Vietnam delays privatisation plans as Samsung affirms commitment

Vietnam delays privatisation plans as Samsung affirms commitment

The government of Vietnam has pushed back its end-2020 deadline for privatising several state-owned firms as a result of the Covid-19 pandemic.

According to business publication DealStreetAsia, Vietnam’s government was aiming to sell stakes in 128 state-owned companies between 2017 and end-2020, but has thus far divested holdings in only 37 of these.

In a report, the government noted that the pandemic was partially responsible for holding up its plans, as Covid-19 has “impacted all socio-economic aspects, market demand and the stock market”.

TeleGeography reports that the government has planned for years to partially or fully privatise Vietnam Posts and Telecommunications Group (VNPT) and MobiFone Telecommunications Corporation. The government has extensively restructured both telecoms firms in a bid to boost their efficiency and therefore competitiveness, although it has not audited either in preparation for a possible initial public offering (IPO).

In more cheering news for Vietnamese authorities, the local unit of Samsung has shot down speculation that it was planning to transfer device factories from Vietnam to India despite plans by its parent firm to strengthen its presence and investment in India.

India’s Economic Times newspaper reported that the South Korean firm was planning to take advantage of the Indian government’s incentive scheme by manufacturing $40 billion worth of smartphones in the country.

However, Samsung Vietnam told local outlet VNExpress that the market would “always be Samsung’s important production base in the world”, dismissing the Economic Times report as “unfounded.”

Samsung opened its first manufacturing plant in Vietnam in 2008, and the country now accounts for around half of the vendor’s device output. In March this year, it commenced construction on a $220 million R&D facility in Vietnam.

However, Samsung has exited markets previously – most notably China, in which it shuttered construction late last year as it looked to streamline operations.

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