Prime Minister's reminder and the future of corporations

The efforts and achievements of economic groups are undeniable, but Prime Minister Nguyen Xuan Phuc also gave these enterprises a stern reminder, from seemingly small matters like a needle or thread to loans of 9.7 billion USD or 9.3 million tons of inventory.

Prime Minister Nguyen Xuan Phuc requested to promote equitization and divestment of state capital in enterprises.

Recently, implementing the Prime Minister's direction, the Prime Minister's Working Group has continuously inspected 3 economic groups that are playing a key role in a number of important economic sectors: Coal-Minerals, Textiles and Electricity.

Commitment of the Corporations

The meetings were first aimed at checking the implementation of the Prime Minister's recent Directive 24 on key tasks and solutions to promote growth in sectors and fields to contribute to achieving the GDP growth target of 6.7% in 2017. At the same time, they also checked the implementation of tasks assigned by the Government and the Prime Minister in the past time.

After the inspection, Chairman of the Textile and Garment Group Tran Quang Nghi pledged to the Prime Minister that he is determined to achieve the export target of 3 billion USD this year, an increase of 9% compared to the planned 2.78 USD and an increase of 20.4% compared to 2016.

Meanwhile, Chairman of the Coal-Mineral Group Le Minh Chuan affirmed that this enterprise will strive to achieve revenue of at least VND110 trillion compared to the expected VND106 trillion and will contribute 0.8 percentage points to the overall GDP growth in 2017, compared to the previous plan of 0.794 percentage points.

The Electricity Group said that in 2017, the electricity output is estimated to reach 196.8 billion kWh, an increase of 11.1% over the same period. The industrial production value is estimated to reach nearly 288.5 trillion VND. The industrial production index (IIP) of the electricity production and distribution sector will reach 11.5% as assigned by the Prime Minister, while ensuring enough electricity for the economy.

As assessed by Minister, Head of the Government Office Mai Tien Dung, Head of the Prime Minister's Working Group, these commitments demonstrate the great determination of businesses in contributing to overall growth.

This is also a very encouraging thing in the context that the Government has determined to achieve the annual growth target of 6.7%, although according to many experts, this is not easy.

However, the Prime Minister is not only concerned with the short-term goals in the operations of these “big guys”. Through the Working Group, Prime Minister Nguyen Xuan Phuc has asked businesses to pay attention to and care about a series of issues.

Without reform, it is difficult to develop.

As for the Textile and Garment Group, this enterprise with revenue of hundreds of thousands of billions is currently doing well in the first and last two stages: yarn and sewing. The important, core stages of supporting the textile and garment industry, dyeing... are currently facing many difficulties.

“Even needles, threads, and buttons must be purchased, so how do we localize them?”, Minister Mai Tien Dung raised the issue and conveyed the Prime Minister’s opinion that the textile and garment industry needs to create a higher value chain instead of just doing processing, to avoid the situation where the export value is large but the actual value is not high.

At the Coal and Minerals Group, the Prime Minister especially noted the need to focus on resolving the inventory of up to 9.3 million tons, but this must be done through improving competitiveness based on market principles. If the group does not handle this well, it will face great competitive pressure from imported coal, so it requires businesses to make more efforts in restructuring, reducing mining costs, and increasing labor productivity.

According to the Prime Minister, reducing production costs and coal prices is a huge pressure on Vinacomin because the workforce is up to 110,000 people. If advanced technology, management innovation, and decentralization are not applied, it will not be possible to assign legal targets like in the subsidy period.

At the Electricity Corporation, the Prime Minister noted that this enterprise is holding the “champion” position in terms of debt compared to other State corporations and groups. According to the report submitted to the Government by the Ministry of Finance, the parent company EVN borrowed an additional 2 billion USD in 2015, raising the Government’s debt guarantee for EVN to 9.7 billion USD.

The Prime Minister requested EVN to increase the efficiency of capital use, diversify foreign currency borrowing to reduce exchange rate risks, pay special attention to strictly controlling capital loans, strictly controlling costs, and increasing investment efficiency.

In particular, a common point that the Prime Minister paid close attention to in all three enterprises was to promote equitization and divestment of state capital, while increasing autonomy for member enterprises, reforming internal administration, avoiding the situation of a cumbersome administrative apparatus, a high-salary management apparatus but low worker salaries. For example, at the Coal-Mineral Group, administrative costs for the apparatus are currently very large with 30 representative offices, branches, and 47 member companies.

“The experience of May Nha Be, Viet Tien, May 10, and Phong Phu has proven that without equitization, it is impossible to compete with foreign enterprises, conquer demanding markets, attract investment, participate in the global value chain, and create high added value,” Minister Mai Tien Dung stated.

On the other hand, the Government and the Prime Minister have been making every effort to facilitate businesses. Even during overseas trips, despite their busy schedules, it can be said that the head of the Government has taken advantage of every opportunity to “market” and expand the market for Vietnamese products.

Meanwhile, in the country, Minister Mai Tien Dung said that one year after the first Conference with enterprises, the Prime Minister still remembered the complaint of General Director of the Textile and Garment Group Le Tien Truong about how many inspection stages a meter of fabric had to go through and requested ministries and branches to comprehensively reform specialized inspection procedures. And the recommendations of enterprises through these inspections will also be fully reported to the Government and the Prime Minister for consideration and handling.

The achievements of the above-mentioned corporations and economic sectors are undeniable, and the “Made in Vietnam” clothing in Ivanka Trump’s store in the US is an example. But clearly there is still a lot of work to be done and as Minister Mai Tien Dung said, “If we do not save ourselves, blame the market, and do not innovate and reform administration, it will be very difficult”. The Prime Minister has sternly reminded about the extremely important issues for the sustainable and long-term development of these corporations and state-owned enterprises in general.

According to chinhphu.vn