Enterprises urged to get creative

Wednesday, Sep 23, 2015 08:00

Milk products of Vinamilk were checked before they were sold in the market. Local companies were urged to be more active and creative in preparing for more intensive global integratioin. — VNA/VNS Photo Kim Phuong

HCM CITY (Biz Hub) — Besides the important role of the government in creating a favorable, transparent business environment, local enterprises should become more active and creative in preparing for more intensive global integration.

During a recent conference held in HCM City on business competitiveness and free trade agreements, Dr. Vo Tri Thanh, deputy head of the Central Institute for Economic Management, said that most small- and medium-sized enterprises in Viet Nam had not considered wider global integration in their business strategies.

Most foreign-invested companies in Viet Nam, however, have developed strategies to prepare for the ASEAN Economic Community which takes effect by year-end.

"The benefit of integration is finding out actual success or failure, and the capacity, of enterprises. Things that develop due to special protection or priority will not exist. The areas in which we have an advantage include agriculture, aquaculture, garments and textiles, footwear, furniture, and others," Thanh said.

The logistics sector has a great deal of potential for the future. In Hai Phong, for example, thousands of enterprises have been established in this sector recently.

The service sector also has potential, as the Samsung factory alone, for example, needs 2,000 security guards, Thanh said.

Regarding the role of creativity and technology in enhancing competitiveness, he said that simple low-tech equipment and solutions still held possibilities, such as a wastebasket opened with feet, scissors for left-handed people, or paper used to wrap toothpaste tubes (instead of plastic) in hotels.

Thanh said that after the US and Viet Nam established diplomatic relations in 1995, many business people feared they would not be successful in exporting to the big market.

But one year later, the US became Viet Nam's biggest export market. Fifteen years later, Viet Nam's export turnover to the US had risen 30-fold.

"There is still a lot of room for Vietnamese enterprises to export to the market as Vietnamese goods contribute only one percent of the US imports," he said.

Local companies must make adjustments and examine their strategies carefully in order to survive, he said.

Market information

As for the upcoming Trans Pacific Partnership (TPP), local enterprises should be more active in seeking information about the FTA as the negotiating countries have been reluctant to disclose details about the ongoing negotiations.

Economic expert Bui Van said he had tried to asked governments of some countries for information but had been turned down as the countries had committed to not revealing negotiation details.

"However, enterprises have a right to guess with the assistance of consulting organisations. We are able to make guesses about TPP according to the ‘rule' of the US, which is leading the TPP," Van said.

Thanh said that Viet Nam had participated in negotiating or signing 15 free trade agreements, but most enterprises know only 14 agreements.

Many enterprises still do not know much about the FTA between ASEAN and Hong Kong now under negotiation.

Dang Duc Thanh, chairman of the Vietnamese Economist Club, said after studying 30 successful enterprises in Viet Nam, he found they had developed good business strategies after studying the market carefully, and mobilised funds from shareholders instead of taking out loans.

He said Vinamilk was equitised in 2004 with total investment fund of VND1.5 trillion. Now, the State-owned capital at the company totals US$2 billion (VND40 trillion).

Kinh Do Company was founded in 1993 with VND1.4 billion. Recently, a part of the company was sold to an American investor for US$270 million, Thanh said. — VNS

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