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Tuesday, July 16, 2024

Half of FDI firms in Vietnam, including Formosa, suffered losses: finance ministry

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HCMC – More than half of foreign direct investment (FDI) firms in Vietnam, including the infamous steel maker behind a marine life disaster, reported losses worth more than VND131 trillion (US$5.6 billion) in 2019, according to a report from the Ministry of Finance.

The ministry said that as many as 12,455 FDI firms, or around 55% of the total of its kind in Vietnam, suffered losses in 2019, but their combined revenue rose by 12.7% from the previous year to around VND846.8 trillion.

As of late 2019, more than 14,800 FDI firms, which made up a staggering 66% of this kind, reported accumulated losses worth VND520.7 trillion.

Those top sectors which have seen FDI firms with two consecutive years of pre- and after-tax losses include the manufacturing of iron, steel and other metals, the production of gas, petroleum and petrochemical products as well as telecommunications and software development.

The multibillion-dollar Taiwanese-invested steelmaker, Formosa Ha Tinh, based in the north-central coastal province of Ha Tinh, reportedly incurred an accumulated loss of over VND25.3 trillion as of late 2019.

In 2019 alone, the steelmaker reported a loss of VND11.5 trillion, a 4.2-fold increase compared with the previous year. It paid some VND51.6 billion to the State budget last year.

Formosa Ha Tinh was solely responsible for a marine life disaster in 2016. The steelmaker was found to have illegally discharged toxic industrial waste into the ocean through its drainage pipes.

Having repeatedly shirked responsibility, Formosa Ha Tinh finally admitted its key role in the massive fish deaths in late June 2016. The water pollution crisis has affected the Ha Tinh, Quang Binh, Quang Tri and Thua Thien-Hue provinces in central Vietnam.

Samsung Vietnam posts major profit

In contrast with the gloomy picture of the FDI firms in Vietnam, two of four major subsidiaries of the Korean tech giant Samsung, based in the northern provinces of Bac Ninh and Thai Nguyen, posted a combined gross profit of more than VND85.9 trillion in 2019.

As of late 2019, Vietnam was home to 25,054 FDI firms, 22,603 of which were providing sufficient financial data for analysis, according to the ministry.

Their total revenue stood at over VND7,100 trillion in 2019, a rise of around VND720 trillion compared with the previous year.

Moreover, their gross profit grew by VND29.4 trillion year-on-year to some VND387 trillion.

Their tax payments in the Southeast Asian country rose by 12.8% compared with 2018 to around VND210.2 trillion. They shipped goods worth US$323.8 billion abroad in 2019.

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