In the past two recent decades, reform in state-owned enterprises (SOEs) has always been regarded as the top priority in the socio-economic development strategy of the Government of Vietnam. One of the critical objectives of the enterprise reform is that the Government will divide the functions of the regulator and investor. To this end, the Prime Minister decided to establish the State Capital Investment Corporation (SCIC) in 2005 with two main missions: to exercise the right of the State representative at state invested companies and to be the Government’s strategic investment arm in various industries and sectors.
An active shareholder of enterprises
As the representative of the State interest in enterprises, SCIC’s objective is to improve the efficiency of the assigned State capital.
As of December 31, 2008, the total number of enterprises in SCIC’s portfolio is 809, which are operating in various industries of the economy. Among these portfolio companies, there are many companies that have good development potential, drawing many investors’ interest, especially those in such fields as IT, construction, tourism, air lines, sea products, plastic…
As an active shareholder, SCIC proactively assists enterprises to improve their governance capacity, performance; and to identify strategic partners, to undertake restructuring to pave the way for their development. Within two years of operation, SCIC has successfully managed to undertake many corporate restructuring projects such as the sale of Pacific Airlines’ 30 percent stake (Jestar Pacific now) to the Qantas Airways as a strategic partner; the sale of Bao Minh’s 16.6 percent stake to AXA; and the sale of Vinare’s stake to Swissre.
Investments in strategic projects
Strategic investment aims at focusing on key and effective projects for the economy. Currently, SCIC is investing in significant projects in power, sea ports, air ports, financial and commercial complex in the two cosmospolitant area of Vietnam, i.e. Hanoi and Ho Chi Minh City. In these projects, SCIC participates as a financial investor and is willing to leave other implementers to take full advantage of each party.
SCIC’s on-going projects:
o Long Thanh international air port (Ho Chi Minh city, Dong Nai)
o Financial Tower (Hanoi)
o Thu Thiem complex (Ho Chi Minh city)
o Ben Luc – Long Thanh high way project (Ho Chi Minh city, Dong Nai)
o Vam Thuan bridge (Ho Chi Minh city)
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Opportunity to Cooperate with SCIC
Delivering tasks assigned by the Government, since its inception, SCIC has focused and stimulated partnership with investors and counterparts, both domestic and international ones. So far, SCIC has set up a relationship with various partners, ranging from similar organizations such as: Temasek (Singapore), Khazanah (Malaysia); and international organizations like WB, IMF, IFC; and banking institutions, investment funds and international asset management firms.
Particularly, in the Middle East, SCIC has established partnerships with several sovereign wealth funds such as State General Reserve Fund (SGRF), Oman Investment Fund (OIF), Qatar Investment Authority (QIA), Kuwait Investment Authority (KIA) …
According to Mr Tran Van Ta, SCIC’s Vice Chairman and General Director, the forms of cooperation between SCIC and foreign partners range from buying stake or cooperating with SCIC to undertake restructuring projects in SCIC’s portfolio companies or becoming strategic partners of these companies, cooperating with SCIC to set up new companies or joint ventures; becoming co-investors along with SCIC in specific projects.
Mr Ta also said that SCIC’s direction is to become a strategic financial investment arm of Vietnam Government with the application of international standards of investment and corporate governance. “Vietnam’s investment environment is improving each day. Vietnam’s market is still regarded with potential, one with a GDP growth rate predicted to be the highest in the world in the coming years. Thus, it’s our strong belief that despite the world economy’s downturn, there are still golden investment opportunities. SCIC is willing to cooperate with investors, both domestic and international ones, so as to take full advantage of the said opportunities in Vietnam” said Mr Ta.
Kim Phuong
Vietnamese
