City sees multiple business closures at IPs, EPZs
By Quoc Hung - The Saigon Times Daily
HCMC – Persistent woes at home and abroad have forced many enterprises at the HCMC-based export processing zones (EPZs) and industrial parks (IPs) to stop operations.
At a press briefing last Friday, Nguyen Tan Dinh, deputy head of the HCMC Export Processing Zones and Industrial Parks Authority (HEPZA), said 90 businesses at the IZs and EPZs in the city had halted, scaled down or permanently stopped operations this year.
This figure is nearly equivalent to the number of businesses thrown into a similar situation throughout the 20-year existence of the IZs and EPZs in HCMC, said Dinh.
The reason is that these firms are facing financial distress, lacking orders, and struggling with poor consumption.
According to HEPZA, domestic firms make up more than two thirds of the 90 enterprises. However, Dinh noted most of them were small businesses that had operated for only a few years with small-scale production, so they would not cause any disturbance with their layoffs.
The biggest problems reflected by these enterprises are difficult access to funding sources caused by high lending rates. In addition, domestic firms mainly produce goods for the local market while domestic consumer demand has been plunging this year.
Furthermore, domestic and foreign investment into this area also declined sharply.
According to HEPZA, as of June 10, the total investment capital, both newly and additionally registered, had reached over US$202 million, meeting 40.46% of the year’s target and declining 38.35% year-on-year. It is noteworthy that foreign investment only totaled US$75.84 million, down 59.45% over the same period last year.
To help enterprises overcome such difficulties and maintain production, HEPZA has taken measures such as offering timely help to troubled businesses and organizing meetings between HCMC leaders and enterprises so that they can stay afloat. The authority has also coordinated with the Department of Science and Technology to launch a science and technology development fund and a business restructuring program.
Moreover, HEPZA has been working with the HCMC Finance and Investment Company (HFIC) to introduce a low-interest loan program under the city’s demand stimulus program. So far, 20 projects at the IZs and EPZs have received subsidized loans worth a total of nearly VND1.18 trillion.
This year, 45 projects at the HCMC-based IZs and EPZs have revised down their capacities, comprising 16 foreign-invested projects and 29 domestic projects. In addition, eight projects have temporarily stopped operations, 30 projects have turned inactive and seven projects had been liquidated prior to maturity.