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MetMetro operates at loss but still expands businessro Cash & Carry, from 2001 to 2009, declared a total loss of VND1.16 billion dong ($57.8 million), but it is striving to have 30-35 centers in Vietnam in the next 3-5 years.

Repeatedly reporting losses but still expanding business scale, many big foreign investors continue to cause controversy over their role in the economy.

On October 17, Metro Cash & Carry Vietnam opened a new wholesale center in Ha Cau Ward, Ha Dong district, Hanoi. This is the 19th center of Metro in Vietnam, with a total area of up to 5,100 m2, providing more than 25,000 kinds of commodities.

19 centers is a respectable number of Metro, if you know that in 2001, after receiving a license to invest in Vietnam, Metro originally asked permission to open 8 centers. Since the opening of the first center in Ho Chi Minh City, Metro has developed pretty fast in the past 10 years.

Recently, Metro leaders have stated to continue to expand its network in the near future.

Randy Guttery, CEO of Metro Cash & Carry Vietnam said the firm would strive to have 30-35 centers in Vietnam in the next 3-5 years.

“We are optimistic about Vietnam, which is the second fastest growing market in the world of Metro and Metro still wants to continue investing here,” said Guttery.

Many foreign-invested enterprises (FDI) keep expanding production despite reporting continuous losses.

In 2010, 2011, and 2012, Metro has built four new centers each year. However, in contrast to that development process, financial statements of Metro are not as nice as expected. In many consecutive years, the company reported huge losses.

A report by the General Department of Taxation said, Metro Cash & Carry declared losses of up to VND1.16 billion from 2001 to 2009, topping the list of loss incurred FDI firms.

After this data is published, there were doubts about the possibility of transfer pricing in this business. However, since then, the tax agency has not released any conclusions, and Metro has also not bothered to explain to the public.

Another case is Coca Cola, which also repeatedly reported losses but recently the company has announced the plan to expand its factory in Da Nang by about 5.000m2 to increase production capacity.

However, Da Nang city said it was “seriously considering” the plan considering the fact that the contribution of this company to the state budget is very little, while the company also reported losses of many continuous years.

The question is if they repeatedly reported losses, why do they want to expand business?

VnEconomy/VietnamNet

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