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Agricultural firms to consolidate
The Ministry of Agriculture and Rural Development plans to create large agri-businesses by merging several existing joint-stock companies to increase scale and boost exports.
Nguyen Phu Hung, deputy chief of the ministry's business management and renovation department, said, however, that the individual businesses must be financially strong enough for the process to go ahead.
He admitted the programme cannot be carried out immediately since most State-owned agricultural companies are in the process of equitisation and need time to shore up their finances.
The Viet Nam Rubber Group (VRG), founded in 2006, is the country's only large agricultural corporation, with a capital of VND19 trillion (US$1 billion), more than half owned by the State.
Also the country's leading rubber exporter, it has a 60 per cent share of the domestic rubber market.
Viet Nam is a major agricultural economy with an annual output of 40 million tonnes of food crops, of which it exports 10 million tonnes.
Hung said his ministry will further study the project before submitting it to the Government for approval next year.
Meanwhile, the process of equitising agricultural businesses remains stuck due a plethora of problems.
For instance, each business has on average charter capital of VND20 billion ($1.1 million) with 15 per cent of them - especially in the vegetable and tea sectors - having less than VND1 billion ($60,000).
As a result, of the 16 businesses run by the Ministry of Agriculture and Rural Development, only two have been equitised while 12 have been transformed into parent-subsidiary limited-liability companies; two others have merged.
vietnamnews
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