BUSINESS IN BRIEF 25/7
July CPI increases 0.13 percent month on month
The July consumer price index (CPI) CPI rose 0.13 percent against June, 2.39 percent year on year and 2.48 percent compared to December 2015, the General Statistics Office (GSO) reported on July 24.
The average CPI for the first seven months of this year increased 1.82 percent from the same period last year.
An upward trend was seen in five out of 11 goods and service groups, of which transport recording the highest rise at 1.19 percent, followed by goods and other services at 0.17 percent, housing and construction materials at 0.14 percent, beverage and cigarette 0.09 percent, and home appliances 0.06 percent.
The restaurant and food catering group saw prices dropping 0.05 percent while the post and telecommunications group posted a 0.1 percent decrease.
Deputy head of the Price Statistics Department Do Thi Ngoc said the growth of July’s CPI was due to increases in fuel prices and train tickets.
Meanwhile, hot weather also drove up prices of water and electricity by 0.14 percent and 1.16 percent, respectively. The scorching summer also pushed up the prices of some cooling products such as air conditioners, fridges and electric fans, she added.
The prices of food in the month reduced 0.64 percent against the month before due to abundant of domestic food supply.
During the month, gold prices fluctuated with the world’s gold prices and hit nearly 40 million VND (1,800 USD) per tael at a time but then quickly dipped and remained stable at around 36 million VND per tael.
The VND/USD exchange rate remained stable at 22,300 VND per USD.
The GSO evaluated that core inflation (the CPI without food and fresh foodstuff, energy and State-controlled commodities such as healthcare and education services) in the month increased 0.1 percent month-on-month and 1.85 percent year-on-year. The seven-month core CPI rose 1.81 percent from the same period last year.
The GSO also anticipated that the CPI of August will grow slightly due to rising prices of health services, school fees and school supplies.
Central Highlands provinces move to develop cattle for trading
Central Highlands provinces have paid special attention to developing cross-bred cattle to improve the quality of cattle for trading in the region.
Upholding its strength of large forest area and natural grassland, the regional localities have encouraged economic sectors to invest in developing cow and buffalo herds for business.
Apart from making it easy for families in the region to access loans for their breeding, the regional localities have also called on organisations, enterprises and individuals to provide a great number of breeding cows for poor households in remote areas, especially those from ethnic minority groups, thus helping them escape from poverty.
The Central Highlands boasts hundreds of cattle farms, concentrating in localities having large forest areas and natural grassland.
Gia Lai province has the largest number of cattle in the region with 397,620 cows and buffalos. It is followed by Dak Lak with 273,078 individuals.
Thanks to support from the Dak Lak provincial authorities, many families in M’Dak, Ea Sup, Ea Kar districts made great profits from breeding cattle.
Locals have been also instructed to plant imported grasses for breeding and give periodic vaccination to their cattle, with the aim of ensuring the quality of cattle.-
RoK’s firm opens plant, research centre in Bac Ninh
Samil CTS Vina Co., Ltd of the Republic of Korea (RoK), which specialises in producing computers and computer peripherals, inaugurated a plant and a research and development (R&D) centre in the Yen Phong industrial park, northern Bac Ninh province on July 22.
The same day, representatives from the firm and the Vietnam-Korea Technological Innovation Centre for standards, metrology and quality (Incentech) under the Ministry of Science and Technology’s Directorate for Standards, Metrology and Quality signed a memorandum of understanding (MoU) on enhancing cooperation in the future.
Under the MoU, Incentech will support Samil CTS Vina in implementing its projects in Vietnam. The two sides will work closely to develop products and expand market in other ASEAN nations.
Speaking at the signing ceremony, Deputy Director of the Directorate Nguyen Nam Hai highlighted the significance of the events and increasing production and investment activities of RoK enterprises in Vietnam in recent times.
He said that his agency and the Korea Trade-Investment Promotion Agency also signed a cooperation agreement two months ago with a view to supporting the implementation of the Vietnam-RoK Free Trade Agreement (FTA), which was signed in 2015.
The formation of Incentech aims to promote trade cooperation between the two counties, he noted.
Cooperation between Incentrech and Samil CTS to set up the R&D centre will lay a foundation for the two sides to provide greater support for Vietnamese and Korean businesses , thus contributing to socio-economic development in the two nations, Hai stressed.
For his part, Commercial Attaché of the RoK Embassy in Vietnam Choi Jong Won said the opening of the plant and R&D Incentech-Samil centre in Bac Ninh will be the first steps for Samil CTS to enter into the Southeast Asian market.
The signing of Vietnam-RoK FTA contributes to stepping up trade and economic connection between the two countries, he stressed, expressing his belief that R&D Incentech-Samil centre will serve a economic and creative model, helping boost links between the two sides’ businesses.
Deputy Head of the Department of Heavy Industry under the Ministry of Industry and Trade Pham Anh Tuan hoped Samil CTS’s plant in Bac Ninh would help Vietnam realise its goal of supporting industry development.
Vietnam is now a strategic partnership of the RoK, with a number of Korean companies building plants in Vietnam. RoK firms have invested 485 billion USD in Vietnam so far.
Business, investment laws should be examined: workshop
Scrutiny of business and investment laws is needed to adjust or remove incompatible regulations to serve the long-term development of enterprises, heard a workshop in Hanoi on July 22.
The event was jointly held by the Vietnam Chamber of Commerce and Industry (VCCI), the Government Office, the Ministry of Planning and Investment, and the US Agency for International Development’s project on enhancing legal building capacity in Vietnam.
Vice Chairman of the Government Office Le Manh Ha said the Government has exerted efforts to improve the business environment in recent years, such as by building the Law on Investment and Law on Enterprises in 2014, and promulgating Resolution No.19 on bettering the business climate and enhancing the national competitive edge, along with Resolution No.35 on supporting businesses.
According to the VCCI, 37 laws on business and investment need to be revised and adjusted to avoid contradictions and overlaps, including the Commercial Law, the Law on Investment, the Law on Enterprises, the Law on Land, the Law on Construction, the Law on Environmental Protection, and the Law on Science and Technology.
The Law on Corporate Income Tax, the Law on Value Added Tax, the Law on Special Consumption Tax, the Law on Tax Management, the Law on Management and Use of State Capital Invested in Production and Business and Enterprises, the Law on Advertising, and the Law on Housing should be overhauled, too.
Head of VCCI’s Legal Department Dau Anh Tuan said the examination of business and investment laws aims to remove barriers and overlaps among legal documents, through which push forward the reform of administrative procedures and create equal opportunities for business players.
Such legal documents as the Law on Accounting, the Law on Cinema, the Law on Telecommunications, and the Law on Prices also needs revision, he said, pointing to some shortcomings in the fields.
European firms report positive business climate in Q2
The European Chamber of Commerce in Vietnam (EuroCham) released the Business Climate Index (BCI) for Q2 on July 21, which is posted at 77 indicating positive sentiment from EuroCham members on the local business environment.
Overall, the assessment on the business situation among European companies in the last quarter is good, with 66.7 percent of the respondents describing it as “excellent” or “good”, and only 12.5 percent classifying it as “not good” or “very poor”.
EuroCham Chairman Michael Behrens commented: “The results for Quarter 2, 2016, show positive expectations for the near future and consistent satisfaction with the present situation.”
“EuroCham members maintain a positive view on the Vietnamese market and their business operations in the country, a result which does not differ from our last survey. This is a good sign for the current implementation of the EU-Vietnam Free Trade Agreement, which is expected to strongly enhance European business and investment,” he added.
In regard to the macroeconomic outlook for Vietnam in the next quarter, from EuroCham members’ point of view, macroeconomic stability will likely continue, as 56.3 percent of the respondents indicated “stabilisation and improvement”. Another 9.4 percent expected deterioration, and 34.4 percent think that it will not change.
Around 49 percent of the respondents expected the number of orders or revenue to increase slightly in the next quarter. 15.6 percent of them were even more optimistic, expecting a significant increase of revenue in Q3.
Specifically, 43.8 percent of the questioned companies answered that they would increase investment, while 43.7 percent expected an increase in headcount, the survey found.
The survey was sent out to 883 members of EuroCham including some of the largest European investors in the country.
Conference looks to promote eco-innovation among Vietnamese SMEs
Eco-innovation consulting services from the ASEM SMEs Eco-Innovation Centre (ASEIC) were introduced to Vietnamese small and medium enterprises (SMEs) at a conference held in Ho Chi Minh City on July 21.
The event, jointly held by the State Agency for Technology Innovation under the Ministry of Science and Technology and the ASEIC, aimed to encourage and support the Vietnamese business community to promote innovation and sustainable development activities.
Businesses were provided with eco-innovation approaches in optimising the use of energy and resources and building sustainable development strategies.
According to the ASEIC, eco-innovation solutions have significant impacts on environmental protection and help increase growth while serving as a leverage to boost sustainable growth.
The ASEM Eco-Innovation Consulting Project for SMEs has been carried out in the garment, food processing and steel structure manufacturing sectors in Ho Chi Minh City and some southern localities.
ASEIC expert Yoon Ji Kang said that the project aims to strengthen the green competitiveness of SMEs through presenting and applying sustainable management method and green technology in their business activities.
At the conference, Chairman of the Ho Chi Minh City Association of Mechanical Industry Pham Ngoc Tuan noted that investment for environmental treatment technologies will help enterprises ensure environmental standards and reduce production costs.
He added that the project should branch out its support and consultation for other sectors.
The ASEIC was established in 2011 with the principal mandate of enhancing the cooperation between Asia and Europe and promoting the eco-innovation of SMEs in both regions. It is dedicated to supporting the efforts of SMEs in ASEM member nations in exchanging environmental regulations and sharing good practices in eco-innovation while promoting eco-designed products.
The centrelaunched its first ASEM Eco-Innovation Consulting Project for 33 SMEs in Thailand, Indonesia, Malaysia and Vietnam five years ago.
Hong Kong based insurer sees Vietnam as huge potential market
Hong Kong based insurer FWD Group is working to quickly establish its presence in Vietnam as the country has a huge growth potential on insurance market with more than 90 million people, according to the group’s CEO Huynh Thanh Phong.
Southeast Asia has been the main playground of FWD Group since it was founded as an insurance arm of investment group Pacific Century Group in 2013. It has been rapidly expanding its operations in Thailand, Indonesia, the Philippines and Singapore, the CEO told the Dau Tu (Vietnam Investment Review).
The firm acquired Great Eastern Life Vietnam from Singapore’s Great Eastern Life Assurance last month in an attempt to lead a faster market penetration by taking advantage of Great Eastern Life Vietnam’s existing market share, personnel and infrastructure, Phong said.
The group also signed a 15-year agreement for a bancassurance partnership with An Binh Joint Stock Bank (ABBANK) on July 14 which will offer it the exclusive right to distribute its life insurance and saving products to the bank’s customers, he added.
Explaining why the FWD group is taking its first step in the country with the bancassurance deal, Phong said bancassurance currently accounts for only around 3 percent of sales in Vietnam compared to 50-60 percent in other Asian markets, meaning a huge opportunity for the group.
In addition to that, the country is shifting from an insurance industry that focuses on single-channel distribution to one with multi-channel distribution.
When entering Vietnam, the firm hopes to change the way people feel about insurance and make them more aware of the importance of life insurance for them and their families, he stressed.
It could be done by the company’s unique approach in providing consulting services and designing a contract, alongside its 24-hour and convenient customer care, and easy-to-understand products.
Headquartered in Hong Kong, FWD offers customers life and medical insurance, employee benefits and general insurance across Hong Kong, Macau, Thailand, Indonesia, the Philippines and Singapore.
Vietnam attends APEC transport workshop in Mexico
Deputy Minister of Transport Nguyen Ngoc Dong attended an Asia-Pacific Economic Cooperation (APEC) workshop on attracting private investment in road and railway transport infrastructure in Mexico on July 20.
The event attracted the participation of 30 officials and experts on management, bidding and policy consultancy from nine APEC economies: Mexico, the US, Canada, Chile, Thailand, Malaysia, Peru, Australia and Vietnam.
This was the second APEC workshop held in 2016 to increase the capacity of member economies on private –public partnerships (PPP).
Delegates delivered speeches on PPP projects in the transport field within the APEC region, while exchanging notes on challenges and policies to successfully implement PPP projects on road and railway infrastructure and urban transport.
They also shared experience in implementing road and railway projects, and lessons on sharing risks and legitimate interests between the State and the private sector.-VNA
Ministry of Justice responds to businesses
The Ministry of Justice plans to review Article 292 of the 2015 Penal Code, with reference to other relevant ministries and agencies, to avoid creating barriers to the development of startup enterprises.
Deputy Minister Tran Tien Dung, the ministry's speaker, confirmed this early this week in response to the business community's petition to scrutinise the regulation.
Dung said the regulation had been proposed to prevent criminals from using the internet or telecommunications networks, as well as to protect legal business activities.
Under Article 292, online service providers will be deemed criminals if they do not have permission to conduct business online or if they do not conduct business according to the specifics of their business registration. Services governed by Article 292 include gold trading, e-commerce, multilevel marketing, payment intermediaries, online games, and other services using computer or telecommunications networks.
The regulation raises concerns among the startup community. Most startup firms develop new ideas and services based on information technology. They worry that the words "other services" are not well defined by the regulation, which may lead firms to accidentally commit crimes.
The ministry will now meet with relevant ministries, agencies, IT experts, representatives of the startup community, and the Viet Nam Chamber of Commerce and Industry to discuss amendments to the regulation before submitting it for approval.
International arbitration a way out for investment disputes
International arbitration would be helpful for businesses in settling trade and investment disputes in the context of Viet Nam integrating rapidly into the global economy, experts said on July 20.
The Viet Nam International Arbitration Centre (VIAC) and Korean Commercial Arbitration Board (KCAB) jointly held the conference in Ha Noi to promote awareness of international arbitration and its development in the region.
Vu Anh Duong, VIAC's general secretary, said that the centre expected to enhance the capacity of businesses to settle disputes through out-of-court resolutions amid the country's rapid economic integration.
As trade and investment was booming in Viet Nam, with the presence of investors from more than 110 countries and territories in the world, arbitration became an important alternative dispute resolution, experts said.
According to Ji Ho Kim, director of KCAB, with the Viet Nam – Korea Free Trade Agreement officially coming into effect at the end of last year, legal activities should be increased to promote economic development, in which international arbitration is considered an effective solution to this problem.
Phan Trong Dat, deputy general secretary of VIAC, said that with the promulgation of the Law on Commercial Arbitration 2010, the legal framework on arbitration of Viet Nam was moving closer to international standards.
He cited statistics which showed that VIEC handled 146 disputes in 2015, increasing by 18 per cent over the same period last year and up from a mere 6 cases in 1993 when the centre was founded. The disputes were related to a variety of sectors, such as sales, finance, construction and insurance.
Pham Manh Dung, former director of the Ministry of Planning and Investment's Legal Department, said that the legal framework on arbitration, enforcement of judgment and reconciliation should be improved. In addition, regulations on transparency and access to information were needed.
Vinh Phuc province lures 3.43 billion USD in FDI
The northern province of Vinh Phuc has attracted 3.43 billion USD in foreign direct investment (FDI) with 222 projects as of mid-July, 2016, according to the provincial Investment Promotion Agency.
Although ranking third among the locality’s largest foreign investors, Japan takes the lead in capital disbursement, business operation efficiency and contribution to local budget. Japan is running 26 projects valued at over 786 million USD in Vinh Phuc.
Since their establishment in Vietnam, Honda Motor Co.,Ltd and Toyota Motor Vietnam Co., Ltd have contributed more than 6 billion USD to the state budget while creating jobs for thousands of locals with stable incomes.
Meanwhile, Nidec Nissin Vietnam, Maruichi Sun Steel JSC, Exedy Vietnam Co., Ltd and Kohsei Multipack Vietnam Co., Ltd also show good performance.
Vinh Phuc province has recently granted investment certificate for Japan’s Sumitomo Corporation to develop infrastructure of the 213-hectare Thang Long Vinh Phuc industrial park. Once completed, the park will attract 79 secondary investment projects from Japan with a total registered capital of 1.5 billion USD and draw 25,000 local workers.
In a bid to lure more investments, the province has paid heed to improving local business climate, attracting resources for development while building essential infrastructure. Enhancing vocational training quality, mapping out plan for urban development and facilitating administrative procedures for investors are also given top priority.
Furthermore, the province has held talks with FDI businesses to promptly tackle their difficulties.-
ODA technical support for construction sector totals 45.6m USD
The Ministry of Construction (MoC) is managing 19 technical support projects this year with total committed ODA capital of more than 45.6 million USD.
Most of the sum funds capacity and institution improvement efforts.
The ministry said it had completed the capital use and allocation planning for ODA-funded projects.
Recently, the ministry successfully attracted about 24.58 million USD in ODA from Japan, the Republic of Korea, and Germany, among others, for eight projects.
The MoC is also coordinating the implementation of three projects on urban facility upgradation, water supply and wastewater treatment. They are funded by loans worth a total over 937 million USD from the World Bank.
The World Bank has also agreed to provide an additional 7 million USD for a project on water supply and urban wastewater treatment in the Mekong Delta, the MoC added.
ODA capital has proved to be a considerable contributor to Vietnam’s socio-economic development.
The national committee for ODA and preferential loans requested ministries to promote the effectiveness of ODA and concessional loan use, especially the loan disbursement progress.
In the first half of 2016, over 2.56 billion USD of ODA and concessional loans was committed for Vietnam, surging by 61 percent year on year.
The disbursement of ODA capital and concessional loans during the reviewed period declined by 4 percent from a year earlier to about 1.85 billion USD, including 1.75 billion USD of ODA loans and 100 million USD of non-refundable ODA, according to the Ministry of Planning and Investment.
A Cuong Minerals shares fall sharply
Shares of A Cuong Minerals (ACM) were often amongst the lowest valued in the market, and now they have hit an even lower point after the firm was found harming the local environment.
A Cuong Mineral Group Joint Stock Company engages in the mining and wholesale of minerals and coal in Son Dong District, Bac Giang Province.
Since the publication of the information discovered by officials, specifically the firm's discharge of untreated waste water directly into the local river, shares lost about 50 per cent in value from the previous week. On July 19, they fell to their lowest figure of the year, closing at VND1,800.
Yesterday, after A Cuong told its shareholders for the first time about the case, and confirmed that the issue related to a leaking waste water tank that they were trying to fix, each share of the mineral firm rose more than 5 per cent to reach VND1,900(US$0.08) on the Ha Noi Stock Exchange.
Despite the increase yesterday, the firm's shares remained lower than last week's figure.
On June 26, the Bac Giang Department of Natural Resources and Environment and the local environment police caught the firm discharging untreated waste water directly into the local river.
On July 18, the Ministry of Natural Resources and Environment decided to inspect the environmental protections of the group, with the inspection teams partnered with functional officials of the ministry and the local province.
According to ministry, the firm would be subject to punishment under the law if the team found violations.
Consortium to deepen ports in Cai Mep-Thi Vai
Joint venture ports between Vinalines and its foreign partners in the Cai Mep–Thi Vai port complex in the southern province of Ba Ria-Vung Tau, including SP-PSA and CMIT, are expected to be able to handle larger vessels thanks to the upgrading and dredging of lanes.
An alliance of investors Cienco1, Cai Mep, and Thai Son has proposed pouring VND6.378 trillion ($291.23 million) inupgrading and dredging lanes in the Cai Mep-Thi Vai area to enable receiving vessels of 100,000 DWT and higher under the public–private partnership (PPP) model.
Of the sum, the investment of dredging from Buoy No. 0 to CMIT port co-owned by Vinalines and Danish company APMT, is estimated at VND1.375 trillion ($62.75 million).
According to the alliance, the investors will dredge 22 million cubic metres from between Buoy No. 0 to CMIT port, 5.34 million cubic metres from between CMIT and SP-PSA (owned by Vinalines and Singaporean PSA), 2.23 million cubic metres from SP-PSA to SITV, 3.95 million cubic metres from SITV to Tac Ca Trung, and 2.68 million cubic metres from Tac Ca Trung to Go Dau.
If the proposal is approved, the project will be completed in the first quarter of 2019.
The proposal was made amid the growing volume of goods shipped via local ports, which surpassed forecasts by Japan International Cooperation Agency (JICA).
In recent years, the volume of goods transited via ports in the Cai Mep-Thi Vai area significantly increased from 8.73 million tonnes in 2010 to 25.65 million tonnes in 2011 and 19.30 million tonnes in 2014.
In 2010, the volume of dry goods passing through ports in the Cai Mep-Thi Vai area reached around 16.84 million tonnes, equal to the volume of goods forecast by JICA. If liquid and transited commodities are included, the volume was even higher.
Do Hong Thai, deputy head of the Vietnam Maritime Administration, said that the volume of goods shipped via local ports will rise to 101.6-109.2 million tonnes by 2020.
Taiwanese Fuco sets second phase of steel project on course
Fuco Steel Corporation Ltd. has kicked of the construction of the second phase of its steel production plant, investing an additional $76.5 million in the southern province of Ba Ria-Vung Tau’s Phu My 2 industrial park, increasing Fuco’s total investment capital in the plant to $156.5 million.
The six-hectare plant will be equipped with a manufacturing line imported from Italy. The construction is expected to be completed in August 2017 so that the plant can come into operation one month later, with an output of 600,000 tonnes per year.
Almost all products of the expanded plant will go to large domestic customers, namely Vina Kyoei Steel, SSE Steel, Nha Be Steel, Tay Do Steel, and Vinh Phuc Mechanic. The remaining products will be exported to the Philippines, Thailand, Bangladesh, and Singapore.
Fuco currently runs the first phase, a 30-hectare steel billet plant to produce billets, which is used to make reinforcing bars, bars, and wires.
The construction of the first phase was started in 2012 and finished in 2014. The plant has an annual capacity of one million tonnes, 20 per cent of which is distributed on the domestic market, and the remaining 80 per cent being exported to the ASEAN and Middle Eastern markets.
Entering Vietnam in 2007, Fuco is a subsidiary of Fuco International Ltd.-the largest steel maker in Taiwan. The company in Vietnam currently has 250 trained employees and engineers.
Vista Verde topped out, poised for launch
CapitaLand, one of the leading Singaporean real estate developers, along with Thien Duc Trading Construction topped out the Vista Verde project in Ho Chi Minh City on July 20.
Comprising of 1,152 high-end apartments in four 35-storey residential towers offering a spectacular view of the Saigon River, Phu My Bridge, and the surrounding city, Vista Verde showcases lush green landscaping and was designed to bring a symphony of nature to residents.
Strategically located in the heart of District 2’s administrative centre, it is five minutes from essential amenities and 10 minutes from districts 1 and 7.
According to Chen Lian Pang, CEO of CapitaLand Vietnam, the topping out was an important milestone of the project, which was launched in 2014 and have sold more than 80 per cent to date.
“We look forward to presenting this landmark residential development that redefines modern living in Vietnam. The successful topping out of Vista Verde would not have been possible without the support of the local authorities, our consultants and contractors, our strategic business affiliates, as well as Thien Duc, our valued partner in Vista Verde,” Chen said.
Vista Verde has won the prestigious “Best Condominium in Vietnam” award at Asia Pacific Property Awards 2015 and the “Best Architectural Landscape Design” award at Vietnam Property Awards 2015.
The two awards recognise CapitaLand’s efforts to incorporate international design principles and practices at Vista Verde.
CapitaLand Vietnam’s first residential project in Ho Chi Minh City was The Vista, which was completed in September 2011 and has since been handed over to homebuyers. Other completed projects include PARCSpring in Ho Chi Minh City and Mulberry Lane in Hanoi.
Hoanh Son Group acquires 51.11% of Phuoc An Port
The Hoanh Son Group, a private company specializing in transport, construction, and infrastructure and based in north-central Ha Tinh province, has recently acquired a majority stake in the Phuoc An Port project in southern Dong Nai province.
A representative from the Hoanh Son Group confirmed with VET that the company’s holding in Phuoc An is 51.11 per cent and the acquisition was implemented via a subsidiary, the Hoanh Son Ltd Co., on July 9.
Hoanh Son Ltd Co. outlaid VND460 billion ($20.7 million) to buy 46 million shares from the State-run PetroVietnam (PVN) group, which was previously the major shareholder with a holding of 80 per cent.
Phuoc An Port is a cooperative agreement between PVN and the Dong Nai People’s Committee signed in 2007 with investment capital of $765 million. One year later the PetroVietnam Phuoc An Port Investment & Operation Joint Stock Company was established and was granted an investment license in 2009.
Project implementation has been very slow in the seven years since, however, with site clearance still being conducted. With a policy of investment socialization and a focus on its core areas, PVN decided to find a strategic partner to speed up the project and selected the Hoanh Son Group.
With a prime location, just 40 km from the center of Ho Chi Minh City and the industrial belt in Binh Duong province, Phuoc An Port is expected to become a seaport and logistics complex on 800 ha that will serve customers in the Southern Key Economic Region. It has a planned capacity of 2.5 million TEUs per year and 6.5 million tons of cargo.
The Hoanh Son Group has recently been in the news, after the Sao Vang Rubber JSC (SRC) chose it as a partner in investing in a trade center, service and office complex at 231 Nguyen Trai Street in Hanoi’s Thanh Xuan district.
Hoanh Son will spend VND435 billion ($19.5 million) on supporting SRC to move its rubber plant on the site to the Chau Son Industrial Park in northern Ha Nam province. The two parties plan to establish a joint venture, in which SRC will hold 26 per cent.
The deal sparked much controversy in the real estate sector as real estate giants such as the BRG Group and the FLC Group were hoping to partner SRC.
The reason for selecting Hoanh Son is that it has solid financial resources and has also been a partner in many projects with the State-run Vietnam National Chemical Group, SRC’s largest shareholder.
Over the last few years Vietnam has witnessed a trend in which private companies buy or acquire a majority stake in State-owned companies or their subsidiaries that also possess significant land assets.
According to the Vietnam Maritime Administration, Vietnam now has 49 seaports at three levels - I, II, and III. Total investment capital needed for the country’s seaport network to 2020 is estimated at VND100 trillion ($4.5 billion).
Hoa Sen pushing into real estate
Steel-maker the Hoa Sen Group (HSG) is now stepping up its investments in real estate after unsuccessfully attempting to enter the sector seven years ago.
HSG has poured significant sums into tourism real estate in recent times, which is considered a “gold mine” by many real estate giants, and reflect its ambition to become a major investor in resort real estate.
At the end of May it invested VND1.2 trillion ($54.5 million) in a four-star hotel in northern Yen Bai province. “Hoa Sen Yen Bai is the first tourism, service and real estate project of the group, marking a new step in a completely new business sector,” it said in a press release at the time.
Covering 1.5 ha, the project is expected to be completed by 2020 and will be the largest international-standard hotel and commercial center in the province, with a 15-storey building that will include a four-star hotel, a business center, a conference center, a restaurant, a café, and luxury apartments.
The steel giant has also established four subsidiaries to invest in real estate: Hoa Sen Yen Bai Co., Hoa Sen Hoi Van Co., Hoa Sen Van Hoi Co., and Hoa Sen Quy Nhon Co. HSG holds 70 per cent of Hoa Sen Yen Bai and Hoa Sen Hoi Van and 45 per cent of the other two companies. The remaining shares in the four subsidiaries are held by HSG Chairman Mr. Le Phuoc Vu.
The vegetarian Chairman has told local media of his plans to invest in other projects in Yen Bai. In particular, the group will invest in a spiritual resort on an area of 1,000 ha, including the 400-ha Van Hoi Lake. HSG will also build a hotel and resort complex in south-central Binh Dinh province.
According to real estate experts, HSG’s investments in tourism real estate at this time make perfect sense. Ms. Duong Thuy Dung, Associate Director and Head of Research and Consulting at CBRE Vietnam, told local media that 2016 is a key time for the resort real estate market.
“The growth in tourist numbers to beach resorts is very positive,” she was quoted as saying. “HSG has captured this positive sentiment to invest in resort real estate.”
HSG first stepped into real estate in 2009, investing in the Phuc Thanh Dien residential project in District 9, Ho Chi Minh City. Two years later it then invested in two other apartment projects in District 9 - Hoa Sen Phuoc Long B and Hoa Sen Riverside Apartments.
The investments, however, came at a time when Ho Chi Minh City’s real estate market was in decline. In 2011 HSG announced its withdrawal from the real estate market after results were not as expected.
Steel sheet manufacturing remains its core business. On July 15 the group announced it would seek shareholders’ approval at an extraordinary shareholders meeting on September 6 to take over a 6-million ton steel mill at the Ca Na Industrial Park in the south-central province of Ninh Thuan.
The group has estimated that total investment capital for the delayed project would be some $3.8 billion. The 6-million ton mill would bolster HSG’s total capacity significantly.
Established in August 2001, HSG is now among the leaders in steel sheet production and trading in Vietnam and Southeast Asia. Its products have a domestic market share of 40 and 20 per cent in steel sheet and steel, respectively, and its products are present in over 60 countries and territories around the world.
The group owns numerous steel and steel sheet manufacturing plants in Vietnam. On March 17 it held a breaking ground ceremony for the Hoa Sen Ha Nam steel mill at the Kien Khe I Industrial Cluster in the northern province of Ha Nam.
In January it began construction of the Hoa Sen Nhon Hoi steel sheet plant at the Nhon Hoi Economic Zone in Binh Dinh province. The 12.4-ha, $89-million facility is expected to commence operations in June 2017 and supply 180,000 tons of galvanized steel sheets and zinc-aluminum alloys, 90,000 tons of color-coated steel sheets, and 200,000 tons of cold-rolled steel to domestic and foreign partners.
Trade surplus reaches US$1.7 billion in H1
Vietnam posted a trade surplus of around US$1.7 billion in the first half of this year thanks to strong exports to major markets, including the U.S., the European Union and the Middle East, according to the General Department of Customs.
Last month, imports hit US$14.7 billion with foreign direct investment (FDI) enterprises contributing US$8.3 billion. Meanwhile, exports inched up 2.5% to US$14.7 billion compared to May, with the FDI sector accounting for US$10.2 billion.
Overall, the country shipped abroad US$82.1 billion worth of goods in the year to June and spent US$80.4 billion on imports.
Machinery topped the list of imported products with a combined value of US$13.1 billion, followed by computers, electronics and parts with US$12 billion. Items with an import value of less than US$5 billion include plastics and raw materials, iron and steel, and animal feed and animal feed ingredients.
Of 19 export products worth over US$1 billion, phones and parts took the lead with US$16.9 billion, followed by apparel with US$10.8 billion. Seafood, furniture, vegetables, coffee, cashew nuts, rice, suitcases and handbags came next.
In the six-month period, Vietnam recorded a trade surplus above the US$1 billion mark with six markets, including the U.S. with US$14.1 billion, the United Arab Emirates US$2.5 billion, Germany US$1.6 billion, the Netherlands US$2.3 billion, Hong Kong US$2.2 billion and the United Kingdom (UK) US$1.9 billion.
The country, on the other hand, had trade deficits with five countries, including China with US$14 billion, South Korea US$5.1 billion, Malaysia US$1.04 billion, Singapore US$1.5 billion and Thailand US$2.1 billion.
China remained Vietnam’s largest source of imports, with a value of US$23.1 billion, accounting for nearly 30% of all imports. Among key products imported from the northern neighbor, iron and steel contributed US$2.1 billion. Other imported products worth over US$1 billion included electronic devices and fabrics and materials for apparel production.
Then the January-June period saw Vietnam’s trade deficit with China shrinking by US$2.3 billion year-on-year to US$14 billion. However, that was still the largest single-country trade deficit for Vietnam.
Apart from China, imports from South Korea reached US$14.7 billion with three product categories posting over US$1 billion in revenue: computers, phones, devices; machinery; and equipment and parts.
Trademark registration challenges local firms
Vietnamese enterprises have bemoaned that they are having a hard time dealing with trademark registrations both at home and abroad, a recent conference heard.
Lawyer Pham Thi Thoa from Apolat Legal Law Firm said the National Office of Intellectual Property of Vietnam (NOIP) is often late in giving updates on trademark applications and their statuses on its website.
There were cases in which it took a year for companies to learn that the registration had ended in failure, Thoa told reporters on the sidelines of the conference on trademarks in ASEAN countries last week.
The firms could have applied for different trademarks if they had been informed earlier, Thoa said, adding that a lot of money and time could have been saved.
She also criticized the weird registration regulations, particularly a rule that stipulates that applications by two firms for the same trademark on the same day will be automatically rejected, unless the parties involved manage to reach some sort of agreement.
Such rules give rise to unhealthy competition and may put older and prestigious firms at risk of losing their own brands to new companies, Thoa said, calling for a review of the rules.
Le Trung Tho of Hoang Ngoc Joint Stock Company said many domestic firms still care little about registration of their brands. For businesses who are fully aware of the need to protect their brands, the registration process would not be easy either.
According to a representative of dairy company NutiFood Vietnam, local businesses also have difficulty registering their trademarks in overseas markets due to inadequate guidance and limited resources for research.
Tran Giang Khue, deputy head of the NOIP’s HCMC office, said a trademark is only valid within the country of application, which means exporters need to register their trademarks in their export markets to protect their brands.
Legal mechanisms are different among countries in the region. Rules on intellectual property protection in Singapore and Thailand are strict while those in other markets are usually lax and incomplete. Vietnam, Laos, Cambodia, Singapore and the Philippines have joined the Madrid System, which facilitates international trademark registrations.
H2 exports of key products expected to inch up
The Ministry of Industry and Trade has projected Vietnam’s exports in the second half of this year will climb by an estimated 10% against the first half and export revenue of many key items to increase significantly in the whole year.
According to a report released at a conference on export promotion in HCMC on July 19, the country saw its export turnover rising by 5.7% year-on-year to US$82.13 billion in the first six months of 2016.
Export revenue of agri-aqua-forestry products amounted to US$13.3 billion, up 4.1%, while that of the manufacturing-processing sector stood at US$62.59 billion, an 8.7% rise and the fuel-mining sector at US$1.65 billion, a 40% plunge.
The ministry said a sharp fall in the fuel-mining sector matches the nation’s policy to reduce exports of raw minerals and crude oil to ensure sufficient supplies for local production. Declines in export volume and value of this sector led its revenue to dip strongly and accounted for only 2% of the country’s total.
Export prices of agri-aqua-forestry products edged down on world markets due to an economic slowdown in China and Brazil. Besides, demand in Vietnam’s major export markets like the U.S., the European Union and Japan also slowed.
The trade ministry predicted export in the remaining six months of the year would jump around 10% compared to the first half. In addition, many items have begun to benefit from Vietnam’s signing of free trade agreements (FTAs), thus supporting more agri-aqua-forestry products to join global supply chains.
However, Vietnam will have to cope with tougher competition in the second half since competitors will also take measures to boost exports. China saw its exports skidding by 7.6% in the January-June period, India dipping by 8%, Brazil edging down by 3.4% and Indonesia falling by 13.6%.
The ministry projected the seafood sector will fetch US$7.12 billion in export turnover in all of 2016, up 8% versus 2015, while coffee exporters will sell an estimated 1.5 million tons and collect US$2.43 billion, up 10% in volume and down 7% in value.
Outbound sales of rubber products are forecast to reach 1.1 million tons worth US$1.65 billion, almost unchanged from the previous year. Pepper shipments will likely total 145,000 tons valued at US$1.38 billion (up 9.5%) and cashew nuts 350,000 tons worth US$2.6 billion (up 8.3%).
The textile-garment sector is expected to post export revenue of US$28.5 billion to US$29 billion this year, up only 5% versus 2015, due partly to tumbling export orders.
Truong Dinh Hoe, general secretary of the Vietnam Association of Seafood Exporters and Producers (VASEP), told the conference that the supply of unprocessed shrimp for processors has become limited this year, thus sending prices up.
In the past, Vietnam sold seafood to three major markets – the U.S., the EU and Japan. China has emerged as another key importer since it accounts for 16% of Vietnam’s seafood export revenue.
At present, Vietnam ships seafood to 144 markets with the five biggest markets – the U.S., the EU, Japan, South Korea and China, making up over 70% of the total.
Hoe said apart from expanding farming areas, local producers will step up import of materials for domestic processing to maintain growth.
Hoe proposed streamlining export procedures to help enterprises.
HCM City needs over 6 billion USD for infrastructure
The HCM City People’s Committee has submitted to the Ministry of Planning and Investment the list of projects intended for Public-Private Partnership (PPP).
The projects will need a capital amount of 137,563 billion VND (6.17 billion USD), which, 37,960 billion VND (1.7 billion USD) is from the State.
Priority projects include the Monorail Route No.3, the expansion of National Road No.22 and the construction of elevated road No.5 on belt road No.2.
The city has been implementing five big projects with a combined capital of 110,699 billion VND (4.96 billion USD), of which official development assistance loans account for 91,400 billion USD (4.1 billion USD).
Flexible monetary policy stablises financial system
The flexible implementation of monetary policy from the State Bank of Vietnam (SBV) contributed to stabilising the financial market from the beginning of this year.
According to the SBV, thanks to the flexible execution of the daily reference exchange rate based on the domestic supply and demand, the world finance market, as well as the synchronous implementation of tools to support the interest rate when needed, helped the foreign currency market develop positively.
The USD/VND exchange rate in the inter-bank market reduced and fluctuated around the SBV’s new exchange rate level of 22,300 VND per USD.
The market liquidity has been good and the demand for foreign currency has been met.
According to the SBV, deposit interest rates have been kept stable, reducing the pressure on the lending interest rates of credit organisations and the risk of increasing inflation.
Based on the situation of the macroeconomy, currency and inflation, the SBV maintains stable key interest rates via monetary policies to ensure liquidity and keeping the inter-bank interest rate at a low level, helping credit organisations to keep their deposit interest rate levels stable.
The synchronous implementation of solutions kept deposit interest rates stable despite increases of from 0.2-0.3 percent per annum in the first three months.
As for lending interest rates, despite the slight increase of deposit interest rates in the early months of the year, lending interest rates are relatively stable to assist enterprises, the State commercial banks and some joint stock banks reduced the rate for short-term loans by 0.5 percent and capped the rates of mid- and long-term loans to no higher than 10 percent.
In the remaining months of the year, the SBV will continue instructing credit organisations to implement measures to reduce interest rates for loans.
According to the SBV, the credit issued in the first half this year increased 8.16 percent, higher than the same period last year and is on route to achieve the yearly target of 18 to 20 percent.
The SBV said that in the rest of the year, it will focus on controlling credit growth to ensure safety and effectiveness. It will prioritise capital for production in agriculture, export, support industry, SMEs, hi-tech enterprises and start-ups.
T&T Land launches its first housing project in Hanoi
AsiaReal and STDA, two official sale agents, will launch T&T Riverview housing project with competitive pricing in Melia Hanoi Hotel on July 30.
The project will offer an average price of VND20.4 million ($9,300) per square metres excluding value added tax (VAT).
Located at 440 Vinh Hung ward in Hanoi’s Hoang Mai district, T&T Riverview has a total land area of 8,612sq.m with a total investment value of VND836 billion (US$38 million).
The project consists of three blocks with 610 modern apartments, amenities, two basement garages and two-storey commercial space, kindergartens and other services. The highest block has 23 floors.
T&T Riverview is beautifully and luxuriously designed from inside to outside. The harmony of design and a peaceful setting with more than 200 units overlooking Red River create an impressive picture.
The construction has reached the 14th floor and the project is expected for hand-over in the second quarter of 2017.
Taekwang Industrial to crack open Vietnamese fertiliser market
On July 20, Korean-owned Korea-Vietnam Fertiliser Co., Ltd. (KVF) organised the ground-breaking ceremony of its US$60 million compound fertiliser production plant in Ho Chi Minh City’s Hiep Phuoc industrial park.
According to newswire Pulsenews.com.kr, the construction is expected to start operation in September 2017. The plant will be equipped with modern technology lines imported from Spain, and will have a designed capacity of 360,000 tonnes of compound fertilizer containing nitrogen, phosphorus, and potassium per year, which will be exported to Southeast Asian countries, primarily to Japan and the Republic of Korea.
KVF is a joint venture between Taekwang Industrial Co., Ltd. (Taekwang Industrial) and its subsidiary Huchems Fine Chemical Corporation. The mother company Taekwang holds a 51 per cent stake and Huchems the remaining 49 per cent.
Once the plant comes into operation, Huchems will be in charge of the operation and management of the plant, while Taekwang Industrial will be responsible for sales and marketing.
“Once completed in 2017, the plant is expected to account for nine per cent of the entire NPK compound fertilizer production in Vietnam. We expect the plant to generate 150 billion won (US$13 million) in sales a year,” said Choi Gyu-sung, president and CEO of Huchems.
Taekwang Industrial also plans to implement a US$171 million shoe-manufacturing factory in 2B Hung Phu industrial park in Cai Rang district of the Mekong Delta city of Can Tho.
The factory covers an area of 62 hectares, 52 hectares of which houses the production area, while the remaining 10 hectares is set aside as a service and commercial area and warehouses for lease.
The investor is completing the necessary procedures to implement the project and expects to carry out the land clearance in the upcoming months.
The factory’s construction is divided into three phases. The first phase’s construction is expected to kick off in 2016 and last until 2019, and the second and third phases are to be finished by 2022 and 2025, respectively. The factory constructed during the first phase will start operation in the first quarter of 2017, while the second phase will be inaugurated in 2020, and the third phase in 2023.
Once the factory comes into operation, it will have a total capacity of 100 million products per year and create 30,000 jobs.
Vietnam's top mobile retailer expands electronic chain
The Gioi Di Dong (Mobile World), Vietnam's biggest retailer of mobile devices, plans to open another 286 electronics stores in an effort to double its market share to 30 percent next year, local media reported on July 21.
In the first six months, the company launched 33 new outlets, expanding its Dien may Xanh (Green Electronics) chain to 119 stores around the country, according to news website VnExpress.
Figures from the company showed that electronics sales grew 212% year-on-year to over VND4.56 trillion (US$202 million) in January-May. That was equivalent to more than 28% of its revenue in the same period.
In September last year The Gioi Di Dong made a foray into the sector of food retail, and its chain Green Grocery now has 15 stores around Ho Chi Minh City.
The company, which owns a chain of 977 mobile stores around Vietnam, expects its revenue to top US$1.5 billion this year, up nearly 34% from last year.
Russia trade fair participating businesses get support
Domestic enterprises will receive support for their participation in the Ho Chi Minh City Products Week to transpire October 6-14 in Moscow, Russia.
The information was released at a July 21 conference to launch the trade fair, jointly held by the municipal Department of Industry and Trade (DoIT), the municipal Centre for Trade and Investment Promotion, the Embassy of Vietnam in Russia, and the Hanoi-Moscow Trade Centre Investment JSC (INCENTRA).
Participating businesses will be able to enjoy discounts for accommodation, air tickets, brand name promotion, and free-of-charge booths.
DoIT Deputy Director Nguyen Phuong Dong said the trade fair is designed to bolster exports and investment in Russia and the Eurasian Economic Union.
Major items on show during the event include leather footwear,garments, handicrafts, wood products, agricultural products, tourism and financial services.