10/9/2013 10:31:39 AM

HCMC – The list of enterprises stopping or temporarily suspending operations and reducing production at export processing zones (EPZs) and industrial parks (IPs) in HCMC is getting longer due to lingering economic difficulties.The list of enterprises stopping or temporarily suspending operations and reducing production at export processing zones (EPZs) and industrial parks (IPs) in HCMC is getting longer due to lingering economic difficulties.

According to statistics provided by the HCMC Export Processing and Industrial Zones Authority (Hepza), the January-September period saw 20 enterprises suspending operation, including 13 foreign-invested ones with chartered capital of US$18.4 million and seven local firms (VND122.8 billion).

Besides, 21 other enterprises dissolved in the period. Among these, there are five foreign-invested enterprises with total investments of over US$6 million and 16 local ones with over US$1.544 trillion.

According to Hepza, high costs of workshop lease, inefficient operation, and operation restructuring are among reasons choking off enterprises.

Besides, due to business difficulties, 15 foreign-invested and 20 local enterprises announced to cut their production output by 20-30%. These enterprises are those producing building materials, interior decorations, electric equipment and apparel products.

Such moves of enterprises resulted in over 1,170 laborers being laid off in the nine-month period.

Regarding the information which says that foreign-invested enterprises at EPZs and IPs incur huge losses and are suspected of transfer pricing, a representative of Hepza said that there has not official statistics about the number of enterprises reporting losses in the period.

Last year’s report of Hepza indicated that up to 114 out of 416 foreign-invested enterprises at EPZs and IPs in HCMC reported losses and did not pay corporate income tax.

However, according to Hepza, only Vietnamese enterprises as a whole faces difficulties caused by economic difficulties while the foreign-invested enterprises do not and still achieve slight growth in production and export.

In the nine-month period, the export turnover of enterprises at EPZs and IPs was estimated at US$3.4 billion, equivalent to 66.67% of the year’s target and up 6.2% year-on-year. Meanwhile, enterprises imported US$2.5 billion worth of products, declining by 10.7%.

Besides, January-September investment attraction inched up by 48.22% year-on-year to over US$480 million, with foreign investments accounting for over US$341 million, or an increase of 114.27%.

Nevertheless, most of the fresh foreign-invested projects licensed in the period were of small and medium scale.

Meanwhile, in terms of domestic investments, EPZs and IPs attracted US$138.8 million in the period, down 15.7% from last year’s same period. The reason for this are domestic economic situations remaining difficult, declining purchasing power, huge inventories, according to Hepza.

By Hung Le - The Saigon Times Daily  
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