On November 25, Vietnam Report and VietNamNet released the 2010 VNR500, the list of the 500 Vietnamese biggest enterprises in terms of turnover in 2010. For the fourth consecutive year enterprises are ranked and made public on mass media. Now, when Vietnamese people are discussing a new five-year socio-economic development plan, it is the perfect time to review a complete picture of Vietnamese enterprises over the last four years.No discrimination in ranking by economic sector expected
Currently, Vietnam Report releases two main rankings 1/ the list of the top 500 biggest Vietnamese enterprises of all economic sectors and 2/ the list of the top 500 biggest private enterprises.
The classification of enterprises in accordance with the economic sector seems to be seen only in Vietnam.
The proportion of private enterprises in the VNR500 (list 1) has been increasing yearly with an average increase of two percent per annum. The figure shows that the private economic sector has been steadily increasing. Business results of the enterprises on the second list are approaching to the indexes of list 1, which shows the considerable progress of private enterprises, even though the progress remains below expectations.
Therefore, one can place high hopes that in the near future, Vietnam will only have one ranking – the VNR500 – the list of top 500 biggest enterprises of all economic sectors, with no discrimination of the type ownership.
However, this will only become true when discriminations between economic sectors are removed.
Private enterprises still bottom the list in terms of business result
Despite the challenges from the economic downturn, the VNR500 enterprises have still been staying firmly grounded, and the total turnover of all500 enterprises on list 1 has still been gradually increasing over the past four years. Meanwhile, the total sums of taxes paid by the enterprises increased sharply in 2009 and 2010 after the shock in 2008.
Regarding the two main business indexes, ROA and ROE, one can see that the indexes of foreign invested enterprises (FIEs) far exceeded that of the two remaining economic sectors.
However, the gap has been closing. The two indexes of FIEs decreased sharply from 26.9 percent and 62.4 percent in 2007 to 14.7 and 30.9 percent, respectively, in 2008, and the downward trend is continuing.
Contrary to expectations, the business results of private enterprises, which are much lower than that of FIEs and state-owned enterprises, place them at bottom the list of enterprises.
The weakness of private enterprises is partially explained by the fact that the enterprises are facing more difficulties than state-owned enterprises in accessing land and bank loans.
Little changes in business field structure
The list of the top 500 enterprises shows only little changes in the business fields of the biggest enterprises.
Industrial enterprises are still dominating the ranking (70 percent of enterprises), while the two other business fields, agriculture and trade services, have the same proportion of enterprises on the list – 10 percent.
The enterprises operating in five key fields are still topping the rankings, including enterprises focused on mineral resources – oil and gas, construction – real estate – construction materials, banking – finance – insurance, steel and agriculture – forestry.
The crisis storm deal a blow on exports
While some business fields such as mineral resources – oil and gas, and steel still can show their strength, other business fields which rely on exports, such as footwear, seafood and garment, have endured negative impacts from the global economic crisis.
This explains why in the 2007 ranking footwear and garment companies stayed above the construction and real estate field with 5 percent of enterprises, but in the 2010 ranking, the figure has dropped to 2.6 percent.
The number of manufacturing enterprises in the ranking remains very modest, which shows that the productivity and competitiveness of Vietnam’s economy remains weak after four years of joining WTO.
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