Government announces large-scale agricultural divestment

Investors can look forward to plenty of opportunities as Vietnam Rubber Group (VRG), Vinafood 2, and many more companies where the Ministry of Agriculture and Rural Development (MARD) represents the state holding, will put up to 100 per cent stake up for public auction in 2017.

According to the recently released schedule by the MARD, in 2017, Vietnam General of Agricultural Materials Corporation Limited will continue its equitisation process.

Vinafood 2 is resolving its financial, land, and labour problems and the State Audit of Vietnam has finished its valuation.

VRG will have the parent company and 20 wholly-owned subsidiaries equitised. The valuation is almost done. The company is building its plan to sell stakes to the public.

VRG will receive the final results of its valuation in the third quarter of the year. Vinafood 2 will be done with valuation in the fourth quarter. The two are looking for strategic partners.

The MARD is also going to soon finish the valuation of Vinacafe, Vinafood 1, and Halong Seafood Co., Ltd.

In the first quarter, the MARD will finish selling the state stake in Seaprodex JSC, Vinasugar 2, Corn Investment and Development JSC, as well as Technology Consulting and Transfer Co., Ltd.  which is part of Water Resources University.

At other companies, including Vinafor JSC (where the state holds 51 per cent), Navetco (65 per cent), Vetvaco (65 per cent), the MARD is going to sell the state stake according to the rules specified in Decision 58/2016/QD-TTg on criteria to classify state-owned enterprises.

In total, in the 2017-2020 period, the government is going to sell VND2.19 trillion ($96.4 million) worth of agricultural company stakes at book value. Only in 2017, the figure is projected at VND1.643 trillion ($72.3 million).

According to Pham Quang Hien, director of the Enterprise Management Department under the MARD, it is difficult for agriculture companies to find strategic partners because of their low profit margins, high risk, and the lacking preferential policies on offer.

“The Ministry is trying to come up with policies to attract investors into the field,” he said.

By Tam Lien / VIR