‘Provincial unity can clear goods backlog'

A worker operates a steel tube and frame production line at Bac Viet Steel JSC in Que Vo Industrial Park, northern Bac Ninh Province. — VNA/VNS Photo Tran Viet

HA NAM — Fourteen provinces in Song Hong (Red River) Delta and the northern central region need to boost their co-operation to solve high inventories and create a larger market, said deputy minister of Industry and Trade Ho Thi Kim Thoa.

Speaking at a meeting on industrial and trade activities of the provinces last week, Thoa noted the importance of co-operation in designing mechanisms and policies to attract investment, while also making use of their advantages and potential to complement each other.

At last year's meeting, the provinces signed a co-operative agreement to promote industrial and trade activities, however, practical moves have not been as effective as expected.

According to the ministry's Agency for Industrial Promotion, last year the region had a total industrial value of over VND442 trillion (US$21 billion), nearly 21 per cent higher than that in 2010. The region contributed 35.57 per cent of Viet Nam's industrial production value, making it the second biggest region, just behind Cuu Long (Mekong) Delta region.

Total retail and services revenue in the whole region was nearly VND572 trillion ($27.3 billion), 26 per cent higher than that in 2010. In the first seven months of this year, regional retail and services revenue totalled VND390 trillion ($18.5 billion), 23.8 per cent higher than at the same period last year.

Notably, many cities and provinces in the region have seen increases in industrial production much higher than that of the national average of 4.38 per cent, including Bac Ninh with 28.2 per cent, Ha Nam with 13.3 per cent and Nam Dinh with a 14.35 per cent increase.

However, despite the growth in industrial production, and retail and services, several key products such as auto assembling, bricks and wood processing have been on the decline.

Moreover, value added to industrial products remained low and logistics have yet to meet demand.

Also at the meeting, representatives from provincial departments of Industry and Trade voiced their concerns over capital shortage, naming it the biggest difficulty currently facing enterprises.

The head of Bac Ninh Province's department of Industry and Trade, Vu Duc Quyet, said that enterprises had faced difficulties in accessing loans in the past and that high interest loans had contributed to increasing prices, resulting in high inventories.

His counterpart in Nam Dinh Province, Tran Le Doai, said that one-tenth of 4,000 enterprises in the province had claimed bankruptcy and stopped operations since the beginning of this year.

As most of them were small and mid-sized companies with diminutive equity, they could not afford the high interest, he said, adding that these enterprises were short of the capital required to continue production.

To help solve the shortage, Thai Binh Province paid half of the interest for enterprises in trade villages while the provinces of Thanh Hoa, Hai Duong and Bac Giang conceived a model to connect farmers, producers and distributors.

However, deputy minister Thoa criticised the isolatory feel and lack of scope of these efforts, urging more comprehensive and collaborative undertakings at regional level.

She also said that the ministry would continue to conduct trade promotional campaigns in Europe and Japan to help expand the market, as well as urging the provinces to implement policies that raise added value and reduce the production of high-energy goods that consume too many resources. — VNS