BUSINESS IN BRIEF 9/6
Vissan to list on UPCoM and HSX
State-owned meat processor Vissan will list its shares
on the market for unlisted public companies (UPCoM) and then move to the
Hochiminh Stock Exchange after it completes procedures to become a
shareholder-owned concern this July.
At a general meeting in the city last week, Vissan
shareholders elected members of the board of directors and the supervisory
board and approved a plan to list shares on UPCoM and the HCMC bourse later.
Shareholders permitted Vissan’s board to choose a listing date.
Van Duc Muoi, general director of Vissan, said the firm
would try to complete listing procedures three months after it gets a
business registration certificate, and float shares on the southern exchange
a year later in line with the prevailing regulations.
According to the Prime Minister’s Decision No.
51/2014/QD-TTg, effective from November 1, 2014, within 90 days after getting
a business registration certificate, State-owned enterprises must finish
procedures for their recognition as public firms, register their shares at
the Vietnam Securities Depository and apply to list on UPCoM.
Besides, eligible SOEs are required to get listed on
the stock market within one year after getting a business registration
certificate.
Vissan will do business registration paperwork and get
a new seal for a joint stock company.
Vissan’s board in the 2016-2020 term has a
representative from Vietnam’s International Agriculture Nutrition JSC (Anco)
which owns 14% of Vissan’s chartered capital. Last year, Masan Group
announced to own a 70% stake in Anco after its acquisition of a strategic
stake in Sam Kim Co Ltd.
Vissan’s board members now include Pham Trung Lam, Anco
general director, Nguyen Ngoc An, Vissan deputy general director, Van Duc
Muoi, Vissan general director, Nguyen Phuc Khoa, deputy general director of
Saigon Trading Group (SATRA), and Tran Ngoc Dang, SATRA deputy director for
finance and accounting.
Khoa has been appointed Vissan chairman and Muoi took
up the post of general director in the 2016-2020 term. At present, SATRA represents
a State stake of over 67% in Vissan.
Doan Thi My Duyen, chief accountant of Masan Group, has
joined Vissan’s supervisory board, together with Nguyen Kim Khanh, deputy
head of Vissan’s finance-accounting department, and Hoang Thi Kim Phuong of
the department. Khanh has become head of the supervisory board.
According to the 2016-2020 business plan, Vissan looks
to attain net revenue of nearly VND4 trillion in 2016 and the figure is
forecast to rise to VND5.25 trillion in 2020. Its after-tax profit is
expected at VND99.1 billion this year, VND99.4 billion in 2017, over VND106
billion in 2018, VND9 billion in 2019 and VND52 billion in 2020. The
firm said it would pay an annual dividend of 5%.
Vissan general director Van Duc Muoi said low after-tax
profit forecasts in 2016-2018 are attributable to an expected surge in
operation costs. Meanwhile, its 2019 and 2020 after-tax profit would drop as
Vissan plans to invest an estimated VND1.5 trillion into a plant in Long An
Province in 2019.
This facility will be up and running in the same year,
so loan interest and depreciation cost of fixed assets could edge up.
Muoi said the company was planning to use VND1.5
trillion from its budget, 30% of the investment cost of the plant, and borrow
the remaining 70% from banks to fund the new facility.
Vissan launched an initial public offering in March
with the State holding a 67.76% stake, Anco 14% and five other investors 14%.
Its employees hold a 4.21% stake and the labor union 0.02%.
HCMC seeks ODA for underground
walkways
Authorities of HCMC have asked the central Government
for permission to use a Japanese loan to develop facilities for public use in
an underground shopping mall in the downtown area.
An official development assistance (ODA) loan from the
Japan International Cooperation Agency (JICA) which is being sought by the
city will go to building public walkways, public square and auxiliary works
in the underground mall linking the stations of Metro Line No. 1 in front of
the Ben Thanh Market and the Opera House.
The city has also asked Japan’s Toshin Development
Company to work with JICA to seek ODA.
The company submitted the underground shopping mall
project to the city government in March. The 45,420-square-meter center would
comprise 21,600 square meters of underground walkway, 16,850 square meters of
retail, dining and entertainment space, and auxiliary works.
The project is estimated to cost VND8.4 trillion
(US$376.6 million), including an ODA loan of VND4.98 trillion used to finance
public walkways, public square and auxiliary works. The rest would be funded
by investors to build and manage the shopping mall in the form of direct
investment, and construct public works under the build-transfer (BT) format.
According to Toshin, the project would be carried out
from late 2019 to early 2024 and the time needed for recovering State capital
is 13 years from the date of inauguration.
Currently, the Metro Line No.1 station in front of the
Opera House and the underground track under Le Loi Boulevard are under
construction.
Experts warn of environmental
hazards behind FDI attraction
Experts have sounded an alarm bell over environmental
hazards associated with a race to attract foreign direct investment (FDI) at
all costs.
Speaking at a seminar in Hanoi last week on free trade
agreements with investment flows and environmental issues, Tran Thanh Thuy
from the Center for People and Nature Reconciliation said nearly 90% of the
projects in the textile sector belong to Chinese and South Korean investors
in Nam Dinh Province.
Data of Nam Dinh’s Department of Planning and
Investment show the province’s FDI approvals totaled around US$190 million
last year, up from 2014’s US$135-140 million, he said.
Thuy said the most polluting industries in Vietnam
include leather tanning, fish farming, textile, iron and steel.
The free trade agreements Vietnam has recently signed
have led to an upsurge in investment in polluting sectors, Thuy noted.
According to Do Thanh Bai from the Chemical Society of
Vietnam, the textile sector can attract a lot of investments thanks to low
labor cost. However, the major challenge is how to properly treat wastewater.
In addition to textile, other sectors with high FDI
approvals such as leather tanning, oil refinery and electronics also pose a
high risk of environmental pollution.
In her presentation, Thuy cited the National Economics
University’s statistics on compliance with regulations on environmental
protection as showing 60% of FDI enterprises discharge wastewater that fails
to meet standards. Nearly 70% of FDI enterprises said they could save
environmental costs by 10-50% by setting up shop in Vietnam in comparison to
their home countries.
Speaking at the seminar, economic expert Le Dang Doanh
said foreign investors have come to Vietnam because they want to maximize
profits while Vietnam’s oversight of environmental issues is lax.
According to Doanh, Vietnam is not yet an
industrialized country but environmental pollution is really serious, which
affect the quality of life.
Each year damages caused by environmental pollution in
Vietnam account for 2.5% of GDP while the percentage in China is 6.5%, Doanh
said, adding Vietnam might surpass China in this regard if no action is taken
to remedy the situation.
Thailand helps Vietnamese firms join
exhibitions effectively
The Thailand Convention and Exhibition Bureau (TCEB) on
May 30 hosted a meeting with enterprises in HCMC to help them build skills to
effectively join international trade exhibitions.
TCEB has also launched support programs for those
Vietnamese businesses partnering with Thai firms in the wake of a strong rise
in Vietnamese tourists to Thailand. The programs will fund Vietnamese firms’
travel costs when they participate in trade fairs in Thailand and offer other
forms of assistance like making arrangements.
TCEB has cooperated with the Vietnam Trade Promotion
Agency (Vietrade) to provide financial aid for Vietnamese firms to
participate in trade shows in Thailand. Nguyen Ba Vinh, a TCEB representative
in Vietnam, said the support is targeting local dealers and small and
medium-sized enterprises which seek assistance and information on
exhibitions.
Supawan Teerarat, TCEB’s vice president for strategic
and business development, said Thailand is home to various exhibitions,
prompting the Thai government to introduce programs to attract businesses in
the region to join. It has set a goal of welcoming 191,000 foreign visitors
to exhibitions in 2016, from which it could earn US$447 million.
The number of Vietnamese visitors to Thai exhibitions
has been on the rise in recent years.
TCEB statistics showed Vietnamese firms made up 6.63%
of the total arrivals to Thailand shows in the 2013-2015 period. The sectors
that attracted attention of Vietnamese corporate visitors included food and
farming with 48% the total Vietnamese arrivals, automotive engineering with
25% and healthcare with 10.5%.
HCMC’s Jan-May exports grow slightly
Export revenues of HCMC amounted to nearly US$12
billion in the first five months of the year, up a mere 1.2% against the same
period a year earlier, heard a review meeting of the city on May 30.
If crude oil had not been taken into account, the
city’s exports would have picked up 7.1% year-on-year to US$11 billion,
director of the HCMC Department of Planning and Investment Su Ngoc Anh told
the meeting on January-May socio-economic performance.
Strong export growth was recorded in some export
markets like China with 37.3%, South Korea with 16%, Hong Kong with 16.6%,
Indonesia with 163.7%, the Netherlands with 22.3% and India with 20.8%.
Meanwhile, the city’s exports to Japan, Malaysia, Australia, Singapore and
Thailand slowed down.
In the five-month period, the city imported US$14
billion worth of products, up 9.2% year-on-year. Most of the imported
products were equipment and materials for production of pharmaceuticals,
electronic products and parts, and autos.
Regarding the monetary market, banking operations in
HCMC were stable in the period, with borrowing and lending inching up against
the same period a year ago.
In particular, borrowing by credit institutions in HCMC
as of the end of this month is estimated at VND1,637 trillion, increasing by
4.5% against late last year and nearly 20% year-on-year. Meanwhile, HCMC
banks have reported VND1,297 trillion in total outstanding loans, up 5%
versus late last year and 16.2% from the year-ago period.
The bad debt ratio as of late March had edged up
against earlier this year and accounted for over 4% of total outstanding
loans, up 12 basis points against late last year.
According to Anh, the city will continue taking
measures to promote production, help enterprises ride out difficulties and
improve the investment environment.
In addition, the city will foster trade promotion,
expand markets, introduce contents of the Trans-Pacific Partnership (TPP)
trade agreement, the ASEAN Economic Community (AEC) and free trade
agreements, and support enterprises to actively prepare for the
implementation of these accords.
In all, HCMC’s total sales of goods and services in the
January-May period surged by 11.2% to VND288.55 trillion.
According to Nguyen Phuong Dong, deputy director of the
HCMC Department of Industry and Trade, the industries of textiles, plastics,
beverages and electronics posted positive growth in the period.
To assist enterprises and further boost supporting
industries, the city is preparing workshops for foreign-invested enterprises
active in supporting industries, he said, adding next month the department
will send the city government a draft decision on stimulus for supporting
industries.
Interbank interest rates drop
further
Interest rates for overnight to one-week loans on the
interbank market on May 30 plunged to the lowest in more than one year after
the State Bank of Vietnam (SBV) issued Circular 06/2016/TT-NHNN to reduce
adequacy ratios at banks.
The overnight rate fell 0.32 of a percentage point to
1.46% a year and the one-week rate dropped 51 basis points to 1.55%. In
contrast, the annual interest rate for two-week loans inched up 7 basis
points to 2.45%, a low level in recent months.
Low interest rates on the interbank market indicate
that liquidity has been ample in the banking system. An investment fund told
the Daily that interest rates might fluctuate slightly this week and
liquidity would remain stable.
The SBV last Friday issued Circular 06 amending and
supplementing a number of provisions in Circular 36/2014/TT-NHNN which
stipulates limits and adequacy ratios at banks. Notably, the maximum ratio of
short-term funds used for medium- and long-term loans is unchanged at 60%
until the end of this year. The ratio will dip to 50% from January 1, 2017
and 40% from the beginning of 2018.
This is expected to keep the interbank currency market
stable in the coming time.
Experts at Bao Viet Securities Company said the new
circular would give banks time to prepare to meet the requirements for
adequacy ratios set by the central bank. It will ease pressure on liquidity
at banks in the short term.
Sales of Government bonds on the secondary market shot
up 36% against last week. Foreign investors net bought over VND2.2 trillion
worth of G-bonds.
Meanwhile, coupons for one-year, two-year and
three-year bonds declined more than 4 basis points each to 4.58%, 4.93% and
5.376% a year respectively. The respective bond interest rates for seven-year
and 15-year tenors stood at 6.754% and 7.693%, down 1 basis point each.
The coupon for five-year bonds inched up 0.004
percentage point to 6.22% and that for ten-year bonds stayed unchanged at
6.99%.
A foreign investment fund said the central bank’s new
circular is to ensure stability for the banking system, pump more credit into
the property sector and boost economic growth as Vietnam’s first-quarter
gross domestic product (GDP) growth was lower than in the same period last
year.
The circular is expected to fuel credit growth in the
coming time. The investment fund said credit growth would hit its peak this
year before falling next year. Higher credit growth will prop up GDP growth.
However, the circular may lead to an increase in bad
debt and net interest margin (NIM) and the capital adequacy ratio (CAR) may
become worse.
Vietnam – Canada trade revenue grows in Q1
Vietnam leads ASEAN members in bilateral trade revenue
with Canada, with the figure hitting 928.97 million USD in the first quarter
of 2016, up 11.8 percent year-on-year.
According to Statistics Canada, Canada exported 92.9
million USD worth of goods to Vietnam, an annual decrease of 38.7 percent
during the period. The country spent 836.1 million USD on Vietnamese imports
– mainly machinery, electronic devices, apparel and footwear, 23 percent
higher than last year.
Vietnam secured a trade surplus of 743.2 million USD,
with an annual surge of 123 percent in the overall value of machinery and
electronic devices exported to Canada.
Canada bought less seafood from Vietnam, leading to a
drop of 22.4 percent in revenue compared to last year.
Vietnam mostly imported fertilizer, nuts, seafood,
machinery-spare parts and fur from Canada.
Vietnam ranked fifth in ASEAN in terms of imports from
Canada but exports the most to the country.
In the period, the ten ASEAN state members together
recorded almost 2.9 trillion USD worth of exports to Canada and more than 1
trillion USD worth of imports from the country.
Belarus ratifies EAEU – Vietnam
trade deal
Belarusian President Alexander Lukashenko signed to
ratify the free trade agreement (FTA) between the Eurasian Economic Union
(EAEU) and Vietnam on May 31.
The pact was given the green light by the House of
Representatives of Belarus on May 25.
Belarusian First Deputy Minister of Foreign Affairs
Aleksandr Mikhnevich noted the trade pact would boost bilateral cooperation
with Vietnam, helping Belarus’ products make inroads into Vietnam, a gateway
to the Southeast Asian market.
The EAEU, which comprises Russia, Belarus, Kazakhstan,
Armenia and Kyrgyzstan, signed the FTA with Vietnam in May 2015. This was the
first FTA signed between the EAEU and an external partner.
Previously, Russia and Kazakhstan ratified the trade
pact, which will lift most tariffs on goods traded among participants.
The deal is expected to increase trade revenue between
Vietnam and the EAEU to 10 billion USD in 2020 from the current yearly
average of 4 billion USD.
Vietnam, China look to boost trade
ties
Minister of Industry and Trade Tran Tuan Anh and
General Director of China’s Administration of Quality Supervision,
Inspection, and Quarantine (AQSIQ) Zhi Shuping discussed measures to enhance
trade and export links between the two countries in Ho Chi Minh City on May
31.
Minister Anh said Zhi’s working visit to Vietnam will
promote cooperation between ministries and sectors in many fields.
He stressed that enhanced connection between Vietnam’s
Ministry of Industry and Trade (MoIT) and the AQSIQ will help implement the
two countries’ strategic cooperation programmes, creating favourable
conditions for Chinese and Vietnamese enterprises to forge trade and export
connections.
The Chinese official highlighted the great potential
for cooperation between his agency and Vietnam ’s MoIT because the two sides
work in similar fields.
He said his agency hopes to closer work with the MoIT
to build long-term cooperation, towards fostering trade links between the two
nations and their business communities.
During the talks, representatives from the two agencies
also looked at issues related to cross-border trade management and
export-import goods quarantine.
Vietnam-China trade ties have recorded rapid growth in
recent years. Vietnam is now China’s biggest ASEAN trade partner.
Chinese statistics show that bilateral trade revenue
hit 95.8 billion USD in 2015, a year-on-year increase of 14.6 percent.
In January 2016, 7.8 billion USD worth of goods were
traded between the two nations.
Hai Phong remains among top FDI destinations
The northern port city of Hai Phong still holds its
position among the country’s top performers in foreign direct investment
(FDI) attraction with 31 newly-registered and capital adjusted projects
valued at more than 1.74 billion USD in the first five months of the year.
Large economic groups from Japan, the Republic of Korea
(RoK) and Belgium chose Hai Phong to land their investments thanks to the
city’s favourable geographical location and potentials. The city is housing
more than 450 valid FDI projects with a total registered capital of over 12
billion USD.
The RoK LG Display Co.Ltd’s OLED display project at
Trang Due Industrial Park is among the largest foreign-invested projects.
Kicked off in May, covering 40.2 hectares, the 1.5 billion USD factory will
come on stream next year and is expected to provide jobs for some 6,000 local
people.
The robust results in FDI attraction represents the
municipal authority’s concerted efforts to improve administrative procedures
and the business investment climate, as well as further investment promotion
activities, said Secretary of the municipal Party Committee Le Van Thanh.
He highlighted that prompt land clearance and policies
to attract a high-quality workforce are also significant contributors to the
city’s FDI attraction.
Such projects as Cat Bi International Airport and Hai
Phong International Container Terminal (Component B) together with a
comprehensive and modern transport infrastructure will give huge advantages
to the city to lure more FDI capital and tap its position in the northern
coastal region to the fullest extent, in the coming years, he noted.
Ho Chi Minh City’s customs sector
looks to facilitate trade
Ho Chi Minh City’s Department of Customs has said it
always defines trade facilitation as one of its most important tasks.
At a seminar on comprehensive approaches to trade
facilitation and capacity improvement for businesses held in the city on May
31, the department reported that e-declaration and handling dossiers online
have helped businesses save much time, costs and manpower.
Ho Chi Minh City is home to over 140,000 active firms
with customs filing, accounting for 40 percent of the country’s total.
According to the department, nine out of 18 ministries
and agencies have so far connected with the national single window. The
city’s customs sector has also renewed its supervision and risk management,
adopted technological advances in its automatic cargo clearance system and
built e-permit, e-payment and e-certification of origin systems.
Deputy Director of the municipal chapter of the Vietnam
Chamber of Commerce and Industry Tran Ngoc LIem acknowledged progress in
customs procedures reform but also admitted existing hindrances, saying that
delayed customs clearance is the result of a number of overlapping legal
regulations.
Statistics show that Vietnam has 256 documents
instructing specialised management, including 20 customs laws and ordinances,
he added.
Dinh Ngoc Thang, Deputy Director of the city’s
Department of Customs, said licensing for exports-imports and specialised inspections
are major obstacles to customs clearance.
He called for closer cooperation among ministries,
departments and the business community throughout the customs procedure
reform.
In the near future, the department plans to halve the
time needed to process customs clearance and work with specialised inspection
agencies to reduce the timeline for handling specialised inspection
procedures to 5-7 days, from the current 10-15 days.
Investors to seek opportunities in
Hanoi at upcoming event
Hundreds of Vietnamese and foreign investors interested
in business opportunities in Hanoi will be present at a conference slated for
June 4 in the capital city.
They are among at least 500 domestic and foreign
delegates to the event, which is themed “Hanoi 2016 – Cooperation, Investment
and Development,” said Deputy Director of the municipal Department of
Planning and Investment Vu Duy Tuan.
At a meeting with the press on May 31, Tuan noted that
the conference is a chance for Hanoi’s authorities to reiterate their
commitment to creating a transparent and favourable environment for all
enterprises.
The municipal People’s Committee and businesspersons
will discuss and devise measures for improving the local investment climate
and methods for attracting investments and development cooperation with
companies.
The conference will also serve as a platform for
enterprises to seek partnerships, he said.
During the function, the local administration is to
call for companies to engage in social welfare programmes in environment,
health care, education and culture to raise local living standards.
It will also grant investment registration certificates
to major projects while honouring investors who have substantially
contributed to the socio-economic growth in Hanoi, Tuan added.
EVFTA – boost for bilateral trade
and intestment
The EU-Vietnam free trade agreement (EVFTA) will create
a boost for trade and investment between the two sides, affirmed Deputy
Minister of Industry and Trade Tran Quoc Khanh at a seminar on opportunities
brought by the agreement for businesses in Hanoi on May 31.
According to Khanh, two-way trade increased from 6.3
billion USD in 2003 to 41.2 billion USD in 2015, making the EU one of the
leading trade partners of Vietnam .
Statistics from the ministry showed that Vietnam ’s
exports to the EU in 2015 were valued at 31 billion USD, while its import
value was over 10 billion USD.
EU enterprises are running 1,809 projects in Vietnam ,
with a total registered capital of 23.16 billion USD.
However, the deputy minister said that Vietnam has yet
to fully tap its export potential to the EU.
Vietnam ’s export value to the EU accounts for only
0.75 percent of the bloc’s total import value.
Khanh asked Vietnamese businesses to directly approach
the distribution system, study European consumers’ taste, and listen to their
product feedback in order to improve product quality.
Mauro Petricione, Deputy Director General of the
European Commission’s Directorate General for Trade, said that the EVFTA is
an important step in the roadmap to intensify bilateral trade and investment.
Both Vietnam and the EU agreed to make efforts to
complete the ratification to make the agreement effective in 2018.
At the event, a guidebook on the agreement was
introduced to the public.
Promoting business connections
between Thailand, Viet Nam
More than 100 trade officials and business
executives attended a training course on maximising business opportunities by
taking part in international trade shows held by the Viet Nam Trade Promotion
Agency and the Thailand Convention and Exhibition Bureau in HCM City on May
30.
The training sought to improve Vietnamese firms' skills
in participating in trade shows abroad, Bui Thi Thanh An, chief
representative of Vietrade in HCM City, said.
It is an effective way to market and sell a company's
products, especially in foreign markets, she said.
But not all businesses know how to capitalise on the
business opportunities fairs and exhibitions bring or even how to effectively
participate, she said.
Vietrade helps businesses promote their products abroad
through national trade promotion programmes, and also collaborates with
foreign organisations to enable more Vietnamese firms to market their
products abroad, she added.
At the event, TCEB introduced the "Thailand Extra
Exhibition" that aims to provide support to international trade visitors
looking to grow their business via exhibitions in Thailand.
Supawan Teerarat, strategic and business development
vice president at TCEB, said Thailand organises a slew of exhibitions on the
food industry, agriculture, automation, health care, infrastructure, and
others.
More and more Vietnamese businesses have been visiting
trade shows in Thailand in recent years to explore business opportunities,
accounting for 6.63 per cent of the all foreign visitors in 2013-15, she
said.
Exhibitions specialising in the food and agriculture,
automotive and medical and healthcare sectors attract high numbers of
Vietnamese corporate visitors, she said.
Thailand is a major trading partner for Viet Nam in
Southeast Asia, with bilateral trade reaching $1.6 billion in the first two
months of 2016.
Bad debts rise to 2.62% by Q1 end
Non-performing loans (NPLs) at credit institutions by
the end of the first quarter this year increased to 2.62 per cent from 2.55
per cent late last year.
This news was released in a new report from the State
Bank of Viet Nam.
Financial reports from credit institutions also showed
that their bad debts had increased significantly in Q1.
BIDV, the country's second-largest bank in terms of
assets, remained the bank with the highest NPLs, amounting to more than VND11
trillion (US$488.8 million) at the end of Q1. The amount accounted for 1.8
per cent of the bank's total outstanding loans and marked an increase against
the 1.67 per cent rate reported at the end of last year.
BIDV attributed the rise in bad debts to its merger
with the ailing Mekong Housing Bank (MHB) last year.
The same trend was seen at major banks Vietcombank and
Vietinbank. By the end of March this year, Vietcombank's NPL ratio increased
to 1.84 per cent and the rate at Vietinbank was 0.96 per cent.
Eximbank's bad debts were worth VND2.3 trillion,
accounting for 2.78 per cent of the bank's total outstanding loans. The ratio
was up against the 1.85 per cent rate reported at the end of last year.
Some other banks reported a sharp rise in risk
provision costs, though they have not released information on their NPLs as
yet. SHB, for example, spent more than VND168 billion on provisions in the
first quarter. The bank's provisions in the same period last year was only
nearly VND8 billion.
For the Asia Commercial Joint Stock Bank (ACB),
although its pre-tax profits in Q1 increased by 8.35 per cent over the same
period last year to VND389 billion, the bank had to spend VND22.25 billion on
provision costs, an increase of 23.91 per cent year-on-year.
At the recent annual shareholders meeting, ACB said the
total liabilities related to the group of six companies under its former CEO
Nguyen Duc Kien remained at VND5.767 trillion. In Q1/2016, ACB set aside
VND200 billion in reserve to pay towards this debt.
ACB leaders also said the bank still had two bad debts
linked to two major banks that the central bank had acquired for zero dong,
with VND400 billion in bad debts from the Construction Bank and VND772
billion from GPBank. ACB had to set aside VND176 billion in reserve to cover
the bad debts of the Construction Bank alone.
Another listed bank that also had to increase provision
costs in Q1 was Saigon-Hanoi Commercial Joint Stock Bank (SHB). SHB's Q1
profit reached VND244 billion, up 47 per cent year-on-year, but its provision
costs amounted to more than VND168 billion.
Experts warned that credit institutions should
scrutinise their plans to boost lending as overextending credit at this time
could cause a sharp rise in bad debts later.
Japan asked to help Vietnam finalize
major infrastructure projects
Deputy Prime Minister Trinh Dinh Dung has asked Japan
to support Vietnam in building and completing national major infrastructure
projects at a May 31 meeting with Japanese Minister of Land, Infrastructure,
Transport and Tourism, Keichi Ishi.
The two sides agreed to promote cooperative agreements
in training, human resource development in construction, ecological urban
development, foster people-to-people exchanges and tourism cooperation.
The Deputy Prime Minister also met with leaders from Japan’s
leading economic groups. Dung said Japan is Vietnam’s leading and significant
partner. At a meeting with Kyohei Takahashi, President of the Vietnam-Japan
Economic Committee under the Japan Federation of Economic Organizations
(Keidanren), the Deputy Prime Minister asked Keidanren to continue in
cooperating with and implementing the Vietnam-Japan joint initiative to
further improve Vietnam’s investment environment.
He asked them to encourage the Federation’s enterprises
to further invest and transfer technology in 6 selected sectors as part of
the industrialization strategy and assist Vietnam in implementing action
plans in each sector.
While meeting with Hiroshima Sakuma, Vice President of
Mitsubishi Corporation, Deputy Prime Minister Trinh Dinh Dung asked the
Mitsubishi group to expand its investment and trade in Vietnam in various
fields including infrastructure, auxiliary industries and agriculture.
On the same day, the Deputy Prime Minister also met
with Shigeki Dantani, President of Sojitz group, and Takashi Yamauchi,
President of Taisei group.
Deputy Prime Minister Trinh Dinh Dung concluded his
trip to Japan for the 22nd Asia Future Conference.
Firms urged to seize FTA
opportunities
Vietnamese businesses should be active in seeking
information about markets to further penetrate into distribution systems
abroad to improve their export turnover, a minister has said.
"Several local firms have been waiting for orders
instead of directly seeking information from markets and listening to
responses from their partners. This could make them lose several business
opportunities which could benefit from Free Trade Agreements (FTAs),"
Tran Quoc Khanh, deputy minister of Industry and Trade (MoIT) said.
Khanh told the seminar, "EU-Viet Nam Free Trade
Agreement (EVFTA): Opportunities for Businesses" held in Ha Noi
yesterday that each firm should prepare itself with an active action plan in
the aspects of market orientation, partners, renewing production and
administration methods, together with corporate social responsibility and
business culture.
"There could be different market segments in the
Asian region, but the European market is quite united. The only way for local
firms to penetrate into the market is to ensure high quality," he added.
In addition, consumers in the European Union (EU) have
always paid attention to the environment and ensuring benefits to labourers.
For this reason, Vietnamese exporters should note the requirements to ensure
higher export turnover in the market.
Over the past decades, the EU-Viet Nam trade and
investment relations have witnessed remarkable progress. The two-way trade
between the EU and Viet Nam has increased nearly seven-fold from US$6.3
billion in 2003 to $41.2 billion in 2015, making the EU one of Viet Nam's
biggest trade partners.
However, a survey of the Central Institute for Economic
Development (CIEM) shows that around 30 per cent of private firms had no
plans in place to increase their business operations for their EU partners.
Some did not even pay attention to renewal plans for long-term strategies.
"The Government should further improve awareness
of businesses in implementing the renewal to avail the opportunities from the
FTAs," Tran Toan Thang, deputy head of the CIEM's Business Environment
and Competitiveness Capacity Department, said.
Mauro Petriccione, deputy general director of DG Trade,
EU's chief negotiator for the EVFTA said the conclusion of the negotiations
in December 2015, had been an important step towards strengthening bilateral
comprehensive relations, especially trade and investment relations.
With the level of commitment undertaken by both sides,
the EVFTA has been a comprehensive agreement of high quality and balanced
interests for both Viet Nam and the EU which is also expected to further
promote trade and investment between the two parties.
To realise the benefits gained from the EVFTA, the EU
and Viet Nam have agreed to attempt to complete the ratification process so
that the agreement could take effect in 2018.
He said they would facilitate businesses both in the EU
and Viet Nam to access and expand investment opportunities as well as
business corporations.
The two sides have been in negotiations to find a way
to implement commitments for better exchange while encouraging the business
community to support each other in investment, he said, and added that the
economic relations are expected to see a strong growth in the upcoming time.
Concretised efforts needed for
business development
The Government is promoting the role of private
enterprises for national growth, yet significant obstacles lie ahead as
agencies work to accelerate their development.
Officials from several business associations revealed
these sentiments to Hai quan, a newspaper of Viet Nam Customs, after Prime
Minister Nguyen Xuan Phuc told a meeting in late April that private
enterprises would be a driving force for economic growth.
Phuc said special support policies were needed to
foster the development of start-ups and small- and medium-sized enterprises,
and to intensify investor confidence.
The PM signed Resolution No 19-2016/NQ-CP in late
April, which entrusts ministries with specific action plans to improve the
country's business environment and competitiveness for the third year in a
row.
"I highly appreciate the PM esteeming private
enterprises," said Viet Nam Timber and Forest Product Association
General Secretary Nguyen Ton Quyen. "Recent moves of the Government and
the spirit of the resolution have blown a new breath of air into the business
community."
"However, enterprises are most interested in
whether the policies will rapidly come to life," he said.
Quyen said private firms needed significant capital to
renew technology and improve productivity, but currently they found it hard
to compete with State utility and foreign direct investment (FDI) companies
in accessing credit.
Domestic timber enterprises need loans worth US$1.5-17
billion per year, but it would not be easy for them to borrow with annual
interest rates of 7 per cent to 8 per cent. Firms in many other countries
could manage dollar loans with rates of 1 per cent to 2 per cent, he said.
Quyen also suggested that the Government should enact
more appropriate policies for human resources. Up until 2010, there were
about seven vocational schools for forestry workers nationwide. Now, they
have become junior colleges that educate teachers, no longer labourers.
"This makes skilled and productive workers become
less and less so, causing difficulties for enterprises," he said.
Viet Nam Textile and Apparel Association Vice President
Truong Van Cam said a Government policy requiring annual minimum wage increases
at enterprises was causing challenges for sectors using numerous workers,
especially in the footwear, garment and textile sectors.
He said regular wage increases would push up manpower
costs and restrict the ability of firms to boost investment for more
productivity and competitiveness, as well as regulation of the labour market.
Cam also said it was still time-consuming for
businesses to deal with customs clearances, as this process largely depends
on licences of other agencies in inspecting import and export goods. There
was a need for closer connection among these authorities to speed up the
process, he said.
Nguyen Hoai Nam, the deputy general secretary of the
Viet Nam Association of Seafood Exporters and Processors, said the country's
policies related to temporary imports for re-export were making domestic
seafood and farm produce less competitive in some cases.
For example, Viet Nam enabled fish, shrimp, poultry and
vegetable imports to pass through the northern port of Hai Phong before these
goods were exported to China with border trade policies between the two
countries.
The policy virtually helped Chinese importers dodge
tariffs, and they even received value-added tax refunds in their country when
exporting the goods again to other nations. This explained why China's fish
and shrimp exports were cheaper in Japan, the US and the European Union.
Nam said the Ministry of Industry and Trade should soon
ask the Government to remove the temporary import for re-export policy. They
should stimulate that only domestic enterprises could import materials and
process them for export, he said.
A representative of production, trading and service
firm Thien Bao told Hai quan under the condition of anonymity that some local
authorities still ignored the national determination to improve the business
environment.
Resolution No 19 recognised this situation.
"Heads of some ministries, agencies and localities
do not pay adequate attention to the implementation of Resolution No 19,
treating it as a movement or campaign rather than a specific task or a
must-do item," it stated.
"Oftentimes, businesses have to pay (the
authorities) significant amounts of ‘lubricant fees,'" the anonymous
official said. "The Government asks us to raise our voices about that,
but we hesitate about ‘hitting'. We hope for more drastic actions from top to
bottom so that business conditions can be eased with less costs and
risks."
To Hoai Nam, General Secretary of the Việt Nam
Association of Small and Medium-Sized Enterprises, said the Government should
focus on building a law to support these firms. This would ensure the most
effective enforcement of national policies for them.
Nam said the policies should include a reduction in
corporate income taxes, the designation of key enterprises to serve as a
guarantee for other businesses in a business area, and preferential loans of
commercial banks and credit funds extended to companies producing high added
value products or contributing to a production chain.
The Government must continue to speed up administrative
reforms, especially in providing public services, he said.
Govt keeps growth target unchanged
The Government will keep major socio-economic growth
targets unchanged despite emerging woes, Prime Minister Nguyen Xuan Phuc told
a review meeting in Hanoi on Monday on the nation’s January-May macroeconomic
situation.
He urged mobilization of internal and external
resources to maintain high growth, swift disbursement of capital for
construction works, and quick equitization of State-owned enterprises (SOEs)
to create new resources for growth.
Phuc also requested a working group be set up to
inspect, review and remove obstacles to capital disbursements. Deputy Prime
Minister Vuong Dinh Hue was assigned to head this group.
He called for a closer coordination among fiscal,
monetary and other policies. He also underlined the need to guarantee the
quality of growth, saying people in underprivileged areas and those affected
by natural disasters should be taken care of.
Participants at the meeting agreed that the economy has
been performing better, the macro economy has remained stable, inflation has
been put under control, the number of startups has increased and social
security has been ensured.
However, difficulties and challenges remain to be
solved, with macroeconomic stability not yet sustainable and the possibility
of high inflation returning still high.
The meeting was attended by Deputy Prime Minister Vuong
Dinh Hue, Minister of Planning and Investment Nguyen Chi Dung, Minister of
Finance Dinh Tien Dung, Governor of the State Bank of Vietnam Le Minh Hung
and Minister-Chairman of the Government Office Mai Tien Dung, other
government officials and economic experts.
Sugar imports likely as domestic
supply falls short
The Ministry of Industry and Trade has asked the
Government for permission to import 200,000 tons of sugar to offset a
domestic undersupply in the coming months, the Vietnam Sugar and Sugarcane
Association (VSSA) said.
This volume is outside the tariff-rate quota. If 85,000
tons of sugar Vietnam imports as committed to the World Trade Organization
(WTO) is taken into account, the total import volume would surge to at least
285,000 tons this year.
Nguyen Hai, general secretary of VSSA, said the
ministry’s sugar import proposal was based on supply and demand on the market
but authorities should practice prudence because the domestic sugar industry
might get hurt in future.
An industry source told the Daily that only 120,000
tons of sugar should be imported first to see market reactions before the
remaining 80,000 tons is brought in.
According to the Agro-Forestry-Fisheries Processing and
Salt Production Department under the Ministry of Agriculture and Rural
Development, the country turned out 1.4 million tons of sugar in the
2014-2015 crop, down 13% year-on-year.
According to VSSA, 41 sugar mills nationwide had
produced nearly 1.2 million tons of sugar by May 20, down 200,000 tons
against last year. This was the second consecutive year of domestic sugar
production fall.
VSSA statistics indicated the domestic price of sugar
ranged from VND16,400 to VND17,100 per kilogram in the third week of May, up
from the range of VND12,750 and VND13,400 in the same period last year.
Tough times ahead for shrimp
exporters
Shrimp exporters will see market conditions getting
dismal in the coming time even though their performance in the first four
months of the year was better than in the year-earlier period.
Le Van Quang, chairman and general director of Minh Phu
Seafood Corp, the country’s leading shrimp exporter, said severe drought and
salination had left a negative impact on shrimp stocking. Since early this
year 20-30% of the shrimp stocking target has been met.
The El Nino weather phenomenon has caused drought in
the Central Highlands and Mekong Delta. Unusually low water levels in the
Mekong Delta’s rivers have allowed saltwater to make its way into rice fields
and fish/shrimp farms.
However, El Nino is often followed by La Nina which
dumps rains, so the prospect of the shrimp export sector is bleak.
Moreover, local exporters are facing strong competition
from Chinese traders who are ready to pay higher prices for breeder shrimp.
Shrimp price competition from India and Indonesia is strong as well.
Minh Phu still looks to obtain export revenue of US$687
million this year, up 30% versus last year.
A report by the Vietnam Association of Seafood
Exporters and Producers (VASEP) says that in the first four months this year,
shrimp exports grew 7.8% year-on-year to US$858.8 million as world shrimp
prices were on the rise and demand of major markets like the U.S. and the EU
was strong.
Research center plans farming of
deepwater rice
The Research Center for Rural Development (RCRD) at An
Giang University is mulling a project to revive the cultivation of deepwater
rice in the Mekong Delta.
With financial aid from Japanese firm Mitsui & Co
Ltd and professional help from the Australian National University, RCRD
expects the project could be expanded to Cambodia and Myanmar.
Speaking to the Daily on the sidelines of a conference
on deepwater rice cultivation held in An Giang Province on May 31, RCRD
director Nguyen Van Kien said Mekong Delta provinces and his center’s
partners in Cambodia and Myanmar have expressed interest in expanding the farming
of such a rice variety.
In the three years to end-2015, the Mekong Delta had
revived a total of 190 hectares of land for cultivating deepwater rice. Of
the figure, Vinh Phuoc and Luong An Tra communes in An Giang’s Tri Ton
District account for 100 hectares.
Farmers have high demand for expanding the cultivation
area of the variety, according to Kien.
In Dong Thap Province, Thanh Binh District has planned
to expand its rice growing acreage to 1,000 hectares while Hong Ngu District
has 1,000 hectares of unoccupied farmland which can be used for growing
deepwater rice. The area around Tram Chim National Park is also suitable.
Vinh Hung and Tan Hung districts in Long An Province want to farm this
variety as well.
Cambodia has nearly 1,000 hectares of land under
deepwater rice farming and Myanmar farmers are still living on this crop.
“The two countries really want us (RCRD) to come and
share our experience gained through research. They want help to expand
deepwater rice farming in an eco-friendly way,” he said.
Kien said his center has taken the first step by
outlining a rough plan and that the next step will be to hold conferences in
Vietnam, Cambodia and Myanmar to collect opinions from farmers.
RCRD’s reviews on economic efficiency in An Giang’s
Chau Phu District showed that in the conventional three-crop, high-yield rice
cultivation system, farmers earn VND4.8 million (US$214.42) per 1,000 square
meters while the ratio of profit to investment is 0.71.
The respective figures are VND4.4 million and 1.81 in An
Giang’s Tri Ton District where farmers adopt a crop rotation between
deepwater rice and cassava farming.
Moreover, there are more fish in deepwater rice growing
areas, a key source of nutrition and growth for farmers, Kien said. Since a
lot of hydropower dams in the upper reaches of the Mekong River are forecast
to result in a 40% decline in fish, growing deepwater rice could be seen as a
solution to conserving aquatic resources.
AutoExpo 2016 opens in Ha Noi
The 13th International Exhibition on Automobile and
Supporting Industries (AutoExpo 2016) opened at the International Convention
Centre in Ha Noi on June 8.
The four-day event showcased passenger cars, trucks,
and buses, along with motorcycles, bicycles and special-purpose vehicles, in
addition to materials and facilities for production and assembling of autos,
motorcycles and bicycles, spare parts and accessorises.
Other services such as garage, repairing and
maintenance, banking, insurance and counselling for production, business and
consumption also attended the expo.
The exhibition attracted the participation of domestic
manufacturers and automobile companies as well as businesses from Japan,
Thailand, South Korea, and United States, in addition to Portugal, China, and
Taiwan.
With an exhibition space spanning more than 7,000sq.m,
commercial cars and special-purpose vehicles have become an advantage for the
Vietnam AutoExpo in the recent years.
Vietnam Engine and Agricultural Machinery Corporation
(VEAM) showcased many models of trucks and buses, which are the favourite
ones in the domestic market such as VEAM trucks, Hyundai, Maz and Chang An.
Other companies including FAW-Long Giang, Dong Phong, Inamco and Tin Quang,
showed many new commercial vehicles.
At the event, a statistic revealed that nearly 59,700
cars were sold in the first three months of this year, a year-on-year
increase of 23 per cent. Of these, passenger cars, commercial cars and
special-purpose cars rose 6 per cent, 55 per cent and 57 per cent,
respectively.
Three int’l trade shows kick off
together in HCM City
The Vietnam International Retail and Franchise Show
(VIETRF), the 2016 Korea Sourcing Fair and the 2016 Vietnam International
Coffee & Dessert Fair were kicked off together at the Saigon Exhibition
& Convention Centre (SECC) in Ho Chi Minh City on June 8.
The VIETRF 2016 is organised by the Korea International
Trade Association (KITA), the Association of Vietnam Retailers (AVR) and
Coex, an exhibition company in the Republic of Korea (RoK).
The event has attracted more than 250 exhibitors from
14 countries and territories worldwide who are franchisers and retailers in
different fields, such as food & beverage, education & training,
beauty & health, fashion & accessories, home products, electronics
and gifts & toys.
Among these are major education franchisers in Vietnam
like AMA, Wall Street, Eye Level and Global Art.
The 2016 Vietnam International Coffee & Dessert
Fair, the first of its kind, is hosted by Coex and the Vietnam Coffee and
Cocoa Association (VICOFA), featuring more than 200 enterprises from 14
countries and territories.
The Vietnam Super Barista Championship will take place
at the fair. The winner will have the chance to compete in the 2017 World
Super Barista Championship in Seoul, the RoK.
The Korea Sourcing Fair is held by the KITA bringing
together various brands from the RoK. On display are food, beverages, fresh
fruits, home appliances, clothing, accessories, decór and electronic
products.
In addition to the exhibition are side events that
provide visitors with authentic Korean cultural experiences, including a
K-Pop Festival, K-Food Tasting, K-Fashion, K-Makeup and K-Hair.
The three trade fairs will run through to June 10.
Japanese businesses eye investment
in Vietnam agriculture
A workshop on opportunities in agriculture and
investment cooperation between Vietnam and Japan was held by the Consulate
General of Vietnam in coordination with Japan’s Kokorozashi Network in Osaka,
Japan on June 7.
Participants to the event were representatives of 45
Japanese enterprises, operating in the areas of agriculture, farm produce
processing, and agricultural machinery manufacturers who are eagering to
learn about investment opportunities in Vietnam.
Local enterprises at the event were provided with the
latest information on Vietnam’s economic development situation, its policies
on hi-tech agriculture growth and investment attraction in the field, as well
as information on other general investment and business opportunities in
Vietnam.
They spoke highly of the potential in investment and
business opportunities in the Southeast Asian country, especially in the
context of the establishment of the ASEAN Economic Community (AEC) and the
participation of Vietnam in bilateral and multilateral trade agreements such
as the Trans-Pacific Partnership (TPP) and the Regional Comprehensive
Economic Partnership (RCEP).
According to Japan’s leading bank Sumitomo Mitsui
(SMBC), Japanese and Vietnamese enterprises should form business affiliations
in accordance with food value chains from production to processing, sales and
exports.
The participating enterprises to the event will take a
working tour to Vietnam’s provinces of Ha Nam and Lam Dong between July 5-12.
Vietnam-RoK policy dialogue on ODA
held in Hanoi
A policy dialogue on official development assistance
(ODA) between Vietnam and the Republic of Korea (RoK) was held in Hanoi on
June 8.
Vietnam’s 2016-2020 socio-economic development plan,
medium-term public investment plans, and several laws were introduced at the
event, along with the RoK’s new regulations and policies on development
cooperation and ODA.
Head of the Foreign Economic Relations Department under
the Ministry of Planning and Investment, Le Quang Manh, said that financial
cooperation will play a main role in development partnership between the two
countries.
To have the most effective cooperation, Vietnam should
take advantage of assistance from the RoK Government and the Korea
International Cooperation Agency (KOICA) and attract their investment in the
fields that the RoK is strongest and where Vietnam has demand; such as
transport, health, environment and high technology, Manh suggested.
The country also needs to be proactive in making
proposals for projects that are in conformity with its medium- and long-term
and annual development plans and policies.
Lee Sang Kyu, a representative from the KoK Ministry of
Strategy and Finance, stated that the RoK Government treasures and attaches
importance to its development cooperation with Vietnam, as the country is an
important partner. Priority will be given to transport and urban
infrastructure, education, health, environment, clean energy and information
technology.
Currently, the government is building a Country
Partnership Strategy (CPS) with Vietnam to help the nation achieve its goals
on transport infrastructure, information technology, and human resources in
its 2011-2020 socio-economic development strategy and 2016-2020
socio-economic development plan, he added.
The RoK Government signed lending agreements or
committed to providing credit for nearly 60 projects worth 2.8 billion USD in
Vietnam from 1992 to 2015.
At present, the country is running 34 ODA-funded
projects in Vietnam with a total registered capital of 1.7 billion USD, of
which 0.9 billion USD has been disbursed.
The two nations are preparing for negotiations on a
framework credit agreement for 2016-2020. The RoK plans to provide ODA loans
worth 1.5 billion USD for Vietnam during the period, with the focus on
large-scale infrastructure, railways, health and information technology.
Air route linking Vinh to Bangkok
launched
A new air route linking Vinh city in the central
province of Nghe An to Thailand’s capital city of Bangkok was launched on
June 8 with a ceremony at Vinh Airport.
There will be from three to four flights each day on
the new route.
Speaking at the ceremony, Nguyen Xuan Duong, Chairman
of Nghe An’s People’s Committee, affirmed that the launch of the route will
be of great significance to the province’s social-economic development.
It also opens up opportunities for boosting investment
and social-economic development for the north central region.
The route will promote links among Nghe An, Thanh Hoa
and Ha Tinh provinces in building local and international tourism products
and marks a new step of development in localising Thailand-bound tours via
direct flights from the province to Bangkok.
Construction of Coco Bay project
begins
The Empire property investor started construction of
the Coco Bay project – the first and biggest entertainment-cum-hospitality
complex in the central region – in the central city on June 5.
The project investor said the complex will cover 31ha
with total investment of VND14 trillion (US$622 million).
The complex, which runs 600m along the coastline
linking Da Nang and Hoi An, will include a series entertainment and
recreational centres, resort, condotels, and a conference centre, in addition
to a park and opera house.
The Coco Ocean Resort is expected to begin operations
in 2017 for the first stage of the complex.
As scheduled, the complex will be managed and operated
by Naman Hospitality.
The complex would be an ideal location for recreation
and stay as it is sandwiched by the two biggest golf courses – the
Montgomerie Links and Da Nang Golf Club.
Earlier this year, An Thinh Da Nang Investment
joint-stock company commence its Soleil Da Nang Five-star hotel and luxury
apartment complex project on My Khe Beach with total capital of VND10
trillion (US$444 million).
Tourist real estate remains a favourite investment
magnet in this central city, attracting 25 foreign direct investment (FDI)
projects worth US$1.8 billion.
The city has so far developed 16 tourist property
projects, consisting of 749 villas, of which 609 are for sale and 140 for
lease.
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR
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Thứ Năm, 9 tháng 6, 2016
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