One in ten non-State firms goes bust
By Ngoc Lan - The Saigon Times Daily
HANOI – Non-State enterprises have the highest bankruptcy and dissolution percentage of 9.1% in the first quarter due to business problems and difficult access to capital, according to a survey of the Ministry of Planning and Investment announced last Friday.
The General Statistics Office under the ministry said a survey of 9,331 enterprises nationwide was carried out from January 1 to April 1 with results showing that 91.6% of businesses nationwide are currently active.
Bankrupt, disbanded and suspended enterprises account for 8.4%. In particular, those having completed the bankruptcy and dissolution procedures make up 4.1%, and those still going through the process account for 4.3%.
Through this survey, the ministry further clarified the situation of business dissolution and bankruptcy, which has captured the public spotlight over the past several months.
Non-state enterprises have the highest percentage of dissolution and bankruptcy, at 9.1%, far exceeding the State sector, 2.7%, and the foreign-invested sector, 2.4%.
In terms of regions, the Mekong Delta has the highest rate of business bankruptcy and dissolution (13.6%), followed by the Central Highlands (9.9%), the southeast region (8.6%), the north central and central coast (8.2%), the northern midland and upland (7.2%) and the Red River Delta (6%).
Of the 784 bankrupt and dissolved businesses joining the survey, 69.9% said the reason was business losses, while 28.2% blamed the lack of capital for stalled production and business. Other reasons are poor consumption (14.7%) and unfavorable business locations (11.7%).
Meanwhile, 4.6% decided to fold up their businesses to establish new firms or switch to other business fields, and another 4.6% did so to merge into other enterprises.
However, up to 88.4% of the bankrupt and disbanded enterprises said they could not set up new businesses, while 11.6% expected they would continue to do so.
Among those with plans to form new businesses, 38.9% planned to do it this year, 25% will do so in 2013, 16.7% in 2014 and 19.4% after 2014.
The results also show that the biggest obstacle to production and business operations is sky-high lending rates.
However, the surveyor said corporate governance capability is also a major cause, seeing enterprises fail to survive current economic woes.