VNR500 forum: expert says big businesses need sustainable growth

Vietnam needs big enterprises which can compete on the international market. However, “big” should mean “substantial and sustainable” growth, Tran Si Chuong, Member of the Advisory Council of the VNR500 Club, told Vietnam Economic Forum at the ceremony to announce the top 500 Vietnamese enterprises.

What are your comments about the lists of the 500 Vietnamese largest enterprises (VNR500) that have been released in the last four consecutive years?

In all economies, business assessments, rankings and information updates are necessary for investors, consumers and for policy makers. Therefore, I highly appreciate the tasks of ranking businesses, such as the ranking of the top 500. This is a kind of information organizing and processing, and once the information can be organized systematically, it will bring will be beneficial to many parties.

To date, the VNR500, the list of 500 biggest enterprises, has been defined based on the enterprises’ turnover. In fact, the concept about “big enterprise” remains controversial. What do you think “big enterprise” should mean?

Big enterprises must be the enterprises which have big turnover, big assets or have big operation scale. However, it is clear that biggest enterprises do not always mean most profitable businesses. The best businesses must be highly effective businesses which can be seen in a lot of indexes such as the growth rate and profitability…

As far as I know, Vietnam Report is planning to release the list of top enterprises in terms of profits, growth rates or the numbers of workers.

If so, together with the list of biggest enterprises in terms of turnover, Vietnam Report will provide more sufficient information about enterprises. As such, investors will not have to spend time collecting and processing information. They can rely on the rankings to make investment decisions more quickly.

Vietnamese enterprises are clearly small if comparing with the biggest enterprises in the world. Only Vinamilk has recently been added into the list of Forbes Asia’s 200 best enterprises in Asia Pacific. What should be done in order to make Vietnamese enterprises become really big in the world?

There are two aspects of the issue. If I am a businessman, the most important thing for me is the business effectiveness, not the scale of business, i.e my business is big or small. If so, a 20 percent ROE would make me happy.

The second important thing is the sustainable development of enterprises. Enterprises need to have vision, corporate governance skills and ambitions to reach out into the world. If every year, my business obtains a growth rate of 20-30 percent, the assets of the business would be double after three years and 4-5 times bigger after 10 years. Even so the most important thing is sustainable growth.

Of course, Vietnam needs big enterprises which can compete with big foreign enterprises. However, we will not be able to obtain big enterprises just by combining enterprises or pouring more capital into them. If you have a 12 year old boy and he looks like an 18 year old boy, this does not mean that the boy has reached the adulthood. Despite his looks he is still a 12 year old boy.

In the morning of January 15, the list of 500 Vietnamese biggest enterprises in 2010 – VNR500 was officially released by Vietnam Report and VietNamNet.

More than 400 managers from the enterprises – members of the VNR500 Club were present at the Thong Nhat Meeting Hall in HCM City to attend the ceremony.

This is the fourth consecutive year, Vietnam Report and VietNamNet released the list in order to recognize the achievements of the enterprises.

Harvard University’s Professor Stephen M. Walt, the leading expert in lobby art, and Alex Malley, chief executive officer of CPA Australia.

Vietnam Economic Forum

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