BUSINESS IN BRIEF 1/6
My Thuan Bridge to cost $247m
An investment of VND5.5 trillion (US$247 million) is
needed for construction of the proposed cable-stayed bridge My Thuan No 2,
according to Project Management Unit No 7 (PMU7).
About VND5,251 billion of the total amount will come
from Japan's ODA (Official Development Assistance) loans, and the remaining
from the Vietnamese government, which will pay compensation for site
clearance of the project.
According to PMU7's proposal, My Thuan Bridge No 2 will
be built along 350 metres on the upper section of the existing cable-stayed
Bridge My Thuan No 1, with total length of 6.81km and width of 25 metres. The
completed bridge will have six lanes.
My Thuan Bridge No 2 is part of the HCM City – Trung
Luong – My Thuan – Can Tho Expressway.
The operation of big bridges in the region, including
Co Chien, Cao Lanh, and Vam Cong, will overload the existing cable-stayed My
Thuan Bridge No. 1, causing traffic congestion, according to PMU7.
The proposal from PMU7 was sent to the Ministry of
Transport last week, reports Tuoi Tre (Youth) newspaper.
My Thuan Bridge No 1 is a cable-stayed bridge over the
Tien Section of the Mekong River, connecting Cai Be District of Tien Giang
Province with Vinh Long City in Vinh Long Province.
Located 120km upstream of the river mouth on the Mekong
Delta and 125km from HCM City, My Thuan Bridge No 1 was developed in a joint
venture between the Australian and Vietnamese governments.
It is the largest overseas assistance project
undertaken by the Australian government, costing US$80 million. Construction
was completed in 2000.
SBV announces new circulars for
credit institutions
The SBV on May 27 issued Circular 07/2016/TT-NHNN
to supplement and amend some articles of Circular 24/2015/TT-NHNN on
providing foreign currency loans by credit institutions and foreign bank
branches.
Under the new regulations, from June 1, companies who
have demands for short-term loans in foreign currency can borrow from banks
to satisfy their short-term capital needs.
Borrowers must commit to have sufficient foreign
currency revenue from exports to repay the loans.
After getting the loans, borrowers must immediately
sell the amount of foreign currency to the lending institutions under the
spot foreign exchange trading method, except for the case that the foreign
currency will be used to make payments.
This decision will take effect until December 31, this
year.
According to the old regulations, commercial banks are
not allowed to provide lending in foreign currency to exporters from 31 March
this year.
Banking expert Nguyen Tri Hieu said that the decision
would help enterprises, especially small- and medium-sized ones, to reduce
costs for capital by getting loans in foreign currency at low interest rates,
thereby making exports more competitive.
However, he warned that the policy would raise demand
of exporters for foreign currency, thus have effects on the stability of the
foreign exchange rate in the near future. Therefore, companies should take
careful consideration related to foreign exchange rate.
He suggested that the SBV allow commercial banks to
increase the interest rates for US dollar deposits to raise the banks'
liquidity.
Treasury sells G-bonds worth VND8.2
trillion
The State Treasury offloaded VND8.2 trillion (US$366.8
million) in government bonds on May 26, G-bond auction organiser Ha Noi Stock
Exchange (HNX) said.
HNX said the treasure offered bonds worth VND10
trillion -- VND6 trillion-worth five-year term bonds, VND2 trillion-worth
15-year term bonds and VND2 trillion-worth 30-year term bonds.
After the auction, over VND4 trillion in five-year term
bonds were offloaded at the coupon rate of 6.18 per cent per annum. The
entire VND2 trillion in 15-year term bonds were offloaded at the coupon rate
of 7.65 per cent per annum. Owing to the high demand, the treasury offered
another VND600 billion in15-year term bonds and sold them all at the same coupon
rate.
The treasury also sold over VND1.5 trillion-worth 30
year term bonds at a coupon rate of 8.00 per cent per annum.
Dollars drying up as banks park them
abroad
Regulating the use of dollars in the banking sector is
again in the news after overseas deposits of the greenback by Vietnamese
entities, mostly banks, have skyrocketed.
According to the Việt Nam Institute of Economic and
Policy Research, the overseas deposits, previously negligible, had surged to
$7.3 billion at the end of the third quarter of last year.
This was believed to have been caused by the State Bank
of Việt Nam (SBV)’s policy tightening with respect to banks’ foreign currency
transactions.
To stabilise the forex market and reduce dollarisation
in the economy, the central bank has applied several measures in recent years
to prevent speculation in and hoarding of dollars.
One of the most important of them was to ban banks from
offering loans to companies in any other currency except the đồng.
Only companies in need of foreign exchange to pay for
imports of goods and services are allowed to borrow in dollars.
The central bank also decided to reduce interest on
dollar deposits to zero per cent.
These were aimed at making banks switch from accepting
dollar deposits and lending them to buying and selling the greenback.
The efforts have paid off, with the forex rate as well
as market becoming rather steady and helping the Government keep a lid on
inflation.
But other problems have cropped up.
Since the interest rate was cut to zero, dollar deposits
at banks have slumped, threatening their liquidity.
As a result, many banks have been illegally offering
interest of 0.5-1 per cent.
The zero interest rate policy is also blamed for a
foreign currency drain as banks that are sitting on large dollar reserves,
companies possessing the greenback and even individuals are looking for ways
to deposit them abroad to make profits.
This is paradoxical since many companies and even banks
lack dollars for their business activities, and are forced to borrow from
foreign banks at high interest rates.
Many analysts said that the central bank’s decision to
bring down dollar deposit interest rates to zero is not appropriate since the
country does not have a foreign currency market where US dollar trading is
carried out smoothly and efficiently.
But the fact that some banks park their foreign
currencies abroad to enjoy profits irks some, who think “it is not fair”.
But banking experts and the State Bank of Việt Nam
dismiss this saying it is the normal practice of banks.
Some analysts called for going back to old policies and
allowing banks to mobilise foreign currency deposits and lend them.
Some others urged the central bank to review and tweak
its policies to make them win-win for all concerned.
One of their suggestions was to extend the
de-dollarisation roadmap to ease the burden on businesses.
The process has been too rapid in recent times, they
said, adding that the central bank should rethink certain aspects, including
the zero interest rate policy.
The country needs large amounts of foreign exchange
because most industries rely on imports for raw materials and feedstock, they
pointed out.
But the central bank seems to be unmoved and determined
to go full speed ahead with the de-dollarisation, instructing banks to
scrupulously comply with foreign currency-related policies.
Withdrawing investment from non-core
sectors
Vietinbank recently announced plans to sell its stake
in the Sài Gòn Commercial Joint Stock Bank (Saigonbank) through an auction.
It will offer 16.875 million shares, equivalent to 5.48
per cent of Saigonbank’s chartered capital.
If the auction is successful it will help the bank pare
its ownership of Sài Gòn Bank from the current 10.39 per cent to 4.91 per
cent as instructed by the State Bank of Việt Nam through its Circular 36/2014.
The circular stipulates that a bank can own no more
than 5 per cent shares in a maximum of two other banks.
Circular 36 regulates prudential ratios for the
operations of credit institutions, including foreign, to reduce
cross-ownership and manipulation in the banking sector.
The SBV will allow higher than the stipulated 5 per cent
ownership in specific cases where it designates banks to either prop up the
financial situation or support the restructuring of fragile organisations.
Selling stakes in other banks was also a hot topic at
Vietcombank’s annual shareholders meeting in April when many wondered how the
bank would achieve it.
Vietcombank leads the banking sector in holding stakes
in other lenders, most of which exceed the central bank’s ceiling.
It owns a 7.16 per cent stake in Military Bank, 8.19
per cent in Export and Import Bank, 5.07 per cent in Orient Commercial Bank,
4.3 per cent in Saigonbank and more than 10 per cent in Cement Finance
Company.
Vietcombank bosses said the stakes in the three banks
would be retained since they were very profitable, though adding this could
change depending on their future performance and share prices.
Banks are scrambling to sell shares in other banks
because the deadline for it set by the central bank has ended.
The circular took effect on February 1, 2015, and banks
were given 15 months to comply with it.
Many banks have yet to do so and petitioned the SBV to
extend the deadline, saying it was too tight.
State firms in many other sectors too require to
withdraw from non-core sectors, but in the last five years have only achieved
30 per cent of the target.
A finance ministry official said the target for 2016 is
nearly VND15.69 trillion (over $697.33 million), but in the first four months
only VND659 billion worth of stakes have been divested.
Analysts blame the slow pace on certain reasons, one of
which is that the shares of businesses to be sold are not attractive to
investors.
Besides, the securities markets have been too volatile
for investors’ comfort, they said.
Vietnamese retailers fight to
maintain their share of the domestic market
Foreign retailers are turning to the Vietnamese retail
market, either investing directly or merging with or acquiring Vietnamese
businesses and putting great pressure on domestic companies. The government
has outlined strategies to help local retailers improve their competitiveness
and establish a stronger foothold at home.
Retail giant Central Group has agreed on a M&A deal
to purchase Zalora, the fashion-focused e-commerce site, in Vietnam and
Thailand at 10 million USD each.
Before Thailand’s Central Group bought Big C, another
Thai group TCC bought Metro Group’s Cash and Carry wholesale chain earlier
this year. The transaction included all 19 wholesale stores and its related
real estate portfolio for 655 million Euros.
Vietnamese retail enterprises are under threat of
losing in the domestic market. The Sai Gon Union of Trading Co-operatives,
Saigon Co-op, was involved in the buying of Big C. While the foreign
enterprise had more advantages in the acquisition transaction, Saigon Coop
has faced a lot of difficulties including obtaining an external investment
license.
Over the past 9 years since joining the WTO, Vietnam
has almost fully opened the retail sector, but has not yet issued sufficient
policies for domestic enterprises in the integration process regarding human
resources, market information, and trade mark marketing.
Diep Dung, Chairman of Saigon Co-op, said that they
have “suggested the government construct a national strategy for Vietnam’s
retail sector development towards 2030. It should focus on developing the 20
top Vietnamese retailers to compete with foreign enterprises. The government
will adjust policies and obstacles in foreign mergers and acquisition
transactions.”
Beside the government strategy, retail enterprises have
to reform and improve their services. According to Nguyen Tan Hoang Hau,
Marketing Director of Thien Hoa Electronics and Furniture Shopping Center,
the company will “continue to invest in our trademark recognition system and
upgrade our electronics supermarkets in Vietnam to improve competitiveness
and attract foreign investment.”
Le Thi Thanh Lam, Deputy General Director of Sai
Gon Food, said: “we’ll regularly introduce new products. No one can
understand the taste of Vietnamese people better than Vietnamese people.
We’ll take this advantage to produce suitable products at competitive prices
and maintain our foothold.”
As well as retailers, producers will also have to
improve product quality and reduce their prices in order to penetrate retail
chains in Vietnam and abroad. Foreign retail store operators from Thailand,
Japan, and South Korea have expanded their stores in Vietnam and sold an
increasing number of foreign products to Vietnamese consumers. Under free
trade agreements and Vietnam’s integration commitments, more than 10,000
products will enjoy tax free benefits among ASEAN countries. Another
challenge is that some Vietnamese consumers prefer foreign goods at lower
prices.
Dinh Thi My Loan, President of Vietnam Retailers’ Association,
shared her views: “when the market is more open, enterprises have to review
their production and trade plans. We have to produce what the market needs,
not sell what we have.”
Economists say Vietnamese enterprises should reform
production, trade, and management to produce better products at reasonable
prices as the open market has been moving away from the supplier-controlled
distribution networks towards retailer- controlled networks.
Coca-Cola beverages to be served
aboard
The Vietnamese private airline and Coca-Cola Vietnam
signed a deal on May 25 to boost cooperation, including an agreement to paint
Coca-Cola’s logo on Vietjet’s new planes and serve Coca-Cola beverages on
board.
In a press release on May 25, the Vietnamese carrier
said the agreement between the two companies will diversify each other’s
service and product lines, thus increasing value-added benefits to the
community and society.
The deal follows historic agreements inked between
Vietnam and the United States during President Barack Obama’s recent visit to
the Southeast Asian country.
Obama left for Japan yesterday after beginning his
first visit to Vietnam on Monday, during which Vietnamese and U.S. sides
closed deals worth tens of billions of dollars.
Vietjet placed an order to buy 100 planes from Boeing
at a cost of $11.3 billion.
The airline and Coca-Cola will together promote
co-organized activities, develop and expand mutual sales channels, provide
better customer service, and launch co-promotion programs for customers.
“Through this agreement, besides the current nine hot
meals and beverages on Vietjet’s flights, passengers will now have more drink
choices from the world’s number-one beverage company, Coca-Cola,” said
managing director of Vietjet Luu Duc Khanh.
“Vietjet will also soon welcome new aircraft with the
Coco-Cola brand livery into the world’s most lively fleet,” he added. “The
Coca-Cola brand will fly with Vietjet into domestic and international skies,
bringing more air travel opportunities to people in the region.”
According to the agreement, Vietjet and Coca-Cola
Vietnam will cooperate in sales activities, promoting both brands through
appropriate promotions, events, communication, and more.
The two companies will also cooperate in increasing
opportunities of mutual information exchange to promote the cooperation
between both companies and deploy customer care activities for up to 150
million passengers on both domestic and international flights.
“Aiming to become one of the most successful U.S.
investors in Vietnam, Coca-Cola Vietnam is committed to continuing
sustainable development investment to build up an effective and comprehensive
value chain in terms of production, business, and community activities,” said
Vamsi Mohan, regional director of Coca-Cola Indochina & Myanmar.
“With that vision, we have been looking for the right
partner to share our common values with,” he added. “We recognize Vietjet as
a company who operates on the passion and desire of success foundation. That
is also the values that Coca-Cola appreciates and follows in the company’s
business direction.”
Businesses’ engagement needed for
agricultural production
The agricultural sector must draw businesses’ more
engagement as they will bring new technologies into production to help
farmers create competitive products, according to experts.
Speaking at a conference in Hanoi on May 27 on the
prospects of Vietnam’s agricultural market in 2016, Nguyen Do Anh Tuan, head
of the Institute of Policy and Strategy for Agriculture and Rural Development
(IPSARD) under the Ministry of Agriculture and Rural Development, said that
in the medium and long term, the sector needs to restructure its products,
firstly coffee, rice, pepper and seafood.
It is necessary to overcome consequences of natural
disasters and control diseases to boost supplies while ensuring food hygiene
and safety, one of the hot issues today, he noted.
Le Van Binh, deputy head of the National Assembly
Office’s Department of Economic Affairs, said free trade agreements would
open up opportunities for Vietnam to expand its agriproduct export market in
the face of technical barriers as well as fierce competition from other
countries.
However, climate change and new diseases are posing
challenges to Vietnam’s agriculture, he said.
JongHa Bae, FAO Representative in Vietnam, said Vietnam
should increase investment in rural infrastructure, develop geographical
indications for quality products as well as boost farmers’ adaptability in
the integration process.
FPT to work with Japanese printing
and education firms
FPT signed contracts with Toppan Printing Co. and Tokyo
Shoseki on May 26 in Nagoya during Prime Minister Nguyen Xuan Phuc’s visit to
Japan from May 26 to 28.
Toppan Printing and FPT will cooperate in software
outsourcing and expand their business in Southeast Asia. The cooperation is
expected to bring more orders to FPT for software outsourcing from the
company, especially in business process outsourcing (BPO), in which there is
competition from China and the Philippines.
The contact between FPT and Tokyo Shoseki is focused on
digitizing electronic textbooks for Japan and Vietnam. The Ministry of
Education in Japan will pass plans this year to digitize all textbooks in
primary school and secondary school by 2020. Signing a contract with Tokyo
Shoseki gives FPT a major opportunity to secure orders in this regard.
These are two key sectors where FPT wishes to expand in
Japan. Gaining a contact with a large Japanese firm like Toppan Printing will
help boost Vietnam’s brand in the BPO field.
Over recent years Japan has been the most important
market in FPT’s software exports, which contributes 50 per cent of its
revenue. In first four months of this year FPT’s revenue in Japan was its
highest ever, increasing 59 per cent year-on-year. FPT now has 4,500
engineers working for Japanese partners.
In 2017 FPT expects the Japanese market will earn it
revenue of $200 million and create job opportunities for 8,800 employees in
Japan and Vietnam.
Toppan Printing was established in 1900 and is a leader
in the printing sector but also involved in many others, such as information
technology, electronics, healthcare, and furniture. Tokyo Shoseki was founded
in 1909 and is the largest Japanese textbook publisher.
Companies on HNX submit quarterly
reports
Three hundred and seventy two of the 379 companies
listed on the Hanoi Stock Exchange (HNX) have submitted their financial
reports for the first quarter of 2016.
Figures indicate that in the first quarter the 372
companies recorded a combined after-tax profit of VND2.86 trillion ($127.92
million), an increase of about 1 per cent against the same period last year.
Some 319 of the 379 companies (86 per cent) earned a
profit, totaling VND3.06 trillion ($136.87 million), an increase of 3.55 per
cent against the same period last year. Fifty other companies (14 per cent)
incurred losses of VND193 billion ($8.63 million) in total, an increase of
67.97 per cent year-on-year.
Industrial enterprises saw the best performance, with
104 out of 319 enterprises recording profits totaling VND949 billion ($42.44
million), accounting for 31 per cent of the total.
Following were finance companies, with 25 recording
profit of VND898 billion ($40.16 million), accounting for 29.3 per cent, then
trade and hospitality companies, with 43 recording profit of VND467 billion
($20.88 million), accounting for 15.2 per cent.
The industrial sector also saw the largest amount of
losses, with 12 enterprises losing VND65 billion ($2.90 million).
Vietinbank to sell 5.48% of SGB
The Vietnam Joint Stock Commercial Bank for Industry
and Trade (Vietinbank - stock code CTG) has released a notice of divestment
from the Saigon Bank for Industry and Trade (stock code SGB). SGB’s charter
capital is around $138 million, of which more than $14 million, or 10.39 per
cent, is held by Vietinbank.
Vietinbank expects to conduct a public auction of
nearly 17 million voting shares, or 5.48 per cent of capital, in the second
quarter of this year at an initial price of VND10,800 per share.
The divestment is to comply with the provisions of
Point B, Item 3, Article 20 of Circular No. 36/2014/TT-NHNN dated November
20, 2014 from the State Bank of Vietnam, which regulates limitations and
capital safety ratios in the operations of credit organizations and foreign
bank branches.
Garment companies encouraged to use
more domestic raw materials
According to the Vietnam Textile and Apparel
Association (Vitas), textile and apparel exports in the first four months of
this year exceeded US$8.1 billion, up 6.2 percent over the same period last
year.
Of which, garments exports topped $6.8 billion, an increase
of 6.95 percent; staple fiber exports reached $824 million, an increase of
2.87 percent; raw materials exports were at $273 million, up 4.14 percent;
whereas, nonwoven fabrics exports hit $145 million, down 3.97 percent.
Countries participated in the Trans-Pacific Partnership
account for 65 percent of Vietnam’s total textile and apparel exports, with
the US accounting for 48 percent, and Japan 12 percent. The EU market
accounts for 15 percent and South Korea takes about 10 percent.
The representative of Vitas said that although the
country’s raw materials exports bring in billions US dollar annually, several
garment companies still have to import fabrics for manufacturing of export
clothes. Vitas recommended that garment companies and raw material producers
should strengthen connection and try each other’s products.
Raw materials producers should focus on meeting
requirements for quality, quantity, competitive price, and delivery time. In
long term, garment companies should shift from doing outsourcing to making
products to export under FOB (free on board), ODM (original design
manufacturer) or OBM (original brand manufacturer) modes and cut down
exporting via intermediary. Thenceforth, garment and textile companies are
able to meet the rules of origin under the TTP and FTA.
Singaporean firm to invest in
innovative park in HCM City
The Sembcorp Development company from Singapore has
expressed intention to invest in a Vietnam-Singapore Innovative Park in Ho
Chi Minh City.
The firm’s general director Kelvin Teo discussed the
plan with Chairman of HCM City’s People’s Committee Nguyen Thanh Phong during
a working session on May 27.
The general director said the park will need about
50-100 hectares of land near the city’s centre, adding that it differs from other
industrial zones in that it will have a commercial centre, research
facilities and residential quarters to ensure quality living conditions for
scientists and experts.
Once operational, it will attract investors and
interdisciplinary experts from all over the world to develop new products, he
said.
According to Chairman Nguyen Thanh Phong, the HCM City
Hi-tech Park has sufficient conditions to meet Sembcorp Development’s
requirements for the project.
He assigned the hi-tech park’s management board and relevant
agencies to work with the Singaporean firm on land use procedures.
The city leader also expressed his hope that the firm
will invest more in the development of renewable, wind and solar energies in
the city.
So far, Sembcorp Development has poured 8.5 billion USD
into 7 projects in Vietnam, creating about 160,000 jobs.
VN finds difficulties enforcing
environment protection policy: experts
Vietnam will face challenges in implementing policies
and laws on environmental protection, especially in industries seeing strong
growth, said Nick Thorpe from the People and Nature Reconciliation
(PanNature) centre.
Speaking at a seminar themed “Free trade: Investment
movement and environmental issue in Vietnam” held by PanNature in Hanoi on
May 27, Nick Thorpe highlighted that Vietnam will meet difficulties in
abiding by environmental standards regulated in the Trans-Pacific Partnership
(TPP) agreement, and those concerning land compensation at the local level.
There are loopholes in Vietnam’s policies on environmental
management for businesses, he stressed.
Le Dang Doanh, former Director of the Central Institute
for Economic Management, said by joining free trade agreements (FTAs),
Vietnam has to commit to ensuring regulations related to indicators on
ozone-depleting substances , pollution at sea, transparent cooperation in
protecting the environment, and reduction of fishing activities detrimental
to fisheries resources.
Doanh suggested building a relevant regulation system,
adding that it is necessary to enhance supervision of environmental
protection for foreign-invested enterprises.
FDI businesses’ operation ought to obey regulations on
management of waste water, dust, and noise – right from the first phases of
design and technology selection, to construction and operation, he noted.
According to Do Thanh Bai from the Chemical Society of
Vietnam, industries that will most benefit from TPP such as textiles,
footwear, and electronics are the most prejudicial sectors to the environment
because they use many toxic and persistent chemicals.
Bai underlined the need to carefully select investors,
aiming to seek those using environmental friendly technologies.
Vietnam has joined and negotiated 15 FTAs so far, with
the TPP officially signed in October last year after five years of
negotiation.
The trade pact is said to give Vietnam the chance to
upgrade its investment and business environment, attract foreign investment,
speed up its restructuring process and shift its growth model.
Vietnam banks allowed to resume
dollar loans to exporters
Vietnam’s central bank has permitted commercial lenders
to resume dollar loans to export businesses starting June 1, two months after
it banned that activity, amid economic difficulties.
In a circular released on May 27, the State Bank of
Vietnam said that local banks and subsidiaries of foreign banks are allowed
to offer short-term dollar loans to export companies until the end of this
year as long as these companies will be able to pay off their debts from
their export revenues.
On March 31, the central bank tightened dollar lending
in an attempt to prevent dollarization, stipulating that local banks and
subsidiaries of foreign banks can only provide foreign-currency loans to
importers and businesses with overseas investment.
Vietnam’s economic growth slowed in the first quarter
as the country’s income from crude and agriculture production dropped.
Gross domestic product (GDP) rose 5.46% in the first
three months from a year earlier, according to the General Statistics Office.
That compares with the 7.01% pace in the last quarter of 2015.
Official figures show that more than 28,500 businesses
across the country ceased operations in the first five months of this year, a
26% year-on-year increase.
Meanwhile, more than 4,600 businesses completed
dissolution procedures in Jan-May, up 20% from the same period last year.
The country has also seen the establishment of more
than 44,700 new businesses in the first five months, up 24%.
Taiwan auto parts firms seek to
enter Vietnam
Saigon International Autotech & Accessories Show
2016 has kicked off in HCMC’s District 7, with an upsurge in the presence of
Taiwanese auto parts companies with plans to enter the domestic market.
According to the organizers, the four-day expo at the
Saigon Exhibition and Convention Center (SECC) is attended by around 700
enterprises, up 30% against last year’s event. Foreign exhibitors make up 70%
of the total and Taiwanese auto parts firms number more than 50.
Eugene Hsiao, chairman of the Taipei County Auto Parts
Association, said Vietnam’s auto market has been expanding, with sales in
2015 totaling 245,000 vehicles. This is why many Taiwanese companies have put
their names down to join the 1,000-booth expo to explore business
opportunities.
In addition, a number of Taiwanese companies have come
to gauge the investment environment before deciding to set up shop in this
market.
According to Hsiao, many Taiwanese companies have
invested in production facilities in Vietnam but mainly outsourced products
for export. Companies in the field are eyeing the Vietnamese market and other
ASEAN countries with a combined population of over 600 million consumers.
If Taiwanese auto parts firms invest in Vietnam, they
can turn out products for domestic consumption and export to other regional
countries with low tariffs, Hsiao said.
He added that Vietnam has advantages in labor costs and
incentives for foreign investments.
The major advantage of Taiwan’s auto industry is the
large-scale supply chain that helps minimize production costs, he noted.
Taiwan currently has around 2,800 factories producing
auto parts. Statistics of the vehicle manufacturing association of Taiwan
showed revenue of auto parts reached US$6.8 billion last year.
Biggest software park urged to go
public for stronger performance
The company that manages a Ho Chi Minh City-based
software development center should undergo a privatization process as soon as
possible for the facility to live up to its potential, the city’s Party Committee
chief said on May 28.
Once going public, the Quang Trung Software City
(QTSC), the operator of the Quang Trung Software Park, will also be able to
afford better incomes for its executives and engineers, party committee
secretary Dinh La Thang said as he toured the facility in District 12.
During the visit, Thang asked the QTSC director Lam
Nguyen Hai Long of his salary. After knowing that Long gets VND24 million
(US$1,071) a month, Thang shook his head to show disappointment.
“It is unacceptable for the wage of the director of the
leading software park in the country and the region to be so modest,” Thang
said.
The party chief said the park director deserves a
salary “ten times the current rate,” so that he could feel motivated to work
better.
“To this end, you should speed up the privatization
process for QTSC,” he concluded.
Founded in 2001, QTSC, 100% owned by the government, is
now biggest software park in Vietnam.
Responding to Thang’s privatization request, Long said
he “is personally in great support of the idea.”
“But we should follow the state procedure, and can only
speed up the process with approval from the government,” the director added.
Thang quickly said “You do not have to wait for any
permission, just do it now.”
Thang said as a company in charge of ensuring
infrastructure for a software park that makes more than US$220 million worth
of products annually, it is unacceptable for QTSC to be prevented from
developing just because of state mechanism.
The party chief said QTSC should go public so that
private investors can take part in developing the company. “Then you will be
able to offer reasonable incomes to attract talents,” he said.
Thang said QTSC is underpaying its staff, which is a
hindrance for the company to grow further. The official was also briefed
during the visit that an engineer with three years of experience earns VND8
million – VND10 million (US$350-US$450) a month at QTSC, which he said is
“too modest company to the high living standard of a software engineer.”
Thang also said QTSC should not just wait for order for
software products from the city’s administration.
“You should be active in figuring what software
solutions the city is in need and encourage authorities to buy your
products,” he said.
“There are many things you can do: the city needs
anti-crime software or products that increase transparency in giving
construction licenses.
“If you can make products to solve these issues, the
city’s authorities will buy immediately.”
Spanning 430,000 square meters, QTSC is accountable for
various functions, including software production, exhibition center and
accommodation, according to the company’s website.
In 2015, QTSC had 120 tech companies operating and 33
investors, including such big names as HP and IBM.
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR
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Thứ Tư, 1 tháng 6, 2016
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