State enterprises fail to meet deadline
by Thuy Anh
Although the State-owned Enterprise Law, which was designed to regulate wholly state-invested firms, expired last Thursday, many SoEs have not yet changed their status to one-member limited companies as required.
Nguyen Kim Toan, head of the Government Office SoEs Renewal Department, said at a seminar in Ha Noi on June 29, only two days prior to the expiration, that 51 SoEs could not meet the requirement for various reasons. She said the major reason was their poor performance, which had resulted in losses.
The Viet Nam National Sericulture Corp is one of the said companies. Another 14 farms and forestry plantations are also at the end of the tunnel due to problems related to land and other assets.
Toan added that the Prime Minister had required completion before the new year.
She said that on June 15 around 1,200 SoEs had not completed the process. She said that authorities would issue decisions on status change by July 1, but that was not an indication that it had been completed.
After the decision was issued, steps, including the working out of a plan for the new changes and business registration for the new institutions, would follow.
Changing the form of State-owned enterprises is set by the Government, which aims to improve their management and performance, thus creating a more positive impact on the country's economy.
Another target is to provide businesses in all economic sectors a common framework, the Law on Enterprises.
According to Dr. Nguyen Dinh Tai, permanent vice president of the SoEs Club and head of CIEM's Advisory and Training Management Centre, the importance is the quality rather than the quantity of SoEs changing status.
Prime Minister Nguyen Tan Dung has recently decided on a list of 15 State owned corporations, including Viet Nam Cement Industry Corp, Viet Nam National Textile and Garment Group, Viet Nam Railway Corp and Viet Nam Ship Building Industry Group, to be turned into the one-member limited companies.
"The difficulty lies in the change in quality and corporate management as the working habits and mind-set have taken deep root in SoEs," said Tai.
A survey of 321 SoEs completed their renewal to operate as one-member limited companies last October, showed that more than 65 per cent of them are SoEs under management of local governments. And up to 72.5 per cent of these (65 per cent) companies chose a model in which the chairman also assumes the general director position.
More than 45 per cent of the 321 one-member limited companies have not yet carried out organisational restructure or adjusted their companies' rules as required by the Enterprise Law. One of the urgent requirements of the change is to renew corporate governance in accordance with the law and international practices.
Interest rate cut
According to Duong Thu Huong, general secretary of the Viet Nam Banks' Association most of its members will lower their lending rates beginning today to around 12 per cent per annum. Priority will be given to areas of agriculture, export and small – and medium-sized enterprises.
Last week the associations held two meetings in Ha Noi and HCM City and agreed to do so.
Huong said banks also agreed to decrease deposit interest rates to around 11 per cent, then later to 10 per cent, from the current 11.5 per cent.
However, many banks with corporate customers, who have large cash deposits, have negotiated higher rates, some as high as 13 per cent, for these bigger companies.
Several commercial banks including the biggest ones like Vietcombank, Vietinbank and Bank for Investment and Development (BIDV), announced that they would offer lower lending interest rates beginning from last Thursday. BIDV has set a 12 per cent rate for short loans to three areas (agriculture, export and SMEs).
The short-term rate of Vietcombank is 12.3 per cent and for medium – and long-term, 13 per cent. Meanwhile Vietinbank's maximum rate was set at 12.5 per cent. Credit employees announced last Thursday they had not yet received instruction on the decrease, so they applied their existing rate.
On the part of smaller banks, Sacombank has already offered exporters of cashew nuts and seafood of rates to 12.5 per cent and further cuts will take place step by step, according to chairman Dang Van Thanh.
Asia Commercial Bank general director Ly Xuan Hai also promised to gradually reduce interest rates, adding that his bank had been offering a 6.5 per cent rate to exporters who had committed to sell their collected foreign currency to the bank.
Several others have mobilised funds at high rates of up to 12 per cent, which have not been disbursed yet in loans, so they did not cut their lending rate immediately.
Positive moves in hi-tech
Foreign direct investment projects in the hi-tech sector have signaled positive movements, which include the US$1 billion Intel Products Viet Nam in the HCM City's Sai Gon Hi-Tech Park (SHTP). This Intel chip assembly and testing facility is running on a trial basis and expects the first export shipments later this quarter.
SHTP has recently awarded an investment certificate to the Japanese Nidec Copal Precision with the investment of $70 million. Preparations have been hastened so that its factory will begin production of precision motors for use in mobile and digital devices next April.
A company representative announced it had won orders from partners like Canon, Panasonic and Pentax. The Nidec Copal Precision Viet Nam is Nidec's fourth project in the park, which is expected to reach an annual export turnover of $60 million in 2011-12.
Statistics of the park's management board show that this year's first six months saw almost 90 foreign investors who visited looking for opportunities. Two of them, with a total registered capital of $81 million, received investment certificates, and another four projects are due to do the same. — VNS