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BUSINESS
IN BRIEF 27/2
Kuwaiti Consul
General in Ho Chi Minh City Omar Al-Qenael has voiced his hope that two-way
trade between
The Consul General
was speaking at a February 25 ceremony in
The Kuwait-Vietnam
relations have developed constantly for decades demonstrated in various
cooperation areas while their trade ties have grown rapidly, reaching US$740
million in 2013, Omar Al-Qenael said.
He cited the Nghi
Son oil refinery and petrochemical complex as one of
Vietnamese
businesses should be more proactive in market survey and marketing their
products in
Municipal People’s
Committee Vice Chairman Le Thanh Liem affirmed his city’s willingness to facilitate
Kuwaiti investment and applauded the Consul General’s idea of calling for
Vietnamese investors to come to
Liem also used the
occasion to congratulate
Farm
exports hit US$4.33 billion in two months
Agro-forestry and
fishery exports in the first two months of 2014 jumped 9.4% from a year
earlier and reached US$4.33 billion, according to official statistics.
Statistics of the
Ministry of Agriculture and Rural Development (MARD) also report that exports
of major farm products dropped sharply by 20.5% to US$1.73 billion.
Seafood exports
shot up 23.5% and fetched US$919 million and key forestry products
skyrocketed up 30.2% to US$837 million, compared to the same period last
year.
Rice exports in the
first two months hit US$154 million, while other key export items seeing
continual export growth included coffee (US$254 million), rubber (US$80 million,
cashew nuts (US$57 million), pepper (US$63 million), seafood (US$335
million), and timber products (US$263 million).
Viettel
boosts foreign market expansion
Military-run
telecom group Viettel recently announced that telephone exports comprised at
least 90% of its total sales in 2013.
“The domestic
mobile phone market has become saturated” said, the group’s Research and
Production Department Head Luu Quang Truong.
“Therefore, the
group has devised a bold business plan that targets expansion in foreign
markets both in investment and sales.” he added.
Viettel is invested
heavily in markets such as
These distribution
channels give out us a competitive edge and an advantage in delivering our
products to customers, he continued. Viettel aims to expand investment to
many nations.
In the future,
Viettel is eyeing investment in the telecoms sector in markets such as
Truong postulates
that these are huge markets where sales of its terminal equipment will
explode.
The most
significant problem facing the group is increasing its localization rate.
The group’s rate
currently remains low and it is dependent on importing key components which
add significant costs.
By increasing the
localization rate the group will be better able to control the overall
quality of its products at a more economical price, bringing more value to
the customer and concurrently providing an economic boost to the nation.
Viettel’s telephone
products are becoming ever-increasingly more popular in foreign markets,
especially some smart phones such as the V8404, 8403, i67 models which sell
for an average price of VND900,000 -VND1,400,000.
These are “Made by
Viettel” and “Made in
The document was
signed by Chairman of the municipal People’s Committee Le Hoang Quan and
Chief Minister of the Northern Territory Adam Giles in
Both sides will
share experience and foster collaboration in a wide range of areas, including
education and training, fishery, agriculture, cattle breeding, trade
promotion, tourism and environmental protection.
They agreed to
deepen their engagement in each other’s key trade and investment promotion
activities, while assisting the two governments in considering and approving
cooperation opportunities in such fields.
Both leaders shared
the same view on the necessity of further boosting the connectivity between
the two localities in the future, which they agreed will fuel the economic
and strategic development of both sides.
EuroCham:
The 14th quarterly
EuroCham Business Climate Index (BCI) survey released on February 25 showed
that business confidence and outlook among European businesses in
For the first time
since 2012 the index has exceeded the 50-point threshold to reach 59 points,
affirming European enterprises’ confidence in the Vietnamese market, it said.
According to the
European Chamber of Commerce in Vietnam (EuroCham), the remarkable rise is
likely due to the increasing optimism in the business outlook and turnover
during the Lunar New Year festival, plus falling inflation concern, enhanced
trust in macroeconomic prospects and a hope for the conclusion of a feasible
and effective Free Trade Agreement (FTA) between Vietnam and the EU.
Nearly half of the
businesses involved in the survey operate in the service sector, one quarter
in the manufacturing sector, one fifth in trade, and the remaining in other
sectors.
The number of
respondents reporting satisfactory business outcomes rose from 38% last
quarter to 45%. This showed that business operations have much improved.
Businesses said
that they will increase investments in
The positive
development in investment plans and expected business orders has translated
into increased recruitment plans, with many respondents expecting to slightly
increase their headcounts.
EuroCham Chairman
Preben Hjortlund commented that he is glad to see the BCI reach 59.
EuroCham will
continue to work with the Vietnamese Government to create practical benefits
for the business community in order to ensure this positive progress, he
stressed.
Since its
establishment in 1998, EuroCham has grown from 60 members to represent more
than 750 European businesses, counting among its supporters many of the
world's leading enterprises.
Handbook on
The State Bank of
Vietnam (SBV) in collaboration with Japan International Cooperation Agency
(JICA) on February 25 announced the publication of a handbook for use by
The manual aims to
provide guidance to small and medium-sized enterprises (SMEs) in the industry
on methods of evaluating business risk, techniques for making equipment
investment decisions and marketing tips.
According to Chief
Advisor of SMEFP III (Small & Medium Enterprise Finance Program) Manabu
Tsurutani, many support industry SMEs want to access bank loans for
investment in future business projects.
However, most of
the surveyed enterprises reported that they find it difficult to access bank
loans due to their lack of formal business plans and familiarity with
requirements and procedures for obtaining mortgages, including the various
types of credit available.
Tsurutani also
suggested that banks should work closely with machinery retailers to clarify
the various types and methods of obtaining appraisals to facilitate the
processing of loan applications by SMEs.
Vinamilk
imports 5,000 cows from Australia
Vietnam Dairy
Products JSC (Vinamilk) received two hundred dairy cows from
As part of its
business strategy to deal with strongly fluctuating world milk prices
Vinamilk has embarked on investments in dairy farms to supply its processing
plants quality product and increase the rate of localization.
In the 2014-2015
period, Vinamilk will open a total of four additional dairy farms in Tay
Ninh, Ha Tinh and Thanh Hoa, bringing the total to nine stocked with
approximately 46,000 cows.
The strategy is
expected to assist Vinamilk increase its output to around 50 million litres
per year.
Dung Quat
oil refinery celebrates five year anniversary
Binh Son Oil
Refinery located in the central
In the short five
years since production began, its products have gained high stature and
recognition by the Ministry of Science and Technology for outstanding
quality.
So far, the plant
has processed nearly 29 million tonnes of crude oil and sold over 26 million
tonnes of a variety of products, fetching total revenue of nearly VND520,000
billion.
It has also
contributed VND81,000 billion to the State budget.
Addressing the
ceremony, Secretary of the Quang Ngai provincial Party Committee Vo Van
Thuong applauded the contributions by the plant toward the province’s
socio-economic development.
He pledged his best
efforts to assist the refinery expand and transform the Dung Quat Economic
Zone into the national oil refinery industrial park.
The Southern Seed
Joint Stock Company on February 25 inaugurated a representative office in
The inaugural
ceremony was attended by Vietnamese Trade Counsellor in Laos Tran Bao Giam,
leaders of the Southern Seed Joint Stock Company, and prominent officials
from both countries.
Director General of
the Southern Seed Joint Stock Company, Hang Phi Quang, said his firm has provided
a variety of maize for Lao farmers since 1998.
Last year, the
company supplied 20% of the total volume of maize varieties to
It also exported
different types of seeds to the Lao market including rice, bean and
vegetable, along with organizing training courses to help Lao farmers
increase productivity.
Lao officials said
they hope the newly-established representative office will make significant
contributions to reducing the poverty rate in
Quang
The People’s
Committee of Quang
Provincial People’s
Committee Vice Chairman Huynh KhanhToan said that to raise the funds, the
province had to mobilize capital sources from the State budget and Chu Lai
Industrial Park One Member Co, Ltd, the primary investor in the park.
Additionally, the
province has put legislation in place that provide a legal basis to control
investment in the IP, lease lands in it as well as for granting licenses for
construction projects.
Over
411,000 tonnes of rice shipped in first two months
Last year, the
country exported 6.68 million tonnes, as exports lulled to their lowest level
since 2010.
At present, the
price of dried paddy at stores in the Mekong River Delta is hovering around
VND5,450-5,600 per kilo while the price of long-grain paddy is holding steady
at about VND5,750-5,900 per kilo.
The price of 5%
broken rice ranges from VND8,200-8,300 per kilo while 15% broken rice varies
from VND7,850-7,950 per kilo and 25% broken rice at VND7,600 -7,700 per kilo,
depending on each locality.
The Tay Nguyen (
The irrigation
works include 670 reservoirs, 250 dams and 30 pump stations.
The region will
also upgrade about 590 kinds of existing irrigation works by 2020.
The total
investment capital for upgrading and building irrigation works is estimated to
be VND79 trillion (US$3.7 million).
The capital will
come from the State budget, Official Development Assistance loans, investors
and local residents.
The upgrading and
building of the irrigation works will help to increase the supply of
irrigation water to more than 80 per cent of the region's farmland by 2020.
As of the end of
last year, the region's irrigation works supply irrigation water for nearly
71 per cent of the region's farming areas that are in need of it.
To date, the region
has built a total of 2,115 irrigation works, including 1,035 reservoirs, 970
dams and 110 pump stations, according to the steering committee.
Existing irrigation
works have helped expand the region's farmland to nearly 1.9 million
hectares.
Of the area's
561,534ha of coffee, 232,600ha have water accessed from irrigation works.
In these areas,
farmers can grow two to three crops a year and achieve a yield two to three
times higher than areas without irrigation works.
However, many
small- and medium-size irrigation works in the region are in disrepair as
they have not been maintained properly, according to several government
agencies.
The region has a
total area of 54,474 sq.km, accounting for 16.8 per cent of the country's
total area. The area's soil and climate is suitable for cultivation of
industrial trees like coffee and rubber.
US
businesses keen on
High-level
executives from 33 leading US companies, who are sanguine on prospects for
doing business in
This year’s event
saw an increase of 11 businesses compared to last year’s – a clear signal
that the
USABC President
Alexander C. Fedman explained one of the main reasons for the keen interest
of the
When
Vietnam-
the most attractive investment destination in ASEAN
A representative
from the Boeing Group said that the aviation market in Southeast Asia is
exploding and that
The President of
Boeing Southeast Asia, Ralph L.Boyce, said Vietnam’s economy has turned the
corner and is on a bright path to full economic recovery as evidenced by its
high GDP growth rate of more than 5% last year.
Boeing is bullish
on the
At the meeting, the
The
Central
Highlands’ development plan given go-ahead
The
The target was set
in the region’s development plan for the 2011-2020 period recently approved
by the Prime Minister.
The development
plan is consistent with the national socio-economic development strategy and
fully taps into the region’s strengths for rapid and sustainable economic
growth.
It also
specifically targets accelerating international integration as a key
undergird to support economic growth, in addition to expanding cooperation
with other localities and regions in the country.
The plan also
addresses the need for a more effective growth model that harmonises the
natural resources and the urban infrastructure of the region in an economical
and effective manner .
Specifically the
region aims to raise GDP per capital income from VND24 million in 2015 to
VND46 million by 2020 and adjust the economic mix of agriculture-industry-services
to 34.7%, 35% and 30.3% by 2020.
The target for
annual average export growth is 17% for the 2011-2015 period and 15.5% for
the 2016-2020 period.
It aims to reduce
malnutrition for children under 5 years old to below 16% and maintain a 3%
unemployment rate for those of working age, popularising junior secondary
education for 50-60% of communes and raise trained employment rate to 50-55%
and forest coverage to 59% by 2020.
The region strives
to maintain security, political stability and social order, strengthen unity
among ethnic groups, consolidate national defence and build provinces into
firm defence areas.
The
The provinces will
better implement the agriculture and population resettlement program for
ethnic minority groups, especially those vulnerable to natural disasters.
They will also
concentrate on developing key industries, especially agro-forestry processing
and rubber and coffee processing plants up to international standards.
Over 1
million tons of contracted rice yet to be shipped
Over one million
tons of rice that has been contracted with foreign buyers has yet to be
shipped though rice traders already exported 307,000 tons in January,
according to the Vietnam Food Association (VFA).
Based on the
preliminary statistics, the volume of pending contracts totals about 1.047
million tons, an increase of 39% compared to the same period last year. Of
the amount, contracts signed directly with foreign traders total 763,000 tons
and contracts under government-to-government 284,000 tons.
Some member
enterprises of VFA noted that January’s exports were lower than the
corresponding period as much of the volume was shipped to the
VFA in a report
confirms the situation, stating that January’s rice exports declined 24.11%
in volume to 307,200 tons but tumbled 30.52% in value to US$127.5 million,
with the average export value of US$415.14 a ton.
Speaking at a
conference last week on rice exports in the coming time, a representative of
VFA said the global rice market is unpredictable pending new factors.
According to VFA,
some key factors with possible adverse impacts on Vietnam’s rice export
include the political uncertainty in Thailand, the yield of the 2013-2014
winter-spring crop in the Mekong Delta, and China’s and Africa’s demand for
rice.
Duong Van Men, a
rice trader in Lap Vo District of Dong Thap Province, said local rice prices
in the Mekong Delta ranged between VND7,150 and VND7,200 a kilo, while fresh
paddy of the type IR 50404 were between VND4,700 and VND4,850 a kilo, a
slight rise of VND50 – VND100 compared to last week.
According to
www.oryza.com, a website on the world’s rice trade, the export rice prices of
the three biggest suppliers namely
Shrimp
exports see bright prospect
Shrimp exports are
expected to rise strongly this year given positive signals from importing
markets, prompting many households to keep on farming shrimps despite the
threat of ongoing diseases.
According to the
Vietnam Association of Seafood Exporters and Producers (VASEP),
In addition,
Data of the General
Statistics Office (GSO) showed that
In addition, shrimp
exports to the
Given the positive
signs, VASEP expects the nation’s shrimp export value at US$3.5 billion this
year. In 2013, shrimp exports generated over US$3 billion.
However, VASEP
Chairman Tran Thien Hai said that the success largely depends on enterprises’
control over impurity injection problem. Exporters should also take advantage
to boost exports while
Sau Ngoan, a farmer
in
According to
VSSA
demands 500,000 tons of sugar exports
Although the
Ministry of Industry and Trade has allowed enterprises to export 200,000 tons
of sugar, VSSA continues to propose the exporting of 500,000 to 600,000 tons
of sugar this year.
Also, VSSA has
proposed the Ministry of Industry and Trade not to set out a particular
deadline for export because buyers may take advantage when it comes to
meeting the deadline.
VSSA says in order
to facilitate exporters, regulatory agencies should limit sugar exports via
only one border gate.
Among 200,000 tons
exported prior to June 30 are mostly refined standard sugar (RS). Refined
sugar (RE) for confectionary, beverages and other foodstuff is not included
in this exportation.
VSSA adds that both
RS and RE should be allowed for export. If enterprises stock RE or seek to
stock materials to produce RE, it may be unfair to producers and businesses.
According to VSSA,
there are 41 sugar mills nationwide, 10 of which specialize in RE.
Compared to the
period three weeks ago, sugar prices at factories dropped by VND500/kg, from
VND12,300 to VND12,900/kg. Illegally-traded sugar from Thailand is priced at
VND12,600/kg.
Around 1.45 million
tons of sugar was consumed in 2013 nationwide; however in the 2013/2014
harvest, plants are likely to produce 1.5 to 1.6 million tons.
The fact that
supply is higher than demand still prevails in the market, decreasing the
prices due to smuggled sugar into the Vietnamese market. This situation is
predicted to continue this year.
According to
calculations of the Ministry of Agriculture and Rural Development, the sugar
amount supplied to the market is from 1.2 to 1.3 million tons after excluding
the exported amount based on the Ministry of Industry and Trade’s quota. In
other words, there is a surplus of sugar nationwide at the moment, around
300,000 tons.
Price no
longer top concern of home buyers
Pricing is no more
the top concern of home buyers as they now care more about who the investors
are and their reputations.
This tendency which
is recorded by market research and property brokerage companies through
day-to-day contacts with home buyers in the past time is forecast to increase
in the coming time.
Nguyen Van Tu,
general director of Minh Khang Gia Real Estate Corporation, said that the top
factor helping a project to find buyers is its investor’s reputation.
This could be seen
on the market last year when many companies had to struggle hard while some
others were successful in selling their apartments.
The next important
factor is the real progress of projects. Those projects that are finished or
are about to be handed over will have a big advantage in finding buyers. It
is now difficult to convince home buyers to spend money if they do not know
how the houses look like.
Such factors were
also confirmed by the HCMC Department of Construction when looking back at
last year’s market. The implementation of many projects had to be suspended
due to the investors’ capital shortage as they failed to persuade home buyers
who doubted the progress of their projects.
The selling price
is the third factor home buyers care about but the price has to be
competitive with that of other projects.
The payment
schedule is also important. Buyers now only pay money following the
implementation progress, not the schedules set by the investors like before.
In fact, many
projects lack capital and cannot be constructed. Home buyers rescue the
investors as well as rescue themselves by creating accounts to pay money and
only disburse when the projects are finished.
According to
statistics of market research companies, the volume of apartment inventories
in HCMC is around 17,200 units, with high-end apartments mainly located in
districts 2 and 7 and mid-end apartments lying in outlying districts like
Binh Tan, Tan Phu and Binh Chanh.
Timothy Horton,
general manager at Cushman & Wakefield, forecast that the apartment price
might continue declining this year.
Banks seen
lowering home loan rates this year
Some banks have
announced to offer lower lending rates for homebuyers in 2014 but lending
conditions would not be loosened.
Since late last
year, local lenders have launched many loan packages focusing on consumers
and homebuyers instead of attracting depositors like in previous years.
HDBank has offered
the lowest rate of 6.8% per annum for citizens and family-run businesses
through a special program that aims to serve customers who have demands to
buy or repair homes, buy cars or supplement capital for their business.
The bank will apply
the lending rate of 6.8% per annum in the first six months for loans of VND1
billion or higher, 8.6% per annum for those borrowing from VND500 million to
less than VND1 billion and 9.6% for loans from VND100 million to lower than
VND500 million. The program will run till June 30 with the total value of
VND1.5 trillion.
BIDV has also
offered a preferential home loan program for individuals and families with
the total value of VND3 trillion. Customers will enjoy lending rate of 10%
per annum in the first six months and will not pay the principal sum in three
months from the date of disbursement.
HBSC Vietnam has
also announced a program for homebuyers with lending rates of 9.5% annually
or higher. The bank provides credits of up to 70% of the home value with a
term of 25 years.
Nguyen Minh Tam,
deputy general director of Sacombank, told the Daily that Sacombank’s total
home outstanding loan at the end of 2013 had jumped 35% from a year earlier.
The bank has deployed three property loan packages with VND2.8 trillion
disbursed so far.
Real estate prices
have declined while Sacombank has cooperated with investors to extend loans
to customers with real housing demands. Therefore, the bank has seen credits
moving up, Tam said.
In 2014, Sacombank
will continue to boost home credits, launching more loan programs with
competitive lending rates. Currently, it is applying a home credit program
with the total limit of VND1 trillion.
If the central bank
allows commercial banks to deploy the VND30-trillion credit package for the
real estate sector, Sacombank will be ready to join hands. Currently, the
VND30-trillion housing bailout program is open to only a few banks. With a
wide network of banking units, huge number of clients and experiences in
giving small credits, participation in the program will help the Sacombank
reach out to more homebuyers and better transactions.
Pham Huy Thong,
deputy general director of VietinBank, said that the lender will continue to
focus on the VND30-trillion package. Disbursement has improved for both
homebuyers and project developers. This year, when some budget home projects
are launched onto the market, disbursement rate will increase.
For other ordinary
customers, VietinBank has not given specific home loan programs but has cut
lending rates to 11-12% per annum. The bank has plans to reduce lending rates
further in the future.
Meanwhile, banks
said they would not increase new loans for real estate enterprises.
A banker said that
the property market has seen better signs as input costs of enterprises have
declined. However, to prevent risks, the lender will appraise projects
carefully and will only disburse for projects that would be finished soon.
Many
projects launch apartment sales
With positive
signals on the real estate market since last year’s second half, some
property enterprises are preparing to launch apartments to grasp business
opportunities in the early months of the year.
Phu My Hung
Corporation said it would offer Green Valley apartments for sale this
quarter. The Green Valley project consisting of four buildings of 20-27
floors supplies 546 apartments having an area of 88-194 square meters each.
Phu My Hung has not
announced the selling price but said the apartments were for medium-income
earners and affordable to buyers with financial supports from banks.
Also in Saigon
South, The Park Residence located on Nguyen Huu Tho Street with around 1,000
apartments of 52-73 square meters each has been put up for sales. The selling
prices of such apartments start from VND700 million per unit.
The Park
Residence’s investor is receiving bookings and will finish the project in
2016.
Meanwhile, in
District 6, Him Lam Land Company is about to sell apartments of the Him Lam
Cho Lon project located near the district’s administrative center. The
project supplying around 1,400 apartments is almost finished.
Khang Dien House
Trading and Investment Joint Stock Company is going to launch the sale of
Mega Residence townhouses in District 9.
Khang Dien will
sound out the market by offering for sale around 160 adjoining houses at a
price starting from VND13.5 million per square meter, or some VND1.99 billion
per unit.
With its location
near HCMC-Long Thanh-Dau Giay Expressway and the belt road and especially a
price equivalent to that of an apartment, the investor expects to attract
many buyers to Mega Residence in the coming time.
Besides, there are
many other projects offering apartments for sale such as Lexington Residence
in District 2 at around VND20.6 million per square meter, PARCSpring in
District 2 at VND17.4 million, Sunview Town in Thu Duc District at VND11.2
million and An Phu 2 in District 8 at VND16.8 million.
According to
Cushman & Wakefield, the apartment sales volume was better last quarter,
mainly in the budget segment having selling prices hovering around VND15
million per square meter.
Cushman &
Wakefield forecast the price might continue to decline this year.
In related news,
property enterprises said they would develop projects based on their existing
land and would not spread investments this year like before.
According to Nguyen
Van Duc, deputy director of Dat Lanh Real Estate Company, the company will
start the year with a small apartment project having around 150 units in Go
Vap District and develop infrastructure for a townhouse project in Hoc Mon
District.
Duc said that these
were the two final projects on the company’s land left. More projects will be
carried out when it can find partners with financial capabilities, he added.
Luong Tri Thin,
general director of Dat Xanh Group, said Dat Xanh would not invest in
individual apartment projects but develop clusters like small urban areas of
10-20 hectares each. It will be in charge of all investment stages, from
investment to construction and distribution.
Dat Xanh earned
VND66 billion in profit last year, doubling that of the previous year.
Statistics of the
HCMC Department of Construction showed that around 5,000 among the apartment
inventory of nearly 14,500 units found buyers last year.
According to market
observers, the market will continue to incline towards buyers this year.
Finished projects would be more attractive to customers than those under
construction.
SBS to
return to UpCoM
Having obtained
profits in the previous year, Sacombank Securities Company, or SBS, has plans
to soon debut on the UpCoM, the market for unlisted public firms, to
facilitate trading of investors.
The enterprise will
send listing application to the UpCoM. As planned, it will seek approval to
list on the HCMC or Hanoi market early next year after posting up profits in
two years in a row.
SBS will also open
a branch in HCMC’s District 1 to lure more investors this year. Closing the
shareholder list as of the end of last October, SBS had nearly 1,800
investors.
Last year, the
enterprise announced a net profit of over VND440 billion compared to a loss
of over VND135 billion in 2012.
Explaining the
sudden improvement, SBS deputy general director Pham Quang Thanh said that
the broker refunded VND239 billion to share price decline reserve fund and
nearly VND90 billion to the provision for bad receivables while recovering
the VND800-billion debt worth of convertible bonds.
Meanwhile, earnings
from key business activities just rose slightly as SBS’s difficulties
remained.
By late 2013, the
broker’s financial safety ratio soared to 198% and stood at over 180% in
three months in a row compared to a negative figure early last year.
Therefore, SBS has been qualified to be removed out of the special scrutiny
list.
However, it still
has to wait for decision of the State Securities Commission to be put out of
special scrutiny. The enterprise is making improvements to better financial
situation in 2014, Thanh said.
He said that now is
the strategic time for SBS as the stock market is recovering and investor
confidence is strengthening. Listed enterprises have reported better business
results than late 2012.
Besides, SBS has
its own advantages with a large number of long-term investors. The enterprise
currently is managing around VND130-134 billion worth of deposits of
investors and VND5 trillion worth of share balance. The number of accounts
has increased steadily every month while foreigners have still registered
around 800 accounts.
“We have plans to
continue the restructuring scheme, focusing on simplifying organization and
cutting expenses. In addition, with around VND100 billion in cash at the end
of 2013, we will have opportunities to provide better services for investors
and make gains from brokerage service,” Thanh said.
No transfer
pricing found with imported dairy products
Customs agencies
have examined dairy product importers suspected to make transfer pricing to
evade tax as requested, but no violations have been detected so far, an
official said.
Luu Manh Tuong,
deputy director of the Import-Export Tax Department under the General
Department Customs, said that after the Price Management Department under the
Ministry of Finance has proposed cooperation in inspecting the firms, the
department has asked dairy makers overseas to provide related data.
Aside from some
enterprises that have not replied, the department has compared prices of
parent companies with those declared by importers. Basically, there have been
no differences between prices announced by both sides.
In some cases,
there have been minor differences due to transport charges or other costs.
Earlier, some
importing firms have sent price declaration forms to the Price Management
Department, seeking approval to revise up prices by 3-8% as input material
costs have increased.
Therefore, the
department has suggested customs agencies to join hands to detect possible
transfer pricing acts of these importers.
Concerning State
management over imported dairy product prices, Tuong said the products have
been added to the list of commodities risk management since 2012.
Currently, dairy
products are mainly imported to Vietnam through HCMC, Hanoi, and Haiphong.
Japanese
firms to move labor-intensive projects to Vietnam
Many Japanese
enterprises operating in Thailand facing rising labor cost there have tended
to move labor-intensive projects to regional countries, including Vietnam, to
cut costs, said a Japanese trade official.
Hirotaka Yasuzumi,
managing director of the HCMC Office of the Japan External Trade Organization
(JETRO), said last week that the worker wage in Thailand was twice that in
Vietnam. Therefore, many enterprises in Thailand have moved part of their
production activities to Laos, Cambodia and Vietnam, he told the Daily on the
sidelines of a meeting between the HCMC government and Japanese enterprises.
A survey of JETRO
showed that the number of skilled laborers in Laos and Cambodia was few and
not as high as that in Vietnam. Therefore, JETRO often advises Japanese
enterprises to move to Vietnam.
However, Japanese
enterprises in Thailand have already enjoyed big markets and developed
supporting industries for their production activities. Therefore, they will
only move labor-intensive activities to Vietnam to reduce costs while those
bringing in high added values are still maintained in Thailand.
The major challenge
Japanese enterprises encounter when making investments in Vietnam is the lack
of supporting industries, which Thailand can better meet.
With the ongoing
political unrest in Thailand, media citing automakers have reported that the
instability was threatening auto manufacturing in that country.
However, Yasuzumi
told the Daily that the possibility of Japanese automakers moving from
Thailand to Vietnam was unlikely as Thailand was an auto manufacturing center
in Southeast Asia with developed supporting industries.
Besides, Vietnam’s
auto industry can by no means be compared to Thailand’s as the auto
manufacturing capacity in Thailand amounts up to 2.5 million units per year
compared to only around 100,000 units in Vietnam.
Similar political
unrest in the past and the recent historic flood in Thailand caused many
difficulties for automakers. However, Japanese enterprises were determined to
stay there and have expanded investments, according to Yasuzumi.
At the meeting,
Yasuzumi said that Japanese enterprises operating in Vietnam were still
facing many difficulties.
According to a
survey of JETRO, Japanese investors concern the most over issues regarding
taxes, unclear policies and lack of skilled workers.
Suppliers in
Vietnam can meet only 28% of the materials demanded by Japanese enterprises,
which have to import the rest, resulting in higher production costs.
According to a wage
survey of JETRO, the worker wage in Thailand averages US$6,704 per person per
year while that in Vietnam is US$2,602. For the managerial level, the
respective figures are US$27,204 and US$12,245.
Businesses
face low purchasing power in HCMC
Recovery signs of
the economy in the end of 2013 prompted several businesses to increase stock
yet purchasing power has not recovered as expected.
Several shops
closed later and opened sooner than usual during the Tet holidays. Many
served until the afternoon on January 30 and reopened six days later.
Supermarkets and
markets resumed operation as early as two days later.
Many companies
launched promotional programs to stimulate commerce. Electronic centers
offered 30-40 percent discount on several products such as televisions,
electric cookers and video recorders. Trade centers gave 5-49 percent
discounts on hundreds of items.
Vissan Limited
Company spent VND2.4 billion (US$114,000) to reduce Chinese sausage prices VND10,000
a kilogram, said the company’s director general Van Duc Muoi. That was one of
their main products during the holidays.
The company also
spent billions of VND on other items to boost purchasing, said Muoi.
Prices for chicken
eggs in the city’s subsidization program were much lower than those sold in
markets. It decreased VND 1,000-2,000 per pack of ten during the holidays yet
failed to boost purchases, said Truong Chi Thien, director of Vinh Thanh Dat
Company.
The HCMC Department
of Industry and Trade reported 10-15 percent increases in commerce after the
festivals. This is believed to be the lowest growth rate compared to the same
period in previous years.
The income growth
rate of Saigon Co.op supermarkets reached only 15 percent during the holidays,
said Director General Nguyen Thi Hanh. This is a much lower increase than
that of previous years.
Several businesses
express their anxiety about the decrease of sales this year. They believe
that consumption will not rise considerably.
The government will
continue several measures to curb Consumer Price Index to 7 percent in 2014
and consumers have tightened spending and purchased in moderation.
Textile
exports up 10.6% in January
Export of textile
hit more than US$1.9 billion in January, up 10.6% from December, 2013, and a
year-on-year increase of 21.7%, according to the Viet Nam Customs.
The figure included
US$1.13 billion attained by foreign-invested enterprises.
The US, the EU and
Japan are three largest importers of Viet Nam’s textile with US$955 million
(up 23.3%), US$302 million (up 26.4%) and US$228 million (up 10.4%),
respectively.
The Ministry of
Industry and Trade reported that many textile enterprises have secured the
orders till the second quarter of 2014.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Tư, 26 tháng 2, 2014
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