Vietnam PM asks major groups, corporations to turn higher profit

State-owned groups and corporations with large resources that take on important missions must restructure to become profitable, thus contributing more to the country’s GDP growth and budget revenue, said Prime Minister Pham Minh Chinh on Monday.

At a working session with the Commission for Management of State Capital at Enterprises (CMSC) and 19 groups and corporations under its management in Hanoi, the government leader praised the achievements the firms made last year.

In 2023, the total revenue of the 19 state-owned enterprises (SOEs) reached nearly VND1.13 quadrillion ($46.34 billion), equivalent to 105.15% of the year plan.

Their combined pre-tax profit hit VND53.25 trillion (excluding Vietnam Electricity), equal to 166.09% of the 2023 plan and 110.92% compared to the same period in 2022. They paid VND79.25 trillion to the state budget, reaching 199.96% of the year plan and equivalent to 120.22% of the 2022 figure.

Particularly, of the 19 groups and corporations, 15 completed or surpassed their revenue targets, 16 reached or exceeded their pre-tax profit plans, and 16 fulfilled and surpassed their state budget payment plans.

However, PM Chinh pointed out that the firms have shown a number of shortcomings, including bureaucratic issues in mechanisms and policies, limited development investment, lower-than-average disbursement of public investment, inadequate contributions to GDP compared to asset value, and modest business efficiency.

He attributed the shortcomings to insufficient proactivity and creativity among leaders at some groups and corporations, legal problems regarding land, public investment, and decentralization of power; and inappropriate policies for officials working for enterprises.

“Corporate governance is still not really compatible with the market economy, with many intermediary stages,” he said, adding that the Covid-19 pandemic has weakened the health of businesses, typically Vietnam Airlines.

Regarding tasks for 2024, the Prime Minister requested the CMSC and the SOEs to promote development investment, focusing on the country's three strategic breakthroughs (institutions, infrastructure and human resources), renewing three existing growth drivers (investment, export and consumption), and adding new growth drivers (digital transformation, green transition, circular economy, knowledge economy and sharing economy).

“It is necessary to restructure the groups and corporations under their approved plans, focusing on governance restructuring towards efficiency and improved human resources; financial restructuring; and restructuring of industries and input materials to suit development trends,” he stressed.

The CMSC must orient restructuring issues for the groups and corporations, and assess their operations based on overall efficiency, he added.

“It should promote decentralization, reduce administrative procedures, stay more proactive, show mettle and confidence; dare to think, dare to do, dare to bear responsibility in performing tasks within its authority; be steadfast in issues in principle but flexible in performing specific tasks, while complying with the rules of the market economy,” PM Chinh noted.

He emphasized the need to prevent and combat corruption, negative phenomena and group interest, and improve living conditions for workers. He also reminded the groups and corporations of the need to ensure the supply of electricity, coal, petrol, and materials for production industries as well as transportation activities and national security and defense.

Assigning specific tasks for the SOEs, the PM requested Vietnam Electricity (EVN) to ensure sufficient electricity supply for corporations; Petrovietnam to ensure adequate oil and gas supply according to the plan; mining giant Vinacomin to ensure sufficient coal supply based on long-term plans; Vietnam Steel Corporation to complete the expansion project of the Thai Nguyen Steel Plant phase 2 (TISCO 2); national flag carrier Vietnam Airlines to prevent losses and address current issues; and Petrolimex to prevent shortages of gasoline products.