Talking about the efficiency of the restructuring of state-owned enterprises under MOIT, Minister of Industry and Trade Vu Huy Hoang said restructuring state-owned enterprises is aimed to make the sector’s groups and corporations stronger so that they would provide the backbone to the economy. Accordingly, MOIT specified its key tasks which were to restructure major areas for production and trade development strategies; restructure owners' equity, re-organize production and trade activities, administration and human resources. The ministry also gave instruction to end capital withdrawals and scattered investments from its SOEs.

According to statistics from MOIT’s Organization and Personal Department, 100 percent of the groups and corporations of the ministry have completed their restructuring schemes for the 2013-2015 period. After conducting audits, most of the groups and corporations had withdrawn their investment capital from non-core business areas such as real estate, finance, banking and securities.

Specifically, Electricity of Vietnam (EVN) was the MOIT’s first economic group of which restructuring project was approved by the prime minister in the period from 2011-2015. Until now, EVN has completed the transfer of one million stocks at the Global Insurance JSC from EVN to ERGO International Company, reducing its ownership stake from 22.5 down to 20 percent. With other partners like An Binh Bank and real estate enterprises, the capital withdrawals met with difficulties which need a period of time to be resolved but EVN committed to carry out its restructuring process and itinerary according to the prime minister’s decision.

The Vietnam National Coal - Mineral Industries Group (Vinacomin) has also transformed six one-member coal production limited companies into its subsidiaries. The group also withdrew capital entirely from the SHB – Vinacomin Insurance Joint Stock Company, BIDV Highway Development Joint Stock Company, Long Thanh International Airport Joint Stock Company and Airlines Insurance Joint Stock Company.

As for the Vietnam Oil and Gas Group (PVN), Chairman of PVN’s Board of Directors Phung Dinh Thuc said after implementing the restructuring scheme, the Group still holds one state-owned corporation operating in the core area of oil and gas exploration and exploitation, 24 II-grade enterprises, 126 III-grade enterprises and no IV-grade enterprises. PVN has also completed a merger between PetroVietnam Finance Corporation and the Western Commercial Joint Stock Bank to form the Vietnam Public Commercial Joint Stock Bank (PVcom Bank); sold stocks to Russian partners in Binh Son Refining and Petrochemical Co., Ltd and is expected to equitize most of its attached corporations.

As the first state economic group that performed equitization, the Vietnam National Textile and Garment Group (Vinatex) has completed capital withdrawals in seven enterprises with total capital of VND204.1 billion in some areas like securities, finance and banking to make it properties transparent before transforming to the joint stock company model.

Regarding the Vietnam Paper Corporation’s plans to implement its restructuring, the corporation deployed equitization in four companies, including the Forestry Processing and Transportation Company, Forestry Design Company, Song Duong Tissue Paper Company and Chip Import and Export Company. The corporation also rearranged four forestry companies into two new companies and transformed the Institute of Paper and Xenluylo Industry into a scientific and technological company. The corporation also completed capital withdrawals in Diem Saigon Sewing JSC in the first quarter this year and continued to consider capital withdrawals in other companies as planned.

In addition, groups and corporations of other ministries that had their restructuring projects approved by the prime minister have also focused on rearrangements, renovations, reductions and withdrawals of capital from their non-core business areas.

Restructuring – a vital objective

The MOIT’s groups and corporations and most of international organizations frankly admitted that SOE restructuring is vital to improve business efficiency and boost economic development. Specifically, at the 2013 Annual Vietnam Business Forum, it was stressed that the reform and restructuring of SOEs remained the largest concern of donors and investors. EuroCham's Chairman in Vietnam Preben Hjortlund said that the SOEs currently account for 40 percent of the entire Vietnam’s economy but the overall performance of this sector remained limited. “This inhibits the growth of the economy, leading to a decline in investment from the private sector”, the Chairman stressed.

Sharing the same point of view, a representative from Singapore Business Association also said, SOEs were one of the main foundations of the Vietnam’s economy. However, many of them were operating inefficiently and suffering losses. As they acted as a burden for the domestic economy, it was essential to carry out SOEs restructuring to ensure that the economy would recover.

Therefore, Minister of Industry and Trade Vu Huy Hoang suggested that in the coming time, the groups and corporations need to keep on checking their spheres of operation and deploy what have been approved in their restructuring projects. In addition, they also need to correct shortcomings and reorganize or even dissolve ineffective businesses. Those enterprises which should have privatized in 2011, 2012 and 2013 will face penalties if they not carry out their privatization process in 2014.

Minister Vu Huy Hoang affirmed that “According to the roadmap approved by the government, from now to 2015, MOIT will direct the groups and corporations to boost the withdrawal of capital as well as their privatization process and put an end to scattered investment”./.