SCIC asked to focus on key sectors

Monday, Apr 13, 2020 17:10

A worker at Vinatex produces face masks. The SCIC, which represents State ownership at Vinatex and many other State-owned enterprises, has been urged to focus its investments on key economic sectors to boost efficiency. — Photo

Deputy Prime Minister Truong Hoa Binh has asked the State Capital Investment Corporation (SCIC) to focus its investments on key sectors of the economy to boost efficiency and contribute to socio-economic development.

The SCIC should focus on sectors like information technology, telecommunications, food processing, finance, petrol and oil, aviation and railways, Binh said, asking for development strategies for each sector to be clarified.

Binh noted that the SCIC should not take on too many enterprises which might result in inefficient management, adding that restructuring of its member companies should be carried out through divestments and merger and acquisition deals.

The SCIC needed to define an appropriate long-term development strategy to become a spearhead of the economy and contribute more to stabilising the macro-economy, ensuring national security and developing State capital, Binh said.

He also asked the SCIC to ensure transparency in its divestment policies, to evaluate State assets accurately.

Binh urged the Commission for the Management of State Capital (CMSC), which manages the SCIC, and relevant ministries to review and issue policies to remove difficulties for the SCIC’s operations.

Deputy Minister of Finance Dang Hoang An said the SCIC should divest from enterprises which operated inefficiently.

According to SCIC Chairman Nguyen Duc Chi, most enterprises in SCIC’s portfolio operated in sectors heavily affected by the COVID-19 pandemic in terms of input shortages, disruptions to value chains and struggling sales, which were weighing on business.

In a report to the CMSC, the SCIC said that 81 out of 145 enterprises in its portfolio suffered from the pandemic in the first quarter of this year.

The Viet Nam National Garment and Textile Group was among those heavily affected, and forecasts a decline of 22 per cent in revenue and 79 per cent in profit compared to its plan. FPT Telecom also predicted a fall of 15 per cent in revenue and 20 per cent in profit.

Chi said that if the COVID-19 pandemic ended in the second quarter of this year, the SCIC’s revenue and profit would both be 18 per cent lower than targeted. If the pandemic stretched into the fourth quarter, the SCIC’s revenue would drop to just 50 per cent of the plan and profit to 16 per cent.

Still, the SCIC has not decided to adjust its business plans this year.

It targets a revenue of VND6.9 trillion (US$297.4 million) and a profit of VND4.8 trillion.

In 2020, SCIC plans to divest from 85 enterprises, 28 of which are traded on the national stock exchanges. — VNS

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