Channelling Investment into Core Business

According to Mr Phung Tuan Ha, General Director of the PetroVietnam General Services Joint-stock Corporation (PET), from 2012, PET will withdraw its investment in real estate projects, projecting that its revenues will largely come from telecommunication equipment distribution activities. In 2012, PET mainly focuses to implementing its construction projects in Thanh Da Lake of Binh Thanh district.

 

Mr Ta Phuoc Dat, Deputy General Director of the Saigon General Service Joint-stock Corporation (SVC), said this year, SVC suspends investments in big projects in financial and real estate fields, but still concentrates on those which are nearly completed, and require just a little bit more capital to finish.

 

The Saigon Garment Manufacturing Trading Joint-stock Company (GMC) was about to ground-break 213 Hong Bang project in 2011.However, due to the delay in site clearance and the grayness over the real estate market, GMC has suspended project implementation till 2013.

 

Several years ago, the Materials Petroleum Joint-stock Company (COM) also invested in some attractive fields then, like real estate and securities - which are outside of its professional field. At favourable times, these activities brought considerable profits to COM, but after that, they brought a lot of risk when economic downturn and financial turmoil arrived. However, since 2011, COM has focused on petroleum retail distribution and minimised it financial investments in order to maintain sustainable profits.

 

Some Song Da affiliates with main businesses in equipment and installation work for construction have turned their operations into construction and real estate fields. Their new businesses haven’t reached a positive result. The general director of one company of Song Da affiliates said that his company has currently re-evaluated the efficiency of investment projects, and forcefully cut off inefficient investment projects outside of its main industry, trying to recover its investment capital despite suffering losses with the purpose of focusing capital on its core business.

 

The representative of PetroVietnam Construction Joint-stock Corporation (PVX) stated that the company would also reduce inefficient investment projects; along with that, PVX would suspend and extend the progress of unnecessary or capital-lacking projects, and only focus on its key operation sectors, major projects of oil and gas industry. This policy has been implemented by the Corporation since 2011.

 

For the last 3 years, in the general meetings of shareholders of Rang Dong Light Source and Vacuum Flask J.S.C (RAL), many shareholders have challenged the leaders of RAL because the enterprise has not invested in real estate projects despite possessing a nice and convenient land parcel. However, the enterprise has insisted on investing in its main business activities.

 

 In a conversation with the Securities Investment Journal, Ms Ngo Ngoc Thanh, Chairwoman of RAL, said that now it could be confirmed that RAL has gone the right direction, proved by the fact that many other enterprises have invested in real estate and made no success, rather suffering major losses and damages to shareholders. Instead of real estate investment, RAL has built a science and technology centre to serve the research of new products for the enterprise, aiming to expand the market and increase profits.

 

Thu Duc Trading and Import Export J.S.C (TMC) said that the enterprise has concentrated only on its main business of trading fuel and raw materials such as gasoline, the major revenue sources for the enterprise.

After a period in which many businesses ran after multi-sector investment, many enterprises have begun to realize that only focusing on and developing their core fields will bring sustainable growth. This viewpoint is clearly shown in the strategies and visions of many enterprises this year.