Businesses promote investment restructuring after Covid-19 pandemic

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Difficulties for firms post-Covid-19 have forced businesses to restructure their production and business. Photo: Internet

Divestment to focus on strengths

According to a report from the Vietnam Chamber of Commerce and Industry (VCCI) on the impact of Covid-19 on Vietnamese businesses, nearly 85% of firms said the consumption market was narrowed and 60% lacked capital and break down the flow of business money. Meanwhile, 43% of businesses have had to reduce the labour size due to underemployment and 82% think their revenue will decrease compared to 2019. If the disease situation lasts, about 30% of enterprises will maintain operation for no more than three months and 50% of enterprises continuously operate a half of year.

Many experts believe this is also a convenient time for businesses to restructure their business and organisational areas. Businesses with acumen can seize the opportunity to move from freezing to hot growth when the pandemic is under control.

Recently, Vietnam Electric Equipment Joint Stock Corporation - Gelex (GEX) announced a resolution on divesting from the logistics segment by selling all of Gelex's capital contribution at Gelex Logistics Co., Ltd. According to Gelex, the divestment will be implemented in quarter 2-3 / 2020.

The 2019 annual report shows Gelex owns 100% at Gelex Logistics, with charter capital of VND 1,210 billion, operating in logistics services and investment in logistics infrastructure business. Gelex Logistics is a leading enterprise in transportation and warehousing in Vietnam and has great potential as this company is holding a controlling stake in many major logistics companies like Southern Logistics Joint Stock Company (Sotrans) with 54.8%, Sotrans Logistics (100%), Sowatco (84.4%) and Vietranstimex (84%). Besides, Gelex Logistics also has two logistics centres in Hanoi (30 ha) and Long Binh - Ho Chi Minh City (50 hectares). In 2019, Gelex's transportation and warehousing business recorded revenue of more than VND 1,600 billion.

Gelex's move is expected to help businesses focus more on pursuing long-term goals of sustainable development of industrial production and infrastructure, in which the main production is electrical equipment and construction materials.

Also made 100% divestment, Dat Xanh Mien Trung with new orientation and development plan has completely divested capital from North Central Real Estate Investment Joint Stock Company. In the near future, Central Green Land will focus on developing a variety of commercial products with large commercial centres including utilities: shopping centres, supermarkets, cafes, restaurants, amusement parks high-class entertainment with large movie theatres, golf courses and modern sports areas in Quang Binh, Hue, Quang Nam and Quang Ngai.

Expand business

Contrary to Gelex's divestment, many experts believe logistics is an important service that has great potential for development. These are also areas where there are noticeable commitments in the Vietnam - European Union Free Trade Agreement (EVFTA) towards opening the market, ensuring competition and transparency in business cooperation and imposing limits on State management. Therefore, after being officially signed, the EVFTA will take effect this year, it is forecasted to have a significant impact on the logistics market in Vietnam.

Therefore, besides taking measures to stabilise the situation of production and business activities and prepare for possible fluctuations, do not let fall into a passive situation due to the impacts of Covid-19, turn risks into and especially prepared to catch the wave of moving production areas of international corporations to Vietnam after Covid-19, Century Real Estate Joint Stock Company (CenLand , stock code: CRE) has continued to expand its ecosystem, forming a trendy logistics real estate supply chain such as logistics and logistics real estate with Cen Cuckoo.

Previously, CenLand also participated in co-working space for open office with Cen X Space label to catch up market trends. Investing strongly in co-working space model is a step to improving the resonant ecosystem in real estate field of CenLand.