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BUSINESS IN BRIEF 19/3
Licence for
cloth production factory
The southern
Covering an area of
4ha, the plant will be built in the Tan Tao garment and textiles industrial
zone in Nhon Trach district.
In 2005, the
company constructed a $15 million factory in Long Thanh industrial zone.
Due to its
implementation of foreign investment incentives, Dong Nai has become one of
the leading provinces for attracting investment from overseas.
Vietnamese Deputy
Finance Minister Do Hoang Anh Tuan is on a visit to
At a working
session with Italian Deputy Minister of Economy and Finance Stefano Fassina
on June 17, deputy minister Anh said he hopes the two countries’ Governments
and finance ministries will set out concrete plans of action to increase
economic links in general and cooperation in finance-customs, tax and debt
management in particular.
He urged the
Italian Ministry of Economy and Finance to play an active role in promoting
the friendship between the two countries.
The Vietnamese
Deputy Minister spoke highly of
In reply, the
Italian Deputy Minister appreciated Tuan’s visit saying that it is a step to
realise agreements reached by the two countries’ high-ranking leaders earlier
this year.
The Vietnamese
delegation is scheduled to have working sessions with experts at the Italian
ministry. The two sides hope the sessions will map out measures to fulfill
bilateral cooperation programmes in the time to come.
CEO must
avoid losses to keep job
The Chief Executive
Officer (CEO) of the Viet Nam National Textile Garment Group (Vinatex) will
be dismissed if the firm suffers losses in two consecutive years, according
to new Ministry of Industry and Trade (MoIT) regulations.
Vinatex have agreed
to the draft of a new Charter and Regulation which will see CEOs lose their
job if targets are not met.
Vinatex is a
limited liability company, which is 100 per cent owned by State and has
charter capital of VND3.4 trillion (US$162 million).
The Government
wants to develop Vinatex as a specialist in the textile industry.
While the State
allows the company to set up financial funds in order to perform its specific
tasks, they are not permitted to exceed the firm's charter capital.
Seven
drinking water firms suspended
Southern
Among the
companies, Tan Hoa Duc in Ho Nai Ward and Thien Hao in An Binh Ward were shut
down indefinitely.
The move was made
after the department's latest inspections of 26 drinking water producers in
the province this month.
Right time
to invest in property: expert
Having already hit
bottom, the property market is now ripe for new investment, chief economist
Alan Pham of Vina Capital said at a Family Day event for investors and buyers
recently held in
Alan Pham, who has
30 years of experience in working in the financial market in the
Speaking at the
event organised by Vina Dai Phuoc, a joint venture between Vina Capital and
DIC Corp, Alan Pham said the property market in the
Since that time, it
has seen modest improvements, he said, adding that
He said that
But next year, it
would pick up, he added.
With such an
outlook, investors should begin seriously looking at the market, Alan Pham
advised.
Besides the
expected upward trend next year, the Vietnamese economy is showing signs of
stability after the Government took steps to control inflation and the value
of the dong, he said.
In addition, the VN
Index has jumped 18-20 per cent since the beginning of the year.
Property firms,
including Nam Long and Tu Liem Urban Development JS Co, have begun to see
price increases on the
"The
Government has paid a lot attention to the property sector because it has a
major role in increasing the country's GDP," he said.
The property sector
also influences the volume of factory construction activity and the creation
of jobs for labourers.
With such a key
role in the economy, the Government has issued a VND30 trillion support
package designed to help the property sector to get back on its feet.
Speaking at the
event, Mike Gammel, general director of Vina Dai Phuoc, called for investment
in the Dai Phuoc Lotus Ecological Urban Area's Sen Phuong Nam Villa project
in Nhon Trach District, southern
Eighty-five out of
332 villas have already been handed over to buyers. The villas, which measure
200-400 square metres each, cost VND10 million per sq.m.
The Sen Phuong Nam
Villa project requires $64 million in capital. It includes a park,
entertainment zone and sport centres, all of which are expected to be
completed in July.
The project won the
award for the Best Residential Development in
Gammel said the
eco-urban area will increase in value, especially after road infrastructure
projects are completed in District 9 and Nhon Trach District, as well as a
road extending from the eco-urban area to the new Long Thanh airport.
The Long Thanh –
Country has
104 projects dedicated to social housing
There were 104
social housing projects nationwide as of the end of May, 47 of which were
converted from commercial ones, according to the construction ministry.
There were also 38
projects for housing workers in industrial zones.
Deputy Minister of
Construction Nguyen Tran
HUD warned
to pay fees for Ha Tinh housing project
Central Ha Tinh
Province's People's Committee urged the Housing and Urban Development
Corporation (HUD) to pay land use fees worth VND97 billion ($4.62 million)
for its housing project in Ha Tinh City.
If HUD did not pay
the debt before June 20, the project would have its licence revoked, the
committee said.
The housing
project, covering 9.1ha in the north of the city, was licensed in 2011. But
HUD still has not paid the land use fee, even when pressed by provincial
authorities.
Construction
of SeABank Tower kicks off in HCM City
SeAbank started the
construction of
The tower is to
cover an area of more than 578 metres, with 18 floors.
It will include the
bank's head office in
Savills
sees good signs for Nha Trang property market
Housing demand in
Nha Trang will sharply increase in the coming months, as local residents live
in smaller families and many people from Ha Noi and
Home prices in
townships range from VND1.3 billion (US$61,910) to VND2.5 billion ($119,050)
per unit, while villas cost VND3-5.5 billion per unit.
The Ministry of
Construction aims for
The aims were
included in the construction science and technology development strategy
issued recently.
If the development
of construction science and technology reached regional and world levels,
this would help promote the sustainable development of the industry, the
ministry said.
The country also
aims to improve technologies for designing and building nuclear power plants,
manufacturing advanced building materials and treating water.
Ministry
approves first ten investors for loan package
The Ministry of
Construction recently approved the first ten real estate companies for its
VND30 trillion (US$1.42 billion) loan package.
Those include Dang
Xa's Viglacera social housing project, Song Da Construction and Investment
JSC's project in the Ha Dong area of the capital, Dai Hue Investment
Construction Company's Dong Dau project in central Nghe An Province and 579
Company's project in
The companies were
pioneers in constructing social housing projects following the Government's
Resolution 02/NQ-CP, so they will receive loans with an interest rate of 6
per cent per year for 10 years.
These loans will
account for VND9 trillion of the VND30 trillion package.
The list is
currently being reviewed by the State Bank of
ANZ offers
preferential interest rate to homebuyers
ANZ Bank is
offering a preferential lending interest rate of 6.5 per cent per year for
the first three months on home purchase loans or loans with a housing
mortgage.
The rate reverts to
the normal 10.5 per cent at the end of three months.
The bank also
provides property loans with a fixed interest rate of 12.5 per cent for two
years.
Generali
Generali Vietnam
Life (GVL) officially opened its branch office in Ha Noi last week.
Generali Vietnam
Life obtained its business license in 2011 from the Vietnamese Ministry of
Finance. It launched its group business the same year and its tied agency for
individual business in
GVL is the latest
Generali Group venture to expand into the Asian market.
Founded in
Lychee
exports to
The volume of fresh
lychees exported to
The figure
represents a two-fold increase over last year's exports, according to the
Customs Department of Lao Cai International Border Gate.
So far this year,
nearly 20,000 tonnes of lychees, mainly from northern Bac Giang province,
have been exported to the neighbouring country through the Kim Thanh border
gate.
Before the harvest,
many Chinese dealers came to Bac Giang province to sign all-in contracts and
inspect lychee quality. Meanwhile, Vietnamese traders were responsible for
packaging, transporting and exporting the fruit.
The Bac Giang
Department of Industry and Trade also worked with Lao Cai authorities to
create convenient conditions for the export of agricultural products in
general and lychees in particular and ensure that farmers would benefit from
the arrangement.
Finance
ministry may implement export tax for gold items
Gold (including
platinum-plated gold) in unprocessed or semi-manufactured or powder forms
will be subject to export tax of 2 per cent.
Import tax for
other products, including jewelry and jewelry parts in precious metal or clad
with precious metal, is expected to be 1 per cent.
Green Nhon
Trach power plant scoops top award
The Nhon Trach 2
Combined Cycle Power Plant (CCPP) is making an eco-friendly contribution
toward alleviating the country's power shortages.
With a capacity of
750 megawatts (MW) and a plant net efficiency of over 57 percent, the power
plant received the gold award in the Fast-Track Power Plant of the Year
category at the Asian Power Awards 2012.
It was the first
Vietnamese company to receive the prestigious award.
The Asian Power
Awards, dubbed as the Oscars of the power industry, is organised annually to
recognise top achievers in the region as they strive for quality and
excellence.
The Nhon Trach 2
CCPP began commercial operations in late 2011 after a fast-track construction
period of only 28.5 months, 1.5 months earlier than the contracted schedule.
According to a
report from Petro Viet Nam Power Nhon Trach 2 Joint Stock Company, the
project was judged as highly safe, effective and economical, with a short
construction schedule.
Thanks to advanced
Siemens burner technology, the plant's nitrogen oxide emission at full load
on gas is very low, at 25 ppm (parts per million) or less.
The power plant
also tops the contractual figures both for power output and electrical
efficiency, as well as lower emissions.
The plant thus sets
a new power quality benchmark for
Using modern
technologies, Nhon Trach 2 CCPP has achieved the highest efficiency of all
thermal power plants in
The plant has
contributed 5 billion kwh of electricity to the national power grid.
In the first nine
months of 2012, the plant hit 3.2 billion kwh, meeting the assigned plan,
even during difficult economic times.
The installed
electrical capacity nationwide is approximately 21 gigawatts, which can
accommodate only 10 percent of the overall demand.
Stock
options aim to help retain top staff
A growing number of
listed companies are launching Employee Stock Ownership Plans (ESOP) in a bid
to increase their charter capital while providing incentives to retain
qualified employees.
ESOP is a type of
employee benefit plan that buys and holds company stock for the benefit of a
broad group of employees. This programme is also used to align the interests
of a company's employees with those of the company's shareholders.
Earlier this month,
leading private sector business Masan Group (MSN) issued nearly 18 million
shares out of a total of 20 million shares planned for its ESOP this year to
28 employees. The company said this share distribution aimed to reward
employees for their accomplishments at work.
These types of
shares are freely tradable on the stock exchange after their distribution.
MSN shares are being traded at around VND100,000 (US$4.76) a share.
Also in early June,
software giant FPT Corp (FPT) reported it issued over 1.35 million shares to
89 employees who made outstanding contributions to the company last year.
These shares are
subject to a transfer restriction within three years of issuance, however.
FPT closed yesterday at VND45,000 ($2.14) a share.
Many other listed
companies at their shareholders' meetings this year revealed similar ESOP programmes.
Sacombank (STB)
leads the trend with a plan to issuing 32.2 million shares to its key
employees. Sucrerie De Bourbon Tay Ninh (SBT) is close behind with a plan to
distribute 6.57 million ESOP shares, equivalent to 4.93 per cent of its
charter capital, to its loyal staff.
Company such as
seafood processor Hung Vuong Corp (HVG), property developer Tan Tao
Investment Industry Corp (ITA), Saigon Securities Inc (SSI), Ben Tre
Aquaproduct Import and Export Co (ABT) and furniture maker Dai Chau Group (DCS)
are also devoting attention to ESOPs.
All of these
companies announce their ESOPs as part of efforts to retain high-performing
employees.
However, according
to many market observers, companies should make clear how this programme will
be carried out and who can enjoy this benefit to ensure fairness and
transparency.
Steel firms
struggle to cut inventory
Domestic steel
producers are facing difficulties because of the quiet real estate market,
decreased selling prices, imported steel and shortage of capital.
The Ministry of
Construction reported last month's steel output was 270,000 tonnes, up 13,000
tonnes over the previous month. As a result, steel inventories grew from
330,000-350,000 tonnes.
Statistics from the
General Department of Customs also showed that imported steel had reached
800,000 tonnes so far. The imports were still higher than domestic steel
production and consumption though the amount was 11.6 per cent lower than the
same period last year.
Several steelmakers
reported they had not been able to access loans at low interest rates.
In addition, the
steel industry was faced with a range of challenges from European Union
countries which had applied anti-dumping taxes on Vietnamese steel imports.
The Viet Nam Steel
Association said the most difficult factor for the industry was a shortage of
capital. Steel businesses had to depend on loans, imported materials and
old-fashion technologies, resulting in high production costs and low
competitiveness.
The association's
figures showed that nearly 30 per cent of steel makers had used backward
technology, 40 per cent used average technology and 30 per cent used modern
and advanced technology.
The association
said the businesses should gradually introduce new technology as the cost of
energy had been on the rise. This should be a long-term solution for the
industry, it said.
The sector should
also invest in material production and be less dependent on imports.
Do Duy Thai,
chairman of Pomina Steel Company's Management Board said interest rates for
mid-term loans should be reduced to support steel producers.
The association
chairman Pham Chi Cuong added the businesses should themselves find solutions
by proper and regular planning and setting up distribution networks.
Cuong suggested
businesses promote relations with agents and update market information.
Project to
help SMEs be more competitive
For the last two
years, over 2,200 small and medium enterprises (SME) across
The effort was part
of a project to enhance the capacities of SMEs, especially those in rural
areas, after
It was organised
jointly by the Viet Nam Association of Small and Medium Enterprises, Science
Institute for SMEs and the Beyond WTO Programme.
Under the project,
23 SME consultancy offices were set up at association branches in 23
provinces nationwide, including Thai Binh, Hung Yen, Nghe An, Dak Nong and
HCM City.
Association vice
president Dinh Hanh said that in the past, when enterprises sought help from
the association in terms of tax policy, capital and market information, the
branches had to rely on other agencies.
But now, all would
be available at consultancy offices.
Project director
Pham The Hung said SMEs in rural areas were in need of advice on capital
access, technology application, trade promotion and legal documents about
"The project
also offered training courses for businessmen and consultants at SME
consultancy offices while developing an online database that helped them
better access information," he said.
The online
database, or "online integration library" as it was known, at , and
, provided nearly 3,000 documents about economic integration, domestic and
international regulations and policies, business start-ups, business
governance and market studies.
Dr Nguyen Nghia,
from the Viet Nam Intellectual Property Association, said information access
was vital for enterprises if they were to become innovative and more
competitive.
Challenges in
global economic integration should be viewed as a motivation for growth,
Nghia said, emphasising that when equipped with better understanding,
enterprises could make use of information and apply higher technology to add
more value.
Assistant Professor
Nguyen Manh Huan, of the
Such a network of
offices would help share information and other resources, he said.
The project costing
around US$290,000 was implemented in November 2011, as part of the Beyond WTO
Programme, and funded by the Australian Agency for International Development
(AusAID) and the UK Department for International Development.
Fishing teams
protect Phu Yen
Nearly 7,000
fishermen and 787 vessels have been recruited to improve safety off of
Vietnamese shores as part of an initiative set up in coastal
The manpower has
grown to produce 103 fishing teams under the provincial Border Guard in
co-ordination with 27 coastal communes and wards since the force was first
set up in 2005. Initially, four teams were established with just 28 vessels
at their disposal.
With the majority
operating offshore, the teams account for 11 per cent of existing fishing
vessels in the province.
Team members are
educated by the border guard stations on national border law, the 1982 United
Nations Convention on the Law of the Sea, the Government's declaration on
territorial sea, contiguous zones, special economic zones and
Since 2011, the
teams have been backed by VND64 billion (US$3.07 million) to install 120
pieces of satellite positioning equipment using Movimar technology to help
update weather conditions, while enabling authorised agencies to monitor the
vessels' sea routes and fishing grounds, as well as provide support to boats
in distress.
Over the past three
years, the teams have taken part in 254 rescue operations, including the
assistance of four foreign ships.
In January's most
recent case, the PY 90144 TS tuna fishing vessel captained by Luong Cong
Xuyen from Phu Dong Ward,
The Filipino
fishermen were safely taken to the mainland, where they were given medical
care, food and accommodation before returning to their homeland in early May.
Delta hit
by low rice prices
Cuu Long (
On Friday, prices
of paddy and rice remained very low. In the Cuu Long (Mekong) Delta provinces
like An Giang, Long An and Tien Giang, undried paddy sold for VND3,550 –
VND3,600 per kilo while dried paddy fetched VND4,850 – VND4,950 per kilo.
The prices of
long-grain paddy was VND5,100 – VND5,200 kg, much lower than the 2012-2013
winter-spring crop.Do Anh Tuan, a farmer in Tan An Commune, Kien Giang
Province's Tan Hiep District, said his family has harvested over one hectare
of IR 50404 paddy, but "the price was very low, only VND3,700 per kilo.
Therefore, I have to dry it for preserving.
"There will be
more fields to be harvested in the coming days. We will run out of warehouses
to store the paddy from the harvest. So it will be sold at any price."
Le Chi Vung, Deputy
Director of the Dong Thap Department of Agriculture and Rural Development,
said purchasing for reserves started a little late in his province because
the crop is being harvested earlier than in other delta localities.
The late start
makes it difficult for Dong Thap farmers to sell their paddy, because over 60
per cent of the fields under the summer-autumn rice crop have already been
harvested, said Vung.
Le Minh Duc,
Director of the Long An Department of Agriculture and Rural Development, said
the province has over 230,000ha under this year's summer-autumn rice crop, of
which 20 per cent has been harvested so far. Duc proposed that funds
allocated by the Government to purchase rice reserves are made directly to
the provinces (instead of trading enterprises). This would enable provincial
authorities to use them and give three-month interest free loans to farmers
that the latter can use to repay bank loans and buy farming materials.
Huynh Van Ganh,
Director of the Kien Giang Department of Industry and Trade, said a big
problem is that there is no co-operation between the Viet Nam Food
Association (VFA) and provincial authorities.
He said provincial
authorities are the ones who always know how much rice is sold in each
locality, but the VFA does not consult or inform them when it allocates
quotas for reserve purchases among its member enterprises.
According to Tran
Quang Cui, Deputy Director of Kien Giang Department of Agriculture and Rural
Development, by the end of last week, the province had harvested over
35,000ha of the 240,000 ha under the summer-autumn crop, with an average
output of 5.4 tonnes per ha.
"Kien Giang
farmers have come under increasing pressure when the summer-autumn crop
reached its peak, because a large volume of paddy from the last winter-spring
crop is still unsold," Cui said.
Delta
farmers warned of dragon fruit glut
Many farmers in the
Cuu Long (
The farmers have
been attracted by the high profits that dragon fruit currently offers,
especially with cultivation using lamps in the night to stimulate off season
flowering.
This can bring in
VND400-500 million (US$19,000-23,800) per hectare a year, much higher than
rice and other fruit, according to Long An Province's Department of
Agriculture and Rural Development.
The area under
dragon fruit cultivation in Long An has already reached 2,200ha, exceeding
the area targeted for 2015, department officials said.
Nguyen Van A, who
has a 0.5ha dragon fruit garden in Long An's Chau Thanh District, said the
method of having the cacti flower during the off-season has boosted his
household's income.
A said he earns
profits of about VND100 million ($4,700) a year from his garden. He switched
from rice to dragon fruit cultivation after he saw other farmers in the
district do well.
In Cho Gao
District, which is the major dragon fruit producer in the delta's
Farmers in other
provinces like Tra Vinh and Vinh Long have also cut down other trees to plant
dragon fruit, local officials say.
They caution that
with the areas exceeding zoning plans made by local authorities, farmers
could face a shortage of irrigation water as well as electricity for lighting
used to stimulate off-season flowering.
They warn further
that about 80 per cent of dragon fruit produced is exported to
The quantity of
dragon fruit exported to the
Dragon fruit has
recorded the highest export growth among Vietnamese fruit in recent years,
according to the Southern Fruit Research Institute.
Delta rice
stockpile project begins
Enterprises have
begun purchasing 1 million tonnes of rice for stockpile in the Mekong Delta
under a Government programme that aims to ensure farmers make a profit.
The purchase,
carried out at a time when the farmers in the nation's biggest granary have
harvested their summer-autumn rice, will last until the end of next month.
The Government has
covered 100 percent of interest rates on loans for a three-month term for
businesses buying rice. Assigned by the Vietnam Food Association, 115
eligible enterprises have joined the programme with a targeted amount in each
province. For example: Long An province 91,000 tonnes, Kien Giang 85,000
tonnes and Bac Lieu and Hau Giang 10,000 and 15,000 tonnes.
According to
leaders of Vinh Hung district of Long An province, farmers have been waiting
for enterprises.
The price fixed by
the Ministry of Finance is 4,142 VND average per 1kg of unhusked rice.
According to the
association, with such a low price, plus difficulties in export markets, the
programme could only guarantee a low profit for farmers, less than the 30
percent expected by the Government.
Head of the sales
department of the Dong Thap Food Company, Dang Van Khuong, told Radio The
Voice of Vietnam (VOV) that a 30 percent profit could only be gained if the
unhusked rice was sold at 5,400 VND.
Minister of
Agriculture and Rural Development Cao Duc Phat has also admitted it was a
problem, but it could not be settled during the economic downturn.
Other support
policies will be worked out to help both businesses and farmers, he said.
For example, a
special preferential credit programme would be provided to farmers so they
would stockpile their products.
But in the long
run, he said, there must be stable contracts signed between the two sides to
ensure an outlet for farm produce, particularly rice.
The ministry has
also worked with localities in another programme to encourage replacing rice
with other cash crops on poor quality farming land such as maize or soya
bean.
Earlier this month,
in a meeting to seek solutions to consume farm and aquatic produce, Deputy Prime
Minister Hoang Trung Hai requested the association guide their business
members to buy rice.
Any businesses
found to cause damage to the export enterprise community and farmers must be
excluded from the association, Hai said.
However, according
to many businesses, their biggest challenge was the large stockpile of rice
from previous seasons.
Managers of the
Docimexco JS Company in Dong Thap province said due to the fall in the rice
price after the stockpile of the last winter-spring season, the company still
has 30,000 tonnes in storage, despite looking for partners to export the
remainder.
Association
chairman Truong Thanh Phong assured businesses that the rice market would
pick up from July.
The association
figures showed
In June, some
750,000 tonnes are expected to be exported, raising the exported figure in
the first half this year to 3.5 million tonnes, 100,000 tonnes up from last
year's corresponding period.
Investors viewing
Vietnam’s investment environment favourably has increased over the last six
months, according to a bi-annual survey on the nation’s private equity
outlook done by Grant Thornton Vietnam.
The survey found 41
percent of respondents saying they feel Vietnam is a more attractive place to
invest compared with other destinations, an increase of 14 percent over the
previous survey six months ago.
The financial
distress is Europe and weakening of the US dollar are the main factors for
private equity activities continuing to rise in Asia , especially Southeast
Asia .
Hence the number of
respondents who decided to increase their portfolio in Vietnam has improved
significantly from 29 percent in Q4, 2011 to 45 percent in Q2, 2013, although
the country is still suffering from the economic downturn.
Health care and
pharmaceutical industries have been the most favoured investment areas in the
last three surveys.
High growth rates,
demand for expertise as well as favourable demographics have created a
significant opportunity for investors to invest in Vietnam ’s health care
sector, the survey found.
Education is the second
most attractive sector for survey participants with the same proportion as
last year survey (39 percent). It has been in the top run for more than three
years in succession.
Vietnam is ranked
fourth in terms of the retail sector, which has grown robustly in recent
years.
The Government’s
approval for foreign investors to establish 100 percent foreign invested
companies has made this sector highly attractive to investors.
The fourth most
attractive sector, according to the survey, is real estate and property,
which got 37 percent of the respondents’ votes. Merger and Acquisition
(M&A) deals in the real estate sector are forecast to increase in 2013.
Many real estate developers facing financial difficulties were forced to
transfer their projects, creating investment opportunities for buyers with
long term strategies.
The largest
investment in the sector last year was by Japan ’s Tokyo Group with a total
capital of 1.2 billion USD.
On investment
obstacles, 82 percent of the respondents considered corruption and government
red tape as problems when investing in Vietnam , with the latter component
showing an increase of 10 percent since the previous survey.
Current
difficulties and challenges in the economy means PE investors are becoming
more prudent in their investment strategy and focusing on long term growth
opportunities, the survey found.
Transparency in
business activities emerged as the second most important factor in making
investment decisions. This factor has always been in the list of the top three
most important factors to consider when investing in Vietnam , the survey
report said.
The third most
important factor was cash flow, the life blood of every business.
Other factors
included corporate governance and the skill as well as experience of existing
management.-
Exports of
wood products increase in first 5 months
Wood products are
expected to fetch US$5.5 billion in export value this year as targeted,
according to the Ministry of Agriculture and Rural Development (MARD).
In the first five
months, wood and wood products gained a year-on-year increase of 10.4 per
cent in export value to $2 billion.
Those products
achieved an average export value of $400 million each month during the first
quarter this year. The figure saw a year-on-year surge of 35.2 per cent in
the first two months to $809 million and grew 15.7 per cent in the first
three months to $1.17 billion.
Viet Nam also
increased wood and wood product exports to its various markets, excluding
Germany.
The country saw a
surge of 20.7 per cent in wood and wood product exports to South Korea, as
well as growth of 19.1 per cent in export to China, 16.3 per cent to Japan
and 6 per cent to the US.
Vo Truong Thanh,
head of the Truong Thanh Wood Technical Group, said the economy in major
export markets for these products had recovered, while rivals had reduced
competitiveness in production and exports.
He predicted that
demand for wood and wood products would increase again in the coming months.
MARD estimated that
the export value of processed wood products would see a year-on-year increase
of 10-15 per cent to $5.5 billion.
However,
enterprises exporting wood products would face many difficulties in
production and business due to high input costs.
Many enterprises
were forced to import 70 per cent of the raw materials they needed, as local
companies could meet only 30 per cent of their requirements.
Viet Nam will
reduce the volume of natural wood exploited this year and plans to stop
exploiting natural wood next year, so the local timber industry must make
plans to maintain and expand production in order to achieve its export
turnover target of $5.5 billion this year, the ministry said.
The country has
drawn up sustainable growth plans for the wood product processing industry up
to 2020, according to MARD.
The industry will
prioritise investing in and utilising domestic forests while reducing raw
wood exports and improving management of supply.
Viet Nam needs an
annual 3-3.5 million cubic metres of raw wood materials on average.
As domestic
suppliers are currently only capable of meeting 30 per cent of the demand,
the nation would import 4-4.5 million cubic metres yearly by 2020, the
ministry said.
Money men
snub real-estate investment
Fund management
companies in Viet Nam show little interest in setting up real-estate
investment funds under new Ministry of Finance regulations coming into force
on July 1.
According to a
study by Dau tu chung khoan magazine (Securities Investment), of the top 10
fund managers, none has yet developed specific plans to get involved.
This indifference
does not reflect the high enthusiasm of fund managers after the introduction
of Circular 183/2011/TT-BTC early last year guiding the establishment and
management of open-ended funds.
VinaWealth Fund
Management Joint Stock Company, backed by VinaCapital, one of the leading
investment management and real estate development firms in Viet Nam, had been
expected to soon take the lead in introducing a real-estate fund.
However, the head
of Retail Sales at VinaWealth, Dang Vi Thanh, said his fund had no interest
in setting up a real estate fund now as it was focusing on launching two new
open-ended funds - a securities-investment fund and a money-market fund,
which would come into operation in July and August.
Each type of fund
(bonds, securities, real estate) has specific characteristics that require a
lot of expertise as well as financial resources.
Financial asset
managers are unlikely to invest in funds not included in their core products.
The lack of
immediate interest in real-estate investment funds by fund managers has not
helped property developers, who have been struggling to survive in a market
frozen for the past three years.
Experts believe
that the launching of a real estate fund now would have many advantages as
property prices have plunged substantially.
They add that the
more transparent policy and Government incentives will help reduce fund
operating costs.
The head of a
securities company told Dau tu chung khoan that his company was working with
a fund manager to introduce a real estate trust by the end of this year or
early next year.
He said the company
was doing research on on-going real estate projects (legal status, quality
and prices) and would securitise them to sell to investors.
Direct
selling on the rise in Viet Nam
Direct selling
companies in Viet Nam had made business more competitive and provided more
choices for customers, according to Bach Van Mung, director of the Viet Nam
Competition Authority.
At the opening
ceremony of Nu Skin Viet Nam's branch in Ha Noi late last week, Mung said he
was delighted to see the company's expanding operations in Viet Nam.
Last year, Viet Nam
joined a list of 10 Nu Skin markets in Southeast Asia. It became the 53rd
market globally. This year, the company had set a target of earning US$15
million in Viet Nam.
Luxembourg
is Vietnam’s key partner in Europe
Vietnam’s Foreign
Investment Agency (FIA) has described Luxembourg as an important trade,
investment, and economic partner in its broader European cooperation strategy
over the 2011–2015 period.
The Vietnamese
industrialisation process could be accelerated by freeing up foreign
investment flows from developed countries like Luxembourg, capitalising on
their remarkable technological and experiential advantages.
Luxembourg is
currently 19th among the 101 countries and territories investing in Vietnam.
Its favoured investment sectors include mobile information, house and office
construction, light industry, and food processing.
General Department
of Vietnam Customs statistics reveal the two nations’ 2012 import-export
revenue totalled US$32 million, of which US$29 million came from Vietnamese
exports.
To attract more
Luxembourg investors, Vietnam needs to improve its investment environment,
clarify economic legislation and policy, extend and diversify opportunities
for investment, remove planning barriers, and support businesses in
minimising their production costs.
Local businesses
are encouraged to broaden their promotional efforts in Luxembourg to help
introduce the country’s special advantages to prospective investors.
There are also
calls for the FIA to grant Luxembourg’s successful Vietnamese investments
preference, particularly when it comes to the European nation’s finance and
banking specialties.
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 % year-on-year to US$3.1 billion, 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 on briefcases and handbags to
rake in higher returns.
To earn U$9.7
billion from exports this year (10 % higher than last year’s figure), the
sector is seeking more orders from South America. Domestic companies are
stepping up research and development to supply footwear materials to
potential partners in India and Brazil.
Notably, Vietnam
was honoured with five international shoe design awards for Asia after
beating 180 entries from 8 regional countries.
The rate of
locally-made materials is a mere 40 %. This is expected to increase to
between 60 and 65 % this year once the Trans-Pacific Partnership agreement is
signed.
The Ministry of
Industry and Trade (MoIT) is encouraging companies to enhance investment in
materials production using environmentally friendly technology. The move is
expected to put Vietnam in the top five footwear producers and exporters by
2020.
Once the Vietnam–EU
Free Trade Agreement comes into effect, preferential taxes will be cut from
14.3 to zero %. From early next year, Vietnam’s footwear products destined
for EU markets will enjoy tariffs in the Generalised System of Preferences
(GSP).
Capitalizing on
future trade agreements between Vietnam and the EU, numerous UK and German
footwear exporters are seeking business opportunities in Vietnam.
The US remains
Vietnam’s leading footwear and leather importer with a turnover of US$755
million, ahead of the UK (US$149 million), Belgium (US$140 million), Japan
(US$121 million) and China (US$114 million).
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Ba, 18 tháng 6, 2013
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