Thai Nguyen props up private sector development

The province’s competitiveness performance in recent years has remained high

According to Vu Hong Bac, Chairman of Thai Nguyen People’s Committee, for the private sector to grow into a motivating force with major contributions to propel local socioeconomic development, local authorised agencies at all levels need to step up support, encourage small businesses and local trading households to join the market, promote equal access to diverse land and capital resources, and develop an innovative startup ecosystem. Simultaneously, efforts must gear towards fostering dialogues and reacting to their proposals.

In addition, local business associations need to function as an effective link between the business community and the local government, while companies must tighten cooperation such as in product consumption for sustainable development.

Thai Nguyen’s provincial governance and public administration performance index was constantly kept at high levels in recent years. Last year, the provincial competitiveness index ranked 12th, moving up six notches compared to the previous year. Significantly, the time to receive business registration and business setup certificates has been shed to just two working days.

Local transport infrastructure has seen marked improvements and abundant human resources, providing the fulcrum to spur the private sector’s development. Since 2015, about 350 new business setups have been registered in the province annually.

In the first half this year despite the pandemic, Thai Nguyen still saw 314 businesses established, with the total registered capital approximating VND2 trillion ($86.9 million), surpassing 5 per cent on-year.

The province’s recent statistics show that the total investment value in Thai Nguyen amounted to VND238 trillion ($10.3 billion) during 2015-2020, in which VND97 trillion ($4.21 billion, equal 41 per cent) came from the private sector.

This has contributed a great deal to the province’s achieving an average growth rate surpassing 11 per cent per year in the past five years, and budget payment from the private sector jumping 2.1 fold during the period. Per capita income averaged VND83 million (over $3,600). last year, and each year the private sector creates more than 21,000 jobs.

One of eminent growth modes among private companies in Thai Nguyen is An Khanh Thermal Power JSC, investor of the 120MW An Khanh thermal power plant, commenced operations in 2015 with the total registered capital of VND4.7 trillion ($204 million). Each year since, the plant has contributed nearly one billion kilowatt hour to the national power grid, raking in revenue of tens of millions of US dollars and providing jobs for about 500 workers.

According to Nguyen Van Thang, chairman of An Khanh Thermal Power JSC, Vietnam faced a critical shortage of power during 2010-2015, with active support from relevant ministries, branches, and particularly from Thai Nguyen’s authorities, the plant was able to come on stream in a timely manner, helping to ensure national energy security.

In another case, through availing local bountiful advantages, the billion-dollar Nui Phao Mining Co., Ltd. came into existence to exploit Nui Phao mine, one of the world’s largest tungsten deposits based in Thai Nguyen, with mining reserves touching 66 million tonnes of ore.

Nui Phao has been participating in a global value chain and manufacturing network via producing high-tech items serving the aerospace, auto, and computing industries. Every year, Nui Phao fetches an annual revenue of about VND6 trillion ($260 million) and budget contribution reaching VND1.2 trillion ($52.1 million).

With active support from relevant management agencies in Thai Nguyen, six specialised companies working on packaging production, logistics, and transportation serving Nui Phao were set up and managed stable operations. They have created jobs for nearly 200 local workers.

Meanwhile, from humble beginnings TNG Investment and Trading JSC has grown into the largest apparel maker in the province with more than 16,000 employees. In the words of TNG chairman Nguyen Van Thoi, the company has encountered numerous difficulties due to supply chain disruptions in the wake of the dragging COVID-19 pandemic. Cancelled export orders had caused headaches to company executives in finding jobs for the workers.

“Leveraging support from Thai Nguyen’s management, the company has been quickly participating in exporting face masks and protective clothing, helping to ensure stable work and income for the labourers despite pandemic implications,” Thoi said.

As one of major apparel hubs in Vietnam, Thai Nguyen also quickly sought government approval to export face masks and protective clothing for pandemic prevention after the local demands for the projects were met, helping local companies to maintain business continuity and employment of local workers.

In addition, according to Chairman Bac, to alleviate burdens on businesses hit by COVID-19, Thai Nguyen’s authorities have instructed tax and social insurance agencies to postpone and extend implementation of financial obligations; and also asked banks to engage in debt restructuring and soften the interest rate to support business development.