A conner of granite stone processing workshop of Hoan Cau (Global) Co., Ltd. at Nhon Hoa Commune, An Nhon District.

 

* Impressive growth:

Private sector of Binh Dinh has really prospered since the issuance of the Enterprise Law because the law encourages free trade of the enterprises in all of  legal industries. It is much time and cost saving for new enterprises to join in the economic playground because of favourable changes of the administratve procedure - simplified business registration rather than business certificate licence. Binh Dinh government has actively improved local investment environment, boosting investment preferential policies, calling for more investment into the province, simplifying administrative procedures, minimising investment costs, etc. besides the general investment promotion policies of Vietnamease Central government. The hard work of the provincial government results in hundreds of newly-registered enterprise per year. In 2006, 532 new enterprises registered to set up, surging 37% in comparison with previous year. Total 2006 investment is nearly worth VND 900 billion (56,250,000USD). Since the beginning of this year, there have been 148 newly-established enterprised, a raise of 20% compared with the same period last year. Total registered investment of this year has been up to VND 320 billion (20,000,000 USD) so far. At the time being, private sector of Binh Dinh has about 2000 enterprises with VND 5,710 billion (356,875 USD) worth of total registered investment. Such the number of the private enterprises is indeed a fourfold increase in comparison with 2000. They mainly perform their business in industries such as processing of agricultural produces, forest products and aquatic products, mining, manufacturing of construction materials, commerce and services.

Many private enterprises have pushed up themselves to control domestic and  foreign markets with their own brand names and prestigious products such as fine timber, aquatic products, ashlar paving stone, etc. As a result, industrial manufacturing value of Binh Dinh private sector has consecutively grown at annual average rate of 25% since the year 2000. In the first quarter of 2007, the industrial manufacturing value of the private sector reached VND 926.6 billion (579,125 USD), raising 48.4% compared with the same period last year.

Electrical cable manufacturing by Hung Phat Co., Ltd. at Quang Trung Industrial Zone, Quy Nhon City.

 

* And weaknesses:

Besides its achievements, the private sector of Binh Dinh still has a lot of weak points. Most of the private enterprises are at small and medium sizes. 15% of them has over VND 10 billion (625,000 USD) worth of capital; 20% has VND 5-10 billion (USD312,500- 625,000) and majority of the rest has VND 1 billion (USD 62,500) worth of capital. They consequently find difficult to expand their businesses. Banks usually grant rather limited loans to them because of their low value mortage assets. Their expansion of business premises also faces obstacles. Almost all the private enterprises have to use their own houses as the business premises. Only 30% of them has workshops in industrial zones. Co-operation among the private enterprises operating in a same industry is very loose. Some of the enterprises’ owners are not qualified in managing their businesses. Some investors and state management officials are low aware of the laws.

Vietnam has already access WTO. Its economy has integrated thoroughly with global economy. The local private sector has now more opportunities to develop if it quickly overcomes the difficulties and obstacles. Binh Dinh has recently created many solutions to support the active progress of the private sector, gearing it to be a strong force of the provincial economy in the integration. The solutions include planning and building up new industrial zones, assisting the enterprises in human resource training, providing them with information about the markets and promoting trade, etc.

• Reported by Ngoc Thai
• Translated by To Uyen