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. (Photo: VNA)

Hanoi (VNA) - Vietnamese steel and mechanical enterprises have felt a criticalimpact from the COVID-19 pandemic, with a gloomy market and sharply declining orders,and are in need of further support from the Government.

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

The Vietnam Steel Association (VSA) said that steel consumption has fallen as theconstruction sector has cooled, while the transportation of goods and materialsto northern localities like Hai Duong, Hai Phong, Hung Yen, and Quang Ninh has facedchallenges from new virus epicentres in Hai Duong and Quang Ninh.

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

Meanwhile, Chairman of the Vietnam Association of Mechanical Industries DaoPhan Long said auto makers are manufacturing at a moderate pace as they have receivedfewer orders than previously but are paying more for transportation.

In a bid to remove bottlenecks facing local manufacturers, VSA recommended thatthe State Bank of Vietnam and commercial banks provide credit support tocompanies, 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 tobid on domestic projects so they can expand markets and gain more orders duringthese tough times.

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

Car sales plummeted 35 percent when COVID-19 hit Vietnam during the first halfof 2020, he added, but sales then bounced back in the second half following a Governmentmove to halve registration fees.

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

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

VNA