Steel, mechanical firms in struggle for survival amid COVID-19

Update: 19:00 | 05/03/2021
Vietnamese steel and mechanical enterprises have felt a critical impact from the COVID-19 pandemic, with a gloomy market and sharply declining orders, and are in need of further support from the Government.
Steel, mechanical firms in struggle for survival amid COVID-19
Vietnamese steel and mechanical enterprises have felt a critical impact from the COVID-19 pandemic.

A wide range of steel companies reported sluggish manufacturing and low transaction numbers due to project delays as a result of social distancing measures.

The Viet Nam Steel Association (VSA) said that steel consumption has fallen as the construction sector has cooled, while the transportation of goods and materials to northern localities like Hai Duong, Hai Phong, Hung Yen, and Quang Ninh has faced challenges from new virus epicentres in Hai Duong and Quang Ninh.

Preparations for pandemic prevention and control and the arrangement of logistics at steel plants, particularly the Hoa Phat steel complex in Kinh Mon district, Hai Duong province, are costly and have affected production.

Meanwhile, the Chairman of the Viet Nam Association of Mechanical Industries Dao Phan Long said automakers are manufacturing at a moderate pace as they have received fewer orders than previously but are paying more for transportation.

In a bid to remove bottlenecks facing local manufacturers, VSA recommended that the State Bank of Viet Nam and commercial banks provide credit support to companies, such as extending payment deadlines or cutting loan interest rates.

Along with helping business owners with quarantine costs for foreign experts, Long suggested the Government create the conditions necessary for companies to bid on domestic projects so they can expand markets and gain more orders during these tough times.

General Director of Hyundai Thanh Cong, Le Ngoc Duc, said registration fees on locally-manufactured and assembled cars should be cut until the end of this year.

Car sales plummeted 35 percent when COVID-19 hit Viet Nam during the first half of 2020, he added, but sales then bounced back in the second-half following a Government move to halve registration fees.

Most recently, the Ministry of Finance recommended the Government consider allowing the cost of COVID-19 prevention and control to be deductible for tax purposes.

It is evaluating measures introduced and studying suitable tax and fiscal solutions to carry out the Government’s dual task of pandemic prevention and control and economic recovery while ensuring balance in the macro-economy.

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(Source: VNA)