Major firms cut costs to stay afloat
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As many as 83 major companies and four banks in Vietnam have registered to cut their operational costs by some US$624 million (Bt19.58 billion) in a bid to stay afloat during the economic downturn, the Finance Ministry said.
The companies have announced their intent to cut management costs by $144 million as well as other expenses such as raw materials and energy by $451 million, accounting for 24.7 and 75.3 per cent of the total savings, respectively.
Four leading banks Vietcombank, Vietinbank, Agribank and BIDV will cut a combined 735 billion dong (Bt1.1 billion) of their operational costs. Mekong Housing bank (MHB) has also pledged to cut costs, but has not revealed a figure yet, the ministry said.
In January, the government asked most state-owned companies and corporations to cut down on costs and lower their product prices to improve competitiveness during the economic downturn.
BaoViet Insurance Group in February was the first firm to declare it would cut costs by 145 billion dong, but maintain its planned annual revenue.
Other firms followed such as Viet Nam National Garment and Textile Group with 1.1 trillion dong; Electricity of Viet Nam with 1.8 trillion dong; House and Urban Development with 125 billion dong and Viet Nam National Shipping Lines with 105 billion dong.
The State Bank of Viet Nam last month ordered five major banks in the country to cut their costs by 5 to 10 per cent in order to bring down the interest rates.
The economic recession has caused businesses to declare bankruptcy, close operations and increase tax debts.
