Business Restructuring Season: A Transformative Step in a Volatile Economic Context

In the context of a volatile global economy, corporate restructuring has become an essential step for maintaining and ensuring sustainable growth. It’s no coincidence that businesses, both large and small, choose to enter a restructuring phase when faced with turbulent market conditions, and Vietnam is no exception to this trend.

Economic Conditions Force Businesses to Restructure

According to a report by the Organisation for Economic Co-operation and Development (OECD), the global economy has experienced the largest decline in decades, particularly due to the impacts of energy crises and supply chain disruptions. This has forced many businesses around the world, including in Vietnam, to face challenges related to cash flow, rising operational costs, and declining market demand.

Many businesses in sectors such as real estate, construction, and retail in Vietnam are compelled to enter a restructuring phase, involving cost-cutting measures, improved financial management, and organizational restructuring. Data recorded up to the first half of 2024 shows that Vietnam has seen approximately 71,400 businesses temporarily ceasing operations, marking an 18.6% increase compared to the same period last year. Additionally, nearly 28,800 businesses have stopped operations pending liquidation procedures, and over 10,200 businesses have completed the liquidation process, reflecting a 15.4% increase. On average, about 18,400 businesses withdraw from the market each month, highlighting an ongoing period of difficulty.

Important Steps in Restructuring

Restructuring is not merely about cutting personnel or costs; it also requires strategic changes and innovative approaches to adapt to the market. A notable example is Masan Group, one of the leading enterprises in the consumer goods and retail sector in Vietnam. Masan shifted its focus from traditional products to high-tech offerings and invested in a digital retail platform to create an integrated ecosystem, enhancing operational efficiency.

Another example is Vingroup, which, during its restructuring process, exited the retail market and redirected its resources towards technology and automobile manufacturing. This decision not only allowed the company to escape a highly competitive sector but also opened up new growth opportunities.