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  • Thirst for the production of capital

    Mar 7th, 2012

    <p></p><p>Vietnam's cashew sector is entering the peak day buys for business 2012. As expected from the end of the previous season, had never enterprises (companies) to address urgent capital to continue current production.</p> <p>&nbsp;<b>Difficult Laws </b></p><p>At the conference looking for branches of credit held on 6/3 in Ho Chi Minh City, Nguyen Thai Hoc, Chairman of the Vietnam Cashew Association (Vinacas) message, the biggest difficulty of the industry today that many companies are short of capital to purchase raw materials for production. Accordingly, in order to have enough ingredients to serve the export target of $ 1.5 billion in 2012, total capital needed is more than 29,500 branches billion. Specifically, these companies need about 9,000 -10 000 billion to buy 380,000 to 400,000 tons in the same population, 250 million for the import of 300,000 tons of raw cashew for processing and the remainder for investment, improve facilities.</p> <p>Lack of capital is the amount of material that is large inventory industries, more than 200,000 tons and imported mainly from 2011 with high prices. Economy is still difficult in the import market, mainly as Europe, America ... has impacted the current export price has been reduced from 1200-1500 USD / ton over the same period. Recognizing the difficulties of the industry, importers are constantly pressing, pushing prices below or prolong payment affect the financial liquidity of the business. However, according to Hoc, what makes the industry "headache" is the public came to pay bank debts, but businesses still do not know "dig" where the money to continue lending to credit due moi.Nhieu DN participants complained, bank interest rates are too high are difficult to do business. Unlike 2011, when interest rates as high as 20-22% but in return, export prices rose to more than 30% so businesses remain profitable. Two months, interest rates have been reduced but not significantly and not commensurate with the momentum of price declines do not brake for agricultural products. </p><p>In particular, early steps service, price decrease only NIS 18-20 million / ton, only 50% over the same period has a direct effect on incomes of those involved. "In addition to cost reduction, due to unusual weather, the industry is facing a situation to develop diseases that decrease production. In many places such as Binh Phuoc province, the amount of damage to thousands of ha ... "said Nguyen Duc Thanh, Vice President Vinacas said. </p><p>&nbsp;<b>Have to save themselves </b></p><p>According to the plan of Vinacas, in 2012 the industry will export about 170,000 tons and 60,000 tons of cashew nut shell oil, grew more than 10%. Participants, representatives of commercial banks that, before receiving the support of the functional departments, enterprises need to save themselves, attempting to escape the current difficult circumstances. "They have boldly cut losses, release of the raw materials inventory are huge difficulties in capital turnover.</p> <p>In addition, companies need to rearrange our business so the more efficient management, as well as promoting the mechanization of the processing operations to reduce costs and higher profits in exporting " Mr. Su Yi, deputy general director, said Eximbank. Explaining the difficulties of the industry, Mr Thanh said that the purchasing power caused by the weak market. The outstanding balance of about 3000 billion industry is not too large and if access to capital, businesses still are more likely to pay debts and maintain effective business situation. "We strongly encourages banks to increase credit limit for the industry for more than 29,000 billion VND to apply the mortgage loan, mortgage credit by 90% of stock value or value DN. Due to the rotation of the cycle in parallel with capital reserves and production materials should be extended to consider borrowing from 6-12 months. Particularly of interest rates, banks are looking forward for consideration at 11-12% for USD and USD 6% for, "said Thanh proposal.<br></p><p></p><br><br>


    Source: Vietnam Economic Times
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