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BUSINESS IN BRIEF 4/10
Measures
for GDP growth in Q4
The
Ministry of Industry and Trade (MoIT) has insisted on practical measures to
boost GDP growth in the last three months of this year, with priority given
to industrial production, export value, and market stabilization.
The
MoIT expected to see higher industrial production increasing in the fourth
quarter at a year-on-year rate of 5.7%.
It
asked the industrial sector to strictly inspect its production activities and
closely cooperate with associations in helping local businesses iron out
their snags.
In
addition, it is essential to lower inventory level on the domestic market and
launch promotion programmes in both
It
also asked the industrial sector to speed up the implementation of key
projects in the support industry.
The
MoIT forecast that
The
Ministry said it is currently engaged in bilateral and multilateral
negotiations to expand market share and promote export activity. The focus
will be on implementing the already signed free trade agreements (FTAs),
exploring traditional markets, and penetrating new markets in the Middle
East, West Asia, South Asia, Africa, and
Regarding
the domestic retail market, the MoIT proposed balancing supply and demand and
stabilizing market prices. Retail sales and services in 2013 are expected to
rise 13% compared to last year’s figure.
The
Ministry stressed the need to implement promotion programmes in rural, border
and remote areas and encourage local consumers to buy made-in-Vietnam
products.
It
also requested relevant agencies to pay due attention to combating
counterfeit and low-quality products and protecting consumer rights.
Vietnam’s
economy looks bright in 2014: Economist
In
2013,
In
general,
Based
on improvements in inflation and CPI, Dr. Tran Du Lich forecasts in 2014 the
economy will be quite stable.
Emphasizing
the important solutions for economic development in 2014-2015, Dr Tran Du
Lich added that for short term strategy, the government should focus on
cutting the level of bad debts and accordingly help enterprises absorb
capital and resolve payment arrears to construction companies. The
massive piled debts have crippled many construction companies.
There
also needs to be a change in Government Resolution 02 over the VND30 trillion
(US$1.4 billion) lending package to shore up the real estate sector.
For a
long term strategy, firstly, the government needs an economy recovery program
until 2015. The program must strive for CPI yearly growth of 7 percent for
the period 2013-2015 and below 5 percent in following years.
There
should be a combination of better monetary policies, fiscal policies, foreign
trade policies and market policies to privatize some public services.
The
economy recovery program should be designed for medium term to eliminate
careless measures adopted before and switch from passive inflation
constraints to active. Inflation targeting must create surplus for monetary
and fiscal policies but not push up inflation.
Secondly,
the above inflation targeting, monetary and fiscal policies have to mobilize
social investment at 30-32 percent GDP for next three years. These should
have close coordination to balance social investment.
Thirdly,
for 2013 and 2014, the government should increase public spending such as
issuing government bonds exceeding the rate approved by the National Assembly
for construction debts and unfinished construction to stimulate the whole
country’s spending.
Fourthly,
these above measures should be inserted with breakthrough for restructuring
of state enterprises.
Exports
set to surpass target
The
country is expected to see an export turnover of US$131 billion this year,
representing a 14 per cent increase from 2012.
According
to a Ministry of Industry and Trade (MoIT) forecast, turnover would be 4 per
cent higher than the target set by the National Assembly earlier this year.
Its
figures revealed that in the first nine months of the year,
The
processing industry accounted for 69.7 per cent of the total, with turnover
of $67.24 billion, representing 26.4 per cent year-on-year increase.
Head
of the ministry's Planning Department Nguyen Tien Vy said the industry was
the standout performer in the total import-export turnover.
Mobile
phone and landline export turnover rose 75.5 per cent, while computers and
spare parts saw a 45.3 per cent surge.
Vy
said exports to the EU market in the nine-month period saw the highest growth
rate at 22 per cent, following by
The
foreign direct investment sector retained its leading position in exports,
accounting for 60.5 per cent of the total during the period.
Garments
and textiles, shoes, computer, electronic products and spare parts from the
sector made up 44 per cent of the total.
Head
of the Import-Export Department Phan Van Chinh added that businesses had
taken advantage of commercial trade agreements to accelerate exports.
Specifically,
items which enjoyed advantages from Certificates of Origin (C/O) last month
reached 60 per cent. In the South Korean market, the rate was up to 90 per
cent, while that in ASEAN and
Chinh
said export turnover had been on an upward trend, as the country's exports
traditionally surge in the last months of the year.
However,
he suggested that enterprises should further make use of preferential
treatment gained from signed commercial trade pacts.
In
addition, management agencies should further reform administrative procedures
to help grant businesses C/O.
He
also called for tax payment difficulties to be resolved and guarantees to be
given to exporters.
Cooking
gas prices finally subside in HCM City
The
retail price for a 12kg gas canister in
The
slump came after the world gas price this month decreased by $27.5 to $835 a
tonne over the previous month, Do Trung Thanh from Sai Gon Petro Gas, one of
the largest gas distributors in
Construction
of a joint US$450 million Viet Nam–Laos project to process salt in
The
Vinachem-backed project, signed in February last year with the Lao Planning
and Investment Ministry, is its first in the field.
Vinachem
will exploit salt across an area of 10sq.km for 20 years and also build a
factory to process 320,000 tonnes a year.
The
Lao Government granted the group 196.5sq.km of land to survey for possible
salt mines.
On
completion, the project will be able to supply the Lao market, reducing salt
imports and boosting economic development in Khammouan province.
According
to the International Council on Mining and Metals (ICMM), mining industry
represents 80 per cent of foreign direct investment in
Binh
Duong firms restructure to post trade surplus
The
southern
According
to Vo Van Cu, director of the provincial Department of Industry and Trade,
recent harsh years have pushed forward businesses' production restructuring,
leading to increasing export value and an inevitable export surplus.
Local
businesses have taken steps towards more stable and sustainable development
thanks to a steady exchange rate and inflation, declining interest rates and
falling costs for imported materials, the department said.
Cu
said businesses and craft associations in the province have taken the
initiative in having their export contracts and maintaining their production.
It was positive signal for the province's economic development this year.
The
recovery of major importers such as the US, EU, Japan, Australia, Brazil,
Argentina and the Middle East, along with the positive impacts from the
Trans-Pacific Partnership Agreement (TPP) negotiations, have raised their
export orders by 10-15 per cent compared with the same period last year.
However,
the decisive factor behind the surplus is the efforts of businesses to reduce
expenditure, said Phan Van Xo, President of the Binh Duong Association for
Exporters.
Le
Thanh Cung, chairman of the People's Committee of Binh Duong Province said
local and foreign businesses contributed to his province's economic growth.
Despite
the economic difficulty, Binh Duong's economic development remains high. Its
industrial value exceeded VND108 trillion ($5.1 million ), an increase of
12.8 per cent this year, he said.
Sugar
industry to increase exports
The
Viet Nam Sugar and Sugarcane Association has asked the Government to
strengthen measures to prevent sugar smuggling and allow the export of
locally produced product.
Nguyen
Hai, the association's general secretary, said sugar output had reached 1.53
million tonnes in the 2012-13 crop.
With
178,000 tonnes in stock since the beginning crop and 70,000 tonnes imported
under
However,
he said, locally produced sugar cannot compete with the prices of smuggled
one.
Speaking
at a recent conference in
Do
Thanh Liem, the association's deputy chairman and general director of the
Khnh Hia Sugar Company, said that smuggled sugar from
Although
domestic sugar producers have slashed prices, they are still high compared to
smuggled sugar.
"If
domestic sugar producers cut prices further to compete with smuggled sugar,
sugarcane prices will be cut back too. As a result, farmers will suffer
losses and may stop sugarcane cultivation," he said.
The
association has submitted a proposal to the Ministry of Industry and Trade
(MoIT) to seek approval for export of 300,000 tonnes of sugar via border
trade.
The
ministry has allowed enterprises to export 200,000 tonnes of sugar but only
for residual sugar, not refined sugar, because of a possible imbalance of
supply of locally refined sugar.
Nguyen
Thanh Long, the association's chairman, proposed that the Government strictly
inspect the temporary import and re-export of sugar and adopt more effective
measures to prevent sugar from being smuggled in the country.
In the
long term, he said the Government should develop policies for the sugar
industry with consistent regulations on import and export to support and
protect local farmers and the sugar industry.
He
also urged local producers to focus more on reducing production costs to
raise their competitiveness.
Sales
and service revenues rise on recent price hikes
The
country's total retail sales and service revenues in the first nine months of
this year reached VND1,932 trillion (US$92 billion), data from the General
Statistics Office (GSO) showed.
The
figure represents a 12.5 per cent year-on-year rise, GSO said, adding that
the rise would be only 5.3 per cent if price hikes were excluded.
However,
it was still higher than the 5.1 per cent rise of the first eight months this
year, it noted.
Among
the total, the trade sector, which accounts for 77 per cent of the total
revenue, rose 11.9 per cent, while the hotel-restaurant service was up 15 per
cent.
The
foreign invested sector posted the highest growth rate with 35.43 per cent in
the first nine months. The private sector was also up 16.7 per cent, while
the State-owned sector posted a decline of 7.22 per cent.
GSO
expert Vu Manh Ha said that the slight rise was mainly not due to rising
consumption demand but because of price hikes for several goods and services
in September.
The
rise was mainly due to the 10.66 per cent increase in school tuition in 46
cities and provinces nationwide from September. A hike of power and gas
prices also contributed to the increase of the retail revenues, Ha said.
The
Ministry of Industry and Trade also said that supply sources in the domestic
market were profuse, however, local consumption rose insignificantly due to
the slow economic rebound.
The
ministry expected that retail revenue this year would increase roughly 13-14
per cent against last year.
VN,
RoK firms explore economic potential
Businesses
from
Speaking
at the event, Deputy Minister of Planning and Investment Dao Quang Thu said
the Vietnamese Government highly valued the experience and economic
assistance from partner countries, especially
He
said
Highlighting
the similarities shared by the two countries in economic development, as well
as cultural and spiritual life, South Korean Ambassador to Viet Nam Jun
Dae-joo said that his country would always support Viet Nam and remain a key
partner to the country.
It is
also
Bilateral
trade between the two nations rose to $20 billion in 2012 from $500 million
20 years ago.
Both
sides started Foreign Trade Agreement (FTA) negotiations with the aim of
developing their trade ties and balancing two-way import-export.
Gold
auctions were handled legally: SBV
Management,
revenues and expenditures from gold auctions were precisely handled pursuant
to laws, announced the State Bank of
From
March 28 to the end of last week, the central bank already sold 1.611 million
taels of gold (59,87 tonnes) to the market through 61 auctions, generating
VND6.834 trillion (US$323.28 million).
Without
releasing the percentage of total revenue going to the State's budget, the
central bank affirmed that they fully complied with their legal obligations
and responsibilities.
"The
State Bank doesn't subsidise or compensate for the losses of attendees. The
auctions are bound to the law so as to secure the State's interest in this
measure," Nguyen Quang Huy, head of the foreign exchange management
said.
The
central bank has established a team to carry out gold auctions with members
from various departments and offices under the agency to ensure proper
implementation and objectiveness.
In
order to prevent speculation and price manipulation, the SBV reviews the
daily reports from credit institutions and enterprises on their activities
related to gold auctions.
The
latest updated reports showed that 18 credit institutions were able to settle
gold deposits with the first 30 tonnes (equivalent to 50.1 per cent of total
auctioned gold bars).
The
remaining supply of gold, around 29 tonnes, far below the range of 50-100
tonnes imported each year, was sold on the market by the winning bidders.
The
department has conducted regular inspections of the 2,500 licensed retail
points in the country to ensure prices are transparent and in compliance with
regulations.
The
SBV also said banks must keep a record of ID for clients who carry out gold
transactions worth more than VND300 million ($14,285) under Government
Decision 20/2013/QD-TTg, to prevent money laundering.
Responding
to concerns that the pressure of gold auctions might add to exchange rates
and inflation, Huy said that the central bank's market management prevented
such impacts and helped stabilise the macro economy.
Big
companies continue to seek tax benefits
State
agencies are worried about the budget deficit while many big companies from
various sectors ask for tax incentives and other support from the government.
According
to Bui Ngoc Huyen, chairman of Xuan Kien Auto JSC (Vinaxuki), they are able
to produce and assemble 40% of a car with five to seven seats domestically.
They want a 70% reduction of excise tax from January 2014. They say this will
help them to increase the production scale of car brands for rural areas and
transport companies.
At the
same time, Vinaxuki asked for a tax delay of VND750 billion (USD36 million)
so the company can pay for design work and technology transfer from the
German DMG and Japanese Moriseiki companies. They also want to borrow VND250
billion to develop metallurgy factories.
Previously,
several domestic car manufacturers sent their calls for help to the Ministry
of Finance, asking for tax delays worth thousands of billions of VND so they
can "improve and develop the domestic car industry."
Not
only do the car manufacturers want a tax delay, other big players also seek
tax incentives. Viettel Group, one of
An
official from the Ministry of Industry and Trade said car manufacturers
asking for tax incentives is nothing new. The draft plan to develop the
Vietnamese car industry to 2020, with a view towards 2030, said that excise
tax for cars with less than nine seats and over 40% localisation rate will be
reduced by 70%. However, he said, the plan is still just a draft.
According
to the General Department of Taxation, the state budget will be greatly
affected if so many firms delay taxes for five years. During such a long
period, they may try to avoid their duties completely.
Prime
Minister Nguyen Tan Dung during a talk with representatives of 50
Dung
said the Government encouraged foreign investors to join
Despite
adverse impacts of the global economic turmoil, the Government has managed to
maintain macro economic stability and obtain the average gross domestic
product (GDP) growth rate of around 5.6% over the past three years, Dung
said.
Two-way
trade between the two nations hit US$25 billion in 2012 and US$17 billion in
the Jan-Jul period of 2013. The figure is expected at US$30 billion by the
end of this year.
Currently,
the
Concerning
the real estate market, Dung said that the global economic crisis has
affected this sector. The Government has designed a series of measures,
including the restructuring of housing products, administrative reform,
provision of preferential credits for homebuyers, and permission for
foreigners to own houses in the country, to revive the realty market.
During
meetings with the U.S. Secretary of Commerce Penny Pritzker and the U.S.
Trade Representative Michael Froman, Dung also pinned high hope on the
Trans-Pacific Partnership (TPP) Agreement and its benefits for TTP countries,
saying that the pact will develop comprehensive relations between Vietnam and
the U.S.
Dung
affirmed
On the
sidelines of the General Debate of the 68th session of the UN General
Assembly on Saturday, the Prime Minister also met Haitian counterpart Laurent
Salvador Lamothe and Moldovan Prime Minister Yuri Lianke. Earlier, he also
had a meeting with U.N. Secretary General Ban Ki-moon.
Vietcombank
lends VND1 tril. to seaport project
Bank
for Foreign Trade of Vietnam (Vietcombank) last Thursday signed a credit
contract to provide VND1 trillion for the Coastal Power Center Seaport
developed by Power Generation Corporation 1 under Vietnam Electricity Group
(EVN).
EVN
will construct a deepwater seaport as an auxiliary work for the
Located
in Dan Thanh Commune, Duyen Hai District in the Mekong Delta
Holcim
offers US$2 million in prizes for green design
Students
and professional architects will have a chance to win prizes worth US$2
million at the Holcim Awards this year.
Holcim
Group via its Holcim Foundation has launched the fourth edition of the
international competition to seek sustainable construction projects and
ideas. The event also includes seminars on green buildings constructed before
the need to adhere to climate change around the world.
Holcim
Awards welcomes projects in the fields of architecture, construction, civil
construction, landscape design, materials and technology. The organizer will
offer a host of prizes with the top prize valued at US$200,000. The deadline
for applications is March 24.
Speaking
at the seminar on green construction in HCMC last Friday, Yannick Millet,
senior consultant of the Vietnam Green Building Council, said that this is a
chance for green works in
Hoang
Manh Nguyen, director of the
The
other side of the property market
The
frozen property market is largely characterized by the cash flow into
projects being choked off, prompting developers to leave their projects idle
or half-done, causing outcries among customers who have contributed funds to
investors. Numerous lawsuits have been filed against investors who failed to
deliver apartments to buyers on schedule or fail to execute projects at all.
On the
other side of the market, there are also developers who have managed to
complete their project earlier or on schedule, but such developers are also sitting
on fire as buyers refuse to fulfill payments and take over the properties.
This situation sheds light on how the property market has ground to a halt.
The
images of customers surrounding property projects to object or suing project
investors due to slow implementation are no longer strange. But that
customers sue investors just because projects are implemented too fast is
rare.
Such
is the case that happens to Dai Thanh apartment project invested by Lai Chau
Construction Company No. 1 in
According
to an executive of Lai Chau Construction, to share difficulties with
customers who have not owned houses, the company has tried to accelerate the
progress of the project. Though many announcements of payments have been
sent, customers do not make payments and some others even sue the company for
working ahead of schedule.
In
fact, the reason behind this paradoxical situation is that buyers cannot
manage to make payments in accordance with the project’s progress.
Dai
Thanh apartment project sparked a fever early last year although the market
was in difficulty as its location is convenient and the developer offered a
reasonable price of VND10-12 million per square meter for apartments of 38-70
square meters. With the current progress, apartments of the project will be
handed over to customers one year ahead of the schedule instead of late next
year as planned at first.
Meanwhile,
customers of An Hung new urban area in
The
urban area has been constructed right on schedule since last year, but
hundreds of villas and houses are empty with no residents. According to the
investor, many of the customers are speculators and were stuck on the frozen
market.
Late
last year, FLC Group, investor of
Tran
The Anh at FLC Group confirmed that FLC had finished construction.
“Therefore,
we will persuade customers to receive apartments and pay the balance of 30%
as committed. If customers do not come for the handover, we will sell out
those apartments,” Anh said.
Similarly,
only around 200 among 600 customers have received villas and adjoining houses
in Lideco urban area invested by Tu Liem Urban Development Joint Stock
Company in
Houses
which are not received and paid for have caused huge trouble to project
developers. For instance, the investor of Lideco urban area has had to pay
interest sums totaling VND200 for over 400 customers who have not fulfilled
their payment obligations over the past six years and this situation may be
prolonged.
The
investor of Geleximco new urban area, Hanoi General Export Import Joint Stock
Company (Geleximco), has to incur a debt of up to VND200 billion as its
customers do not make payments. Besides, hundreds of villas of the project
have begun degrading as they are unused.
However,
many enterprises still have to persuade customers or offer preferential
interest rates.
“The
market remains difficult and home buyers are also in difficulty, and thus we
do not want to take strong measures forcing them to make payments,” said Vu
Van Hau, deputy general director of Geleximco.
According
to Pham Si Lien, vice chairman of the Vietnam Federation of Civil Engineering
Association, that project developers accelerate the implementation progress
and transfer houses early amid current difficulties of the market should be
encouraged.
“However,
it is not easy for customers with a real demand of accommodation to have
enough money to pay as most of them are low- and medium-income earners.
Meanwhile, for speculators, the frozen property market has pushed them to the
corner, let alone the pressure of bank interests,” Lien said.
This
situation is the consequence of the too rapid development of the property
market in the past time, he added.
HDBank
shareholders approve merger plan
Shareholders
of HCMC Development Commercial Bank (HDBank) during the extraordinary
shareholder meeting last Saturday approved the plan to merge with Dai A
Commercial Bank (DaiABank) at the share swap ratio of 1:1.
The
approval came after the bank’s management persuaded investors of long-term
benefits. Earlier in the shareholders meeting, many investors protested the
swap ratio, saying the HDBank share should be priced higher than that of
DaiABank.
Addressing
concerns over disadvantages the ratio may bring to shareholders, Le Thi Bang
Tam, chairwoman of HDBank, said that medium and long-term benefits are the
key factor of the merge deal. By merging with DaiABank, HDBank will take
advantage of transaction and customer network of DaiABank to facilitate its
development strategy.
With
the network of DaiABank merged into HDBank’s system, the consolidated bank
will become one of 10 biggest banks in the country. Meanwhile, it is
difficult to obtain a license to open a branch now, Tam said.
To
expand operation scale, there are only two ways, merging with another bank
and issuing additional shares. The latter way seems to be challenging given
the sluggish situation of the stock market, Tam added.
DaiABank
has 65 transaction points in
Nguyen
Van Dung, deputy director of the central bank’s HCMC branch, also asserted
that the new HDBank will be one of the 10 biggest banks in the country.
Nguyen
Ngoc Dang, general director of HDBank, said that HDBank has set up plans to
deal with bad debts of DaiABank, which accounts for 6.8% of total outstanding
loans of the bank. Specifically, HDBank has considered four solutions,
including establishment of a steering committee for mortgaged asset handling,
selling a part of bad debts to Vietnam Asset Management Company (VAMC), or
converting debts into capital contributions.
The
new bank will bear the HDBank brand with a chartered capital of VND8.1
trillion. All DaiABank employees and their wages will be maintained after the
merger deal.
All
merging procedures between the two banks will be finished in December.
Earlier,
HDBank has acquired 100% equity of Socíeté Générale Viet Finance. After
getting approval from the central bank in October, the financial firm will
become a subsidiary of HDBank.
Japanese
breathe life into eco-city projects
The
Vietnamese government is seeking investment from Japanese investors for a string
of urban development projects.
Deputy
minister of construction Nguyen Tran
“Particularly,
we should expand our co-operation in housing, urban development and eco-city
development,”
According
to Suzuki Hideo,
“I can
cite the examples of the tightening of regulations permitting foreigners to
buy property and land in
Phung
Quang Hung, chairman of Vinh Phuc province said that with the province’s
large quantities of land and clean environment would make Vinh Phuc a
suitable for real estate projects, especially those of housing development
and eco-cities.
Meanwhile
Nguyen Van Suu, deputy chairman of the Hanoi People’s Committee said that in
the future, the city will aim to develop five satellite urban development
areas in Xuan Mai, Phu Xuyen, Soc Son, Son Tay and Hoa Lac. All five
satellite city projects are presently seeking Japanese investors.
In
addition, the Nhat Tan to Noi Bai expressway, presently under construction,
will present new opportunities for a range of urban development projects with
the potential to attract Japanese investors.
The
issue of developing eco-cities in
Last
year, a group of Japanese private developers came to
January-September
IIP posts slight growth
The
January-September Index of Industrial Production (IIP) posts a slight rise of
5.4% year-on-year which signals an inconsiderable recovery of local
industrial production.
According
to the Ministry of Planning and Investment, with the growth estimated at
5.4%, the mineral exploitation index is still down dropped 0.2% while it
marked up 1.9% year-on-year in the first six months of 2013. The lower growth
is ascribed to local crude oil output volume dipping 0.1% year-on-year.
Similarly,
coal consumption slumped in the rainy season while thermal-power sales volume
fell given an increase in hydropower supply. At the same time, coal demand
among household producers has shrunk due to difficulties in seeking outlets
for the products.
Manufacturing-processing
industries in January-September are up 6.8% over the same period last year,
higher than the six-month growth of 5.7%. The increase is mainly contributed
by a number of industries with big commodity volumes like textile-garment, footwear
and vehicles. However, other manufacturing and processing industries showed a
year-on-year decline in indexes, with iron, steel and cast-iron production
slipping 1.9% and shipbuilding and floating components tumbling 24.4%.
In
particular, the additional values of the manufacturing-processing sectors are
mainly created by foreign direct investment (FDI) companies as exporters. The
nine-month export value of the FDI sector was up 12.4 billion, exclusive of
crude oil exports.
Power
and gas consumption surged 8.3%, with power volume consumed by local
producers including those in the manufacturing and construction industries
surging 9.6% to 44.8 billion kWh and power consumption of agriculture and
seafood jumping 16.2%.
Power
consumption by industrial production, construction and
agriculture-forestry-fishery industries are recovering, proven by the energy
sales volume being higher than that in the same period in 2012.
The
IIP indicated signs of improvements in early 2013, moving up from 4.9% in
January-March to 5% in January-June and then to 5.4% in January-September.
The ministry attributed the steady growth to the recovery of the
manufacturing-processing industries rising to 6.8% in the third quarter from
4.6% in the first quarter.
ITG
shut prominent textile plant amid dispute
Leading
US fabric maker International Textile Group (ITG) and Vietnam’s Phong Phu
Corporation are seeking investors to take over their cotton manufacturing
joint venture in Danang after the factory has been held in stasis for nearly
two years by a dispute between the two partners.
An
anonymous source from Danang’s Industrial and Export Processing Zones
Management Authority who is familiar with the case confided in VIR, saying
that the joint venture had no interest in reopening the factory named
Burlington Phong Phu Supply Chain City and that both had plans to divest by
transferring the project to other investors.
“Foreign
investors from Singapore and Hong Kong have expressed interest,” revealed the
source. However, no final decision has been made.
In
2006, ITG partnered with Phong Phu – a wholly-owned subsidiary of state-run
textile and garment giant Vinatex – to build the cotton manufacturing complex
in the central coastal city of Danang.
The
project was among Vietnam’s ten largest in 2006 with $80 million in
investment capital, of which $22 million came from a Techcombank loan in
October 2007. ITG is the majority shareholder with 60 per cent and Phong Phu
the remainder.
Soon
after opening, however, the project incurred losses primarily due to
manufacturing inefficiencies, product quality issues, and a shortage of
available operating capital, noted ITG’s November 2011 quarterly report.
VIR’s
source revealed that ITG and Phong Phu were in regular dispute over capital
contribution and resultantly, in December 2011, ITG’s board of directors
passed a resolution suspending the project for an undetermined period of
time. The facility was shut down in January, 2012.
In
March the same year, the joint venture still owed Techcombank $18.2 million
including the principal and accrued interest, reported ITG in March 2012.
Le
Tien Truong, deputy general director of Vinatex, refused to comment on the
case when contacted by VIR and this newspaper has not yet been successful in
making contact with anyone from ITG who can comment on the dispute.
However,
ITG in its March 2012 quarterly report stated that there was no dispute
between the company and Phong Phu by that time. “The company and its joint
venture partner have entered into arbitration to resolve their disputes,”
said this report.
German
group pledges to fund wind power project in Soc Trang
The
German Enercon Industries Corporation has pledged to arrange funding and
supply equipment for a wind power project in the Mekong Delta province of Soc
Trang.
The
project, projected to cost 1 billion EUR and have a design capacity of
2,600MW, is part of the province’s wind power development plan.
The
group made the commitment after making a fact-finding tour to the province to
assess local wind power potential.
Experts
of the German group said Soc Trang has favourable conditions to develop wind
power, particularly the coastal area.
The
province has outlined a master plan on wind power development until 2020 with
a vision to 2030, under which the coastal Cu Lao Dung and Tran De districts
and Vinh Chau commune are zoned for the purpose.
Total
investment for projects under this plan is estimated at nearly 8,300 billion
VND (390 million USD).
Chairman
of the provincial People’s Committee Nguyen Trung Hieu said he will create
all favourable conditions for investors to carry out their work.
Lam
Dong authorities scrutinise delinquent projects
An
inspection is planned for nearly 500 delayed projects in Central Highlands’
Lam Dong province.
According
to the Lam Dong Provincial Department of Planning and Investment, the
province is now host to 452 delayed domestic projects and 15 delayed foreign
direct investment (FDI) projects.
Many
are in the areas of trade, tourism, agriculture, industry, and real estate.
Phan
Van Dung, deputy director of Lam Dong Provincial Department of Planning and
Investment said the department had reported the delayed projects to local
authorities. He said that they were doing their best to avoid delayed
projects as it has a major impact on residents and the investment climate of
the area.
Dung
added that the province had created sufficient conditions for investors and
had already extended deadlines up to three or four times in certain cases.
The province plans to meet investors in November and may withdraw their
investment certificates if the projects are not planned to resume in the near
future.
In the
first eight months of this year, the province cancelled 10 delayed projects
including an $800,000 agricultural project registered by Taiwan’s Singdong
Co. At current, the province has 110 registered foreign invested projects
capitalised at over $475 million.
Luu
Trung Duong, head of the Foreign Economic Office under Lam Dong Provincial
Department of Planning and Investment, said that of all the inspected
projects, FDI was primarily going into agriculture or industrial parks and
was small-scale, around $1 million each. The province’s bigger projects in
tourism, service and real estate were capitalised by domestic investors.
The
Sheraton Dalat Resort project in the Central Highlands’ Dalat city was
invested in by Robin-Hill Resort Limited Company, a member of Saigon Invest
Group, one of Vietnam’s leading private firms.
Scheduled
to open in 2011, the $25 million project will feature 150 guest rooms and
other facilities, including an indoor swimming pool, kids club, fitness
centre, spa, and three signature restaurants and bars. The hotel will also
feature nearly 500 square metres of meeting and banquet space. The project
has yet to make anything more than regulatory progress.
Similarly,
Cables and Telecommunication Materials Joint Stock Company (Sacom) broke
ground on their Sacom Resort project at Ho Tuyen Lam tourist area in Dalat in
2008.
The
$107 million resort will include both a 4 and 5-star hotel, an 18 hole golf
course and 400 villas that can house 1,250 residents and 3,000 travelers.
As per
its investment certificate, Sacom was obligated to complete the golf course
in October last year, the villas in November 2014, the resort by the end of
2011 and remaining facilities also in 2012.
Thus
far, the investor has only completed eight villas and nine holes of the golf
course.
Do Van
Trac, general director of Sacom said that the resort’s progress was still
behind schedule due to land clearance issues and slow processing of
compensation by the province.
In the
Ho Tuyen Lam tourist area, a total of 36 housing projects with the total
capital of $434.7 million were registered over the last eight years. Only two
have been completed, most have requested extensions and 12 have yet to even
break ground.
The
Cam Ly-Mang Ling Trading Service Joint Stock Company’s Cam Ly-Mang Ling
resort project, capitalised at $300 million, was granted an investment
certificate in August 2006. It is still completing site clearance and
compensation
Property
developers woo buyers with incentives
Real
estate developers are using promotion programmes in a drive to win buyers as
the downturn of the real estate market is continuing to mount.
Property
developers are introducing incentives that include supporting buyers in
finding lessees for a share of rental payments made to the owner and
temporarily subsidising potential lessors if they fail to find somebody to
rent the property within a certain number of months.
These
incentives, say experts, are supporting developers in finding buyers, but
also protecting the buyers from risk in the early stages of ownership.
Refico,
the developer of high-end apartment complex Watermark adjacent West Lake in
Hanoi, offered customers a highly attractive incentive package that included
nearly $10,000 in furniture and guaranteed a 14 per cent return on their
investment.
This
was the first real estate incentive programme to be offered in Hanoi.
The
package includes a roughly $4,000 a month guaranteed rental payment from the
developer for the first year of ownership to all investors, regardless of
whether they successfully lease their unit or not.
"We
consider this one of the most innovative incentives on the market
today," said Vu Thanh Tung, general director of Tay Ho Tay Real Estate
Joint Stock Company, the project's management company.
"These
incentives protect buyers from the instability of the market and they can be
sure of a specific return on their investment in the first year," Tung
added.
The investor
in Fusion Suites Danang Beach, a seaside residential project in Danang,
announced it would guarantee lease payments for up to three years if the
owner does not find a lessee and will cover potential losses sustained by
buyers over the same period.
Another
Danang project, the Hyatt Regency Residences developed by Indochina Land, is
promising buyers capital gains of 5 per cent for the first two years. This
means a $400,000 unit is guaranteed a cash return of $20,000 each year.
Experts
say that more and more property developers will be offering incentives in the
coming time to entreat buyers but that only those with sufficient capital
strength should consider the option.
MoF
considering penalising loophole auto importers
The
Ministry of Finance is proposing the government collect back taxes from
overseas Vietnamese (Viet Kieu) repatriates who imported automobiles and
other vehicles into Vietnam for personal use but later sold them when they
were obligated to register.
The time
to start collecting back taxes will be after the date Ministry of Finance
(MoF) Circular 118/2009/TT-BTC dated June 9, 2009 took effect (45 days from
the date of signing).
Under
current regulations, each Viet Kieu repatriate is allowed to bring one personal
car to Vietnam for personal use. This vehicle would be exempted from import
duties and value added tax and only incur special consumption tax.
In a
report en route to the prime minister, Deputy Minister of Finance Do Hoang
Anh Tuan argued that in light of Clause 21 in the Import Export Tax Law,
people who had imported commodities that were exempt from tax and changed
their use would have to pay back taxes up to the time they changed the use of
those commodities.
Clause
6 stipulated that commodities that had changed their usage would pay the
appropriate tax rates at the time the change occurred.
Accordingly,
Viet Kieu repatriates who brought cars or other vehicles into Vietnam for
personal use but later sold the vehicles prior to registering them (to avoid
issues with the transition) were obligated to pay back taxes (import duty and
value added tax).
The
Ministry of Foreign Affairs agreed with the MoF’s proposal, but argued that
collection of taxes needed to closely follow the law and have a specific timeline.
In its
comments on the proposal, the Ministry of Public Security recommended
stricter sanctions and that Viet Kieu who had sold their automobiles would
have to pay back taxes and penalty fees for administrative violations.
Deputy
Minister of Public Security Pham Quy Ngo even proposed confiscating the
vehicles that were believed to cash in on legal loopholes.
Luxury
automobiles imported by Viet Kieu for what they registered as personal use
jumped sharply in 2011-2012. They were often very high-end and sold
immediately after entering the country, resulting in a massive loss for the
state budget as they avoided duties and taxes normally imposed on imported
vehicles.
The
MoF is reviewing its policies to establish whether it should go after back
taxes on these automobiles.
Pepper
exports hit 743 million USD in nine months
Vietnam
fetched 743 million USD from exporting 112,000 tonnes of pepper in the first
nine months of 2013, representing year-on-year increases of over 20 percent
in volume and 16.5 percent in value.
In
September alone, the country shipped around 11,000 tonnes of pepper abroad,
earning 72 million USD, said the Vietnam Pepper Association (VPA).
The
association attributed the increase to the rising demands of foreign
importers and the mounting prices of pepper in the global market.
Vietnam
has more than 50,000 ha under the spice, mainly in the six provinces of Gia
Lai, Dak Lak, Dac Nong, Binh Phuoc, Dong Nai and Ba Ria-Vung Tau.
It
exports pepper to more than 90 countries and territories around the world.
Source:
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Năm, 3 tháng 10, 2013
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