Many Support Packages to Be Launched in 2013

2012 was a banner year, or the foundation, for implementing all five-year tasks from 2011 to 2015. Companies confronted numerous difficulties arising from short-term macroeconomic uncertainties and slow growth in the next several years because of economic restructuring. Continued tight monetary and fiscal policies and anti-inflation measures inhibited businesses from accessing bank loans. Meanwhile, competitive pressures intensify as the economy opens wider. In addition, domestic firms were affected by global economic recession as well as energy, financial and environmental crises.

 

During this tough time, with the close leadership of the Municipal Party Committee, the People’s Council and the People’s Committee and the resolute instruction of the Department leaders, the Department of Industry and Trade effectively implemented many policies and measures to develop industry, trade and service, stabilise the market, and ensure electricity supply for production of enterprises and livelihoods of citizens. The industry and trade sector focused on supporting local businesses to deal with difficulties and maintain export activities, stepping up domestic and international trade promotion activities, strengthening trade cooperation programmes with other provinces and cities across the country, stabilising prices of essential goods for citizens, organising consumer stimulus programmes and campaigns, and intensifying market and price inspections in the city.

 

These solutions started to bring in the desired effect. Industrial companies gradually overcame difficulties and performed better in production and consumption activities. The index of industrial production increased 5.1 per cent in 2012. The added value of the industry rose 7.5 per cent over 2011.

 

In 2013, domestic and global economies are forecast to continue to face enormous difficulties. Domestically, continued tight fiscal policies, huge inventories, the frozen real estate market, and mounting bad debts weakened many production companies and even sent many to bankruptcy. The first quarter performance in 2013 was positive but uncertain.

 

Some companies with their products recognised as primary industrial products of Hanoi City by the Municipal People’s Committee - the governing body - also meet with difficulties, evidenced by lower or equal production and business indicators from the previous reporting periods. However, some other companies performed well despite difficulties. Hanoi Beer Alcohol Beverages Corporation (Habeco) reported revenue of VND6,476 billion in 2012, up 22.29 per cent over 2011. Rangdong Light Source and Vacuum Flask Joint Stock Company (Ralaco) earned VND2,208 billion in revenue in 2012, up 16.2 per cent year on year. Son Ha International Corporation (SHI) made revenue of VND2,002 billion in 2012, up 9.58 per cent year on year. Vietnam Electrical Equipment Joint Stock Corporation (GELEX EMIC) raked in VND1,200 billion in sales, up 10.07 per cent. Vinaconex Advanced Compound Stone Joint Stock Company (Vicostone) earned VND965 of revenue, up 8.43 billion. Van Dien Fused Magnesium Phosphate Company (VAFCO) reached VND910 billion of revenue, up 22 per cent. Thong Nhat Electromechanical Limited Company (Vinawind) made VND576 billion of revenue, up 13.45 per cent. Thang Long Metal Wares Joint Stock Company (TLMW) raked in VND930 billion of revenue, up 5 per cent.

 

On June 14, 2012, Mr Nguyen Van Suu, Vice Chairman of Hanoi People's Committee, signed and launched the Plan 85/KH-UBND on the implementation of the Government’s Resolution 13/NQ-CP dated May 10, 2012 on a number of solutions to deal with difficulties in production and business and support market to seek best ways to assist local businesses to deal with hardships. The municipal government ordered relevant bodies to carry out consistent tasks and measures assigned by the Central Government, the Municipal People’s Committee and the People’s Council, while focusing on carrying out the following tasks.

Extending the deadline for value-added tax payment; extending the deadline for corporate income tax settlement; reducing land taxes; extending the deadline for land tax payment; lowering interest rates; implementing measures to restructure debts and adopting other necessary measures to spur production and business sectors; accelerate capital disbursement for investment projects (particularly State-funded capital); stepping up public administration reform related to investment and business aspects, especially procedures concerning tax and customs procedures to reduce the waiting duration; stepping up online tax declaration and tax payment via banks; automating the reception, settlement and returning of tax and customs procedures; and reducing by 10 - 15 per cent the compliance costs for tax and customs administrative procedures for individuals, organisations and businesses.

 

In 2013, Hanoi will continue to implement market supporting measures and inventory reduction measures; set aside VND50 billion for trade promotion activities and facilitate local enterprises to approach and expand markets and boost sales. The city will also launch trade promotion activities to support key industrial products, handicraft products, and innovative industrial products while supporting enterprises to build and develop brand names. The capital will also carry out price stabilisation programmes for essential products, estimated to cost VND328 billion. It will spend VND16 billion, sourced from industrial promotion funds, to assist small and medium-sized enterprises, cooperatives and individual business units to enhance competitiveness and expand consumption markets for products made by local cottage industry villages. It will focus on instructing, inspecting and urging State-funded infrastructure construction for 671 projects at a total value of VND23,879 billion in 2013. It will promptly remove troubles in investment, tender, approval procedures and ensure disbursement of 98 per cent of planned investment capital for projects.

 

Hanoi will implement measures to support enterprises to access credit loans bearing reasonable interest rates and allocate priority capital for exporters, agricultural production units, subcontracting companies, SMEs, companies with high-tech applications, and labour-intensive firms. Sacombank has launched a package of VND1,000 billion in soft loans, of which VND450 billion will have the interest rate of 12 per cent per annum in the first three months for a maximum maturity of six months to corporate customers. Military Bank (MB) will also lend VND1,000 billion with an annual interest rate of 9.99 per cent. Vietnam International Bank (VIB) announced lending VND3,000 billion to real estate companies and individual customers with a fixed interest rate of 11.79 per cent per annum in the first 12 months. Especially, the city will deploy an interest rate support package worth VND100 billion to ease difficulties for enterprises while carrying out the Credit Guarantee Fund for SMEs with a budget of VND80 billion. Companies will be given more time to fulfil tax payment obligations. The city will facilitate the conversion of commercial housing projects into social housing projects to help real estate companies get through difficulties.

 

The Hanoi People’s Committee established a steering board in charge of supporting enterprises to deal with difficulties and boost production and business activities. This board was chaired by the Mayor.