Incentives buoy southern firms
Incentives buoy southern firms
Traditional markets managed by private enterprises and co-operatives in the Cuu Long (Mekong) Delta and south-eastern Viet Nam are thriving after receiving special treatment from the Government.
Under Prime Ministerial Decree No. 114/2009/ND-CP, since February 2010, investment projects in traditional markets in different economic sectors have been given red-carpet status, including low interest rates for credit.
Ho Tan Bi, director of Xuan Vinh enterprise in Vinh Long Province said he won in a bid to manage the Vinh Xuan Market which is located in Tran On District in early 2008.
"In the first year, our enterprise earned VND93 million ($4,400) in revenue from management of the market," Bi said.
"Such a sum was a big surprise to many people. In the previous year, when the business was run by the State, the revenue was only VND 12.8 million ($600)" he added.
He recalled that in the first year overtaking the market, his company invested VND1.2 billion ($56,400) to construct all the roads and the sewage system inside the market, plus three new rows of shops.
According to the director, his enterprise is expected to recover the VND1.2 billion in investment.
Nguyen Viet Cuong, director general of the Viet Mai company in Can Tho Province said his company at present ran and managed more than 30 markets in the Cuu Long (Mekong) Delta. One of them is the Tieu Can market in, Tieu Can District, Tra Vinh Province. Cuong said he had invested more than VND15 billion ($705,000) in rehabilitating the old market.
"Though the market has been in operation for only more than a year, I'm very happy with the high return - many, many times more than the past," he said.
"My company also plans to expand our operation in all communes and district centres in the Cuu Long (Mekong) Delta. I'm now waiting for approval from the authority," said Cuong.
Meanwhile in Dong Nai Province, Trinh Quang Hanh, vice chairman of the Thanh Nien Co-operative recalled his co-operation took over the management of Tam Hoa market, in Bien Hoa City in March 2006.
He said close co-operation with the City's Youth Union had enabled his co-operative to conduct a study on ways to improve the old market's operation through better management and service.
"By now, I can say, annual revenue from the market stands at about VND1.1 billion ($ 51,000) - five times higher than in 2000," said Hanh.
Asked what had made his co-operate so successful he said "Thanks to the decentralisation-in-business operation, I have all the power to do what I think is good for the co-operation. So far everything has gone smoothly."
Nguyen Van Thang, vice chairman of the Dong Nai Co-operative Alliance, which has 25 members throughout the province said he had done all he could to help co-operative members improve their service.
"My alliance has offered a very good interest rate - 1.07 per cent per annum to its members," said Thang.
Despite the successes, enterprises and co-operative leaders have expressed concern about the short land lease (25 years) as regulated in the existing Land Law. In addition, they also complained about slow land clearance in areas allocated to them to build or expand the old markets.
"This has cost us quite a lot of money!" said Nguyen Van Be, director of the Nguyen Vang company in Vinh Long Province.
Cuong said authorities in many localities did not want to give up their control of these traditional market - a big source of revenue to their budgets.
However, Vo Van Quyen, director general of the Market Department under the Ministry of Industry and Trade said it was the Government's policy to hand over the management of traditional markets to co-operatives and private enterprises.
"The decision is to make the operation of the market more efficient and ensure food safety for consumers, as well as helping traders increase business revenues," Cuong said.
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