New regulation faces complaints from Vietnam steel industry
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A new draft of a regulatory measure written by the Vietnamese Ministry of Trade to oversee the distribution of steel by domestic producers has encountered negative reactions from domestic steelmakers. According to Deputy Prime Minister Vu Khoan, the Vietnamese steel industry is troubled by poor planning, weak management and faulty distribution and therefore requested the Ministry of Trade to draft a new regulation directed at improving distribution and building new sales networks. At a meeting held earlier this month to collect feedback on the regulation, steel producers responded negatively to the draft because it requires that steel producers invest their own capital in creating new sales networks and retailers must be entitled to earn a commission on each sale. The problem argued by domestic steelmakers is that since they have to borrow capital from banks, they claim that they cannot repay their loans on time if they are forced to wait for payments from their sales agents and invest in distribution, especially since these days they can barely afford their production costs. However, according to an official from the Ministry of Finance, the regulation targets to establish a stable and transparent distribution network in order to stabilize steel prices and prevent speculation.
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