Lam Dong Province's Equitisation: High Efficiency

1:49:53 PM | 26/6/2006

An interview Vice Chairman of Lam Dong People’s Committee Tran Quang Thai
Can you reveal the results of the SOE equitisation process in LamDongProvince?
By late 2005, Lam Dong had equitised 22 State-owned enterprises (SOEs) and 12 divisions of SOEs into joint stock companies. The equitisation process has fulfilled over 90 per cent (two remaining enterprises should go public in 2005 but incomplete procedures delayed until 2006). Besides, the Lam Dong Province People’s Committee has proposed the Prime Minister to equitise an SOE and an SOE part in 2006. Lam Dong is one of the provinces with the fastest SOE equitisation process.
Did Lam Dong face difficulties in reshuffling SOEs?
Lam Dong Province has dealt with numerous difficulties in implementing the SOE equitisation process. First, Lam Dong lacked experience in appraising value of enterprises while it didn’t have instructions for calculating corporate advantages and invisible values (prestige, reputation, trademark and favourable location). Several enterprises still didn’t attach much importance to processing financial and asset issues based on annual business results. Besides, several other enterprises hadn’t categorised bad debts. As a result, when assessing value, enterprises spent a lot of time dealing with inherent asset and financial issues and the lateness is unavoidable. Worse still, several enterprises hadn’t been fully aware of equitisation works and feared of different treatments from the State after being equitised. So, many were reluctant to follow equitisation.
What are operational results of enterprises like after being equitised?
A majority of enterprises operated effectively after going public. New management method and new corporate charters helped enterprises to adapt to the market mechanism more easily and bring labour democracy into full play. After equitisation, many enterprises expanded its business scopes, productions and consumption markets. Hence, incomes of labourers in equitised enterprises were raised, making them feel more secure as working for the companies.
Among 34 equitised enterprises, only three are operating ineffectively, namely Loc An Stone Tile Co. Bao Loc Tea Joint Stock Company and Lam Dong Mechanical Execution Joint Stock Co.
Can you disclose the measures of Lam Dong in the coming years to speed up the SOE equitisation process and help enterprises to operate more effectively after equitisation?
In 2006, four enterprises will go public and will finish equitisation in September. To fulfil this target, the province has required all governing levels, enterprises and labourers to fully and deeply understand the enterprise reform policy. The reshuffle is indispensable and important to consolidate and develop enterprises and it will help enterprises to renew operational mechanism and improve business results. Accordingly, Lam Dong Province will increase instructions, checks and urgencies in implementing equitisation schedule. The province will resolve difficulties for enterprises and will meet leaders of enterprises and investors every month to solve proposals and recommendations of enterprises.
Ngoc Huong