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BUSINESS IN BRIEF 18/6
The fourth round of
free trade agreement (FTA) negotiations between
More than 70
delegates from
Talks were focused
on opening the market for goods, especially farm products, services and
investment. They reached consensus on a number of issues related to legal
affairs and institution, trade services, trade facilitation, safeguard
measures, and rules of origin.
According to the
Vietnam Ministry of Industry and Trade, the negotiations were conducted in an
atmosphere of openness and mutual understanding.
The two sides
agreed to consult internally before the fifth round due to take place in
Last year, EFTA
signed a memorandum of understanding with
During a visit to
Largest
poly-metallic mine to be operational soon
Hong said the
construction work on Nui Phao poly-metallic mine at Thai Nguyen’s Dai Tu
district has been basically completed three years after the project was
started.
The mine, which has
a total investment of US$500 million, will produce around 3.5 million tonnes
of tungsten, fluorspar, bismuth, copper and gold a year, 80 percent of which
will be exported.
The tungsten
processing factory at the mine will use the latest technologies from Europe,
More than 600
households had to relocate to make land for the mine, which is expected to
create stable jobs for more than 1,000 local workers.
HAGL group
builds airport in Laos
A spokesperson for
the Lao Ministry of Construction confirmed on June 16 that representatives of
the Lao Ministry and the Vietnamese Group have signed an airport building
contract in
Under the contract,
HAGL Group will build the airport which is designed to accommodate large
planes such as ATR72s and FOK-KER70s.
The project is
scheduled to be completed in 2015.
Located in north
The
Vietnam-Mozambique Trade Forum stressed with a large market of 24 million
consumers,
Forum delegates
also encouraged Vietnamese businesses to take advantage of
Mozambique’sincentive policies and investment opportunities, highlighting the
African country’s agricultural, food production, trade, and tourism
industries.
The Ambassador also
described the advantages
More
Chinese companies
are shifting from selling exterior and interior wooden furnishing products
and gifts to buying those items at exhibitions, offering a business chance
for Vietnamese woodwork sellers, said German exhibition firm Messe Frankfurt.
At a press briefing
in HCMC on Tuesday, Stephan Kurzawski, senior vice president of Messe
Frankfurt, said Chinese customers mainly showcased products at exhibitions a
few years ago but now they have become buyers. One feature of Chinese
consumers is that most of them are middle-class people who show keen interest
in sleek and unique products, instead of low-cost items.
He noted Chinese
customers tend to sign contracts for big volumes with makers of wooden
furniture products and gifts to supply restaurants, hotels and casinos in
their country. Vietnamese enterprises should make the most of this
opportunity to become middle- and high-class suppliers for Chinese customers,
he said.
However, it doesn’t
mean that wooden products sellers should have big brands, he said, adding a
furniture supplier for the hotel management firm InterContinental is a small
and medium enterprise at the Messe Frankfurt fair.
Messe Frankfurt, a
fair and exhibition organizer in
The consumer goods
fair Ambiente held by the company in Frankfurt in February attracted more
than 4,680 companies from 81 nations, with 54 entities in the fields of
ceramics, handicraft and interior decoration from
Shrimp
exports top 1bln USD in H1
The country’s
shrimp exports in the first half of this year was estimated to be worth 1.03
billion USD, increasing 1.5 percent over the same period last year.
However, the
Association of Seafood Exporters and Producers (VASEP) forecast that shrimp
exports into the
This is due to the
US Department of Commerce’s (DOC) recent preliminary decision on anti-subsidy
duties on frozen shrimp imported from seven countries, including
The final decision
would be issued in mid-August, according to VASEP, saying that it was
possible Vietnamese shrimp would be hit by two taxes on the
Exports of shrimp
into
The association
said the devaluation of the yen against the US dollar caused difficulties for
those exporting shrimp to
In European
markets, shrimp exports would remain gloomy in the third quarter as the EU
economy struggled.
Dung Quat
refinery imports 300th lot of crude oil
The Dung Quat
Refinery in central Quang Ngai province has received its 300th batch of crude
oil, with a volume of 80,000 tonnes, from the Bach Ho field, about 145
kilometres off the coast of
The refinery’s
operator, Binh Son Refinery and Petro-chemical Company, released this
information yesterday.
Since the refinery
was put into operation in 2009, it has imported a total of 23.95 million
tonnes of crude oil, of which 20.575 million were sourced from the Bach Ho
field and other oil fields in
The company plans
to increase the amount of crude oil imported from abroad to gradually replace
that extracted from the Bach Ho field.
In the first five
months of 2013, the Dung Quat refinery processed 3.1 million tonnes of crude
oil to produce 2.7 million tonnes of products and generate over VND60
trillion (US$2.88 billion) in revenue.
Other
crops’ problem striking Mekong Delta
Local experts and
leaders of the Vietnam Food Association (VFA) have recently called for local
farmers to resort to other crops given the third rice crop’s disadvantages
but the question on how to ensure outlets for new products is still unknown.
At a conference
held in the Mekong Delta city of
Phong ascribed his
proposal to food oversupply worldwide, especially huge inventories in
However, Le Van
Banh, director of the Mekong Delta Rice Research Institute, wondered what
farmers would grow if they stop the third rice crop as well as who will look
for outlets for their products then.
Several farmers
said meager profits they earn from the third rice crop help them make ends
meet and pay school fees for their children in the face of economic
difficulties, Banh told the conference.
The local
agricultural industry has encouraged farmers to switch to planting other
crops and raising other animals but no relevant authorities dare to name
those crops to be adopted accordingly, he stressed.
In fact, Can Tho
University has repeatedly deployed the model of shifting from rice farming to
other crops for years. But the problem is that the model only benefits small
scale farmers, while bringing nothing if launched on a larger scale, Banh
noted.
The proposal on
shifting from rice farming in the third crop to others came after many
experts had warned of the crop’s dark side, including small benefits, high
production costs and bad environmental outcomes.
In 2009-2011,
numerous provinces in the delta focused on enhancing the closed dyke system
to grow the third rice crop to ensure food security and produce more rice for
exports in line with the instruction of the Ministry of Agriculture and Rural
Development.
At that time, the
break of the dyke system in Sa Rai Town in Tan Hong District in
Three dyke systems
suffered breaks in Tan Hong in 2011, including the Ca Mui northern and
southern sides and Ca Vang Field, causing damages worth over VND30 billion,
said Phung Thanh Hai, chairman of Tan Hong District.
Regarding this
issue, Nguyen Tri Ngoc, director of the Cultivation Department under the
agricultural ministry, then told local media expanding the third rice crop in
the Mekong Delta is the right policy with an aim of producing an additional one
million tons of rice to serve local demand and exports as part of the
national food security program. On the contrary, numerous scientists voiced
their disagreements with the policy, citing the dangers caused by the crop.
VSA: Cut
roofing sheet exports to avoid dumping charges
he Vietnam Steel
Association (VSA) has advised producers of galvanized and color-coated
roofing sheets to scale down exports and control prices of products sold to
The steel associations
of
The Malaysian Iron
and Steel Industry Federation said cheap roofing sheets from
Similarly, the
Thailand National Iron and Steel Industry Club said the volume of Vietnamese
galvanized and color-coated roofing sheets exported to
The Thai side
warned that if
To ease the
tension, VSA proposed producers of galvanized and color-coated roofing sheets
curb exports and control prices of products sold to
In the local
market, Thai Trung Steel Co. with a production capacity of 500,000 tons per
year started operation in May. Meanwhile, Middle Region Steel Co. with a
capacity of 250,000 tons a year has been producing steel bars and is now
switching to steel wire production.
An oversupply has
caused a strong competition among domestic steelmakers, said VSA in a report
on steel production in the first five months, which the Daily obtained on
Wednesday.
Many steel firms in
the north this May reduced their prices by about VND400-600 per kilo. Some
companies cut prices 4-5 times a month to maintain market share.
On May 30, VSA
asked large companies such as Hoa Phat, Thai Nguyen Iron & Steel, Vietnam
Italy Steel and Vietnam Germany Steel to stabilize prices and maintain a
healthy competition, and stop price guarantee measures to prevent price
conflicts from damaging the entire industry. However, after just over a week,
steel producers continued to slash their prices, disturbing the northern
market.
As local supply
exceeds demand, businesses are forced to boost exports, but they run into
anti-dumping cases and self-defense measures adopted by some countries to
protect their producers.
There are some 20
companies producing and exporting galvanized and color-coated roofing sheets
to
Shrimp
exports to face difficulties Jul-Dec
Although
According to a
report on
Meanwhile,
According to
Shrimp exports to
the EU, another major market of
In related news,
although some scientists have announced the cause of massive shrimp deaths in
the Mekong Delta in recent times, the situation is still complex and thus
farmers have decided to sell shrimp early to cut losses.
According to Nguyen
Van Tuan, who transports shrimp for farmers in
Farmers Nguyen Van
Doi in Cau Ngang District also harvested shrimp in his 0.5-hectare pond to
avoid losses after detecting scattered shrimp deaths.
Shrimp harvested
early cannot be exported due to small size (100-150 shrimps per kilogram) but
are consumed domestically with a price of VND60,000-70,000 per kilogram,
according to farmers.
Initial statistics
of the Sub-department of Fisheries in
A similar situation
is reported in
Early last month,
scientists of the
According to a
research team led by Professor Donald Lightner at the university, the agent
causing AHPNS on shrimp in the Mekong Delta over the past years is Vibrio
parahaemolyticus.
The Sub-department
of Fisheries in
“Although the cause
has been identified, no solutions have been worked out,” said Loc.
The Animal Health
Department under the Ministry of Agriculture and Rural Development has only
asked shrimp farmers to farm shrimp having clear origins and quarantine
certificates of veterinary offices. Besides, farmers should ensure a healthy
farming environment to increase their resistance, especially shrimp under one
month old.
Japan wants
to shift seafood investments to Vietnam
Many Japanese
investors have recently started to shift their seafood investments from
Nguyen Huy Dien,
deputy head of the directorate, said on the sidelines of a meeting held by
the Vietnam Association of Seafood Exporters and Producers (Vasep) on
Wednesday that the directorate on Wednesday had a working session with a
Japanese delegation of parliamentary members and enterprises coming to study
the seafood farming and processing sector.
The Chinese market
has lost its appeal to Japanese enterprises, and thus they want to invest in
According to
The shrimp export
to
Last month, Japan
increased the level of Trifluralin residues allowed in Vietnamese shrimp by
500 times to 0.5ppm, making it easier for Vietnamese shrimp exporters.
Vasep has forecast
the country’s shrimp shipments to
However, the
Japanese yen fall against the U.S. dollar has made shrimp import and
consumption more expensive in that market.
Footwear
exports gain momentum
Vietnamese footwear
exporters are looking forward to big gains this year as their revenue in the
January – May period surged 11.4 percent year-on-year to 3.1 billion USD, a
positive figure amid the global economic malaise.
According to the
Vietnam Leather and Footwear Association (LEFASO), domestic footwear
producers have secured a stable supply of orders. Apart from sports and
canvas shoes for export, the sector is focusing its on briefcases and
handbags to rake in higher returns.
To earn 9.7 billion
USD from exports this year (10 percent higher than last year’s figure), the
sector is seeking more orders from
Notably,
The rate of
locally-made materials is a mere 40 percent. This is expected to increase to
between 60 and 65 percent this year once the Trans-Pacific Partnership
agreement is signed.
The Ministry of
Industry and Trade is encouraging companies to enhance investment in
materials production using environmentally friendly technology. The move is
expected to put
Once the Vietnam–EU
Free Trade Agreement comes into effect, preferential taxes will be cut from
14.3 to zero percent. From early next year,
Capitalising on
future trade agreements between
The
Property experts call for new approach
Government
officials and experts met yesterday to discuss ways to revitalise the
property market through several measures, including resolving bad debts,
adjusting land prices, and balancing supply and demand.
Speaking at the
seminar, Chris Brown, general manager of Cushman and
Citing John
Sheehan, author of the book Optimising Distressed Loans, Brown said that
markets would not recover until non-performing loans were recycled at a price
low enough to create widespread confidence.
"Sentiment is
a key to recovery," he said.
The seminar, themed
"Revitalising Vietnam's Property Market", was organised by the
Vietnam Investment Review newspaper and Cushman & Wakefield Co.
Brown noted that
one of the biggest barriers to entry, and the single biggest factor in
ensuring profitable property development, was the price of land.
He said that
Dang Hung Vo,
former deputy minister of Natural Resources and Environment, said since 2010
the property market had seen a surplus of supply, resulting in a big
inventory of high-priced and medium-priced houses.
As a result, supply
and demand became imbalanced.
He said this was an
inevitable result of an investment boom that was not adequately and
effectively controlled, even though it had contributed to economic growth.
The property market
boom also fueled inflation.
Last year, amid a
large number of property inventories as well as non-performing loans at
commercial banks, investors reduced prices to a very low level, he said.
But their products
failed to sell, Vo said.
Meanwhile, although
there was a high demand for cheaper houses, the supply was insufficient.
Nguyen Viet Manh,
head of the State Bank of
In addition, as
long as there is a huge unsold volume in the top-end housing and
office-for-lease market, the supply for low-end and social housing will
remain modest.
Manh said there was
a need to restructure the property market to match people's actual demands.
In recent months,
many commercial housing developers in
They have also been
able to access the government's new credit package designed to help builders
and investors save costs and lower prices.
Many said this was
a good sign that the market was responding to people's housing demands.
However, the
property market would remain stagnant for the rest of the year, and would not
likely rebound in the near term.
On May 18, the
Government passed Decree 53 that regulates the establishment, organisation
and operation of a national asset management company (VAMC) for Vietnamese
credit institutions.
The State Bank of
Vietnam (SBV) is ramping up efforts to be able to put VAMC into operation on
July 9.
The asset
management company is expected to help the economy tackle bad debt and
revitalise the moribund property market.
This could help
thaw the amount of unsettled bad debt and bring vitality to the market, he
said.
Taxes also need to
be adjusted, according to Nguyen Mai, former deputy chairman of the State
Commission for Cooperation and Development (now the Ministry of Planning and
Investment).
He said the
reduction of corporate income tax and value-added tax rates were necessary to
help businesses, including property firms.
The Government and
ministries should also introduce guiding documents to bring these regulations
into effect as expected from July 1, he added.
Housing policy,
including the Housing Law and the Law on Property Business, also plays an
important role in the recovery of the property market.
Mai said that in
May the Ministry of Construction noted the Housing Law was eight years old
and the Law on Property Business, seven years old.
The two laws had
failed to inspire market players to take part in housing, especially social
housing development, he said.
Housing prices in
general are too high relative to most people's incomes, he added.
The deputy chairman
of the Vietnam Federation of Civil Engineering Associations, Pham Sy Liem,
said it was now time to give birth to new laws that are closer to the reality
of today's market.
Most banks'
gold accounts to close
Most banks have
closed their gold accounts to meet the State Bank of
The SBV said that
only five or six banks still had outstanding gold accounts to date, adding
that the banks would be pushed and even ‘forced' to close all gold accounts
by the end of this month to meet the deadline.
According to the
SBV, gold deposits fell by 75 percent in the first five months of this year,
while gold loans decreased by 40 percent.
Deputy Director of
the central bank branch in HCM City Nguyen Hoang Minh said that gold auctions
had helped banks to cut their outstanding gold deposits.
The central bank on
June 13 sold 25,900 taels of gold out of 26,000 on offer at its 30th auction.
At the auction,
gold bars were sold to eight banks and gold firms from 40.63 million to 40.58
million VND per tael, slightly less than at previous auctions, according to
the SBV.
In the previous
auction three days earlier, the central bank sold the same volume at
40.66-40.63 million VND per tael.
Year to date, the
SBV has organised 30 auctions for 848,000 gold taels, of which it has sold
761,600 taels or 27.3 tonnes. Industry insiders said that most of the gold
had been bought by banks to close all their accounts before the June 30
deadline.
Standing Vice
Chairman of the Vietnam Gold Trader Association Nguyen Thanh Truc expected
the gold premium to gradually narrow starting from June 30, thanks to lower
domestic demand.
Liberty Vietnam
Insurance Company on Wednesday introduced Liberty MyCar, a collision
insurance product applicable to cars with eight seats or less and a mileage
of more than three years.
Liberty MyCar
covers more than 95% of risks related to physical damage with premiums lower
than Liberty AutoCare, another auto insurance product with more comprehensive
coverage, by 25-60%. The insurer will cover 100% of repair cost and
depreciated spare part cost.
According to
Policyholders will
have their cars repaired at qualified garages appointed by
Enormous
demand for low-cost homes: report
Some 700,000
low-cost homes will need to be built from now to 2015 to meet the demand of
citizens, said the Agency of Housing and Real Estate Market in a report to
the Minister of Construction.
From now to 2015,
about 1.74 million people in urban areas nationwide will be living in housing
with less than five square meters per person, and 1.71 million workers will
have the demand for a condo.
To meet the housing
demand of low-income people and industrial workers, some 700,000 apartments
will need to be built in this period.
Later, from 2015 to
2020, an additional 200,000 budget homes will be sought after.
The demand for
low-cost condos is strong in a number of localities. For example,
Some of these
localities have made plans for low-cost housing development in the period
2012-2015.
The Ministry of
Construction has requested localities to boost development of low-cost
housing projects to address the needs of citizens.
So far, 157
low-cost housing projects comprising 68,500 flats are under construction with
total investment of VND19.9 trillion, Among them, 58 projects costing VND10.9
trillion will provide low-income earners with over 33,000 apartments, and the
99 other projects worth VND9 trillion will serve workers with about 35,500
flats.
A number of
large-scale budget housing development programs have been deployed. For
instance, a social security housing project is being implemented in Binh
Duong with a total of 64,000 apartments, of which 4,700 units have been
completed.
A housing project
for workers is being developed in
Since last month,
six budget condo projects have got off the ground.
They include the
low-cost housing projects in
In response to
Resolution 02 dated January 7, 2013 of the Government, the construction
ministry has issued Circular 02/2013/TT-BXD, giving guidelines for apartment
project restructuring and conversion of commercial projects into low-cost
ones or service works.
So far, 50 project
owners have applied for revision of apartment sizes and transformation from
commercial housing projects to low-cost ones. Their projects consist of
31,000 apartments and are mainly located in big cities like
In
In HCMC, two
commercial housing projects with more than 100 apartments are awaiting the
nod to change their apartment sizes, and 20 other projects with nearly 10,000
condos seek the nod to transform into budget projects.
In Dong Nai, two
commercial housing projects with over 1,000 apartments are seeking permission
to switch to the low-cost segment.
Shortcomings
in VAT Refund Program
Several businesses
involved in pilot plan to introduce Value Added Tax (VAT) refund to foreign
visitors have been unable to sell their products while others have attracted
a lot more customers, said Nguyen Duc Chi, an official from the Department of
Culture, Sports and Tourism in Ho Chi Minh City.
According to Chi,
HCMC has several popular shops where foreigners drop in frequently while in
Chi said that it is
necessary to call on these businesses to participate in the VAT refund scheme.
The pilot plan for
VAT refund was launched for a one year trial period in July 1 last year to
encourage foreign visitors to make purchases in
However, most items
listed in the program are imported fashion products like clothes, shoes,
handbags, watches and jewelry, while domestic products were not mentioned at
all.
In one year since
implementation, the VAT Refund Program has attracted 47 businesses, with 190
shops in
Of these, HCMC has
32 businesses with 140 shops,
Of the 14
enterprises in
VAT refund has
mainly been conducted by some companies in HCMC with delivery channels in
large trade centers, selling high-class import products.
According to
Vietnam Customs, more than 1,540 foreigners have received VAT reimbursement
worth VND4.3 billion (US$205,000) from July to December last year.
In the first three
months of this year, the number grew to 1,280 visitors receiving VAT
repayment of VND3.8 billion ($181,000).
HCMC alone has
1,158 visitors getting VND3.36 billion ($160,000) of VAT back. The VAT Refund
Program has been introduced at Noi Bai and
Foreign visitors
receive 85 percent of the VAT bill value. The remaining 15 percent is used
for paying services to banks.
Those wanting a
refund must present a bill and fill a tax refund form valid for 30 days
before date of exit. Goods purchased must have a total value of at least VND2
million (US$95) and purchased in the same shop on the same day.
‘Green
Consumption Month’ launched by
The 4th Green
Consumption Month has been launched by the Saigon Union of Trading
Co-operatives (Saigon Co.opMart).
Accordingly, Saigon
Co.opMart will offer thousands of gifts to consumers and 50 percent discount
on more than 2,000 products during this period.
The program aims to
raise people’s awareness of environment protection and increasing consumption
of green products; as well as encouraging enterprises to improve quality of
goods and services to attract more customers.
Relocation
of Bien Hoa IZ necessary to save Dong Nai River
The People’s
Committee of Ho Chi Minh City has proposed to the People’s Committee of
neighboring
The IZ evacuation
will help reduce water pollution to the
By 2025, it is
estimated that HCMC will need 3.7 million cubic meters of water a day, of
which the
Warmer
times for
A Cushman &
Wakefield seminar on June 13 put revitalising
Many participants
said the market would be better by the year’s end and deputy minister of
Planning and Investment Dang Huy Dong said the government was seeking to deal
with the country’s economic difficulties and Resolution 02 introduced
important measures to help ensure property market stability and growth.
The State Bank has
also rolled out many measures to support the market, paving the way for
low-income people to buy houses. In May, the central bank for the second time
this year reduced the prime interest rates to help banks further cut down
lending rates. Some banks have launched low-interest credit packages.
Four state-run
commercial banks – Agribank, BIDV, Vietcombank and VietinBank – have slashed
their lending rates to below 13 per cent.
Meanwhile, the
State Bank has just introduced a VND30 trillion ($1.4 billion) credit package
to lend state employees, people in the armed forces and low-income people to
lease or buy social housing and commercial housing which is below 70 square
metres and costing at most VND15 million ($720) per square metre, as well as
corporate customers engaged in building social housing or commercial housing
converted into social housing. The package’s lending rate is 6 per cent, per
year.
The package had
drawn big public attention, said Nguyen Viet Manh, head of the State Bank’s
Credit Department. He said the credit package was involved with the State
Bank and the Ministry of Construction.
Sacombank deputy
CEO Phan Dinh Tue said he thought it was a positive move to support the
market. He said Sacombank early this year launched a VND1,600 billion ($76.5
million) housing loan package and disbursed VND1,350 billion ($64.6 million)
to 240 clients.
Chris Brown,
general manager of Cushman and
He said
Brown said some
commentators suggested that real estate could make up over 70 per cent of non
performing loans in
“The situation is
toxic and unless both banks and investors move quickly to deleverage then the
recovery will be a lot slower and more painful. There are clear signs of
distressed property assets all over
He said the
newly-established Vietnam Assets Management Company’s budget was limited
compared to NPLs. Meanwhile, NPLs are not attractive to investors at the book
value as the reality is they have decreased the loans by 30-40 per cent.
Dang Hung Vo,
former deputy minister for Natural Resources and Environment, also said the
NPL problem must be solved first.
An idea floated at
the seminar was
Participants said
they expected the National Assembly would act rapidly towards the issue.
Another market
problem was land pricing was high, said Brown. Vo said
Some large-scale
social housing programmes underway such as ones in Binh Duong province
developed by Becamex IDC, in Dong Nai province by the MoC’s IDICO, in
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Hai, 17 tháng 6, 2013
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