Rising input and borrowing costs are putting manufacturing companies under “double pressure.” As margins narrow and cash flow tightens, many are cutting back on investment and restructuring to stay afloat. Pressure builds on multiple fronts Manufacturers are entering a tough phase, facing higher input costs, elevated interest rates and longer payment cycles at the same time. These factors are directly eating into profits and limiting expansion. Nguyen Van Sang, director of Viet Products Import-Export Corporation, said his company has come under growing strain from rising interest rates and tighter credit in recent months. Lending rates have climbed by around 1–1.5 percentage points, pushing rates at major banks from about 7% to 8–8.5% per year. At smaller banks or external lenders, rates can be 2–3 percentage points higher. For loans worth tens of billions of dong, that increase translates into tens of millions of dong in additional monthly interest costs, he said. With margins already thin, the higher borrowing costs are weighing heavily on operations. Beyond interest rates, companies are also dealing with rising costs for fuel, transport, logistics and minimum wages. At the same time, raising selling prices is difficult as customers are also under pressure and cutting back on […]
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