Directive No. 01/2007/CT-BXD on certain measures to enhance the efficiency of production and business operations and competitiveness of enterprises under the Ministry of Construction in international economic integration.

DIRECTIVE

On certain measures to enhance production efficiency and business effectiveness

and competitiveness of enterprises under the Ministry of Construction

in international economic integration

___________________________

In recent years, implementing the Party's and State's reform policies, construction industry enterprises have actively and proactively participated in the national process of regional and global economic integration.

On November 7, 2006, Vietnam was admitted to the World Trade Organization (WTO), marking an important milestone in the integration process, opening up both opportunities and challenges for the national economy in general and construction industry enterprises in particular.

Vietnam's accession to the WTO brings construction industry enterprises the opportunity to expand markets, attract, receive, and transfer investment and financial resources; quickly access advanced technology and techniques and learn advanced management experiences from economies around the world. However, construction industry enterprises also face numerous challenges when the country joins the WTO, particularly fierce competition from outside. Compared with countries in the region and globally, construction industry enterprises still lack financial capacity, project management and operation level, managerial and technical staff qualifications, especially knowledge of laws and international practices, modern technology and equipment, information on regional and global markets, construction organization levels; resource utilization, equipment, machinery, labor force capabilities are not high, cooperation among domestic contractors is not tight, the competitiveness of some building materials products is still weak compared to imported products in terms of design, quality, and product price, some products have been exported but the volume is not large and not regular... Some enterprises have not truly prepared well for market research, accurately assessing their own capabilities and competitiveness to develop appropriate production and business strategies, investment plans, and human resource development plans to ensure sustainable development and enhanced competitiveness.

To improve production efficiency and business effectiveness, enhance competitiveness of construction industry enterprises in the process of international economic integration in general and implementation of WTO accession commitments in particular, the Minister of Construction directs the Chairmen of Management Boards, General Directors of State-owned Corporations in the Corporation-Member Company model; Directors of independent companies and Heads of units under the Ministry of Construction to focus on implementing the following tasks and solutions immediately:

1. Study and grasp the strategy and specific commitments related to the construction industry of Vietnam with the WTO. Each unit must understand fundamentally and systematically the objectives, principles, and implementation timelines of commitments related to the Industry and their own operational fields within the WTO, clearly recognizing the opportunities and challenges of joining the WTO to build and adjust their own development strategies and plans accordingly to suit the new situation.

2. Reassess actual capabilities, competitiveness, and development potential of their own units, taking into account regional and global markets, and develop new technology investment strategies, improving management systems suitable for each stage from now until 2010 and 2020.

3. Develop strategies and organize the implementation of training plans to develop leading scientific and technological cadres, business managers, and project managers at regional and global levels. These cadres must be equipped with foreign languages and deep understanding of production technologies, management technologies, technical standards, construction regulations, and international laws. Train and improve professional skills to stabilize high-skilled worker teams, increase labor productivity, and produce products recognized internationally for quality.

4. Units must proactively grasp and apply market economy rules in management and business operations. Strengthen marketing and market information work, enhance competitiveness, particularly focusing on building and promoting product brands and enterprise brands; strengthen cooperation and linkage between production units and major consumers.

Strengthen scientific and technological information work, knowledge about international economics and markets; invest in sufficient equipment, especially specialized equipment, with high-level software programs managed strictly.

5. Diversify investment forms and ownership structures in construction investment, especially in cement plant construction; strengthen mobilization of resources from other economic sectors for joint investment, preventing closed investment construction.

6. Promote collaboration between companies and state corporations, between construction material production, mechanical engineering, and construction installation enterprises to form large construction industry groups with sufficient strength to compete with foreign contractors while paying attention to joint ventures and collaborations with foreign contractors to access and expand markets in regional and global countries, absorb new technologies and international financial sources.

7. For the production of construction materials sector:

Units must conduct a comprehensive assessment of the current status of production technology, management, and product sales networks; the degree of initiative in input factors, especially raw material supply; review and recalculate product costs.

Expand and diversify products, broaden joint venture and collaboration forms in production and business to ensure profits and market share.

Increase investment in researching and applying new technologies.

For clinker and cement products: move towards eliminating wet process rotary kiln technology before 2010; effectively implement the transition plan to convert vertical kiln production facilities to rotary kilns before 2020; improve cement quality; focus on producing high-grade cement types, gradually reducing the proportion of PCB30 cement.

Cement factories must study and apply schemes for utilizing excess heat to generate electricity for cement production in order to reduce power costs, lower production costs while thoroughly addressing environmental issues. Entrust the Institute of Construction Materials to research and guide units in applying this technology, aiming to widely disseminate it throughout the industry.

For ceramic tiles, ceramic products, granite, and Cotto products: enterprises need to focus on deep investment in technology, invest in new product design work, and apply new decorative technologies to create higher-value products with greater economic efficiency and increased competitiveness.

For sanitary ware and construction glass products: focus on deep investment in technology, develop training plans for staff, hire experienced experts in managing operations and designing new product models to enhance the competitiveness of domestic products and exports to other countries.

8. Vigorously implement measures to financialize enterprises, proactively control cash flow; reconcile, review, and classify receivables, payables, especially loans for construction material production projects (sanitary ware, ceramic tiles, granite, cement projects, etc.); concentrate on resolving uncollectible debts, overstocked products, and materials; establish and implement restructuring plans for enterprise finances, the most effective capital-raising plans. Leverage business advantages in geographical location, land, and brand to expand other production and business activities; organize the dissolution or sale of ineffective production and business enterprises.

9. Fully implement the transformation of State-owned Enterprise Groups into Parent Company-Subsidiary Models; strengthen organizational structures and personnel, and draft new Articles of Organization and Operation for Parent Companies. Strictly comply with the Directive of the Minister of Construction regarding further efforts to restructure, reform, and develop state-owned enterprises under the Ministry during the 2007-2010 period.

To effectively implement the above measures, units are required to develop specific plans and proposals for each item, report to the Ministry by March 30, 2007.

Entrust the Departments of Planning and Statistics, Building Materials, Economics and Finance, Cadres and Personnel, and International Cooperation to guide, urge, inspect, and compile reports on the implementation of the Minister's Directive according to their assigned functions.

The Chairmen of the Management Boards, General Directors of State-Owned Enterprise Groups and Parent Companies in the Parent Company-Subsidiary Model, Directors of independent companies, and Heads of units under the Ministry of Construction are responsible for strictly implementing this Directive.