic woe. Orders declined 50 - 70 per cent from the fourth quarter of 2008. Electric and electronic companies followed with order drop by 50 per cent, except for Sanyo which sells its products to the domestic market. Food, apparel and consumer goods producers incurred less difficulty. However, none of Japanese companies in Dong Nai planned to expand their production because they were striving to exit the trouble. With respect to the stimulus package launched by the Vietnamese Government, Japanese companies do not really need to access because the stimulus package mainly helps solve capital difficulties while they need markets to ride out difficulties.

 

Dong Nai province has decided to set up an action committee to help enterprises to overcome difficulties. The committee will keep close eyes on difficulties against businesses in the province, implement stimulus packages of the Government, and assist enterprises timely.