Enterprises and their big dreams for economic recovery journey

Thanks to the impetus from the macro economy, many businesses have expanded and invested strongly in production. In the photo: Production activities at Hoa Phat Steel Sheet Factory, Photo: VNA

Large-scale projects

There were winners and losers in business results in the first months of 2022, but with confidence and optimism, businesses expect the recovery and acceleration of the domestic economy. Now, they are looking for opportunities to break through, especially speeding up and expanding new investment plans.

After the success of Dung Quat 1, Hoa Phat Group has planned to invest in Dung Quat 2 factory with a capacity of 5.6 million tons of HRC (upstream steel products - hot rolled coil), increasing the total output system to about 14-15 million tons of steel products. Total investment for the project will be about VND80,000 billion. Tran Dinh Long, Chairman of Hoa Phat Board of Directors, said that the enterprise has signed all major contracts for the project; in addition, Hoa Phat also has the ambition to invest in Dung Quat 3 steel factory with a capacity of six million tons/year, partly producing HRC and the rest will produce U steel and Y steel. The project will be implemented after 2025.

In particular, according to the Hoa Phat leaders, the investment capital is huge, but they are cautious when only borrowing VND35,000 billion out of the total capital of VND80,000 billion, the rest will be balanced by the business. Furthermore, the company also focuses on producing HRC steel as it is an important material that is lacking in the domestic market. However, Hoa Phat is also aiming for internationalization, with investment in establishing factories abroad.

Also in the steel sector, Vina Roma Quang Tri Steel JSC is proposing to build the Quang Tri Iron and Steel Complex Project producing construction steel, section steel, and hot rolled steel plate with a capacity of 4.5 million tons of steel products/year. The project will be located in Southeast Quang Tri Economic Zone with a total investment of about VND47,810 billion.

In other areas, An Phat Holdings has also started a project to build a PBAT biodegradable plastic factory. This is considered the first green material factory in Southeast Asia, with a capacity of 30,000 tons/year and is expected to be complete after 24 months. With a total investment of up to US$120 million, when put into operation, the factory will meet 100% of the group's raw material needs, and even serve an export goal. According to the leader of An Phat Holdings, this investment will help businesses to be self-sufficient in raw materials, reducing costs to bring products closer to consumers, and proceed to replace traditional plastic products.

The most notable story in 2022 among businesses is Vingroup reaching out to the international market. Recently, Vingroup has planned to issue up to US$1.5 billion of bonds to the international market this year. The proceeds will be used to supplement capital for Vingroup to pay fees and expenses for bond issuance and directly contribute capital to VinFast to implement the VinFast automobile production complex.

Currently, VinFast has had 110 showrooms, service workshops, authorized auto dealers, and 268 showrooms and authorized dealers of electric motorbikes in all 63 provinces and cities across the country. This enterprise also put into operation branches in the US, Canada, France, Germany, and the Netherlands.

Increase quality for recovery

Along with increased investment, businesses are also looking to each other to increase the quality of the recovery. In the first months of the year, many cooperation agreements were signed, not only about syndicating capital to expand investment but also sharing experience, technology, and solutions to support business activities. The goal that businesses are aiming for is to offer products and services that apply high technology, bring great added value, and increase the presence of enterprises in many markets, but reduce production costs and proactively avoid damage from fluctuations in the world economy.

It can be seen that businesses rely on their strengths and accumulated foundation to accelerate investment, dominate the market, and create growth momentum in the future. The larger the investment plan, the more businesses must rely on the long-term vision as well as the stability of the macro-economy. Supporting policies on tax and fee reduction, interest rate reduction, land rent reduction, drastic reform of administrative procedures, and business investment environment are motivations for businesses to boldly invest and cooperate to expand their production.

Therefore, many businesses have achieved successful results, not only in terms of positive business results but also recognized by international markets. For example, by improving the quality from farming to processing, recently, the US Food Safety and Inspection Service (FSIS) under the US Department of Agriculture (USDA) recognized six more Vietnamese pangasius processing factories that are allowed to export to this market. The FSIS recognized 19 factories in Vietnam on the list allowed to export to the US. According to the Vietnam Association of Seafood Exporters and Producers (VASEP), in the US market, shrimp, pangasius, and other key products all recorded high export growth compared to the previous year, especially pangasius.

However, according to experts, business activities of enterprises are still facing many difficulties, especially from the instability of the economy and politics in many countries and large markets around the world. In the first five months of 2022, the number of businesses withdrawing from the market increased by 20% over the same period. On average, 14.4 thousand enterprises withdraw from the market every month. Therefore, businesses expect the management agency to continuously facilitate businesses to have more motivation for recovery and successful implementation of many investment plans.