A coal mine of Viet Nam National Coal and Mineral Industries Group, a State-owned enterprise that withdrew capital from non-core businesses. — VNA/VNS Photo Dinh Tran

HCM CITY (Biz Hub) — For the last three years, most State-owned enterprises (SOEs) have had stable operations with acceptable profits, but capital withdrawal from their non-core businesses contiues to be sluggish.

The HCM City People's Committee reported that the city has 108 enterprises which are fully owned by the State.

During the 2011-13 period, SOEs had an annual total turnover of VND121.5 trillion (US$6 billion) and annual profits totalled VND2 trillion ($98 million).

"State-owned enterprises have reformed their technologies; improved their models and quality; increased skills and capacity for human resources; and saved expenditures for meetings, working abroad, guests' welcome parties; and usage of electricity, water and telephone," Le Thi Huynh Mai, deputy director of the municipal Planning and Investment Department, was quoted as saying in the Thoi bao Kinh te Viet Nam (Viet Nam Economic Times).

State-owned enterprises were recognised as effectively using capital and assets, especially for enterprises in transport, trade, tourism, services, gold and precious stones.

In addition, these enterprises had significantly contributed to the State budget; implemented investment for important projects; served the city's long-term socio-economic strategies; and contributed to the city's shift to biotechnology, high-tech agriculture, food processing, manufacturing and engineering.

To implement the State-owned enterprise re-structuring project, with focus on State corporations and groups during the 2011-15 period, 17 corporations and groups have set up re-structuring projects and 14 of them have been approved.

Another 29 State-owned enterprises will be equitised this year and in 2015, and equitisation plans for three of them were approved.

"The slow process of equitisation was due to resolving current problems on finances, land, workshops and other assets," Mai added.

Furthermore, time for restructuring has been short, and enterprises must spend their resources for the time ahead.

At the same time, corporations and groups have listed their investments in non-core businesses and their plans to withdraw capital from those businesses.

However, progress of capital withdrawal from non-core businesses has been very slow.

During the 2011-13 period, 14 corporations and groups have withdrawn VND30.2 billion ($1.5 million) from non-core businesses.

In 2014, it is expected around VND1.5 trillion ($70 million) will be withdrawn.

The problem is the difficulty in finding buyers, especially in a time of continuing economic downturn.

"The enterprises which haven't listed on the stock exchange will face more difficulties in seeking partners to transfer their shares," Mai added. — VNS