Vingroup’s major move: enters list of top 10 firms in Vietnam

By Kim Anh    December 10, 2018 | 10:36 am GMT+7
Vingroup’s major move: enters list of top 10 firms in Vietnam
Vingroup will introduce its first smartphones on December 14 as part of its tech expansion. Photo acquired by VnExpress

The list of 10 biggest companies by revenue in Vietnam for the first time includes a domestic private company, Vingroup.

It advanced five places to sixth in the 12th annual rankings done by research company Vietnam Report (VNR).

The list includes mostly state-owned giants: Vietnam Electricity, PetroVietnam, military telecom company Viettel, petroleum retailer Petrolimex, lenders Agribank and BIDV, and Vietnam Airlines.

Topping the list is Korean giant Samsung Electronics Co., also the biggest foreign investor in Vietnam. The firm has invested $17.3 billion in eight factories and one research and development center in the country, creating jobs for more than 160,000 locals.

Exports from Samsung Electronics’ factories in Vietnam totaled $54 billion last year, accounting for around a quarter of the country’s total export revenue. Its two cellphone factories in Bac Ninh and Thai Nguyen provinces in northern Vietnam produce around half of all the cellphones that Samsung supplies to the global market.

Samsung Electronics and Japanese automobile and motorbike maker Honda, which is in ninth place behind BIDV and ahead of Vietnam Airlines, are the only two foreign companies in the list.

This year’s rankings continue to reflect the state sector’s major role in key sectors like electricity, oil and gas, telecom, banking, and aviation.

But the big story remains the rise of the domestic private company. This year marked Vingroup’s entry into technology and manufacturing with major projects to make VinFast automobiles and electric bikes and Vsmart smartphones and other smart electronic appliances.

Vingroup was originally a real estate firm but has expanded into education, healthcare, retail, and pharmaceuticals.

In the first nine months of the year Vingroup’s consolidated net revenue was worth VND84.15 trillion ($3.63 billion). As of September 30 its total assets were worth VND268.23 trillion ($11.51 billion), up $2.34 billion from the end of 2017.

The firm has also established a string of research firms for software, artificial intelligence and new-generation materials.

Vingroup sees itself becoming a global tech-industry-services powerhouse within 10 years. 

Nguyen Viet Quang, vice president and general director of Vingroup, had said in August that technology would be a major revenue stream for the company.

Domestic private companies in the top 500 list performed strongly, with their compounded annual growth rate (CAGR) in 2014 - 2017 being a whopping 21.8 percent.

The top five sectors among the 500 biggest domestic private domestic companies in terms of total revenues are finance (15.1 percent); food, drinks and tobacco (14.3 percent); construction, construction materials and real estate (13.9 percent); steel (11.7 percent); and telecom, computer and IT (9.2 percent).

These sectors accounted for 64.2 percent of revenues and 75.5 percent of net profits.

Vietnam Report said its survey shows companies have a positive view of business outcomes in 2018 despite many challenges.

They consider the U.S-China trade spat and its impacts the biggest risk to the business community in Vietnam.

More than 63 percent said the unpredictability due to geopolitical tensions is their biggest difficulty.

Other concerns include lack of skilled labor, red tape and weak policies which do not foster competitiveness.

But they hailed efforts to integrate the country into the global economy (79.3 percent), crack down on corruption (50 percent) and institute administrative reform (48.3 percent).

Half the respondents predicted the business situation early next year to remain basically stable, 37 percent said business costs would increase and 18.5 percent believed profits would decline.

In the overall Top 500 list, services and manufacturing account for a lion’s share of 98.4 percent of revenues with agriculture making up only 1.6 percent. 

 
 
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