Overseas investments a drain on state firms’ finances

They had invested in 114 projects abroad as of last year, mostly in Laos and Cambodia, in several industries including oil and coal mining, aviation, telecommunications, and rubber, according to a report that the Ministry of Planning and Investment sent to the Prime Minister.

Oil giant Petrovietnam had the largest number of projects, 27, mostly to explore and drill for oil and gas and minerals. But 16 are either delayed or face operational difficulties.

The company invested $3.12 billion overseas and repatriated nearly $2 billion worth of profit and capital.

Vietnam Airlines invested $49 million to acquire a 49 percent stake in Cambodia Angkor Air in Cambodia.

The latter achieved cumulative profit after tax of nearly $1 million in 2009-12, but has been making losses since 2013. Vietnam Airlines has been seeking to divest its stake but in vain so far.

Vietnam National Chemical Group (Vinachem) invested $81 million in a potassium mining and processing project in Laos, but with the price of the metal remaining low for a long time, the project is not profitable.

It too has been seeking to sell out, but has not been able to find buyers and remains locked in a dispute with contractors.

Coal mining company Vinacomin invested $13 million in five projects in Cambodia and Laos, but had to sell two of them after making losses.

It is looking for buyers for the three remaining projects after discovering that coal reserves in them are lower than initially estimated and therefore not commercially viable.

Telecom giant Viettel is among the few companies that have made successful foreign investments.

The military-owned company has invested $1.79 billion in 10 telcos in Cambodia, Laos, East Timor, Myanmar, Africa and Latin America, and three research and development projects in France, the U.S. and Russia.

It has so far earned profits of $481 million, mostly from Laos and Cambodia.

But some of its projects in Africa (Cameroon, Tanzania and Mozambique) are facing difficulties due to legal and political uncertainties.

Vietnam Rubber Group has invested over $747 million in Laos and Cambodia and reported profits of nearly $4.4 million.