April 19, 2012
Vietnamese seafood companies may experience stagnancy, bankruptcy in 2012
A senior official of the Vietnam Association of Seafood Exporters and Processors (VASEP) said that about 20% of Vietnamese seafood firms will likely face stagnancy, and even go bankruptcy this year.
A number of local seafood enterprises have filed for bankruptcy since early this year, and the situation is expected to worsen, said Nguyen Huu Dung, vice chairman of the VASEP at the meeting titled "Applicable solutions in resource management and planning for the fisheries industry" in the Mekong Delta city of Can Tho.
Lack of effective policies to support companies and the shrinking of both foreign and local markets were attributed to the situation, Dung said.
The prices of raw catfish in the provinces of the Mekong Delta, such as Dong Thap, An Giang, and Can Tho, continue to fall, with prices ranging from VND20,000-21,000 (US$0.96-1.01) per kilogramme for first-grade fish, and VND19,000-19,500 (US$0.91-0.93) per kilogramme for second-grade products.
The seafood firms needs low-interest loans from local banks and tax breaks from the government to boost production, Dung noted. The arbitrary increase of charges on businesses should also be stopped, Dung added.
However, the most important task, restructuring and renovating operational models, must be done by businesses themselves, he said. Meanwhile, many local lenders are finding it hard to lend even though the State Bank of Vietnam (SBV) last week started to cut many main policy rates in an effort to boost the economy.
The main problem is that the lending rates are still considered out of reach for many businesses, while lenders find that those who really want to borrow do not meet the lending standards, said Trinh Van Tuan, general director of Orient Commercial Joint Stock Bank OCB.
Despite the fact that the Vietnamese dong mobilisation ceiling rate was decreased 1-12% on April 11, the lending rate has stayed stubbornly high, making cheap credit inaccessible to enterprises.
