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BUSINESS IN BRIEF 19/10
VN30
shares rise above domestic market growth
Stocks
tracked by the VN30 outperformed market growth, said Phan Thi Tuong Tam,
general director of the HCM City Stock Exchange.
During
the past three years, those stocks saw 10.3 per cent growth, while the
VN-Index – the benchmark for the entire
Despite
the downturn of the economy and market turmoil, listed firms in the VN30 had
relatively high profits this year. Eight of them were among the top 10
companies by profit. Their return on equity (ROE) ratio reached 9.45 per cent
compared to the market average of 8.37 per cent.
Tam
said that 15 of the 30 blue chips were included in the ASEAN Stars, which
tracks the region's 180 large-cap stocks. In addition, the exchange often
organised visits to international financial hubs for the companies.
These
shares served as "the backbone of the market", said Vu Bang,
president of the State Securities Commission.
"With
their transparent management, they attracted more foreign investors and
contributed to limiting price manipulation," he said.
Bang
encouraged large firms to list shares, saying listing would boost companies'
management and funding abilities as well as their capacity to attract foreign
investors.
The
commission implemented many policy changes to increase the quality of listed
shares, such as urging higher listing standards and signing bilateral and
multilateral partnerships.
However,
Bang requested companies be more active in advertising themselves to foreign
investors.
FDI
wood exporters outstrip lagging domestic companies
The
country's wood exports enjoyed an impressive turnover in the first nine
months of the year, bringing in US$2.6 billion.
As a
result,
However,
local enterprises were left in the shade by firms backed by foreign direct
investment.
According
to Customs of Viet Nam figures, wood product exports reached over $305
million in September, outstripping rice and coffee.
Local
wood companies are losing out in the competition with FDI enterprises. Of
this year's total turnover, FDI enterprises made up $1.67 billion, around 64
per cent, while domestic firms continued to lose ground.
It's
been reported that FDI enterprises from
Vo
Truong Thanh, general director of Truong Thanh Furniture Corporation - one of
the biggest local wood processing businesses - said he had missed out on
hundreds of export contracts worth over $50 million as the company lacked the
finances to undertake big orders.
In
light of the economic downturn, Thanh said he had been unable to take out
loans from banks to access the funds.
"The
larger financial resources and management capabilities of FDI firms are seen
as one of the key reasons for their success," said Thanh. "Their
contacts and distribution systems in major markets give them a greater
advantage."
In
spite of the difficulties, chairman of the Binh Duong Wood Export Association
Huynh Quang Thanh still believed there were opportunities as "exports
are much better now with more orders from the
He
felt local enterprises should now update their technology and restructure to
be able to process big orders in the future.
Import
tariff lines enjoy duty cuts
The
figures were made known by Deputy Head of National Committee for
International Economic Co-operation Trinh Minh Anh at a seminar on the
development of the ASEAN economic community held by the Ha NoiNational
University (HNU).
Anh
said
It's
reported that although the form of AEC will strongly affect people living in
the bloc's member nations, the awareness of the society and businesses
community still remains limited.
A
survey made by the ASEAN Secretariat in 2012 revealed that 76 per cent of the
surveyed participants had not clearly known about AEC, and only 55 per cent
of businesses had understood the basic role of ASEAN.
Director
of HNU Pham Hong Son said
Domestic
businesses also suffer from weaknesses in the country's infrastructure,
labour force and mechanisms.
"If
In
addition, it was stated that
Non-performing
loans (NPLs) accounted for 5.99 per cent of the total loans of HCM City-based
banks in the first nine months of this year, said Nguyen Hoang Minh, deputy
director of the State Bank of Viet Nam's HCM City branch.
During
a meeting between representatives of HCM City-based banks and the local
National Assembly delegation on Monday, Minh said that borrowers of the bad
debt were mainly real estate firms, consumer firms and small- and
medium-sized firms.
Finance
leasing companies had the highest bad debt ratios among credit institutions
with bad debts accounting for more than 44 per cent of their total outstanding
loans in the first nine months – seven times the ratio of the city's whole
finance-banking industry.
Foreign
banks had the lowest NPL ratio of 2.93 per cent, according to Minh.
However,
experts said that the public should not be concerned about the sky-high bad
debt ratios of financial leasing companies, as their assets only accounted
for about 4 per cent of the total assets of all credit institutions.
The
main clients of these companies are enterprises that need specific equipment,
such as that used in construction, textile and garment production and
shipbuilding.
A
senior executive of Vietcombank's finance leasing company, who declined to be
named, said the current legal framework had only loose asset leasing
provisions, meaning risk for the companies was high.
Banks
in HCM City are expected to sell as much as VND6 trillion (US$272.72 million)
worth of bad debts to the Viet Nam Asset Management Company (VAMC) before the
end of the year.
Besides
SCB and Southern Bank, which sold VND1.3 trillion ($59.09 million) of bad
debts to VAMC late last week, other lenders including Vietcombank and
Navibank also plan to ease their bad debt burden by selling NPLs to the debt
trading firm.
In the
first half of this year, 14 commercial banks in the city set aside VND2.3
trillion ($104.54 million) in provision for loan losses and used the
provision to tackle nearly VND1 trillion ($45.45 million) of bad loans.
VN
vows to assist Chinese investors
Two-way
trade and investment ties, despite experiencing significant achievements in
recent years, had failed to match the expectations and potential of the two
countries, the PM said.
He
suggested that the two business communities should speed up co-operation,
especially when
These
agreements, once effective, would open up huge business opportunities for
Vietnamese firms and foreign companies, including Chinese, he said.
During
the event, Chinese Premier Li Keqiang spoke highly of relations between the
two countries, particularly in trade and investment, adding that
Vietnamese,
Chinese companies build coal-fired power plant
The
Vinh Tan 3 Energy Joint Stock Company (VTEC) has teamed up with the Chinese
Harbin Electric Company to build the US$1.1 billion Vinh Tan 3 coal-fired
thermal power plant in central
At a
contract-signing ceremony in Ha Noi on Monday, Hoang Quoc Vuong, chairman of
Viet Nam Electricity (EVN) said the plant will consist of three turbine
groups with a capacity of 1,980MW.
The
plant will use imported coal to generate over 12 billion kWh a year, which
will help ease power shortages in the southern region.
Construction
would start in the third quarter of 2014, and the plant's first turbine was
expected to go into operation in 2018, he said.
Regulations
released for overseas workers
Circular
No 21/2013/TT-BLDTBXH ("Circular 21"), regulating the cap of escrow
deposits and labour markets that a Service Enterprise can negotiate with
Vietnamese workers, was promulgated on 10 October 2013.
According
to Circular 21, a Service Enterprise means an enterprise that is licensed for
sending Vietnamese worker(s) to work overseas pursuant to the contract(s).
The
principles of lodging an escrow deposit are set forth in Circular 21;
accordingly, (i) the escrow deposit must be lodged upon the business line and
the country where a Vietnamese worker will work, and (ii) the amount of the
escrow deposit shall not exceed the highest rate stipulated in Circular 21.
Under
Annex 1 of Circular 21, the highest escrow deposit applicable to several
labour markets and business lines shall be from US$300 to $3,000, or equal to
the price of one-way flight ticket from the host country to
In
case a worker does not lodge the escrow deposit or cannot afford to lodge the
escrow deposit, the Service Enterprise may demand certain guarantees in
compliance with the Joint Circular No 08/2007/TTLT-BLDTBXH-BTP dated 11 July
2007 of the Ministry of Labour, Invalids and Social Affairs and the Ministry
of Justice guiding on the Content and the Liquidation of Guarantee Contracts
for contract-based workers employed overseas.
The
use of escrow deposit money must comply with the provisions of Joint Circular
No 17/2007/TTLT-BLDTBXH-NHNNVN dated 04 September 2007 of the Ministry of
Labour, Invalids and Social Affairs and the State Bank of
The
Service Enterprise shall be responsible for reporting periodically or
occasionally (if requested) on the implementation, management and use of the
escrow deposit paid by Vietnamese workers.
This
report must be annually sent to the Department of Overseas Labour – the
Ministry of Labour, Invalids and Social Affairs before June 20 and December
20.
Circular
21 shall be effective from 1 December, 2013.
New
regulation on social marketing products
From
October 20, retail prices of social marketing products must be printed on
packaging.
This
is provided in the Ministry of Public Health and the Ministry of Finance's
Joint Circular No 25/2013/TTLT-BYT-BTC from September 4, stipulating the
financial management of social marketing activities for contraceptive devices
and products for HIV/AIDS and preventing sexually transmitted diseases.
Retail
prices and the subsidies for each product label must suit each period after
being appraised by evaluation councils and decided by the Ministry of Health.
The
Social Marketing Management Agency must determine prices of aid goods
imported without fixed unit prices.
The
rate of contributions to the state budget per each social marketing product
must not be lower than 30 per cent of its retail price.
Social
marketing products that have not been sold as planned will be carried forward
to the following year while expired products will be disposed of under the
current regulations on disposal and destruction of expired medicines.
First
BPO joint venture debuts in Ha Noi
The
first business process outsourcing (BPO) joint venture in
The
venture is a collaboration between AGREX, a Tokyo-based member of IT Holdings
(ITHD) of
This
joint venture has a charter capital of US$2 million, with FPT software
holding 51 per cent and remainder owned by the Japanese partner.
Ha
Giang to host Viet Nam-China international trade fair
The
2013 Viet Nam-China International Industry and Trade Fair will take place in
northern border Ha Giang province from October 25-31.
The
event will showcase high quality consumer goods, plus agricultural and
industrial products in 570 booths.
It is
expected to provide local companies with an excellent opportunity to
introduce their products, seek business partners and expand markets.
Seminars
on trade and industrial promotions in 28
$26m
to be pumped into Tra Noc Industrial Zone
The
Cuu Long (Mekong) Delta city of Can Tho have recently green lighted four
investors to add approximately US$26 million to their projects in the
municipal Tra Noc Industrial Zone.
The
zone is now home to 183 projects with a combined investment capital of $1.6
billion. Of the total, 168 are already operational, while the remainder are
now under construction.
Over
the past nine months, zone-based enterprises have posted over $800 million in
revenue, with $294 million coming from exports.
The
increasing global rubber demand in recent years has encouraged
Vietnam
Rubber Group General Director Tran Ngoc Thuan said that to restructure the
industry, implementing mergers and acquisitions (M&A) deals with small
companies, associating with major brands, reducing crude production and
diversifying products to improve added-value and ensure sustainable
development were needed.
Thuan
also said that the group agreed with the restructuring project of the
Ministry of Agriculture and Rural Development. However, in terms of the
cultivation sector, the ministry must have appropriate views.
The
cultivation sector currently accounts for 72 percent of the GDP of the
agricultural sector. Therefore, it needs to confirm the role of businesses
involved, especially in the fields of processing and creating a brand,
building added-value chain and improving international competitiveness. It is
difficult to maintain growth, increase income, eliminate food shortage and
reduce poverty for rural households throughout the country when lacking the
role of businesses.
In
terms of competitive capacity of the rubber industry, Thuan said that
Vietnamese rubber stood at top five in terms of area and top five in terms of
exports. In addition, rubber production in
High
dependence on the Chinese market with 60 percent of exports to this market
remains a weakness of
The
government assigned the Vietnam Rubber Group to develop 500,000 hectares of
the tree by 2015. However, this goal seems infeasible in the context of
current economic difficulties, and needs to be adjusted. The group’s point of
view is to improve the quality of varieties, production and added-value
chain.
To
improve value chain for the industry, implementing M&A deals with small
companies and linking to major brands to be able to produce competitive
products are needed. In addition, the rubber industry should focus on
constructing industrial infrastructure and manufacturing tire.
The
group will focus on producing Medium-density fiberboard (MDF) in Quang Tri,
Binh Phuoc and Kien Giang provinces. Moreover, research to expand business
and production activities in the central region is necessary. The group
strives to account for 50 percent of MDF output providing to the domestic market
by 2015 and produces wooden boards and bars to diversity products.
According
to Thuan, closely managing available rubber area is also an important point
in the restructuring project, helping ensuring the quality of varieties and
production.
The
industry’s restructuring project only mentioned rubber areas in southeastern
region and the Central Highlands. Therefore, Thuan proposed to add the
south-central coast, the north-central coast and northern mountainous
provinces into the list, adding that the establishment of a management agency
on rubber is needed.
Central
Highlands aims to harvest 1 mln tonnes of coffee
Provinces
in the Central Highlands have set a target of harvesting more than 1 million
tonnes of coffee in the 2013-2014 crop.
According
to the Central Highlands Steering Committee, the region has almost 552,000
hectares of coffee plants. Dak Lak boasts the largest area with 202,000 ha,
which produce 450,000 tonnes of beans.
The
country has an estimated 86,000 ha of coffee plants that are more than 20
years old.
In the
first six months of this year,
Last
year, the country shipped 1.73 million tonnes, bagging a the total export
value of roughly 3.8 billion USD.
ODA
for Vietnam totals 80 billion USD
The
official development assistance (ODA) received by
The
Red River Delta received the highest proportion of the aid, 10.42 billion
USD. Meanwhile, the Central Highlands received the least, with 1.36 billion
USD.
ODA
has helped
At
present,
KPMG
named ‘Best Advisor for Taxation Services Globally, in Asia and
KPMG
has been named the ‘Best Advisor for Taxation Services Globally’ at the 2013
Euromoney Real Estate Awards.
For
the ninth consecutive year, Euromoney has surveyed its readers – corporate
and financial decision makers in more than 160 countries – to identify the
best advisors, developers, and banks in the real estate market on a global,
regional and individual country basis.
KPMG
has also been awarded the ‘Best Advisor of Real Estate Taxation Services in
Asia’ and the ‘Best Advisor of Real Estate Taxation Services’ in
This
award marks an important milestone in the development of KPMG in real estate
taxation services and further demonstrates KPMG’s commitment to remain as a
leading professional advisor services firm in
“All
over the world, KPMG's member firms have made long-term commitments to become
the leading professional services firm in each market in which they operate.
In
ODA
assists transport, post, telecom development
The
transport and post and telecommunications sectors have led others in
attracting the Official Development Assistance (ODA) loans as they have got
as much as US$16.47 billion or 23% of total ODA secured by the nation over
the past 20 years, according to the Ministry of Planning and Investment.
In the
period from 1990-2015, the transport sector has launched 132 projects using a
total ODA of US$17 billion. To date, 83 projects worth US$5 billion were
completed while 49 projects valued at US$12 billion are underway.
ODA
has in recent time helped
Scores
of life-line transport facilities have been upgraded, such as National
Highway1A, Noi Bai International Airport Terminal 2,
Technical
assistance regarding the building of bridges, roads, seaports and airports as
well as management skills have been transferred to the Vietnamese side in a
bid to enhance the capacity of the transport construction companies.
Besides
large-scale transport projects, transport development projects in rural areas
have been financed by the World Bank, Asian Development Bank and Japan
International Cooperation Agency. These projects have helped farmers reach
new markets.
In
1993-2013, the post and telecommunication sector has carried out 16
ODA-funded projects, of which nine were completed.
In
2010, the Swedish Government spent SEK8.5 million to support the Viet Nam
Media Training Centre in providing short-term training courses and seminars
in press management in three years.
In the
2004-2007 period, the
ODA-funded
programs and projects in post and telecommunications have contributed to the
sector's efforts to realize successfully its integration and development
strategy.
Home
buyers show no fears during ‘Ghost’ month
The
apartment for sale segment is showing signs of recovery, with a significant
increase in the sale of units in
Initial
statistics from Savills indicated that during the first nine months of the
year, real estate developers in
Although
lunar July is traditionally an inauspicious period for buyers to spend cash,
the majority of units sold this year fell in the third quarter when more than
1,800 apartment units were sold in
Savills
claimed sales had been very positive in Hanoi with 11 per cent growth on the
same period last year despite the superstitions associated with the ‘ghost’
month of July, because real demand existed, and buyers wanted to take the
opportunity to secure accommodation at the lowest point of the market.
According
to CBRE, in the first nine months of this year, around 3,500 units were sold
in
Explaining
For
example, Phu Long Real Estate Company was offering a raft of incentives to
buyers at their Dragon Hills project in Ho Chi Minh City with a price of
VND25 million per square metre. Buyers have to pay only 30 per cent in
advance, while the remainder can be paid in three years including the first
year of interest free payments.
While
such offers have been applied by many developers in
Hyundai
Hillstate in
However,
CBRE noted changes in
CBRE
said the sudden surge in market appetite for high-end products might indicate
a few things. Firstly, demand and affordability for high-end products still
exists, especially as standards of living continually improve. Secondly,
good-value-for-money presents as a key to selling.
Richard
Leech, executive director of CBRE in
Although
many developers have stopped or slowed construction,
Initial
figures showed that around 13,000 units were completed in the third quarter,
dramatically up on the 8,000 across last year.
While
the number of developers in
For
example, a total of 8,500 units were provided by the Vingroup’s
Other
large scale projects include Le Van Luong Residentials with 2,000 units,
According
to Savills, total future supply during 2015 and onward would reach
approximately 82,000 units from 100 projects, with the main stocks located in
Ha Dong and Tu Liem districts which will occupy 45 per cent of total supply.
SOE
share sell-off gets mixed review
Foreign
experts and consultants have welcomed the proposal to sell stakes in
state-owned projects to private domestic and foreign partners.
The
Vietnam Association of Financial Investors (VAFI) recently advised the
government to sell additional stakes in well-performing state enterprises and
to
off-load
more high-street real estate in order to replenish the state budget.
VAFI
proposed that
Properties
would include shopping centres, big hotels managed by state-owned enterprises
or city stakes in joint ventures. City authorities currently hold stakes in
the
John
Sheehan, management consultant from Global Commercial Real Estate based in
“Hotels
are best run by hospitality professionals, while reinvesting the money in
better public infrastructure would also improve the city for the benefit of
all the people and the local economy,” Sheehan told VIR.
However
Sheehan suggested the government should however be careful when considering
the proposal.
“For
me the big issue is to make sure that the hotels are sold in a transparent
manner through competitive bidding where the best price is achieved.
Involving foreign investors will make sure that the Vietnamese people will
achieve the highest price on sale,” he said.
“Best
price, highest and best use, which creates additional funds for expenditure
in better public facilities, is a win-win for everyone,” he said.
According
to VAFI secretary general Nguyen Hoang Hai, the bitter management lessons
provided by the Vinashin and Vinalines disasters, in which the state had to
pay roughly $7 billion to learn, definitely stand. If the government
stonewalls the sales, their asset values would collapse and they will have to
make further borrowings to invest in the economy.
Leon
Cheneval, associate director, CBRE Vietnam, said cities in general implement
plans to fund infrastructure and selling assets is one of several options.
Development fees can be charged, as can taxes on well-structured public
infrastructure plans, so selling assets is not necessarily the immediate
answer or solution.
He
said cities could consider relocating some schools, hospitals and ministries
from the city centre thereby improving community facilities on what would be
less valuable but more accessible land, while utilising prime city centre
sites for a combination of public-private development with a strong emphasis
on beautifying the city.
Su
Ngoc Khuong, associate director of Savills
He
said although investing into infrastructure was crucial to the development of
the cities, it was too early to conclude whether sale of a city stake in
prime properties was a good solution or not. More important was how the
proceeds from the sale of the assets would contribute to fund-raising and how
the funds would be utilised.
“We
also have to take into account the fact that those properties have been
allocated to state-owned enterprises, and as a result there would have to be
some consideration involved at a corporate level. The pros and cons should
always be considered in both the medium and long term to determine the best
strategy to raise funds for the state budget,” said Khuong.
C&W
upbeat on property trends
“The
Vietnamese government has successfully stabilised the macro-economy. However,
this must be tempered with a note of caution as a shock rise in inflation
could ruin this emerging confidence,” said Jonathan Tizzard, national head of
research and valuation at Cushman & Wakefield Vietnam (C&W).
The
bottom line of the real estate services firm’s report for the third quarter
of 2013 was that they believe the bottom of the market cycle to have arrived.
However, C&W Vietnam general manager Chris Brown acknowledged that it was
difficult to verify this with certainty.
In the
office sector in Ho Chi Minh City, the average asking rent of Grade A
decreased by almost 5 per cent quarter-on-quarter, and 7 per cent in
comparison with the same period in 2012, to stand at around VND960,000
($45.6) per square metre per month, according to the report. Grade B rents
also continued their downward trend, decreasing by around 1 per cent
quarter-on-quarter and by some 8 per cent year-on-year, standing at
VND523,000 ($24.8) per square metre per month.
Tizzard
commented, “The Ho Chi Minh City office segment has reached the bottom and
improvements have already started to show; a busy final quarter in terms of
leasing activity is expected, paving the way for a recovery in the office market
in 2014. Tenants are urged to secure competitive lease terms before the
market turns.”
In the
third quarter of 2013, the
It is
forecast that the average rent for all grades is likely to follow a downtrend
in the coming time due to high vacancy rates in existing office buildings,
said Tizzard.
In the
retail sector, the report said about 90 per cent of
Tizzard
said rents remained unsustainably high in many fringe locations and a
correction was needed in order to attract tenants and increase absorption
rates. However, the core business district’s retail markets in
Brown
elaborated that world-renowned fashion brands would not leave the core
business district due to high rents because they had to maintain their image
and presence.
He
added his company was working on a deal for a world famous fashion brand to
enter
In the
industrial sector, the supply of industrial parks (IP) in
In the
apartment sector, the report claimed that the oversupply continued in the
third quarter. However, developers are exploring new ways of enticing
customers and the government remains committed to helping this sector.
The
firm said the rest of 2013 and early 2014 was expected to remain a buyers’
market across the residential sector. Given the recent proposed regulations
of the Ministry of Construction expanding the right for foreigners to own
property in Vietnam, and the increasing credit growth, it is expected the
market could warm in the medium term.
Brown
added that the beginning of the transferring of non-performing loans to the
Vietnam Asset Management Company would boost confidence in the market place.
Expos
the convergent point for modern machines
Thousands
of machines and equipment of new technology of 500 brands coming from 25
economies are being showcased at the four exhibitions opened on Thursday at
Saigon Exhibition and Convention Center in HCMC’s District 7.
What
is notable at this year’s exhibitions is the participation of several foreign
suppliers of products in supporting industries.
The
Business Alliance for Supporting Industry expo consists of over 90 booths of
Vietnamese and Japanese enterprises operating in supporting industries like
metalworking, electronic components and machinery.
Besides,
this is the first time 85 leading Indian engineering enterprises under
According
to chairman of EEPC Anupam Shah, some of these firms have supplied components
for automakers like BMW,
Besides,
the metalworking solutions exhibition Metalex Vietnam 2013 and the exhibition
Nepcon Vietnam 2013 on testing technology and related electronic branches
also attract a high number of foreign exhibitors.
According
to Pho Nam Phuong, director of the HCMC Investment and Trade Promotion Center
(ITPC),
Similarly,
Vietnam has around 210 suppliers of components and accessories for 50 auto
manufacturing and assembling enterprises but most of such components and
accessories are simple and have low technological content. Therefore, the
local auto manufacturing has to import nearly US$2 billion of components a
year.
Taking
about this issue, Hirotaka Yasuzumi, managing director of the Japan External
Trade Organization (JETRO) in HCMC, said that the poor development of
supporting industries in Vietnam has hindered foreign investments, though the
country holds big potentials for Japanese companies.
A
survey conducted by JETRO shows that local contents for Japanese-invested
manufacturers in 2012 accounted for only 28%, while the proportion of
supplies from Vietnamese firms was only 12.6%.
The
four expos are organized at Saigon Exhibitions and Conventions Ceter in
HCMC’s District 7 by Thailand’s Reed Tradex, JETRO and ITPC.
Direct
shipping services to U.S., EU to resume
Goods
transport directly from the Cai Mep-Thi Vai port complex to the U.S. and the
EU will resume next year after a period of interruption.
According
to a representative of CMA-CGM Vietnam, each week the line will have two
major vessels of 8,000-9,000 TEUs transporting export goods from the port
complex to the U.S. from next year’s second quarter and the EU from next
September.
The
Vietnam Maritime Administration has recently asked CMA-CGM Vietnam to draw up
a plan for operating ships from the complex to the U.S. and EU from next
year.
According
to the representative, the resumption of direct sea transport from Vietnam to
the U.S. is now ready. However, shipping demand is normally low from January
to March.
CMA-CGM,
Maersk Line and MSC are members of the shipping alliance called P3 Network
active on Asia-Europe, trans-Pacific and trans-Atlantic routes. With this
network, goods transport from Vietnam to other countries can be sped up as
enterprises could choose vessels of any member firms of the network.
Since
the Cai Mep-Thi Vai port complex started to receive goods in 2009, shipping
lines have continuously opened direct sea links between Vietnam and major
markets such as the U.S. and the EU.
In the
past two years, 15 direct weekly services have been launched. However, as
transport volume is not as high as expected, shipping firms have gradually
scaled down their services.
Local
plastic items hold 90% market share
The
amount of household plastic items produced by local enterprises currently
accounts for up to 90% domestic market share.
According
to the Ministry of Industry and Trade’s report on the plastic sector in
January-September, local plastic products had an edge over imports from
China, Indonesia and Thailand.
To
achieve this, plastic producers have made full use of the campaign
encouraging Vietnamese consumers to use Vietnamese goods, provided
high-quality products and good after-sale services and regularly participated
in fairs to build links with consumers, according to the ministry.
Speaking
to the Daily, the director of a plastic company based in HCMC said that such
high market share reflected effort of enterprises over the past time.
“We do
not have official statistics on the domestic market but plastic household
items of local enterprises occupied only 50% of the market share five years
ago. But now the market share has increased considerably,” he said.
An
advantage of local products is prices that are 20-30% lower than imports of
same quality as local producers have invested in new technologies to improve
quality.
In the
past, many local enterprises paid attention to export markets only, not local
consumers. The economic crisis has forced many of them to turn back to the
domestic market.
According
to Vo Van Duc Tam, director of Cho Lon Plastic, the domestic market remains
big. There are more consumers using Vietnamese-made products thanks to a
conviction that local products are safer than imports from some countries.
HCM
City banks restructure VND100 tril. of bad debt
Banks
in HCMC as of September 30 maintained normal status of over VND100 trillion
worth of loans that should have been classified as bad debt.
According
to the central bank’s HCMC branch, the bank has made the move following the
central bank’s Decision 780/QD-NHNN on debt restructuring, helping
enterprises avoid overdue interest rate payments and continue taking out bank
loans.
Over
VND106 trillion worth of debt of over 6,200 borrowers were kept in group 2 in
which debt needs special attention, instead of being moved into group 3 of
substandard debt. The figure increased 22% against the end of 2012 and
accounted for 11% of total outstanding loans.
Adding
to bad debt in the city at nearly 6% as of the end of August, the real bad
debt ratio is up to 17%.
However,
when the central bank’s Circular 02/TT-NHNN with stricter requirements on
provisioning against risks and bad debt classification takes effect in June,
Decision 780 will end its validity. At that time, all debts will be
restructured and classified into the correct groups, sharply boosting the bad
debt ratio of the city compared to the current 6%.
According
to a report of the central bank’s HCMC branch, rising bad debt has hindered
enterprises in reaching loans. Therefore, the branch has suggested the
central bank speed up the restructuring of banks and the handling of bad debt
at banks.
The
branch has also organized many programs to help local enterprises gain access
to bank credit. Up to now, the programs have been organized in 24 districts
with over VND13 trillion worth of loans provided for 531 enterprises, 68
family-run businesses and one cooperative.
The
borrowers have enjoyed short-term lending rates below 9% per annum and medium
and long-term rates from 9-12% per annum.
As of
September 30, the branch had seen 203 enterprises in the city needing over
VND3.4 trillion, of which local banks gave over VND3 trillion worth of loans
to 149 enterprises.
Border
trade buoys rice prices
A
decline in rice exports via official channels has led local enterprises to
switch to exporting large volumes of the food staple to China via border
trade, fueling an improvement in local rice prices.
The
Vietnam Food Association (VFA) has warned against difficulties in rice
exports via official channels recently.
There
are no official statistics on total rice volume exported to China. However,
Lam Anh Tuan, director of Thinh Phat Company in Ben Tre Province, said that
the figure may be 500,000 tons or more in the past month.
“This
year, the total rice volume exported to China via border trade must be really
high,” Tuan said.
According
to rice exporting companies in the Mekong Delta, China has had strong rice
import demand through border trade while domestic supply is limited.
Therefore, rice prices in the country have increased strongly in recent
weeks.
Rice
prices in the delta have picked up by VND400 per kilo while unhusked rice has
marked up by over VND300 a kilo. Meanwhile, the summer-autumn output is
running dry while that of the autumn-winter crop is mainly used for domestic
consumption, Tuan said.
Duong
Van Men, a rice trader in Dong Thap Province, on Thursday told the Daily on
the phone that IR 50404 unhusked rice is around VND4,400-4,500 a kilo, up
around VND300-350 a kilo against last week.
Many
enterprises in Thot Not District in Can Tho City and Sa Dec Township in Dong
Thap Province have strongly purchased unmilled rice at VND6,800-6,900 a kilo
for IR 50404 rice and VND7,000-7,100 a kilo for long-grain rice, up VND400 a
kilo against the previous week, Men said.
Meanwhile,
rice exports via official channels continue to decline. In a recent meeting
in HCMC, VFA revised down this year’s rice export forecast to seven million
tons, down 200,000 tons compared to mid-September and 500,000 tons against
the predictions from earlier this year.
Last
month, the nation exported only 526,000 tons of rice, or 123,000 tons lower
than estimated.
Quoting
a report of VFA, Tuan of Thinh Phat Company said that local enterprises
registered to export 6.5 million tons of rice as of September 30, up only
100,000 tons against two weeks ago.
Source:
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
|
Thứ Sáu, 18 tháng 10, 2013
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