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BUSINESS IN BRIEF 14/10
The
Vietnam International Business Centre (VIBC) was officially inaugurated in
The
VIBC’s combined commercial and exhibition centre is the first of its kind in
It
houses pavilions of the Canadian, Egyptian, South African, and Argentinean
embassies, as well as of leading Vietnamese craft bodies such as the
Engineering Association, Traditional Craft Village Association, Lighting
Association, and Vietnamese Culture Association.
The
organising board said VIBC’s International and Associations Areas will create
a space promoting
On the
opening day, the VIBC’s investors donated VND1 billion to the Vietnam Red
Cross’ “
HCMC
hosts support industry enterprise exhibition
An
alliance of support industry enterprises, aiming to encourage the future
development of support industries in
Its
organisers include the HCM City Investment and Trade Promotion Centre, the
Japan External Trade Organisation (JETRO), the Indian Consulate General, and
Reed Tradex Co. Ltd,
Five
hundred brands from 25 countries and territories are showcasing products and
technologies at the event.
A
pavilion of technology stars also made its debut for the first time.
The
exhibition facilitates meetings between producers, potential partners, and
customers, as well as in-depth discussions with international technology
experts on new developments in machine tools, metalworking, welding,
robotics, and electronics manufacturing.
HCM
City Investment and Trade Promotion Centre Director Pho Nam Phuong said the
exhibition helps Vietnamese businesses promote their products and encourage
the domestic support industry to explore the opportunities offered by
cutting-edge international technology.
In the
first nine months of the year, cotton imports reached nearly 430,000 tonnes,
worth US$864 million, a year-on-year increase of 35 percent.
The
Vietnam Cotton and Spinning Association attributed the increase in cotton
imports to the rising demand for cotton fibers of domestic garment and
textile firms.
Last
year,
The
US,
Local
milk exported to 26 countries
Vietnam
Dairy Products Joint Stock Company (Vinamilk) announced on October 10 that
its dairy products have been exported to 26 countries around the world.
Key
export markets include the
In the
past nine months of this year, Vinamilk earned VND4,700 billion (around
US$230 million), mostly from nutrients, condensed milk, fresh milk, soya bean
milk, and yogurt.
From
2008 to 2012, the company’s export revenue grew by 62 percent, from VND1,215
billion to more than VND3,712 billion thanks to its high-quality products.
Vinamilk
applies the Codex international food standard to meet strict requirements
from the
Since
2007, the firm has invested over VND500 billion in developing five cow farms
in Tuyen Quang, Lam Dong, Binh Dinh, Nghe An and Thanh Hoa provinces.
It has
a plan afoot to open three more cow farms in Tay Ninh, Ha Tinh and Thanh Hoa
provinces and creates link to more than 5,000 cow-breeding households to
ensure its daily purchase of 450 tonnes of fresh milk (over 60 percent of the
country’s total output).
Vietnam
expects to get more ODA from EU
The
European Union (EU) will annually grant more than 300 million euro in
official assistance development (ODA) to
Franz
Jessen said the EU is considering its ODA loans for
He
said middle-income countries are not entitled to get ODA, but
Franz
Jessen informed that in the next three weeks, many EU delegations will visit
At
present, the EU is the largest donor of non-refundable aid to
The EU
granted around US$1.1 billion for
Vietnam
Farm Expo 2013 opens in HCM City
Various
kinds of farm produce dominate Vietnam Farm Expo 2013, which opened at Tan
Binh Exhibition and Convention Centre (TBECC) in
On
display are key export items such as rice, tea, coffee, cacao, cashew,
mushroom, sugar, and a number of handicraft products, as well as latest
processing and preserving technologies.
The
five-day expo provides a good venue for local and foreign businesses to share
experience in farming and environment protection and seek cooperation
opportunities.
The
participation of 150 businesses from
Profit
targets the major headache for banks
As
credit growth remained low as of the end of September while bad debts have
kept on rising, many banks are facing a challenge in fulfilling this year’s
profit targets.
Since
July 31, many banks have announced that they will meet this year’s profit
targets. However, those goals may be beyond their reach as the business
situation has turned sour.
According
to a press release of the Government Office after the regular meeting late
last month, the banking network as of September 20 reported credit growth
rate of 6.05% against late 2012. Meanwhile, another report of the central
bank showed that credit growth rate was 6.45% as of the end of August.
These
figures suggest that lending activities declined during the period while
local credit institutions earlier had expected to push up credit growth rates
in the second half of the year.
As
credit accounts for over 80% of banks’ income, it is hard for banks to reach
full-year profit targets if credit growth rates have declined as of the end
of the third quarter.
Nam A
Bank, which posted up credit growth rate of nearly 25% by July 31, is still
unsure about its profits.
Tran
Ngo Phuc Vu, general director of Nam A Bank, said that the bank has
sacrificed this year’s profits to offer low lending rates for customers, thus
expanding its customer base and total assets. As a result, the profit was
VND13 billion by July 31 compared to VND184 billion at the end of 2012.
Statistics
of the central bank’s HCMC branch showed that half of 14 banks based in the
city reported profits at below half of 2012’s figures.
In
addition, bad debts are also a big problem as banks have to set up reserve
funds for these loans. Although banks are trying to tackle bad debts, the
ratio of non-performing loans has increased steadily month after month.
In
HCMC, 14 local banks reported bad debt ratio of 5.65% by January 31 but the
ratio increased to 5.96% in March 31 and 5.99% in August 31.
According
to Viet Capital Securities Company (VCSC), Vietcombank obtained VND3.7
trillion in pre-tax profit in the Jan-Sep period, down 16% year-on-year,
while risk provisions increased 17% to VND3 trillion.
High
bad debts have also affected financial capability and business efficiency of
banks and curbed credit growth of the banking system.
The
report of VCSC also said that banks are facing rising bad debts and a slump
in profits due to the gloomy real estate market. Banks find it hard to
liquidate mortgaged assets that are properties while competition in the
industry has become fierce.A
Vinashin
to complete debt restructuring in 2013
Troubled
national shipbuilding group Vinashin will complete debt restructuring within
this year, said Vinashin chairman Nguyen Ngoc Su.
Speaking
at the quarterly press meeting of the Ministry of Transport last week, Su
said debt restructuring is the central task of Vinashin’s reform. The total
amount of debts at US$4 billion can be divided into three groups: a foreign
debt worth over US$600 million, domestic debts worth around VND29 trillion
and other smaller debts.
For
the domestic debt, around VND12 trillion has been restructured through bond
issue. The bonds have value of 30% of the debt and carry interest rate equal
to that of the government bond.
Another
VND17 trillion will be restructured in the fourth quarter of this year or
early next year at the latest, Su said.
Vinashin
has also reached agreement with creditors and obtained approval from the
international court in the
Up to
now, Vinashin has solved parts of the US$4-billion debt and sought the way
out for the remaining. The enterprise will solve the debt problem within this
year or early next year at the latest, Su stressed.
Concerning
the restructuring of Vinalines, Deputy Minister of Transport Nguyen Hong
Truong said that the Government has approved the plan, ordering that
Vinalines will only focus on three sectors, shipping, services and seaports.
The enterprise has basically divested capital from non-core businesses.
Vinalines
has sold over 90% of overseas ships given approval of the Government. It has
evaluated the remaining vessels and will sell them within this year.
Besides,
the Government has given nod for Vinalines to delay key shipbuilding programs
until after 2020 as the global shipping industry has yet to recover.
Therefore, Vinalines’ debts have been rescheduled, meaning that it will not
pay interest rates now and will pay the principal after 2020, Truong added.
Local
buyers outnumber foreign clients at woodworking expo
Companies
joining this year’s woodworking and handicraft products expo which finished
up in HCMC last Sunday said that they had mainly sold products to local
customers at the event though the fair was host to help them find importers.
Initial
statistics of the Handicraft & Wood Industry Association of HCMC (Hawa)
indicates that ten members attending the exhibition earned total sales of
around VND700 million at the four-day event.
According
to Nguyen Thanh Binh, director of Nguyen Thanh Co. Ltd, only one third of
customers bought products for exports. These clients came from other Asian
countries, many of them Chinese traders, who only purchased a few sets of
furniture as samples before placing orders with bigger volume, Binh said.
Many
enterprises having products showcased at the expo said that the number of
foreign visitors was small compared to demand of local firms and that those
foreign visitors seen in previous years were mostly absent this year. That is
because the exhibition was organized at a time when customers had already
placed import orders enough for the year, they explained.
The
13th event was organized by the city’s Department of Industry and Trade, the
Vietnam Trade Promotion Agency and Hawa with an aim to support small- and
medium-sized enterprises to promote products, seek outlets and expand export
markets.
More
foreign airlines are coming
Many
foreign airlines are planning to open flights to
Vo Huy
Cuong, deputy director of CAAV, said that numerous foreign airlines had got
nod from the Ministry of Transport to open services to
In
particular, the transport ministry has received a document from
Similarly,
Ethiopian Airlines from
Besides,
another airline of
According
to Vietnam News Agency, Thai low-cost airline Nok Air has recently announced
a plan on opening flights to
Many
firms at EPZs, IPs suspend operation
The
list of enterprises stopping or temporarily suspending operations and
reducing production at export processing zones (EPZs) and industrial parks
(IPs) in HCMC is getting longer due to lingering economic difficulties.
According
to statistics provided by the HCMC Export Processing and Industrial Zones
Authority (Hepza), the January-September period saw 20 enterprises suspending
operation, including 13 foreign-invested ones with chartered capital of
US$18.4 million and seven local firms (VND122.8 billion).
Besides,
21 other enterprises dissolved in the period. Among these, there are five
foreign-invested enterprises with total investments of over US$6 million and
16 local ones with over US$1.544 trillion.
According
to Hepza, high costs of workshop lease, inefficient operation, and operation
restructuring are among reasons choking off enterprises.
Besides,
due to business difficulties, 15 foreign-invested and 20 local enterprises
announced to cut their production output by 20-30%. These enterprises are
those producing building materials, interior decorations, electric equipment
and apparel products.
Such
moves of enterprises resulted in over 1,170 laborers being laid off in the
nine-month period.
Regarding
the information which says that foreign-invested enterprises at EPZs and IPs
incur huge losses and are suspected of transfer pricing, a representative of
Hepza said that there has not official statistics about the number of
enterprises reporting losses in the period.
Last
year’s report of Hepza indicated that up to 114 out of 416 foreign-invested
enterprises at EPZs and IPs in HCMC reported losses and did not pay corporate
income tax.
However,
according to Hepza, only Vietnamese enterprises as a whole faces difficulties
caused by economic difficulties while the foreign-invested enterprises do not
and still achieve slight growth in production and export.
In the
nine-month period, the export turnover of enterprises at EPZs and IPs was
estimated at US$3.4 billion, equivalent to 66.67% of the year’s target and up
6.2% year-on-year. Meanwhile, enterprises imported US$2.5 billion worth of
products, declining by 10.7%.
Besides,
January-September investment attraction inched up by 48.22% year-on-year to
over US$480 million, with foreign investments accounting for over US$341
million, or an increase of 114.27%.
Nevertheless,
most of the fresh foreign-invested projects licensed in the period were of
small and medium scale.
Meanwhile,
in terms of domestic investments, EPZs and IPs attracted US$138.8 million in
the period, down 15.7% from last year’s same period. The reason for this are
domestic economic situations remaining difficult, declining purchasing power,
huge inventories, according to Hepza.
Central
Highlands coffee growers receive credit loans
More
than 1,500 coffee growing households in Lam Dong province’s Di Linh district
have been provided with credit loans for coffee re-cultivation so far this
year.
According
to the district’s People’s Committee, the Bank for Agriculture and Rural
Development provided loans worth 104.3 billion VND (5 million USD) to help
local coffee growers develop over 1,442 hectares for more effective coffee
growing.
In
addition, local authorities and the bank organised workshops on coffee
re-cultivation, encouraging the application of effective methods among the
farmers.
According
to the provincial Department of Agriculture and Rural Development, nearly
23,000 hectares of coffee in Lam Dong province need to be redeveloped. They
have targeted 9,8000 hectares to be re-grown and about 800 hectares to be
newly-planted in order to raise productivity and output.
With
more than 146,000 hectares designated for coffee growing, the province
expects to increase productivity to at least 2.8 tonnes per hectare by 2015
and form sustainable coffee production areas.
Di
Linh currently cultivates 41,520 hectares of coffee, making it the largest
coffee growing area in the province.-
Dong
Thap focuses on fulfilling industry promotion plans
It is
expected that industry promotion funding of Dong Thap province in 2014 will
reach 2.792 billion VND, of which the local funding is 1.543 billion. The
Vietnam Economic News reports.
To
fulfill this year’s industry promotion plans, Dong Thap province’s Industry
Promotion and Development Consultancy Centre is implementing a number of
measures such as closely monitoring on-going industry promotion projects,
quickly handling arising problems and creating favorable conditions for the
beneficiaries.
According
to reports from the centre, in the first nine months of this year, it has
coordinated with beneficiaries to carry out most of the registered industry
promotion projects. More specifically, the center organized five vocational
training classes in handicrafts for 142 rural workers in Lai Vung, Cao Lanh
and Tam Nong districts and five other classes to start business for 145
trainees in local small businesses and production units.
The
centre also aided millions of VND for local enterprises to build technical
performance models and apply modern equipment and technologies as well as
providing them with mechanical facilities. It also implemented numerous
industrial development consultancy, cleaner production and energy efficiency
projects.
According
to Mai Van Doi, Deputy Director of the provincial Department of Industry and
Trade, during the nine-month period, the provincial industry promotion
activities have helped rural industrial facilities expand their production
and business, making an important contribution to the 6.7 percent growth of
the provincial industrial production value. The industry promotion campaigns
also improved awareness of the enterprises of changing production process and
products designs, helping further raise the provincial product value.
However,
Doi also said in the remaining months of this year, there are a lot of works
to do to fulfill this year’s plan such as organising three vocational
training classes for 180 rural workers in Thanh Binh, Cao Lanh and Tam Nong
districts and three other classes to start business for the local production
households and improving professional skills for mechanics.
To
complete this relatively large work volume, Doi asked the provincial industry
promotion center to quickly carry out the unimplemented industry promotion
projects, closely monitor those projects under implementation and rapidly
handle arising problems.
In the
long term, the center needs to improve the efficiency of industry promotion
activities, encourage the participation of local workers and production units
and mobilise more social power resources for industry promotion. It also
needs to gain more experience from industry promotion models of other
localities, such as the energy efficiency and cleaner production models.
In
addition, the center needs to continue to organize vocational training courses
for the local rural workers, call for more cooperation among small production
households to ensure product supplies and expand markets. The centre should
coordinate with the local authorities, businesses and production units to
create close connections in implementing new industry promotion models,
seeking new markets and suitable equipment to help the rural industrial and
handicraft units reach a sustainable development.-
Vietnam
Social Policies Bank reduces interest rates
Prime
Minister Nguyen Tan Dung on October 9 issued a decision on the adjustment of
lending interest rates for three credit programmes at the Vietnam Bank for
Social Policies.
Accordingly,
families living near the poverty line can enjoy a rate which is only 20
percent higher than that for poor households, instead of 30 percent as in the
old decision.
The
interest rates for clean water and environmental sanitation programmes in
rural areas and for business households in underprivileged areas are also
reduced to 9.6 percent from 10.8 percent annually, equivalent to 0.8 percent
per month.
The
decision took effect from October 9 and are applied to new loans.-
Textile
and garment materials to develop domestically
Vinatex
has encouraged its member businesses and other enterprises in the textile and
garment industry to invest in production of materials including fabric and
fiber, and to form a complete material supply chain. Report by the
The
textile and garment industry will be investing in material production, said
Vietnam National Textile and Garment Group (Vinatex) Deputy General Director
Hoang Ve Dung at a Ministry of Industry and Trade’s regular online meeting
reviewing activities in September and the first nine months of this year.
The
ministry’s statistics show that in the first nine months of 2013, the textile
and garment industry exported products worth 13.154 billion USD, up 18
percent from the same time last year. The
However,
businesses said that they had to compete with rivals from other textile
producing countries in buying materials, and that material suppliers took the
advantage of material shortages to increase material prices by 10-15 percent.
These problems affected the accomplishment of orders, they added.
Dung
said that the textile and garment industry is relying considerably on imported
materials and that the sector has satisfied only two percent of its demand
for cotton and one eighth of its fabric demand and made 140,000 tonnes of low
and normal quality fiber each year. Although it made strenuous efforts, the
textile and garment sector could find only 48 percent of all materials it
needed in 2013 domestically. The rate for VINATEX alone is 54 percent.
The
Trans-Pacific Partnership Agreement (TPP) is expected to be signed in late
2014. Businesses must follow fabric and fiber origin principles if they are
to benefit from tax preferences according to TPP. This means that Vietnamese
textile and garment businesses must produce materials themselves apart from
making products according to the order of foreign partners if they are to
benefit from TPP-based tax preferences.
Vinatex
has encouraged its member businesses and other enterprises in the textile and
garment industry, including foreign direct investment (FDI) companies, to
invest in production of materials including fabric and fiber and form a
complete material supply chain. In the first half of this year, the group
implemented 46 projects with a total investment capital of VND6.144 trillion,
most of them are material production projects. Three fiber projects,
including Vinatex-Hong Linh, Phu Bai 2 and Dong Van fiber plants have been
put into production to provide the market with an additional 1,270 tonnes of
Ne30 fiber. Besides, Vinatex put into operation its Yen My textile plant,
while the Texhong Group from
Speaking
at the regular online meeting, Deputy Minister of Industry and Trade Le Duong
Quang said that the Vietnamese textile and garment industry encourages foreign
investors to invest in developing materials in
Textile
and garment businesses need to continue strengthening their positions in
traditional markets and look for new, potential markets while taking the
initiative in using resources and investing in equipment and technology. They
also need to develop complete production processes, shift from making
products according to the order of foreign partners to operating under the
mode of FOB (free on board) and ODM (original design manufacturer) to add
value to products, and strengthen their distribution networks to maintain
niches in the domestic market.
Biomass
power to be priced higher next year
The
prices of biomass power will increase by nearly twice when the Government
issues a decision on a mechanism supporting power projects running on solid
wastes late this year, said the Center for Renewable Energy under the
Nguyen
Duc Cuong, director of the center, told at a conference on renewable energy
projects in An Giang Province held last week in HCMC that the price of power
generated from bagasse, husk, waste and landfill will rise to 6.1 U.S. cents,
7.3 cents, 10 cents and 7.3 cents per kWh.
According
to Cuong, when the new policy comes out, Vietnam Electricity Group (EVN) will
have to buy all such biomass power without negotiations.
The
mechanism of supporting power projects running on wastes is being mapped out
by the Ministry of Industry and Trade.
Cuong
said that the low power prices have discouraged investors from investing in
renewable power projects. Therefore, the aforementioned prices can help
investors have benefits and boost investments in the biomass power sector, he
added.
The
current total power capacity in
The
potential of biomass power in
SBV
wants banks to settle gold loans
The
State Bank of
The
government is eager to prevent gold hoarding, a common habit among
Vietnamese, to boost liquidity in the fragile economy.
Banks
must actively negotiate with customers to either convert gold loans to dong
loans or repay them ahead of schedule, the central bank said.
Nguyen
Hoang Minh, deputy director of the central bank's
Despite
this, some industry insiders have claimed the amount of gold being kept in
Banks
reported only managing to cut two tonnes worth of outstanding gold loans
since early July, but claimed they were in active negotiations over
converting more into dong credits.
Southern
Bank, Sacombank, ACB, Eximbank, and VietA Bank are among the institutions
with outstanding gold credits.
According
to bankers, difficulties had arisen as gold lending contracts are primarily
long-term, while customers were understandably reluctant repay loans early.
Gold
lending contracts typically have terms of 10-15 years, while borrowers are
resisting making the switch from gold loans to dong loans as they are subject
to higher interest rates.
In
addition, many gold borrowers have found themselves in financial difficulty
resulting from the commodity's sharp price rise in recent years.
Meanwhile,
local lenders have all closed their position on gold deposits, having settled
deposit accounts worth 100 tonnes of gold by June 30, 2013.
To
date, the SBV has licensed 12 banks to provide asset-keeping services for
precious commodities such as gold.
Unlicensed
banks cannot provide gold-keeping services to new customers, but can keep
gold for existing clients who have yet to withdraw.
The
banks licensed to perform asset-keeping services are: Vietcombank,
Vietinbank, BIDV, Agribank, MHB, AB Bank, VietCapital Bank, BaoViet Bank,
TienPhong Bank, Lienviet Post Bank, ACB, and MB.
Tra
fish farming area needs trimming
The
area under tra fish farming should be reduced to prevent any further
oversupply, which has already dragged down prices in the last few years,
heard a seminar held in Can Tho on Wednesday.
Nguyen
Van Kich, deputy chairman of the Viet Nam Tra Fish Association, said tra fish
output exceeds export demand, causing a decline in prices.
"[The]
output should be reduced to improve prices," he said.
To
make things worse, the farming area increased by 4.2 per cent in the first
eight months of this year.
Tra is
farmed mostly in the Cuu Long (Mekong) Delta and 96 per cent of the output is
for export.
Nguyen
Huu Nguyen, chairman of the Chau Phu Fishery Co-operative in the Mekong delta
province of An Giang, said if tra supply and demand are not balanced, farmers
would continue to suffer losses in coming years.
The
ratio of tra farmers suffering losses was 9.4 per cent in 1993, but rose
relentlessly to nearly 50 per cent as of last year, according to the Can Tho
University.
The
university's Dr Vo Thi Thanh Loc said Viet Nam accounts for 97 per cent of
the world's tra fish exports.
But
the country has not studied global demand or zoned tra fish farming areas,
causing oversupply, she said.
"A
committee should be set up to forecast the movements of the tra fish
market," she said.
The
delta's provinces should be assigned quotas for area and volume to avoid
oversupply, she added.
Participants
at the meeting said unhealthy competitiveness among exporters is another
reason for the decline in export prices.
Export
turnover fell from US$1.8 billion in 2011 to $1.75 billion last year,
according to the association.
In the
first eight months of this year, the figure was down 2.5 per cent to $1.1
billion, it said.
Le Chi
Binh, deputy chairman of the An Giang Province Fishery Association, said
creating links between exporters and farmers to ensure quality and output is
a sustainable measure for the sector's development.
This
would enable exporters to stop farming the fish themselves and also reduce
risks for farmers, he said.
Farmers
and exporters have to sign contracts to share obligations and rights, he
said.
Exporters
now farm 50-70 per cent of tra fish themselves and individual farmers, the
rest.
Vo
Hung Dung, deputy chairman and general secretary of the association, said the
quality of tra fish strains should be improved and farming areas should
follow zoning plans.
Exporters
should focus on developing new export markets, he said.
The EU
and the US are now Viet Nam's largest tra fish importers.
Accessibility
key to property problems
Public
policies promoting home ownership and real estate investment are not tampered
with and remain in place to nurture the market, which is recovering but still
fragile, stated the US's National Association of Realtors' spokesperson in
Viet Nam.
Vinh
Nguyen, the NAR president's liaison in the country, was speaking at a seminar
held by the HCM City Real Estate Association (HOREA) in the city on Tuesday.
He said: "Our top priority is to ensure home ownership remains
affordable and accessible."
One of
the greatest threats to this is mandating a high down payment that would keep
qualified buyers out of the market, he said.
To
ensure a real-estate recovery, the US continues to offer tax breaks to
promote home ownership and property investment, he said.
The
breaks include deduction of interest on mortgages from income for tax
purposes and waiver of capital gains tax on up to US$250,000 on the sale of
the primary house for an individual and $500,000 for a married couple.
The
association is working on visa reforms to benefit global house buyers, he
said.
HOREA
chairman Le Hoang Chau said Viet Nam's housing market needs policies to
ensure reasonable prices and to see recovery.
"For
many middle – and low-income people house acquisition is still out of
reach."
He
compared the prices of social housing in Indonesia and Viet Nam, saying in
the former it costs $7,500 for a one-bedroom apartment and $15,500 in case of
two bedrooms, while in Viet Nam the prices are double.
Indonesia's
average income is higher.
He
also said the price structure needs to be tweaked in Viet Nam, pointing out
that developers have to pay for land and also for the right to use it.
High
construction costs due to steel and cement price hikes, and mortgage interest
rates of up to 25 per cent in 2008 and around 13 per cent now are other
hurdles, he said, calling for a further lowering of the interest rates.
Tortuous
administrative procedures involved in developing a project also adds to the
price in the form off high management and opportunity costs, he said.
The
Government's programme to lend VNÐ30 trillion ($1.43 billion) at low interest
rates to buyers and developers of low-priced housing should be accelerated
since less than 1 per cent of the amount has been disbursed so far.
A
representative from Savills Viet Nam's HCM City said the disbursement is a
positive sign that the market is reacting to the package and it may have a
positive impact on demand in the residential market. The city housing market
saw impressive growth in the third quarter, with the highest number of units
being sold since the same period in 2011 and a rise of 52 per cent
year-on-year.
Customer
ID required for large value transactions
Customers
who make transactions of precious metals and stones valued at VND300 million
(US$13,636) or more in a day must provide identification to credit
institutions.
According
to a newly issued decree relating to the Law on Anti-Money Laundering, credit
institutions are also required to demand customer identification from
customers making irregular large value transactions.
Besides
precious metals and stones, real estate transactions must also report
customer identification to relevant authorities.
Khanh
Hoa rides high export turnover to surpass plan
The
central coastal province of Khanh Hoa posted export turnover of more than
US$860 million in the first nine months, exceeding its yearly plan by 8 per
cent.
The
foreign-invested sector took the lead with export value of $430 million. It
was followed by the private economic sector with nearly $360 milllion. The
remainder came from the State-run sector.
The
major export staples included 830 tonnes of cashew nuts, 754,000 tonnes of
white sand, 50,000 tonnes of seafood and 12 vessels.
SEC
borrows $16 million to raise its capacity
The
Gia Lai Sugar-Thermal Power Joint Stock Company (SEC) approved a plan to
borrow VND350 billion (US$16.6 million).
The
loan, to be sourced from Asia Commercial Joint Stock Bank in Gia Lai
Province, will help SEC raise the capacity of the Ayunpa sugar plant from
3,200 tonnes of sugar cane to 6,000 tonnes .
The
mortgaged property for the loan will consist of the plant assets and
production lines.
Firms
told to get with the times
The
chairman of the Banking Training and Consultancy Institute (BTCI), Le Mai
Lan, has called on businesses to adapt to the changing environment or risk
being left behind.
Speaking
at a conference on business transformation held in Ha Noi yesterday, the
banking chief said a ‘wider' economy had exposed holes in effectiveness and
productivity.
The
call comes as macroeconomic factors have battered local businesses who are
grappling with high inventories and decreasing financial resources; primarily
due to being unable to tap into business opportunities or finance for debt
repayment.
The
effects have created ripples across the banking sector with increases in bad
debts, slow credit growth and low profits.
The
chairman of the Viet Nam Chamber of Commerce and Industry, Vu Tien Loc,
agreed that Vietnamese businesses had been hit hard. In the first nine months
of this year alone, more than 40,000 firms closed or suspended operations,
while nearly 10,000 reduced their operations.
Loc
said the number of enterprises reporting losses was still high, with 66 per
cent of companies unable to pay corporate taxes.
"The
most important solution for businesses is to save themselves by transforming.
Both banks and enterprises need to transform," he said.
He
added that the banking system could provide capital and debt consultancy for
businesses.
Douglas
Jackson, BCG Group's global director said firms needed to address an epidemic
of volatility, poor positional advantage and poor profitability, adding that
transformation would be difficult in larger corporations with complex
management structures.
The
BCG expert also said businesses opting for a strategy of transformation
needed to create a ‘change agenda', a mechanism for necessary changes and
manage resources.
Nguyen
Huu Thai Hoa, FPT's strategic director, said the partnership between
businesses and banks was critical to efforts to adapt to market volatilities,
adding that transformation required a renewal of corporate administration,
technology and labour.
The
BTCI and the US Omega Performance Group have signed a strategic co-operation
agreement on training professionals in credit and risk management in line
with international standards.
The
agreement aimed to provide benefits to the banking and finance communities
and other businesses to improve human resources and competitiveness.
Industrial
exhibitions feature top technological products in HCMC
Four
exhibitions opened yesterday in HCM City showcasing modern metalworking and
other products and technologies.
The
first, "Business Alliance for Support Industry in HCM City," is
organised by the HCM City Investment and Trade Promotion Centre and Japan
External Trade Organisation.
It
attracted more than 90 Japanese and domestic companies from the automobile,
motorcycle, electronics, and other sectors.
"We
have a big space for business exchanges in five areas: moulds,
injection-moulds and presses, electric and electronic parts, transport
machinery parts, and metal processing," Hirotaka Yasuzumi, managing
director of JETRO in HCM City, said.
This
would help companies find partners easily, he added.
Two
other exhibitions, Metalex Vietnam and Nepcon Vietnam, bring together 500
well-known brands from 25 countries and territories.
Duangdej
Yuaikwamdee, deputy managing director of Reed Tradex, the organiser, said:
"Industrialists can discover how they can improve their productivity
with the right machine tools and metalworking technologies."
Indian
engineering show
Indian
engineering exhibition INDEE Viet Nam has attracted 85 leading engineering
Indian companies who are showcasing some world-class products.
Preeti
Saran, India's ambassador to Viet Nam, said the Engineering Export Promotion
Council of India (EEPC) organised events like this all over the world, and
this is their first exhibition in Viet Nam.
The
exhibitors are from diverse fields like machinery tools for the automobile,
technology, agriculture, and textile industries.
These
are very important sectors for Viet Nam, she said.
"Viet
Nam is a pillar of India's Look East Policy," she said, adding,
"Our bilateral trade and investment relationship is growing day by day."
Yet
trade and investment co-operation between the two countries do not match
their potential, she said, expressing her hope that the Indian engineering
exhibition would further boost Indian trade and investment relations with
Viet Nam.
Anupam
Shah, chairman of EEPC India, said: "I feel that automotive components
and assembly is a big market for Indian companies in Viet Nam."
The
four expos, at the Sai Gon Exhibition and Convention Centre in District 7 and
to run until October 12, are expected to welcome more than 10,000 visitors.
Car
sales driven by incentives
New
car sales in Viet Nam soared to their highest level in three years, lifted by
a brighter outlook for the economy, attractive financing deals, price
discounts and reduced car registration fees.
The
country's 18 leading car makers sold a combined 9,785 units in September, up
24 per cent over a month earlier and 28 per cent over same period last year,
according to the Viet Nam Automobile Manufacturers Association (VAMA).
Of the
figure, 4,070 units were cars and 5,715 units were trucks, up 32 per cent and
19 per cent month-on-month, respectively, said the association, which
represents 18 car makers.
"This
is the sixth consecutive month the industry volume has been higher than the
same period last year," said VAMA chairman Jesus Metelo Arias in a
statement released yesterday.
"With
the current trend of recovery in the industry we still maintain the forecast
of 109,000 units compared with the original forecast of 100,000 units at the
beginning of the year," he added.
Besides
attractive financing deals, price discounts and reduced car registration
fees, which applied from the beginning of this year, a brighter economic
outlook was attributed to the surge in car sales.
According
to a recent World Bank report, Viet Nam's economic growth rate is projected
to reach 5.3 per cent in 2013 and 5.4 per cent in 2014, while its inflation
rate will be at 8.2 per cent at the end of 2013.
The
bank said Viet Nam's macro economy is relatively stable thanks to the government's
proper financial and monetary policies intended to stabilise the economy.
Meanwhile,
September's increase of car sales was also attributed to the traditional
shopping peak towards the end of the year, which usually begins in
mid-September.
In
order to trigger the market, which fluctuated following the economic
slowdown, most car makers have reduced retail prices from VND5
million(US$240) to VND70 million ($3,330).
While
Nissan cut prices for its compact Sunny sedans by between VND5 million ($240)
to VND28 million ($1,330), depending on version, Toyota previously cut its
Vios compact sedans by VND30 million ($1,430).
Also
in the compact segment, Ford reduced its Fiesta 1.6L model by VND28 million
($1,330) to VND525 million ($25,000) for 4 doors version, and by VND26
million ($1,240) to VND580 million ($27,620) for its 5 doors version.
Bigger
cars also experienced sharp price cuts, such as Toyota Camry by VND40
million, while Toyota Altis, Honda Civic and Focus saw a cut of VND20 million
($930) each.
The biggest
discount came from the Korean made Kia Sorento at VND70 million, while the
two other Kia brands, the New Carens and Picanto, saw cuts of VND10 million
($480) and VND5 million, respectively.
Meanwhile,
instead of direct price cuts, other cars makers are offering buyers many
promotional gifts, such as free car insurance, free car tuning packages and
instalment purchases with preferential interest.
Viet
Nam imported 3,000CBU (Complete Built Unit) cars worth US$55 million in
September, up 33 per cent in volume and 18 per cent in value in August,
according to the General Department of Customs.
This
brought the total number of automobile imports in the first nine months to
24,000 units worth $476 million, up 22.5 per cent and 6.1 per cent
respectively.
Customs
statistics showed that Viet Nam's auto imports decreased to a six-year low
last year, reaching only 27,000 cars in 2012, down 50 per cent on 2011.
Vingroup
development backed by banks
Vingroup
announced the signing of a US$250 million international syndicated loan
agreement to finance their development projects on Wednesday.
According
to the group, the three-year amortizing loan pays coupon of Libor + 5.5 per
cent p.a [Libor stands for London interbank offered rate]. The first $100
million would be available for disbursement this month.
Credit
Suisse AG, Singapore Branch and Maybank Investment Bank Berhad were Mandated
Lead Arrangers and Bookrunners ("MLABs") and Deutsche Bank AG and
Singapore Branch were Mandated Lead Arranger ("MLA") of the loan.
Besides being one of the MLABs, Credit Suisse acted as Coordinator for the
loan. General syndication will be launched by the end of October.
Le Thi
Thu Thuy, Vingroup's Vice Chairwoman and CEO, said the fundraising success
proved that international financial institutions were prepared to support
Vietnamese companies with a proven track record, adding that the funding
would offer another source of capital to other Vietnamese corporations.
The
deal made Vingroup the first Vietnamese real estate company to successfully
tap into the international syndicated loan market.
Vingroup
was also the first Vietnamese company to issue offshore convertible bonds,
raising gross proceeds of $100 million in 2009 and accessing the convertible
bond market again in 2012 with a $300 million issuance.
In
May, Vingroup and a Warburg Pincus consortium entered into definitive
agreements for the consortium to invest $200 million to acquire an
approximately 20 per cent equity interest in Vincom Retail, a subsidiary of
Vingroup that owns, operates and develops the largest portfolio of shopping
malls across Viet Nam.
Source:
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Chủ Nhật, 13 tháng 10, 2013
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