The privately-owned business community in Vietnam has made great strides with investment expansion, which has contributed to improvements in the domestic business climate throughout the past year.
THACO is set to reach much greater heights in 2020 with its export dealings in neighbouring nations
In the final days of 2019, Truong Hai Auto Corporation (THACO), one of Vietnam’s largest multi-sectorial groups, exported 15 buses to the Philippines and auto parts to South Korea and Japan, increasing the number of exported buses to 21.
Although the number of automobile exports is not so big, it has constituted a major event in the Vietnamese automobile industry, as Minister of Industry and Trade Tran Tuan Anh put it. “THACO’s export of these vehicles to the Philippines and auto parts to other countries is very meaningful, taking Vietnam onto the regional and global auto industry map and restructuring the country’s import-export picture,” he stated.
Outstanding stories in 2019
At the meeting, THACO has been highlighted as one of the success stories of Vietnamese businesses in 2019, which have managed to weather difficulties to materialise their investment and business plans.
“Along with THACO, many others such as Vingroup, Vietjet, Sun Group, TH, and Thanh Thanh Cong are writing new stories in the Vietnamese economy, with their own imprints,” stated Prime Minister Nguyen Xuan Phuc.
As the investor of a range of resorts, tourist destinations, and the first private airport in Vietnam, Sun Group has recently received many different Oscar-like awards in tourism at the World Travel Awards and World Luxury Hotel Awards 2019, including Asia’s leading new airport 2019 for Van Don International Airport.
“Being honoured by the World Travel Awards as the Asia’s leading new airport 2019, Van Don International Airport has affirmed its prestige, position, and service quality as well as the vision of Sun Group,” airport director Pham Ngoc Sau said.
With the total investment of VND7.46 trillion ($324 million), this airport was completed in a record two years. Being able to receive most modern types of aircraft such as Boeing 787, the airport currently has seven parking positions. The terminal capacity today stands at 2.5 million passengers per year, and it is expected to reach five million passengers per year by 2030.
Vingroup, the country’s largest privately-owned group, also saw a rosy year. It received nine prestigious awards, including Asia’s Leading Family & Beach Resort and Asia’s Leading Riverfront Hotel.
Meanwhile, the new player in aviation field, Bamboo Airways, was honoured as best all-round service. The airline announced its profit before tax in 2019 of VND303 billion ($13 million) and expects to gain VND1 trillion ($43.47 million) profit before tax in 2020.
In 2019, Bamboo Airways carried out nearly 20,000 safe flights, serving nearly three million passengers with an on-time rate of 94 per cent, the highest in Vietnam’s aviation sector. This is also Vietnam’s first private airline using the wide-body Boeing Dreamliner 787-9 and receiving the Operational Safety Audit from the International Aviation Transport Association within less than a year in operation.
In 2019, Vietnam’s tourism witnessed the strongest growth ever. According to the Pacific Asia Travel Association, Vietnam is in the top 10 of countries and territories receiving the most tourists in Asia Pacific.
As per the Vietnam National Administration of Tourism, in 2019 the total of foreign tourist arrivals to Vietnam was over 18 million. Vietnam’s position has thus been upgraded on the world’s tourism map, removing the previous image of simply being a cheap destination.
Vietnamese brands are also leaving an impression on the world in areas that used to be the domain of developed countries such as automobile and phone manufacturing. Bloomberg News, for example, last year commented that Vingroup “is a testament that Vietnamese manufacturers can create products with high value”.
Names like THACO, Sun Group, Vingroup, and Bamboo Airways are proving their capability of competitiveness, while also planting solid footprints of the private sector in Vietnam’s economy.
Good direction for private groups
Addressing the Private Economic Forum 2019 in May, PM Phuc stated, “After two years of implementing the resolution of the fifth plenum of the Party Central Committee on the development of the private economy, although there has not been a full review of the achieved results, we have witnessed the growth, innovative spirit, and rising aspirations of the private sector.”
Meanwhile, Phan Ngoc Mai Phuong, deputy director of the Development Strategy Institute under the Ministry of Planning and Investment, used the words “beyond imagination” when talking about the growth of the domestic private sector over the last few years. “The private economy has increased sharply in size, quantity, and quality. There is still a lot of room for this sector to develop, becoming a main driver for the whole economy in the near future,” Phuong said.
However, senior economist Nguyen Mai said that during the development process, the private sector needs a suitable legal corridor so that they can follow the Party’s policy while still becoming major players on a regional and global basis.
“The state should have policies to support businesses in building and developing brands, especially creating a foothold in the world market so that they can both increase trade and investment relations, as well as participate in the international bidding for large-scale projects,” he said.
Speaking at the meeting between the prime minister and the business community, Duong of THACO mentioned the barriers in borrowing bank loans serving for agricultural projects.
“Enterprises need loans to manufacture on a global scale. For instance, if bananas are planted on 50-100 hectares, production is not stable enough for export. So banks should relieve barriers and facilitate agricultural enterprises,” he said.
Meanwhile, Sun Group CEO Dang Minh Truong said, “We need more support so that the private sector can do even more for the country, and contribute in areas that used to be the realm of state-owned and foreign-invested enterprises.” VIR
Over the past few years, privately-owned enterprises have been developing strongly.
The private sector in Viet Nam should receive support to become a pillar of the local economy, said Nguyen Thi Nga, chairwoman of BRG Group.