Private Economy in Dong Nai with a Strong Growth

In recent years, alongside the State-owned sector, the private sector in Dong Nai province has seen rapid development in both the number of enterprises and their operational effectiveness. Statistics show that the number of private enterprises increased from 1,663 with a total registered capital of VND 1,700 billion in 2001, the second year’s implementation of the Enterprise Law, to 3,800, or 2.5 folds, with a total registered capital of around VND 6,000 billion. The private sector, each year, generates 5,000 more jobs for local people. Those localities which have seen the most rapid development pace of the private sector include Bien Hoa city with over 1,000 enterprises, Long Thanh district with over 300 enterprises, Trang Bom with around 200 enterprises and Thong Nhat with over 100 enterprises.

 

Many enterprises have increased their capital for expanding production and business activities. Since 2004, there many enterprises have expanded their business and production scales. For example, the Giang Nguyet enterprise in Tam Phuoc commune, Long Thanh district, has invested over VND 10 billion in manufacturing woodwork for export, the Loc Hung Phat enterprise in Xuan Hoa commune, Xuan Loc district, has invested VND 1 billion in producing albums with PP and PVC paper, the Trung Cao mechanic enterprise in Tam Hiep ward, Bien Hoa city has invested over VND 600 million in manufacturing mechanic products, and the Hoan My enterprise in Thanh Phu commune, Vinh Cuu district, has invested VND 300 billion in expanding the production of buttons of snail, rubber wood and coconut shells for export. Other enterprises, such as Binh Tien - Dong Nai footwear, Hao cashew nut processing in Xuan Loc district, Thanh Long pottery in Long Thanh district, and Dong Tam ceramic in Bien Hoa city have invested hundreds of millions of Vietnam dong in expanding their production activities, thus generating jobs for between 300 and 400 people each.

 

In fact, the private sector has played an important role in the economic development in Dong Nai province. Many local private enterprises have found a foothold in domestic and foreign markets with prestigious trademarks and high quality products. One outstanding example is Binh Tien - Dong Nai, which manufactures between four and five million pairs of shoes and footwear, earning revenues of between VND 200 billion and 300 billion per annum. The Binh Tien trademark has become favourite choice of consumers in Laos, China and the US. The Thanh Long pottery enterprise has promoted the export of its products to many markets around the world. In particular, the Truong Hai automobile manufacturing and trading enterprise, after six years’ operation in the Bien Hoa II industrial park, has developed many branches and shops nationwide, generating jobs for over 600 people. Each year, the company earns revenues of between VND 400 billion and 500 billion.

 

The private sector has witnessed rapid development in recent years thanks to the State’s policies on encouraging the sector and treating equally among economic sectors. However, there are still many difficulties facing the private sector. According to the Union of Co-operatives in Dong Nai, many private enterprises have small or medium size with a small budget for investment. These enterprises face many difficulties in getting loans from banks due to a lack of mortgage. Recently, the Government issued regulations on the establishment of a credit guarantee fund for small and medium-sized enterprises. However, apart from capital from the budget and State banks, enterprises have to contribute capital to the fund. In fact, small and medium-sized enterprises do not have enough capital for their production and business activities, where can they find capital to contribute to the fund? As a result, the fund has not become operational yet.

 

At the same time, private enterprises face difficulties in having land for expanding their production and business activities, especially enterprises operating in the industrial and construction sectors.

 

As planned in the 2006-2010 period, Dong Nai will have 6,300 more private enterprises with a total registered capital of over VND 10,200 billion. To achieve the target, Dong Nai has developed many solutions. Accordingly, the province continues to orientate the development of private enterprises in combination with arranging land for industrial and handicraft complexes for wood processing, handicrafts, plastic and mechanic manufacturing in districts. The province will boost activities of business associations to create favourable conditions for helping enterprises overcome difficulties in getting loans and develop their production and business activities.