SEOUL, Feb. 8 (Korea Bizwire) — About one-half of the South Korean companies operating in Vietnam reported a decline in both their financial results and facility utilization rate last year due to the impact of the COVID-19 pandemic.
According to a report released by the Korea Institute for Industrial Economics and Trade, 46.5 percent of the 217 South Korean firms operating in Vietnam saw their revenue decline last year.
Among these companies, 32.7 percent noted that they had suffered more than a 20 percent decline in revenue last year.
More than half of the companies operating in Vietnam witnessed a decline in operating profits compared to a year ago.
These companies blamed the disappointing results on work disruptions caused by the pandemic, sluggish local demand and stiffer competition in the Vietnamese market.
In response to a question asking what factors pose challenges to their management in Vietnam, respondents picked COVID-19 disease control measures, business approval and licensing and opaque regulatory practices.
The facility utilization rate for more than 75 percent of companies remained below 40 percent. The share of the companies whose facility utilization rate remained below 20 percent stood at 33.2 percent.
More than two-thirds of the companies expected the business environment to worsen in Vietnam amid growing concerns about government policies (regulations), increases in production costs, and regulations on foreign companies.
M. H. Lee (firstname.lastname@example.org)