Private economic groups live well despite big challenges

Despite many big difficulties, big enterprises in VNR500 (top 500 Vietnamese enterprises), especially private businesses, still can stand steady on their legs.

More difficulties than expected

When the year 2010 began, most of the big enterprises in VNR500 said they were optimistic about the economic prospects in the year.

Answering questions raised by Vietnam Report at the ceremony declaring the rankings of Vietnam’s 500 biggest enterprises VNR500 on January 13, 2010, 86 percent of big enterprises said they believed the turnover and profit would increase in 2010. Only seven percent of polled enterprises said the profit would decrease or remain the same.

However, the events in 2010, especially in the second half of the year, proved to go beyond businesses’ predictions.

Unfavorable conditions appeared in the second quarter of the year. The foreign currency market became scorching hot and businesses found it very difficult to purchase dollars to make payments.

The market continued burning in the third quarter of the year with the dong/dollar exchange rate on the black market surging to 20,000 dong per dollar. As a result, the prices of import goods have been escalating. Importers prove to be the biggest sufferers from the dollar price increases.

Though the Government has been taking necessary measures to stabilize the foreign currency market and ease the thirst for dollars, only production companies and companies which need dollars to import essential goods can purchase dollars at the prices quoted by commercial banks.

Manufacturing companies are facing difficulties as the bank interest rates have been increasing day by day.

The consumer price index (CPI) in September and October hit 1.31 percent and 1.05 percent, respectively. The National Assembly’s Economics Committee predicts that the inflation rate in 2010 may reach 8.4 percent.

VNR500’s enterprises still can adapt well

Despite troubles big enterprises in VNR500, especially private enterprises, still remain standing

All the five leading enterprises in 2009 VNR500’s private business ranking have shown high growth rates in comparison with the same period of 2009.

The Corporation for Financing and Promoting Technologies (FPT), which led the VNR500’s private business ranking for the last consecutive years, had a turnover of 18,817 billion dong in the first 10 months of 2010, increasing by 32.3 percent in comparison with the same period of 2009 and fulfilling 84 percent of the yearly plan. The group’s 10-month profit reached 1732 billion dong, increasing by 18.1 percent over the same period of the last year and fulfilling 81.7 percent of the yearly plan.

Asia Commercial Bank (ACB), which was second in the VNR500’s private business ranking, got 1137 billion dong in net profit, an increase of 55 percent over the same period of the last year.

In the third quarter of 2010, the post tax profit of ACB reached 478.67 billion dong, down by 3.6 percent from the same period of the last year.

Vinamilk, which held the 5th position in the same ranking, has also shown impressive growth with a post tax profit of 1,136.7 billion dong by the third quarter of 2010.

2010 VNR500 is coming out

On November 25, Vietnam Report, in cooperation with VietNamNet newspaper, will officially release the 2010 VNR500, the list of top Vietnamese 500 companies.

There will be two rankings, the list of top 500 enterprises in general, and the list biggest private businesses in Vietnam.

This is for the fourth consecutive year Vietnam Report will release the VNR500 and report about the biggest Vietnamese enterprises.

The 2010 VNR500 is expected to show important changes in comparison with the last year’s ranking. Especially, it shows the comparatively stronger development of private businesses.

Details of VNR500 will be at www.vnr500.com.vn, www.vef.vn và www.vietnamnet.vn.

Tags: Vietnam companies, Vietnam economic groups, Vietnam enterprises