Restructuring for sustainable business growth

The large number of businesses temporarily suspending production and operations, particularly micro, small and medium-sized enterprises, indicates that the market is facing a range of increasingly pronounced pressures. It also reflects a more intense process of market-driven selection taking place across the business sector.

 

Production at Binh Phuoc Branch of Japfa Comfeed Vietnam Co., Ltd., located in Northern Dong Nai.

For businesses that remain in operation, now is the time to take an honest look at their “financial health,” restructure their operations and business models, foster innovation, and strengthen corporate governance to achieve more sustainable growth.

Businesses at a major crossroads

According to data from the Statistics Department under the Ministry of Finance, more than 155,000 businesses nationwide withdrew from the market in the first seven months of 2026, an increase of nearly 28% year-on-year. In Ho Chi Minh City alone, the country’s largest business hub, nearly 39,000 businesses either temporarily suspended operations or completed dissolution procedures, exceeding the more than 34,000 newly established businesses.

In Dong Nai, 4,900 new businesses were established and nearly 1,100 resumed operations during the first seven months of 2026. Overall, the province’s business sector continued to show signs of growth, with the number of newly established businesses, capital increases, and returning businesses all rising as the investment and business environment gradually improved.

However, despite these positive developments, several businesses continue to face significant difficulties in production and operations. More than 1,100 businesses dissolved over the past seven months, up 92% from the same period in 2025, while as many as 2,400 temporarily suspended operations. The Dong Nai Statistics Office said the number of businesses that dissolved or temporarily suspended operations remained high, indicating the need to continue effectively implementing business support policies, with a focus on addressing difficulties related to capital, markets, land, and administrative procedures, and creating favorable conditions for businesses to recover, expand production, and achieve sustainable growth.

Assoc. Prof. Dr. Dinh Trong Thinh, a lecturer at the Academy of Finance, said that businesses temporarily suspending operations account for a large proportion of those withdrawing from the market nationwide. The increase in temporary suspensions reflects a “hibernation” trend, as businesses halt operations temporarily to monitor market developments, restructure short-term cash flows, or await new regulations.

Meanwhile, for some small and micro businesses and production establishments, rising production and operating costs have become a major burden. For now, many are focusing on clearing inventories. “The market is quite sluggish at present, making it very difficult to maintain a high level of production. Our cash flow has also tightened considerably. The immediate solution is to try to sell off the inventory we have already produced,” said a representative of a handicraft woodworking establishment in Binh Minh Commune.

Restructuring for a new phase

Market difficulties, combined with the demands of a new phase of development, are placing restructuring firmly on the agenda for businesses.

Many businesses said they are initially focusing on resolving outstanding problems, such as discontinuing products that are no longer profitable, scaling back markets where they have lost their competitive advantage, clearing inventories, collecting outstanding debts, or renegotiating loans. Only after addressing these immediate challenges can businesses consider investing in technology, expanding into new markets, and changing their management models.

Economic experts say businesses can no longer be assessed solely based on revenue, workforce size, or factory scale. Cash flow, debt-servicing capacity, productivity, product quality, dependence on a particular customer or market, and the ability to innovate are more meaningful indicators of corporate health. This is also why the current market-driven selection process should be viewed as a transition rather than simply a period of decline. Weak business models that lack the capacity to adapt will gradually be pushed out, allowing resources to shift toward more efficient enterprises.

At the same time, innovation and corporate governance are essential for sustainable growth. However, according to Dau Anh Tuan, Deputy Secretary General of the Vietnam Chamber of Commerce and Industry (VCCI), these remain two weak links among Vietnamese businesses. Only 8.8% of businesses have introduced product innovations, while innovation capacity remains low compared with regional and global levels. Innovation capabilities and the quality of corporate governance remain long-term weaknesses in the private sector. Without breakthroughs in these two areas, businesses will struggle to shift from a growth model based on scale and quantity toward one driven by stronger core competitiveness. Therefore, support programs need to be designed to help the business community, particularly small and medium-sized enterprises, adapt, restructure, and pursue sustainable development.

In the coming period, businesses will continue to face significant pressures from multiple factors, including high costs, difficulties in accessing capital, weaker consumer demand, and limited resilience. This will intensify the market’s natural “selection” process, allowing more efficient businesses to weather the challenges and move forward into the next stage of development.

By Vuong The – Translated by Mai Nga, Minho