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Private economic corporations invest multi-sector: happy and worry

09:43 | 17/06/2017

VCN- Many private companies, corporations invest many sectors successfully, but some corporations do business fail. Around this issue, the Customs News interviewed Mr. Dao Huy Giam, Secretary General of Vietnam Private Business Forum (VPFS).

private economic corporations invest multi sector happy and worry

Could you show your assessment for the expansion of investment outside key areas of some corporations such as Truong Hai, Hoa Sen, FLC, Vingroup, TH True Milk ... the last time?

It can be said, last time, in the development process, the Vietnamese large corporations has accumulated resources such as relationships, the link with the market, management capacity, staff, has access to technology, created relationships with partners in other fields at home and abroad that the largest resources have been capital... Therefore, in my opinion, the new sector development of the enterprises and corporations is suitable for the rules, when the resources are accumulated to a certain level, the enterprises will develop some industries that they think they have strengths, while the strengths being relative or absolute depending on a number of other factors.

Secondly, this is also consistent with the legal regulations and this is also an inevitable economic tendency that has arisen in some other countries for a long time. It is important that these enterprises, corporations do not waste the resources provided by others (as the shareholders of the enterprises). The solution of each corporation will bring different successes so it is not easy to evaluate common characteristics. But all these movements require great resources, such as capital resource, the ability to exploit the strengths they possess. For example, Vingroup's clean agricultural model, their strength is capital, Vingroup's market network when they have markets in their commercial centers and about 500 small supermarkets. Not to mention they apply the trend that uses land resource for clean agriculture and the need for clean vegetables of society is very high... Of course, this process will be slow progress, it is not easy for these enterprises to succeed in a short time and they are startups in new industries. Their success or failure can last from 2-5 years, even 10 years.

In sum, the multi-sector investment is an inevitable developmental rule, each industry has different characteristics, so each industry must have policies, regulations and control levels to facilitate the most for the enterprise development, but how to control the enterprises not to deviate. Because let the enterprises develop in the rule, the management capacity of the State is very important in determining whether the enterprises can meet management requirements in the medium and long term. The story about iron sheet making business Referring to make steel is an example. As for the steel industry, if left unchecked, it may be possible to have long-term environmental consequences.

Dear Sir, what is the duality of multi-sector investment?

Basically, that is the inevitable rule and a good sign, but the management capacity of the enterprises is worried. Because there are a number of the enterprises with good management capacity and control capacity, but for some enterprises, when they have more money, then they just think what should do more, so that their capacity of organization, management, connection orientation, exploring, defining the business strategy... have a hastiness and lack of many factors. Or, policy system of the enterprises does not perceive long-term issues, such as environmental issues, training, social obligations, when they have achieved good results in business. Actually, profit of the enterprises is due to avoid taxes and the State does not collect the necessary funds, the accumulation can make them realize that they can develop quickly in other areas but when developing, the result is not exactly what they want.

In general, the views of many enterprises in the implementation of business plans are simple relatively. In Europe, we approved the business plan of small enterprises with a few hundred thousand to several million US dollars of capital, the cost of each business plan is about $US 50,000 (about 1 Billion VND), but in Vietnam, there are some businesses whose business plan is only 2-3 million VND, so the way of plan writing is very stereotypical, no connotation and quality is not high.

There have been big corporations, enterprises failing to invest in multi-sectors. What are your recommendations to the enterprises in this case?

In my opinion, there is no common solution for all enterprises. The trend of multi-sector investment is inevitable but in this process, not only the Vietnamese enterprises fail but also the European companies fail. So, it is important that when a company accumulates resources to a certain level, it must consider which resources are the core, the decisive key to open up the multi-sector business. As I mentioned above, Vingroup, when deciding on clean agriculture business, they exploited financial strength, prioritized land for clean agriculture, they had their business network, as well as demand for clean agriculture, is high.

From the failure, it can be seen that the most important thing for the enterprises is a determination in order to exploit which strengths they have and right determination which resources they have. Currently, in general, the enterprises are weak on the market, especially, they often simplify the issues of standards, quality, technical ability and strength of other enterprises. For example, when signing a contract with a foreign company, while the Vietnamese company has only 1-2 consultant lawyers, the foreign company has a large support team. Therefore, in my opinion, it is necessary to encourage the enterprises to expand their investment, but in terms of policies, they must solve the environmental problems, human resource training, encourage the linkage among the enterprises. The State should make conditions for healthy enterprises, at the same time, support the business consultant, this is the issue that the enterprises are in need.

Thank Sir!

By Thu Hien (interview) /Binh Minh