Enterprises optimistic about business prospects

Friday, 2021-01-08 16:09:45
 Font Size:     |        Print
 

Workers at a factory of the Garment 10 Corporation.
 Font Size:     |  

NDO – Contrary to usual practices, the production, business development and investment plans of the business community in 2021 had to involved backup plans as well as operating scenarios, due to the appearance of COVID-19 variables. Forecasts for business prospects have never been so grey, but survey results from a number of reputable organisations and assessments of businesses in some important industries show many positive signals.

>>> International media praises Vietnam's success in COVID-19 fight

>>> International economic integration - a bright spot in Vietnam’s foreign affairs in 2020

>>> Bright prospects for Vietnam-EU cooperation

More opportunities to flourish

The business initiative support company MEVI has recently increased its involvement at a series of events and seminars on production and business connection. MEVI is the newest member of an ecosystem consisting of a chain of businesses and cooperatives founded by a group of young entrepreneurs in 2016.

Through its activities connecting, purchasing and coordinating between manufacturers and sellers, as well as product trading among members, so far, MEVI has connected more than 60 small and medium-sized enterprises in distributing nearly 200 regional specialties throughout the country with both safety and clearly traceable criteria, including products with a high added value meeting new consumer trends, such as strawberry vermicelli and herbal skin care cosmetics.

Ms. Nguyen Thi Thu, Deputy Director of MEVI, said by using its own methods to break the weakest link in the whole chain – connectivity, MEVI and its ecosystem are still working well during the COVID-19 pandemic with a growth rate of more than 20%. In 2021, the enterprise expects higher growth thanks to the promotion of a three-sided linkage among farmers, the State and enterprises being strongly deployed by the Government and relevant authorities.

Many Vietnamese businesses are showing a positive recovery thanks to policies designed to stimulate the domestic market through various types of retail, tourism, transportation, accommodation and catering services. Of which, tourism and travel enterprises have developed plans to divert their efforts to focusing on exploiting the domestic tourist market in the "new normal" state. According to economists, the domestic market has not been able to help the tourism industry fully recover, but it has brought many other social ramifications. Of which, the most important thing is to create jobs for a certain number of workers.

The domestic market and its unexpected growth post-COVID-19 also helped speed up the recovery of Vietnamese airlines. The Vietnam Airlines Corporation (VNA) said that in its production and business plan for 2021, VNA's domestic passenger traffic volume is expected to grow more than during the previous year, approaching a recovery threshold. In an optimistic scenario, in 2022, VNA’s business operations will return to the same scale as prior to the COVID-19 epidemic, while in the more conservative scenario, recovery is expected in 2023. This is a rapid recovery compared to the general situation of the international aviation market.

Meanwhile, export enterprises are expected to continue to benefit from a series of new-generation free trade agreements (FTAs) that have just been signed or taken effect. The implementation of the EU - Vietnam Free Trade Agreement (EVFTA), which took effect from August 1, 2020, has had a significant impact on bilateral trade between Vietnam and the EU, reflected in the strong growth of Vietnam's exports to the EU and in imports from the EU to Vietnam during the final months of the year. Opportunities will continue to come to businesses who ready themselves for participation.

As reflected in businesses, from the end of 2020, the export market has gradually been cleared, leading to the output of footwear, textile and electronic products and components improving. If the epidemic is not too long lasting, production will improve from the beginning of 2021.

It is forecast that Vietnam's economy will see further positive signals in 2021 thanks to the progress in implementing FTAs and positive results in relation to the management of the pandemic.

Improving adaptability

A recent survey of senior managers of CEL Consulting showed that, in 2021, up to 77% of managers thought that the business situation will be improved to much improved, while only 8% said that they see it moving in a pessimistic direction.

In a recently released report, HSBC's Global Research Division acknowledged that the Vietnamese business community has found ways to overcome the challenges brought about by the epidemic, while at the same time improving its operating methods, accelerating digital transformation and proactively approaching banks in order to find solutions to optimise cash flow management.

The updated data on business registration from the Ministry of Planning and Investment also shows the efforts of the business community to improve its resilience against the crisis. After the influence of the COVID-19 epidemic, many businesses still chose to continue the suspension of their operations to review market developments, combined with constantly looking for new ideas and directions and/or waiting for the State's support policies before deciding to continue or dissolve their businesses. Therefore, the number of newly established enterprises, enterprises "hibernating" and those leaving the market has continuously fluctuated following the epidemic’s development and the related economic policies. This shows that the business community has never run out of resilience.

Economica Vietnam's CEO Dr. Le Duy Binh said that in order for businesses to take advantage of better business opportunities in 2021, the Government should focus on effectively implementing solutions to support them. Of which, it is necessary to clearly define which businesses need support in order to focus resources on them, while encouraging the development of enterprises operating in new industries and those with the greatest potential such as innovative, digital enterprises and hi-tech enterprises. It is a must to accept market screening for enterprises that are not competitive enough and those operating in sectors that are not suitable for the new context.

At this moment, Australian enterprises are reviewing, evaluating and reshaping their operations, as well as considering diversifying their supply chains, especially into Asia, including Vietnam, said David John Whitehead, Vice President of Australian Chamber of Commerce in Vietnam (AusCham Vietnam). It is expected that by mid-2021, the business situation will have gotten better with the opening up of international markets and the restoration of trade activities. Like all other foreign-invested enterprises, the challenges posed by the COVID-19 epidemic to Australian enterprises operating in Vietnam are enormous. However, Whitehead expressed his belief that the worst is already behind us. Together with their knowledge and experience living and working in the context of the pandemic, AusCham Vietnam believes that Vietnam will recover strongly in the near future, he stated.