Development of joint-stock companies in post-WTO entry period

SACOM makes it a priority to invest in developing its core businesses

At a recent shareholders’ meeting in the Dong Nai Tourism Joint Stock Company, its strategic shareholders including Mai Linh Company and the Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) proposed an action plan for promoting tourism in Dong Nai province in 2007. They recognised that Dong Nai is endowed with numerous natural sceneries which are high potentials for tourist attraction and decided to invest as much as tens of billion of dong in Dong Nai’s tourism sites such as Buu Long Park in Bien Hoa city and Dao O - Dong Truong in Vinh Cuu district. The potential of landscapes, such as Buu Long Park and Dao O – Dong Truong resort, will be used to make the province an attractive destination for both domestic and foreign tourists. Besides, the Dong Nai Tourism Joint Stock Company plans to build new restaurants in Nhon Trach district and continues investing in the existing tourist sites to attract more visitors into the province. It is important to find out advantages of development in Dong Nai that have not yet been fully explored or that seem to not have been recognised sufficiently when developing strategies for further development of tourism industry in the province. Accordingly, the major and strategic shareholders will be convinced that they will make profits from their investment in tourism projects and will be willing to invest into the projects.

Cables and Telecommunication Materials Corporation (Sacom) is the first equitized company in Dong Nai. Its SAM shares were listed at the HCM City Securities Trading Centre and were attractive to investors due to the high potential of telecommunication industry. The Sacom’s advantage is that its shareholder members are the post offices in the provinces of Vietnam. Therefore, the corporation has been trusted and selected to provide its products to the post offices. However, the efforts did not stop there. Sacom has invested to establish a closed production system. Accordingly, the corporation’s subsidiary companies have been set up to implement the product development strategy. In 2006, the corporation recorded a turnover of VND1,650 billion, exceeding the set target by VND650 billion, earned an after-tax profit of VND203 billion. The monthly average salary of employees in Sacom reaches more than VND6 million. In the first quarter of 2007, Sacom’s production increased 23% over the same period of 2006. For that reason, purchasing the SAM shares is considered a wise investment deal. Sacom also plans to build an obstetrics hospital in Can Tho in the next time.

 

Main object of Bien Hoa Sugar Company is to develop a stable raw material growing area

Although facing some difficulties and challenges after equitization, Bien Hoa Sugar Company has made efforts to overcome obstacles and to expand production. In 2006, the company reported a turnover of approximately VND768 billion, a before-tax profit of more than VND51.5 billion and a paid dividend of 16 percent. The monthly average salary of employees reaches VND2.8 million. The company’s production in first quarter of this year was 18 percent higher than that of last year. Currently, Bien Hoa Sugar has a total assets of nearly VND590 billion. At Bien Hoa Sugar Joint Stock Company’s 2007 annual shareholders meeting, the company planed to develop sugarcane raw material area in Tay Ninh province and in areas bordering Cambodia. Besides, Bien Hoa Sugar Company also plans to diversify its business interests into real estate, depot, etc.

 

It can be seen that the most important factors for joint stock companies are to catch opportunities at just the right moment and develop flexible and effective strategies that will bring benefits to owners of companies, their employees and shareholders. These things will also help to consolidate the trust of stakeholders to the companies. It is time for companies to take steps for sustainable development in order to cope with challenges brought about by Vietnam’s WTO entry.

Reported by K.Loan