Enhance the brand value of state-owned enterprises thanks to overseas investment

PVN's foreign investment projects are bringing in a lot of positive revenue. Photo: PVN

94 projects recorded revenue of nearly 9.7 billion USD

In a report to the National Assembly, the Government said that by the end of 2022, there were 30 state-owned enterprises investing abroad directly or indirectly through level 1 and level 2 subsidiaries. The total overseas investment capital at the end of last year was more than 6.62 billion USD.

Of which, Vietnam Oil and Gas Group - PetroVietnam (PVN) has invested over 4 billion USD, accounting for nearly 61% of the total investment capital abroad of state-owned enterprises. Next, the Military Industry and Telecommunications Group (Viettel) and Vietnam Rubber Group (VRG), invested nearly 1.5 billion USD and over 0.77 billion USD, respectively. Foreign investment fields remain focusing on 14 industries, of which the most are fields such as telecommunications, mining, agriculture, forestry and fisheries...

In 2022, foreign investment projects of state enterprises and state-owned enterprises earned more than 427.4 million USD, with profit repatriation reaching nearly 236 million USD. Cumulatively from the time of investing abroad until the end of 2022, 72 investment projects of 16 enterprises have incurred recoveries with a total accumulated amount of more than 4.08 billion USD, equal to 61.7% billion USD of total invested capital. PVN had the largest total recovery of more than 2.9 billion USD, followed by Viettel with more than 950.4 million USD

According to the Government report in 2022, there were 94 projects with revenue of nearly 9.7 billion USD, an increase of 24% compared to 2021. Of these, 67 projects were profitable, but the total profit after tax and shared profits of Vietnamese investors all decreased compared to 2021, 30% and 10.6% respectively.

Multi-goals in making investments

In the first months of 2023, despite current chaos, foreign investment projects of state-owned enterprises and state-owned enterprises still recorded many positive results, helping to increase the trade value brand of Vietnamese enterprises.

For example, Viettel International Investment Joint Stock Corporation (Viettel Global) reached VND 13,300 billion, growing 18% in the first 6 months of 2023. Of these, most market companies achieved good growth in sales revenue and service providers, notably Movitel in Mozambique (28%), Telemor in East Timor (23%), Metfone in Cambodia (19%)... In particular, the E-Wallet Company in Viettel Global's markets had very impressive growth: M_mola in Mozambique at 906%, Telemor Fintech in East Timor at 82%, Star Fintech in Laos at 81%, Halopesa in Tanzania 41%, Lumicash in Burundi 31%... Thanks to that, the brand value of Viettel in 2023 is being valued at nearly 9 billion USD according to Brand Finance - the world's leading organization in brand valuation.

Regarding the oil and gas industry, according to information from PVN, the entire industry currently has 32 signed foreign investment projects, including 5 oil and gas searching projects, 21 oil and gas exploration projects, 6 mine purchase projects and reserve collection. Among these 32 projects, only with the Nhenhetxky oil and gas project and another in Algeria, Vietnam's revenue exceeded the capital transferred abroad of all projects combined. The Rusvietpetro joint venture between PVN and Zarubezhneft is carrying out search, exploration, development and exploitation activities in 13 oil fields in 4 blocks in Nhenhetxky autonomous region with geological reserves and oil recovery reserves of about 244 million tons and 96 million tons, respectively. By the end of June 2023, the project in Algeria had exploited 48.14 million barrels of oil and is expected to reach 50 million barrels in 2023.

In addition, the iron and gold mining project of the Economic Cooperation Corporation (Military Region 4) of the Ministry of Defense is highly evaluated by the Government. In addition to its economic efficiency, businesses with abroad investments are also associated with the goal of ensuring national defense and security through good implementation of social responsibilities with the government and people in the project area..., contributing to maintaining and enhancing prestige and promoting economic, political, social, diplomatic and defense relations between Vietnam and investment-receiving countries.

According to a representative of the Vietnam Confederation of Commerce and Industry (VCCI), state-owned enterprises and enterprises with state capital invested abroad have contributed to affirming their governance, business as well as vision and strategy of businesses. Thanks to that, state-owned enterprises have demonstrated their position and leading role in the economy.

However, investment activities abroad are still "gray". According to the Government's report, projects with accumulated losses are still increasing and are facing difficulties and potential risks. Some have not yet recovered capital or have no restructuring plan. Some fields and investment projects are not effective, must be stopped, and are at risk of losing capital. For example, PVEP's oil and gas exploration and exploitation project, and the Potassium salt mine project in Laos of Vietnam Chemical Group (Vinachem), or Viettel's telecommunications project in Cameroon, face exchange rate risks and large accumulated losses. By the end of 2022, there were 43 projects with accumulated losses with a total loss of more than 1.44 billion USD, an increase of nearly 8% compared to 2021.

Therefore, according to experts, it is necessary to offer support and directions from the Government and agencies to promote the development of state-owned enterprises. At the same time, enterprises should focus on fields with high-technology content, capable of dominating the domestic market and reaching out to the international market.