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BUSINESS IN BRIEF 7/10
Bad
supply chains soil agriculture sector
Weak
supply chains and unreliable products have prevented the agriculture sector
from growing in recent years, said Deputy Minister of Agriculture and Rural
Development (MARD) Nguyen Thi Xuan Thu at a forum in Ha Noi on Thursday.
"Agriculture
creates employment for about 70 per cent of
At the
forum, held by MARD, the Asian Development Bank (ADB) and the French
Development Agency, domestic and international experts recommended policies
to help
Nguyen
Do Anh Tuan, director of MARD's Centre for Agriculture Policy Consultancy,
said that
Tuan
also urged more investment in the fishery sector and irrigation system.
"We
need to control the quality and hygiene of food, ensure food security, join
bilateral agreements and ensure that trade laws and regulations are in
accordance with those of the World Trade Organisation as well as
international standards," he said.
Giovanni
Capannelli, ADB's Special Adviser to the Dean, said that
Consequently,
he pointed out, agriculture policy needed to focus on boosting productivity,
enhancing supply chain management and increasing investment for research and
development, agriculture promotion and rural infrastructure.
Capannelli
also said it was necessary to improve the financial policy for agricultural
enterprises, enhance the competitiveness of the breeding industry and improve
food safety standards.
He
added that the four countries would produce 12 reports about national policies
and other technical manuals to enhance agricultural productivity this year.
U Tin
Htut Oo, Chairman of the National Economic and Social Advisory Council of
Myanmar, said that when it came to policy making, CLMV countries were stuck
in the mindset of the 1968 Green Revolution, which focused simply on boosting
productivity.
The
region needed to adopt a new approach to agricultural development that would
ensure food security, environmental sustainability and economic development
opportunities, he said.
Imported
pesticides saturate VN market
Concerns
are growing about the ineffective management of plant protection chemicals in
the domestic market.
According
to the Plant Protection Department under the Ministry of Agriculture and
Rural Development (MARD), there are currently around 1,100 types of plant
protection chemicals on the market, but 90 per cent of raw materials were
imported.
Official
statistics show that in the first eight months of this year, $454 million
worth of raw materials for plant protection chemicals were imported, and more
than half came from
Tran
Thi Thang, a farmer from Chuong My District in Ha Noi, said her family had a
5,000sq m vegetable farm, but struggled to find an outlet that sold reliable
plant protection chemicals.
Thang
said she had spent about VND1 million on various types of plant protection
chemicals, but was unsure about which ones were reliable.
"We
can only listen to what the shopkeepers tell us, but they often try to sell
us substandard products to make a quick profit," she said.
Nguyen
Xuan Hong, head of the Plant Protection Department, said there were 97
small-scale outlets for self-processed plant protection chemicals, but
government agencies were unable to control their activities.
Agriculture
Minister Cao Duc Phat said the management of plant protection chemicals was a
top priority, but regulations regarding the chemicals were established 10
years ago, and were outdated.
These
regulations are going to be replaced by the Law on Plant Protection and
Quarantine, which should provide a tighter legal framework.
According
to experts, the ineffective management of plant protection chemicals was because
there were too many vendors and farmers lacked information.
Experts
are calling for better co-ordination among agencies to build distribution
channels and information sources for farmers, where they can find out more
about the various types of plant protection chemicals available and report
companies that sell inferior products.
Sweden
brings winds of change to VN
Local
and foreign stakeholders in the energy sector discussed the potential for
renewable energy and energy efficiency projects in the Mekong Delta
Twenty-one
projects, including 10 capacity-building projects on energy efficiency and
renewable energy, were presented at the workshop for investment
opportunities.
The
workshop was one of the final activities of the Partner Driven Cooperation
Programme on energy efficiency and renewable energy between An Giang Province
and the Swedish Energy Agency.
It has
been implemented since 2012, said Maria Selin, counsellor and deputy head of
mission for the Swedish Embassy.
As
With
the Partner Driven Cooperation (PDC) model, sustainable partnerships can be
maintained over time even without
Environment
and climate change are the priority areas for strategy cooperation between
the two countries, she added.
The
PDC programme, with a total budget of US$1.15 million, aims to develop
capacity in both the public and private sectors in order to increase the
number of energy efficiency and renewable energy applications in An Giang
Province.
A
training programme for initial project development and financial engineering
is the main focus of the PDC programme, which is funded by the Swedish Energy
Agency, the Swedish International Development Cooperation Agency (SIDA) and
provincial government.
Business
plans for several projects were developed under the financial engineering
training programme, including a small-scale gasification of rice-husk project
and three projects for the production of pellets from biomass residues.
It
also supports project development with a focus on capacity-building and
utilisation of climate change through the carbon market, as well as a
clean-development mechanism by raising awareness and providing assistance in
addressing barriers to project development.
The
Centre of Excellence on Renewable Energy and Energy Efficiency, which was
established under the programme, plays an important role as an operational
counterpart between the project partners.
In the
past two years, the two sides have jointly developed three projects,
including the PDC Programme on Energy Efficiency and Renewable Energy, said
Vuong Binh Thanh, chairman of An Giang Province's People's Committee
Other
projects are the An Giang-Pitea Sustainable Community Development and the An
Giang-Vaxjo Building Capacity on Energy Development Programme, Thanh said.
An
The
province exports 600,000 tonnes of rice per year and 140,000 tonnes of
seafood per year.
Nguyen
Duc Cuong of the
More
than 118 million tonnes of biomass was being produced every year, mainly from
husks and straw, bagasse and sugarcane leaves, corn residues, natural and
planted forest, barren lands, deforested hills and planted trees, Cuong said.
A
total of 4.8 billion cubic metres of biogas could also be recovered every
year from husbandry activities, he said.
SHB
helps fund new projects
Sai
Gon Ha Noi Bank (SHB) will offer loans of nearly VND1.2 trillion (US$56.8
million) for the construction of a hydro-power plant in
Accordingly,
the HCM City branch of the bank would lend VND584 billion ($27.7million ) to
Dak Nong VRG Joint Stocks Company – investor of Dak Sin 1 Hydro-power Plant
located in the province's Dak R'lap District. The loan accounts for about 70
per cent of the total investment needed for the plant's construction.
The
dual turbine hydro-power plant is expected to yield about 105.61 million KWh
yearly, meeting power demand in the province as well as reduce power loss
during power transmission.
The
bank also committed to lend VND600 billion ($29 million) for the construction
of a new
The
bank's deputy general director Dang To Loan said that one of the bank's
priorities this year was to finance key infrastructure projects in a move to
boost its credit growth while fulfilling its social responsibility to the
country's development.
Hai
Phong attracts new FDI projects
The
northern port city of
According
to the latest report of the Hai Phong Economic Zone Management Board, of the
new foreign-invested projects, the most significant was the $1.5 billion one
invested by LG Electronics from the
The
four other foreign-invested projects were King Plastic Pte Ltd and Dongbu
Singapore Pte Ltd (both from
The
management board also granted investment certificates to three domestic
projects with a total registered capital of over VND290 billion ($13.8
million).
In
addition, the city authority agreed to add $25.1 million to the investment
capital of seven ongoing foreign-invested projects.
In the
first nine months of this year, the Dinh Vu-Cat Hai Economic Zone in the city
attracted 13 foreign-invested projects valued at $1.776 billion and 11
local-invested ones, worth VND1.765 trillion ($84 million).
By the
end of September this year, the city's economic and industrial parks had 138
valid foreign-invested projects with a total registered capital of $5.368
billion and 70 domestic ones worth more than VND 36 trillion ($1.7 billion).
In
August alone, exports to the market hit $384.3 million, according to
statistics from the General Department of Customs.
During
the reviewed period, telephones and components experienced the highest
turnover of $871.3 million, accounting for 30 per cent of
They
were followed by footwear at $358.5 million, marking a yearly rise of 8 per
cent, and textiles and garments at $307.8 million, up 3 per cent.
The UK
Government has announced the launch of a business chamber in
The
business chamber is meant to make official the existing British Business
Group Viet Nam and offer more support for British businesses in
Despite
ranking seventh in terms of value, transport means and components posted the
strongest growth of 160 per cent.
Other
items that recorded encouraging turnover growth including wood and wooden
products, coffee, computers, electronics, seafood and pottery.
Nguyen
Thi Hong Thuy from the
In
order to expand trade relations sustainably, she urged Vietnamese businesses
to focus on improving awareness in these areas, while intensifying trade
promotion activities.
Experts
have branded the
They
added that Vietnamese businesses would make higher profits if they could meet
the
The
In a
report released on Thursday, it said around 1,700 units were launched in the
apartment-for-sale sector during the third quarter, a 45.8 per cent rise
quarter-on-quarter and 11.6 per cent up from the period last year.
The
affordable segment accounted for 72.4 per cent of the supply, and the
high-end segment for 21.1 per cent.
The
rise in the number of new launches, the sharp increase in the number of
projects being advertised, and the amount of advertisement reflect
developers' reviving confidence in the market, Ngoc Le, CBRE's senior manager
for research and consulting, said.
The
new price range for the high-end segment is getting closer to buyers'
expectations after falling to US$1,300-1,600 per square metre after
incentives.
Marc
Townsend, managing director of CBRE, said both the affordable and high-end
segments were witnessing sales because of "encouragingly longer payment
terms."
Developers
who had been cautious about extending payment terms have been offering
flexible payments in the third quarter, allowing the last payment of 50-70
per cent of the cost within one or two years after handover.
Districts
2 and 7 have been bright spots in the apartment market due to the fact that
pricing has become more affordable and infrastructure is set to significantly
improve with the opening of Sai Gon Bridge 2 next month.
"Sales
were triggered again, projects are handing over actual units, people,
especially wealthy Vietnamese and expatriates, are moving in, giving the
areas more energy," Townsend said.
"These
two districts are always at the top of the inquiry list and in the top five
of the most sought-after rental markets."
The
report said the two districts would continue to attract high-income people,
while Binh Tan and Thu Duc will be the choice of middle – and low-income
people.
In the
office space market, vacancy levels in grade A and B buildings fell by 3.5
per cent and 0.3 per cent quarter-on-quarter since there was limited new
supply and continued demand from companies centralising operations and
consolidating occupational requirements.
Net
absorption in the A and B segments was 27,720sq.m, 31.1 per cent up
quarter-on-quarter and almost three times the rate a year earlier.
The
segments also saw rentals climb respectively 3 per cent and 3.2 per cent
quarter-on-quarter to $32.47 and $18.73 per square metre per month.
"There
are identifiable sub-sectors within the market and it appears that the top
seven or eight properties in District 1 are now detaching themselves from the
rest of the market," Townsend said.
They
are already raising rents while those in the next tier, A – or B+, are acting
in a more stable manner.
The
retail sector saw tenants moving out and rentals softening in the third
quarter.
With
no new supply coming into the market for two consecutive quarters, the
negative absorption was 4,133sq.m, reflecting tenants' dissatisfaction with
rentals at major shopping centres and the number of visitors they are able to
generate.
While
malls in the central business district (CBD) maintained their high rentals
and waited for the best contracts, non-CBD retail rent was adjusted downwards
to attract retailers.
"Retailers
do not actually shut down their business, they simply relocate, moving out of
the overpriced CBD retail centres to high-street shop houses in the centre or
on the periphery, which offer more affordable rates and attract larger
footfalls," Ngoc said.
But
the report named several malls –
Besides,
in the context of consumers reducing spending amid worries about recession,
unemployment, and high prices, food and beverage and convenience stores that
supply basic needs remain active.
In
response to this,
The
report said any pick-up in the retail market would have to wait for an
economic recovery.
The
serviced apartment segment has been increasingly fragile, with both rents and
occupancy falling.
Grade
A rentals saw a fall of 4.4 per cent quarter-on-quarter while occupancy
decreased by 5.1 percentage points.
"This
steep rise in the serviced-apartment vacancy rate amid largely softened rents
is the result of fierce competition from buy-to-let landlords," Ngoc
said.
Exports
of rice to decrease sharply
This
year, the country's rice export is planned to stand at 7 million tonnes,
according to the Viet Nam Food Association (VFA).
According
to the VFA, the world rice export market faced difficulties as supply
outstripped demand, while rivals from
In the
fourth quarter, it is estimated that the rice demand of African countries
will range between 3-3.5 million tonnes while
By
September 30, Vietnamese rice export volume had reached 5.2 millions tonnes
at an average price of about US$429 per tonne. However the rice volume
decreased $13.79 per tonne over the same period last year.
The
2007 ASEAN-Korea Free Trade Agreement has significantly increased trade
between
Le An
Hai, deputy director general of the ministry's Asia-Pacific Market
Department, said two-way trade went up from US$6.58 billion in 2007 to $21.1
billion last year.
It is
expected to top $27 billion this year, he said at a conference organised
yesterday by the HCM City WTO Centre.
The
two sides have pledged to boost exports of Vietnamese farm produce to reduce
The
FTA may have helped
As an
agricultural country,
Hong
Won Sik, general director of Lotte Viet Nam Shopping Co Ltd, said
Kim
Tae Ho, non-food director of Lotte Viet Nam Shopping Co Ltd, said however the
Korean Government has monthly limits on farm imports.
Ho
said Vietnamese firms should carefully study when they can export their
products to
They
must also study the Korean Government's stringent conditions for imports,
especially of fresh fruits, he said.
Despite
low prices, the inconsistencies in size, colour, and taste of Vietnamese
fruits have worked against their export to
Their
packaging too cannot match those from countries like
Their
screening and hygiene standards must be improved if they are to be exported
in larger quantities to
Hai
urged local firms to invest in production technologies to improve the quality
and competitiveness of their produce.
Garment
and textile, seafood, processed foods, household utensils, farm produce, and
electronic and machinery parts are among products that can be exported to
He
urged companies to carefully study demand, consumption habits, trade barriers
and distribution systems in
Min
Kim, director of Dole Viet
Hai
said the two countries are negotiating a bilateral FTA, which, when it takes
effect, would hopefully boost Vietnamese farm exports.
Mobile
phones press towards top of export list for first time
Mobile
phones and spare parts are likely to top the list of Vietnamese export items
for the first time this year, with their annual export earnings expected to
hit US$20 billion.
The
export value of mobile phones and spare parts increased 21.45 times from 2009
to 2012, or 177.8 per cent each year on average.
In
2009, these products ranked ninth among the country's top 10 export items
behind garments, footwear, crude oil, seafood, electronics, computers and
spare parts, wood and wood products, rice and rubber.
One
year later, they climbed to the fourth place. They placed second behind
garments in 2011 and 2012, but jumped to the top in the first nine months of
2013.
Notably,
foreign-invested businesses accounted for 99.2 per cent of exports.
The
high export growth was attributed to new phone handset manufacturing projects
in northern
The
European Union was the largest importer of Vietnamese mobile phones and spare
parts, consuming $5.4 billion in the past nine months, a year-on-year
increase of 71 per cent.
‘New
approach' needed
With
trade becoming a major contribution to economic growth,
At a
workshop held yesterday in HCM City, representatives of the World Bank and
the Viet Nam National Committee for International Economic Cooperation
discussed recommendations in their new report, "Trade Facilitation,
Value Creation and Competitiveness: Policy Implications for Viet Nam's
Economic Growth".
They
said
However,
"
In his
foreword to the report, Deputy Prime Minister Vu Van Ninh noted that the
advantages of trade liberalisation were reaching their limits.
"It
is time to have a new approach to improve trade competitiveness and export
growth," he said.
World
Bank economist Pham Minh Duc told the conference that the key for export
growth was enhancing competitiveness.
Thus,
the country must improve trade-related infrastructure, border management and
manufacturing supply chains.
According
to Duc, trade-related infrastructure in
In
addition, there is weak awareness of logistics and an inadequate framework
for public-private partnerships (PPP) and logistics operators.
Also,
warehousing, trucking services and freight forwarders lag behind global
standards.
"Investment
in annual transport infrastructure was 3.1 per cent (an average from 2009-11)
of gross domestic product, far below the average for countries at the same level
of development," the report says.
Speaking
to Viet Nam News, Duc said: "
"Exports
are predicted to increase threefold over the next 10 years. So, we need
support from the private sector as well as from the Government budget,"
he added.
As for
border management, the World Bank report says slow, inconsistent procedures
are a problem.
Complex
business processes and weak coordination among key stakeholders, including
customs, ministries and border troops, are other constraints.
Another
weak area is supply-chain usage.
To
improve trade, the report recommends the establishment of a National
Committee for Trade Facilitation to develop a national action plan for trade
competitiveness enhancement and improved infrastructure and transport
services.
Simplifying
regulatory procedures to reduce time and costs and improving the reliability
of cross-border trade are other recommendations.
In
addition, it is imperative to restructure the manufacturing supply chains to
capture value and to participate proactively in global value chains. The
restructuring of agriculture supply chains is needed as well.
According
to the report, success will require considerable and sustained effort by all
stakeholders, with the Government playing the role of a facilitator and
coordinator.
Political
commitment will be needed from the top leadership, given that the
recommendations will affect country competitiveness and directors of social
and economic development at large, the report concludes.
Executives
from 46 Taiwanese companies are in
At an
exchange organised yesterday by the Taiwan Trade Centre (Taitra), they
showcased products like cosmetics, home appliances, machinery, automobile
parts, many of them technologically advanced.
Food,
foodstuff, cosmetics, and other companies looking for franchise partners were
introduced to Vietnamese companies, the first time Taiwanese franchise
opportunities have come up here, a Taitra official said.
She
added that a similar exchange had been organised a few months ago, and it was
extremely successful.
Many
Vietnamese companies saw the benefit in co-operating with Taiwanese companies
and approached Taitra looking for more opportunities, she said.
Trade
ties between
Agricultural
product imports surge
The
import value of agricultural products in the first nine months of this year
saw a year-on-year surge of 10 per cent to US$13.6 billion, said the Ministry
of Agriculture and Rural Development.
Importers
of cashew, fertiliser products and animal food have had a particularly
successful year so far.
Raw
cashew imports recorded a year-on-year surge of 78.1 per cent in volume to
495,000 tonnes and 67 per cent in value to $466 million, including 37,000
tonnes in September, earning $66 million.
During
the first nine months of this year, the imports of animal food products
experienced year-on-year growth of 39 per cent in value to $2.42 billion from
The
increase in animal food imports was due to rising demand on the local market,
where the domestic production of those products is still confronted with many
limitations, the ministry said.
In the
first nine months of this year,
However,
imports of some farming products saw reductions, including wheat, seafood and
soybeans. The import volume fell 45 per cent for wheat, 3.1 per cent for
seafood and 0.7 per cent for soybeans year-on-year.
Gold
auction sells 14,800 taels
The
State Bank of Viet Nam (SBV) held its 63rd auction yesterday, releasing a
further 14,800 taels onto the market.
The
latest auction saw more than US$26 million raised from the gold bullion sale.
Credit
institutions bought the 14,800 taels at a cost of VND37.40-37.42 million
($1,774-1,775) per tael.
The
Saigon Jewellery Company (SJC) posted prices marginally above and below the auction
prices at VND37.32-37.54 million ($1,770-1,780) on its website the same
afternoon.
SBV
has sold over 1.6 million taels since the first auction in March 28 this
year, as a mechanism to regulate the local price of the commodity which
continues to remain high.
Local
retail prices remained $200 per tael higher than the rates posted by the
internet trading floor kitco.com.
The
central bank said an agency comprised of members from various government
departments and offices had been established to ensure there was proper
oversight for the sale of the gold.
Dong
Thap strives for $599 million in exports
The
Cuu Long (Mekong) Delta
Despite
facing many difficulties such as decreasing demand and increasing
inventories, the province's exports up to the end of the third quarter
exceeded $438 million, equivalent to 89 per cent of the same period last
year.
In the
past nine months, Dong Thap's industrial output value reached VND11 trillion,
an increase of 7.5 per cent over the same period last year.
Eight-month
trade with
Two-way
trade between
Over
the period, the country's imports from the market have decreased 27 per cent
year-on-year to $0.68 billion. Among the major imports are pharmaceuticals,
transport vehicles, machines, accessories and steel.
International
Furniture and Handicraft Fair begins
More
than 100 businesses are showcasing their products at the HCM City
International Furniture and Handicraft Fair 2013, which opened its door
yesterday in the city.
Deputy
Industry and Trade Minister Tran Tuan Anh described the four-day fair as
important to the development of
The
fair will offer businesses valuable promotional space and the chance to
explore potential markets while consolidating relationships with domestic
customers, he said.
Provinces,
cities lined up for property trading floors
Provinces
and cities could be granted permission to establish property trading floors
at state administrative offices, according to a draft of the amended real
estate trading law made by the Ministry of Construction.
Under
the draft, the office would provide services related with property
transactions and the collection of fees. The Government would introduce
specific regulations on the procedures of establishing and operating such
floors.
The
ministry said the draft also stipulates that no property trading floors can
receive investment. The floors play an intermediary role for facilitating
transactions and receive fees from these deals.
Government
approves Kinh Do Tower construction
Deputy
PM Hoang Trung Hai has approved a proposal from the Ha Noi People's Committee
and Le Truc Garment Joint Stock Company to build the Kinh Do Tower at the Le
Truc Garment JSC in Ba Dinh District, Ha Noi.
According
to the investor, Kinh Do Trading, Construction and Investment JS Company,
Kinh Do Tower will be a complex containing a trading centre, offices for
lease and luxury apartments. It will have 17 floors above ground and four
below.
Second
property trading session opens this month
A
second property trading session will open in Ha Noi from October 18-20 to
sell 1,500 property products at luxury, popular and low-income levels.
The
session expects to attract many property investors, banks and 2,000 potential
customers, said Nguyen Anh Tu, head of the Viet Nam Real Estate Association's
office.
Luxury
hotel chain to make VN debut in capital city
The
450-room nine-storey JW Marriott Hotel Ha Noi will be located next to the
National Convention Center in the city's Tu Liem District, about 7.5km west
of central Ha Noi.
The
hotel will have 2,150 square metres of space, including a 1,000 square-metre
grand ballroom, a 450 square-metre ballroom and five meeting rooms.
The Ha
Noi property will be Marriott's third in Viet Nam. A 271-room JW Marriott
Resort is scheduled to open in central Da Nang City in 2013.
Thai
investors seek opportunities in VN
Financial
group Maybank Kim Eng welcomed 35 Thai investors at the start of this week
who are looking for investment opportunities in Viet Nam, said Kim Thien
Quang, director of the company's customer department.
The
Thai investors rated the Vietnamese stock market's cost to earnings ratio at
12, relatively lower than the Thailand market.
The
investors visited corporations such as Vinamilk (VNM), PetroVietnam
Fertiliser and Chemicals Corporation (DPM) and PetroVietnam Drilling and Well
Services (PVD).
Maybank
Kim Eng Viet Nam expects to invite more investors from the Southeast Asian
region to survey the country's investment opportunities.
In
addition, 46 foreign investors were granted transaction codes in September by
the Viet Nam Securities Depository.
Vinacomin
sets dong issuance record
The
Viet Nam National Coal and Mineral Industries Corporation recently announced
it had successfully sold VND5 trillion (US$235.8 million) worth of five-year
bonds with a floating interest rate.
The
issuance attracted many investors, including commercial banks, financial
firms, insurers and securities companies.
The
corporation's deputy general director, Nguyen Van Bien, said the issuance had
helped his company raise a large amount of capital at a low cost in a short
period of time. This is the largest issuance in dong ever made by a
state-owned enterprise.
Credit
growth falls behind target
Continuing
economic difficulties are weighing on national efforts to achieve desired
credit growth, say experts.
An
unnamed general director of a joint stock bank told Dau tu chung khoan
(Securities Investment) that the general lending situation wasn't
satisfactory although loan costs had significantly declined.
This
year, deposit interest rates have decreased 2-3 percentage points, and
lending rates have been down 3-5 percentage points, according to the State
Bank of Viet Nam.
Interest
rates for existing loans also eased, with the ratio of loans subject to rates
of over 13 per cent having dropped by roughly 67 per cent.
Recent
central bank reports revealed that overall credit growth fell from 6.45 per
cent at the end of August to 5.83 per cent on September 18.
The
director said the decline was because the quantity of new loans couldn't
compensate for matured ones.
Many
small- and medium-sized firms refused to sign new credit contracts, although
bank credit staff visited them to offer an interest rate of only 8 per cent
per year.
Company
leaders said they couldn't sell goods and just tried to maintain modest
operations.
Few
banks dared to risk financing firms which accepted high interests.
"There's a distance between increasing bank caution and decreasing
business qualifications involved in lending conditions. Loan demand is not so
strong as people expect, but I suppose that such credit growth is already
good in the current economic situation," the director said.
"The
fourth quarter is the beginning of a production and business season, but the
actual enterprise situation shows that fewer firms qualify for accessing new
loans," the deputy general director of the Vietnam International Bank,
Le Quang Trung, said at a seminar in Ha Noi last week.
He
said that credit growth, despite improvement in the last two quarters, was
currently low compared to the 12-per-cent annual target.
Economist
Tran Du Lich told the recent Autumn Economic Forum in central Hue City that
credit growth was still trapped in a vicious circle, which was involved in
the ups and downs of market demand, business inventory, production and bad
debt – all were feeling the impacts of continuing global headwinds and
domestic difficulties.
Vu Nhu
Thang, director of the Ministry of Finance's Institute of Strategy and Policy
on Finance, warned that there was a potential risk of macro-economic
instability as the State budget was seeing deficits caused by economic
stagnancy, business losses and a frozen property market.
"Looking
at these conditions, any lower credit growth this month than last month won't
be something amazing," banking expert Nguyen Tri Hieu told Dau tu chung
khoan. "The annual target for credit growth of 12 per cent may be
unreachable."
In a
report newly submitted to the Government, the Ministry of Planning and
Investment said national economic reform programmes had initially seen
satisfactory results, but the restructuring of fragile banks was not solid as
bad debt resolution had just begun and the cross-ownership in banks remained
difficult to control.
State
Bank Governor Nguyen Van Binh said re-organising credit institutions still
needed caution to avoid creating even more difficulties for them.
Mini
supermarkets, convenience stores on the rise
With
an impressive growth rate in less space and smaller capital requirement,
convenience stores and mini-supermarkets are finding favor with investors.
Explaining
reason for switching from shopping in a big supermarket to a mini supermarket
near her house, Bui Thu Thao in District 1 said she can easily control
spending in a smaller store where she is not inundated by promotional
programs and piles of commodities to choose from.
Like
Thao, a number of consumers are choosing to shop in mini supermarkets or
convenience stores now.
This
shows a change in shopping patterns in urban Vietnamese, who are buying more
goods but at stable prices while also saving on the time factor.
According
to a recent survey by Kantar Worldpanel, mini supermarkets and convenience
stores have seen growth rate of 74 percent higher while for big supermarkets
growth has been at around 6 percent.
Two
years ago, around 10 percent households in urban districts chose convenience
stores once a year. This year at least one household out of five chooses a
convenience store once a year.
Kantar
Worldpanel predicts soon every household will go to mini supermarkets or
convenience stores once a year.
Local
and international retailers do not want to miss this chance. Many big
supermarkets have switched to convenience stores. For instance, Saigon Co-op
set up Co-op Food, Citimart launched B&B convenience store, Satra has
Satra Food convenience chains, Big C with New Cho and Express, and many
different names such as Circle K, shop & go, Ministop, Family Mart.
Investors
just spend VND2.5 billion( US$118,749) on an area of 50-200 square meters
while they need hundreds of billions and an area of tens of thousands of
square meters to set up a big supermarket.
Moreover,
the payback period in mini supermarkets and convenience stores is quite fast.
At
present, 2-3 mini supermarkets or convenience stores are mushrooming in
residential blocks every month.
This
trend will not stop in the future as retailers plan to grow more chains. For
instance, Saigon Co-op targets to have 150 stores by 2015. Similarly,
Satra plans to develop 20 to 50 stores as soon as possible.
Foreign
investors make no secret of their desire to dominate the retail market.
Japanese retailer Family Mart has made a comeback in Vietnam’s retail market
with a Ho Chi Minh City-based store. As per its plan, Family Mart will set up
an additional 20 convenience stores by year end.
When
it comes to Family Mart, people remember bidding farewell to the Japanese
retailer and local distribution and retail firm Phu Thai Group JSC.
Phu
Thai Group has developed a new retail brand B’smart. Thai Beri Jucker Plc
(BJC) has jumped into the Vietnamese retail market by buying equities of Phu
Thai. According to plan, 20 B’smart convenience shops would be opened in Ho
Chi Minh City by end of 2013 to increase the total number of shops to more
than 60.
Yet a
coin has two sides. Challenges of setting up a convenience store or mini
supermarket is that leasing price will increase year by year, investors will
face difficulties in maintaining operations in a fixed place.
Furthermore,
when the economy improves, people will prefer to go to big supermarkets where
piles of commodities are displayed with various promotional programs.
Authorities
to apply stricter laws in the petrol market
A
newly-issued decree by the government concerning the trading of petrol has
suggested stricter punishments for those who store and trade in low-quality
products.
Resolution
97, which concerns administration fines for violations in the fuel business,
will take effect from October 10.
Firms
that store and trade sub-standard products will be fined an amount as high as
1.5 times the cost of the products. If the firms try to mix strange
substances into the fuel to lower the quality or create low-quality products
in any way, the fine will be 1.5-2.5 times the cost of the products.
Firms
will be fined VND50 million (USD2,400) if they try to use improper
measurement tools to earn profits. In addition, violators that are petroleum
companies or export-import companies may have their business licences revoked
for one to six months. Violators that are dealers and service companies will
have their licences revoked for one to three months.
Nguyen
Dac Loc, head of the Hanoi Department of Market Management said, Resolution
97 has filled in some of the loopholes from the previous Resolution 104.
"Due to unclear regulations, we only checked on the octane and sulfur
indexes. But now we'll have to check more carefully for any strange
substances." Loc said.
According
to Loc, the dealers can hardly make a profit in this industry so they try to
mix in other substances to increase the volume of petrol. "They spent
the money to build the stations, hired staff to do the management work, yet
the commission fees are not nearly enough to offset these expenses. These
agents have made a lot of complaints." he said.
A new
resolution about copyright protection will also take effect on October 15,
raising the maximum fines to VND250 million for violators who are individuals
and VND500 million for an organisation.
Source:
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Chủ Nhật, 6 tháng 10, 2013
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