Major Vietnamese business people have geared up to take over State-owned enterprises, which were recently equitised, in the role of strategic partners.

A corner of Nha Trang Port in the southern province of Khanh Hoa. After being transferred to the VinGroup Vinpearl JSC, the port will be transformed into a harbour with moorings for pleasure craft and cruise liners.

Thousands of billions of dong have been spent to buy stakes in State-owned enterprises in recent times, reports online vietnamnet.vn.

Early this year, Chairman of T&T Group Do Quang Hien said that he is ready to pour more than VND490 billion (US$23 million) to buy a 98.02 per cent stake in Vietnam National Shipping Lines (Vinalines) at Quang Ninh Port.

If the buying of the stake is successful, the port will be added to the list of Vinalines ports that are selling shares after equitisation.

A year ago, Da Nang Port sold 13.2 million of its shares to five private domestic investors for a fairly high price, after several rounds of unsuccessful initial public offerings.

In August last year, the VinGroup Vinpearl Tourism and Trading Joint Stock Company bought Nha Trang Port shares worth VND85 billion, or US$4 million. The amount was reportedly equal to the Vinalines investment capital in the port. Vinpearl JSC has been coordinating with the Nha Trang Port JSC to set up an investment and development plan, in which the multi-functional port will be transformed into a harbour with moorings for pleasure craft and cruise liners.

The purchase was not the only one carried out by the giant Vingroup last year. Earlier, the group became a strategic investor of the Vietnam National Textile and Garment Group (Vinatex), in a move seen to be in the interest of both parties.

At the same time, Vietcombank and Techcombank have become two large investors of national carrier Vietnam Airlines.

In the field of transport, a series of Cienco companies have fallen into the hands of domestic private businesses or large enterprises after equitisation. Till date, the State has not held any stake at Cienco 4 after the Tuan Loc Construction Investment Company got a controlling stake. This company has considered buying a controlling stake in Cua Lo Port in the central Nghe An Province.

Huge change

The purchase of State-owned enterprises by domestic investors is a huge change during the equitisation process. Previously, large investment capital or strategic investments were expected from foreign investors, but now domestic businesses are at the centre of the State-owned enterprises' equitisation.

The history of restructuring of State-owned enterprises shows that private investors' participation strongly revitalised many enterprises.

Vinamilk is a key example. Ten years after its equitisation, its business capital has increased by 30 times and the firm has become the country's largest. It is also expanding its operations abroad very well.

Other successful businesses include DHG Pharmaceutical JSC, Refrigeration Electrical Engineering (REE), FPT and Binh Minh Plastic JSC, besides Tien Phong Plastic JSC.

Nearly 30 years after the country began its open-door policy in 1986, privately owned businesses have produced many entrepreneurs who have administrative abilities of an international level, such as Chairman of Vingroup Pham Nhat Vuong, Chairman of Hoang Anh Gia Lai JSC Doan Nguyen Duc, Chairman of FPT Truong Gia Binh and Chairman of Hoa Sen Group Le Phuoc Vu. They are strong and always eager to seek opportunities for larger mergers and acquisitions. The equitisation process is seen as a huge opportunity for them.

Viet Nam has been implementing the policy on renovating and improving the operations of the State-owned enterprises since 1990, with measures including mergers and acquisitions, renting, dissolving of firms and declaration of bankruptcy, besides equitisation. The number of State-owned enterprises has significantly reduced, from more than 12,000 then to 5,600 in 2000; a little more than 1,350 in 2010; and to about 800 at the end of 2014.

Early this year, the Transport Ministry, one of the leading forces of equitisation in Viet Nam, called for investment capital from the society for 41 projects in the 2015-20 period, with a total capital of VND43 trillion ($2 billion).

Prime Minister Nguyen Tan Dung had affirmed at the Viet Nam Development Partnership Forum (VDPF) held in Viet Nam last year that the Government will focus on the development of private economy. An action plan for the 2015-17 period was announced to develop the private sector.

Privately owned businesses have played an important role in the country's economic development. It's the right time for them to develop and take the lead in contributing to the country's growth. 

VNS