BUSINESS IN BRIEF 4/10
Most companies confident of better
performance in Q4
Enterprises, especially foreign-invested and
State-owned ones, expect better business performance in Q4, according to the
General Statistics Office (GSO).
Up to 85.6 percent of the surveyed companies believe
that their production and business situation will remain stable or improve in
the last quarter of 2016. Among them, 48.8 percent expect improvement while
another 36.8 percent hope for continued stability.
About 50.3 percent of the businesses forecast their
production output will increase from Q3 while 36 percent said it will remain
unchanged. Only 13.7 percent said their production may decline.
An augmentation in export orders is forecast by 38.6
percent of the questioned firms, and another 46.3 percent hope for the same
volume of export orders as in Q3.
The GSO said while 16.2 percent of the respondents
believe their products will be sold at higher prices in Q4 compared to the
previous quarter, 75.4 percent expect unchanged prices. Only 8.4 percent of
the businesses predict lower prices.
Meanwhile, 30.4 percent of the companies are confident
of a drop in their unsold inventory, and 54 percent think their inventory
will remain unchanged from Q3.
As many as 91.3 percent of the surveyed enterprises
plan to expand or maintain their workforce in the last quarter. Only 8.7
percent said they will reduce the number of employees.
GSO General Director Nguyen Bich Lam highlighted a
positive business panorama in the first nine months of 2016, including over
100,000 companies established or resuming their operations. Up to 95.8
percent of the 81,000 new businesses immediately went into operation,
indicating a healthy economy.
Deputy Prime Minister hosts Thai
Central Group’s leader
Deputy Prime Minister Vuong Dinh Hue noted his hope
that Thailand’s Central Group (CG) will continue to invest in product
distribution, retail and wholesale trade in Vietnam.
At a reception for CG General Director in Vietnam
Jariya Chirathivat in Hanoi on October 3, the official called on the group to
introduce the world’s quality goods, especially those from ASEAN, to
Vietnamese consumers.
He suggested the group join Vietnamese businesses in
production chains in the fields of industry and agriculture to churn out
quality and safe products, while closely coordinating with competent Vietnamese
agencies in guiding its branches to observe local law.
The Deputy PM hailed the group’s contribution of over 2
trillion VND (90 million USD) in tax from its acquisition of Big C Vietnam
super market chain.
Jariya Chirathivat, who is also CG’s legal representative
in Vietnam, promised that CG will provide high-quality products for the
country, adding that the group is seeking Vietnamese producers to introduce
good products in Big C supermarket chain and Thailand.
The group has partnered with the Vietnamese Ministry of
Industry and Trade to successfully organise Vietnamese Goods Day in Thailand
to seek promising Vietnamese producers, she said.
Apart from retail trade, CG will invest in real estate
and commercial centres in Vietnam, the guest noted.
Earlier, the Thai group purchased Big C Vietnam and 49
percent stake of Nguyen Kim electronics retailer and Lan Chi Mart. The group,
together with Nguyen Kim, took over Zalora Vietnam.-
Vietnam-India trade hit 3.47 bln USD
in eight months
Two-way trade between Vietnam and India hit 3.47
billion USD in the eight months of this year, up 1.23 percent year-on-year,
according to the Ministry of Industry and Trade’s Vietnam Trade Office in
India.
Of the figure, Vietnam exported 1.76 billion USD and
imported 1.7 billion USD worth of goods, up 7.4 percent and down 4.4 percent,
respectively.
In August alone, Vietnam ran a trade surplus of 25.72
million USD with India, marking a 5 percent rise, raising the total to nearly
60 million USD since the beginning of this year.
The country shipped tea, cashew nuts, metal, garment
materials, leather, footwear, coffee and apparel to India. In August, the
total garment export reached 7.22 million USD, increasing three-fold from
July, bringing the total to 22.81 million USD in January-August.
Several kinds of goods saw falling shipments, including
coal, confectionary, cereals, plastic materials, phones and spare parts, down
as much as 48.8 percent annually in eight months.
Vietnam upped the imports of vegetables, gemstones, precious
metal, computers and spare parts, papers, iron and steel products while
decreasing the imports of animal and plant cooking oil, animal feed, and
fertilisers.
According to the office, the Vietnam-India strategic
partnership has been increasingly growing since the ASEAN-India free trade
agreement was signed.
As one of the top 10 trade partners of Vietnam, India
has invested in 87 projects worth 298 million USD in Vietnam, ranking 30 th
out of 101 countries and territories investing in the country, mostly in
manufacturing and mining.
On the back of India’s Act East policy and Vietnam’s
renovation process, India continues considering Vietnam an attractive
destination in the fields of oil and gas, steel, mineral resources, tea,
sugar, information technology training, and a goods transit point in
Southeast Asia.
In 2015, India organised trips for 25 business
delegations to Vietnam to explore the market and seek opportunities.
The Indian government has offered incentives in land
and taxation for foreign investors.
Apparel, engineering and farm produce are in the list
of priority set by the two governments.
In order to raise two-way trade to 15 billion USD by
2020, the ministry suggested encouraging firms to join exhibitions and fairs,
as well as liaison with embassies and trade offices to seek cooperation
opportunities.
New economic complex expected to
boost Yen Bai’s growth
Work on an economic complex worth 1.25 trillion VND
(56.05 million USD) started in Mu Cang Chai district, the northern
mountainous province of Yen Bai on October 3, with expectations that it will
spur the locality’s socio-economic growth.
The complex, invested by the MCC Company, covers 150
hectares of land and houses a son tra (Fructus Crataegi) tea and green tea
factory with a capacity of 700 tonnes per year, a biological coal plant, and
a resort.
The tea factory and the coal plant is scheduled to
become operational in July 2017, employing more than 200 labourers whose
monthly income is about 6 million VND each.
The MCC company also pledged to supply the locals with
varieties of son tra tree and cultivation techniques and buy back all son tra
fruits at a price of 5,000 VND per kilo for its tea plant.
Currently, Yen Bai has about 1,200 son tra trees, with
an output of about 3,500 tonnes of fruits.
According to Nguyen Van Khanh, Vice Chairman of the Yen
Bai People’s Committee Nguyen Van Khanh, the complex is significant to the
socio-economic development of the province and Mu Cang Chai district in
particular, helping the locality fulfil its targets and the agricultural
structuring plan for the 2016-2020 period.
He also asked the provincial departments and agencies
to support the investor to ensure the progress of the project.
Vingroup named Vietnam’s best
developer by Euromoney
Vingroup has been named the best developer in Vietnam
in three categories by British finance magazine Euromoney.
Accordingly, it is the best retail developer, the best
mixed-use project developer and the best leisure/hotel developer of
Vietnam.
The Euromoney Real Estate Awards are one of the most
prestigious to honour real estate developers in the world. They are compiled
basing on developers’ products, service quality, long-term investment
strategies, and reputation, among others.
Duong Mai Hoa, Vingroup General Director, said the
three awards affirm her business’s prestige, scale and standing in Vietnam’s
property market. They also help Vietnam’s real estate sector integrate into
the regional and global market.
Last April, Vingroup also ranked first in three
categories of the Asia Pacific Property Awards.
Vinhomes, a brand of Vingroups, was evaluated at 511
million USD by brand valuation consultancy Brand Finance in September,
becoming one of the five most valuable brands in Vietnam.
Swedish trade minister highlights
importance of free trade
Sweden’s Minister of EU Affairs and Trade Ann Linde
will be accompanied by the largest ever business delegation during her
upcoming official visit to Vietnam from October 4-6.
Ahead of the visit, Minister Ann Linde discusses
priorities in Sweden-Vietnam cooperation programme and emphasizes the
importance of free trade in an article.
The following is the full text of the article.
“Vietnam and Sweden enjoy a long standing diplomatic
and unique relationship. Over the last decades, we have moved from
development cooperation into a new phase of partnership, not least as trading
partners. While our countries are far apart geographically, we share the
conviction that good governance, respect for human rights, the rule of law
and adherence to the international rule-based system are determining factors
for development. Vietnam has achieved major success in its economic
development and has rapidly been moving up the development ladder. Today,
Vietnam is a country and a market with significant potential.
In 2015, Vietnam and EU signed a Free Trade Agreement
(FTA). The agreement is one of the most ambitious and comprehensive FTAs that
the EU has ever concluded with a developing country. It shows Vietnam’s
dynamic approach in pursuing international integration for the good of its
citizens. It will help Vietnam to integrate successfully as a market economy
into the global economy.
Like Vietnam, Sweden is a staunch supporter of free
trade. The economic and social wellbeing of our respective nations depends on
a transparent, rules based and open global trade regime. For us, free trade
is the only way going forward.
But while free trade may be indisputable in Vietnam and
Sweden, it is increasingly being criticized elsewhere. Today we see a trend
in which more people are demanding that the doors we have fought for decades
to open, now be closed to both people and trade with the rest of the world.
Some people feel that their jobs are being destroyed by global competition
and technological developments – and therefore that their life situations are
under threat.
The Swedish Government understands that frustration.
Essentially, it is about increased inequalities, a lack of security and
inadequate welfare. Stagnating or even declining real wages are a reality for
many employees in large parts of the EU and the US. At the same time, the
safety nets for those who lose their job are often too weak.
But directing anger at trade and development is not
only the wrong approach – it is a dangerous approach. The Swedish model shows
that development and security goes hand in hand. Secure people are not afraid
of progress. In Sweden, the labour movement acknowledges that structural
transformation of the labour market is good for workers. Workers compete on
the basis of knowledge and skills, which means that globally competitive
businesses are needed. Without free trade, Sweden risks missing out on jobs,
and losing out to global competition. In the long term, inefficient and
unprofitable operations are devastating for wage earners and for our society.
The structural transformation that Sweden has undergone
in recent decades has made us one of the world's leading innovation and
industrial nations. Since 2014, 120,000 new jobs have been created in Sweden.
Today, 1.3 million Swedes are directly or indirectly employed thanks to our
exports - a third of the Swedish work force.
The Ericsson Globe is the largest spherical structure
in the world and was finished in 1989. It has since then become a symbol for Stockholm.
It can house up to 16,000 people in a concert arragement (Photo: Swedish
Embassy)
The Swedish government has adopted an ambitious export
strategy aiming at increasing trade and boost participation of Swedish
companies in the global economy. Bilateral trade and investments in Southeast
Asia, the growth engine of the world, forms an important part of this aim. By
having the second biggest growth rate in the world, Vietnam has a key role to
play in the region. With the implementation of the progressive Free Trade
Agreement, Swedish trade with Vietnam, and Swedish companies investing in the
country, would certainly grow.
More trade would benefit Vietnam and Sweden, as well as
the whole of Southeast Asia, by creating new jobs and more prosperous societies.
Sweden supports the earliest possible implementation of the EU-Vietnam Free
Trade Agreement, not least as the agreement forms an important building block
towards the possibility of a future region-to-region EU-ASEAN Free Trade
Agreement. In this regard, Vietnam is leading the way in the region. Our
strengthened partnership will allow us to better address future challenges on
the road towards prosperous, democratic and just societies.
I am therefore very happy to visit Vietnam for three
days in October, leading the largest delegation of Swedish companies that has
ever visited your country, to learn more about Vietnam, discuss innovation
and sustainability and explore how Sweden and Vietnam can work together for
more open and free trade, for the benefit of both our countries.
Sweden firmly believes that we must push for more open
and free trade through a progressive free trade agenda that not only aligns
with, but also supports the implementation of the United Nations’ Sustainable
Development Goals. For us it is a given that in trade policy we must stand up
for human rights, our environment, people's health and our democratic space.
Based on this approach, more free trade means more prosperity for all.”
Mekong Delta urged to use advanced
farming techniques
Experts have recommended that the Cửu Long (Mekong)
Delta, the country’s largest producer of fruit, set up concentrated fruit
cultivation areas and apply advanced farming techniques.
The delta has a fruit cultivation area of 300,000ha,
accounting for 37 per cent of the country’s total area, according to the
Ministry of Agriculture and Rural Development’s (MARD) Plant Cultivation
Department.
The region produces an annual total output of 3.5
million tonnes of fruit a year.
Tiền Giang, Vĩnh Long, Hậu Giang, Sóc Trăng and Bến Tre
are the delta’s largest fruit cultivation provinces. They have many fruit
varieties with high value, such as mango, orange, grapefruit and dragon
fruit.
Last year, the delta exported US$1.8 billion of fruit
to 60 countries and territories, including the US, EU and Japan, according to
MARD.
Speaking at a forum in Tiền Giang Province on August
12, Trần Văn Khởi, acting director of the National Agriculture Extension
Centre, said the quantity, varieties, export markets and value of the delta’s
fruit had increased rapidly.
However, linkage between farmers and consumption
outlets where sales occur remains weak.
In the delta, many farmers have to sell fruit at retail
markets during peak harvest seasons as they can not find traders to buy their
fruit.
Small-scale, unzoned cultivation and poor fruit
processing facilities are the major limitations, according to MARD’s Plant
Cultivation Department.
Lê Hoàng Anh, who grows 1.2ha of Cát Chu mango with an
annual output of 15 tonnes in Đồng Tháp Province’s Cao Lãnh District, said
that farmers were most concerned about sales outlets.
“The sale of mango depends on traders, so the price is
not stable,” he said.
Nguyễn Văn Hoà, deputy head of MARD’s Plant Cultivation
Department, said policies to improve links between fruit growers and
companies had yet to be created.
Though companies link with farmers to buy fruit, they
do little to establish links in cultivation.
The obligations of farmers and companies under their
sale contracts are not secured, so when one party breaches the contract,
nothing can be done, according to Hoà.
Nguyễn Hữu Đạt of the Việt Nam Fruit and Vegetables Association
said cooperation should be improved in fruit cultivation and use of advanced
farming techniques to produce off-season fruits under Good Agricultural
Practices (GAP) standards.
Companies should also be more proactive in establishing
linkages as well.
Only about 3 per cent of the delta’s fruit cultivation
area is cultivated under Vietnamese or global GAP standards.
Most of the VietGAP and GlobalGAP cultivation areas
contain dragon fruit, according to MARD’s Plant Cultivation Department.
The development of co-operatives and teams in the delta
has helped secure outlets for many farmers, improving income and sustainable
development.
A co-operative requires a minimum of seven members,
while a co-operative team has at least three members.
The delta has 69 fruit-cultivating co-operatives with a
total of 4,022 members and 489 co-operative teams with a total of 12,722
members, according to MARD’s Co-operative Economy and Rural Development
Department.
They grow a combined area of 7,662ha of fruit, accounting
for 4.1 per cent of the delta’s farming area.
Võ Chí Thiện, director of the Mỹ Tịnh An Dragon Fruit
Co-operative in Tiền Giang’s Chợ Gạo District, said the Mỹ Tịnh An Fruit
Co-operative was set up based on demand of participating members.
The co-operative aims to develop the brand name “Chợ
Gạo Dragon fruit”, a specialty of Tiền Giang.
The co-operatives ensure the purchase of dragon fruit
at a minimum price of VNĐ10,000 (45 US cents) a kilo and VNĐ2,000-4,000
higher than the market price.
Before joining the co-operatives, the members with
small-scale farms and unzoned cultivation areas had to sell their dragon
fruit at a low price after a good harvest because traders had pushed the
price down.
MARD’s Co-operative Economy and Rural Development
Department said the delta should focus on developing so-called new-style
fruit co-operatives linked with companies to ensure material input supply and
sales outlets.
Under a Government pilot project approved in March,
about 300 co-operatives in the rice, fruit and fisheries sectors will be
turned into new-style co-operatives in the Mekong Delta over the next four
years.
The project is focusing on improving the capacity of
management and technical staff of co-operatives and providing capital
solutions for production and business operations of co-operatives.
Hoà, deputy head of MARD’s Plant Cultivation
Department, said the department would consult MARD and relevant agencies to
increase linkage in fruit cultivation, and manage the cultivation of
off-season fruits and fruit zoning areas.
He said the Government should outline new policies on
fruit cultivation development.
Tien Giang province posts 14.6% rise
in exports
The Industry and Trade Department of the Mekong Delta
province of Tien Giang reported export earnings of US$1.48 billion in the
past nine months of this year.
This was a surge of 14.6 per cent from the same period
last year.
The figure, which accounted for 70 per cent of the
yearly plan, is expected to help the province reach its export value target
of $2.1 billion for this year.
Foreign-invested businesses continued asserting their
leading role by making up 63 per cent of total exports with products such as
handbags, shoes, apparel and processed aquatic products, as well as
vegetables, fruits and plastic items.
Businesses have been striving to expand their export
markets beyond the traditional European ones, the department said..
The United States, a new, potential market, accounted
for 90 per cent of the locality's export earnings from the American
region.
The export results reflected the local administration's
efforts to continuously improve business and investment environment,
accelerate trade promotion activities and encourage the start-up
spirit.
That effort allowed the province to reel in 17 new
investment projects with more than VND9.2 trillion ($414 million) capital
over the past nine months, a four and 3.6 times increase in terms of the
number and value of projects, respectively, compared with the same period
last year. In addition, eight operating projects asked to increase their
capital by over VND1.35 trillion, four projects more and 75 per cent higher
in terms of registered capital year-on-year.
Tran Hoang Phong, vice director of the Planning and
Investment Department, noted that the effort should focus on bettering
investment and business climate, hastening administrative reform, building
complete technical infrastructure and promoting dialogue between local
agencies and businesses and investors to tackle obstacles in production and
export in a timely manner.
VN goods face stiff AEC competition
Nine months after joining the ASEAN Economic Community
(AEC), Vietnamese goods still face strong competition in national and
regional markets from products from other ASEAN countries, experts said.
Tran Thi My Van, director of administration and
personnel and communications representative of Acecook Viet Nam Joint Stock
Company, said the products of her company have been exported to 47 countries
and territories, including three ASEAN countries – Cambodia, Laos and
Myanmar.
But Acecook Viet Nam did not manage to enter the
Indonesian market, the largest instant noodle market in the ASEAN region
which buys five billion units of noodles per year, she said. As a result, the
company has not yet realised its expectations of increasing its exports of
instant noodles after Viet Nam joined the AEC.
Doan Trong Hieu, director of Thuy Binh Ltd Company,
said the company's main export market was Cambodia but the business has faced
more difficulties since Viet Nam joined AEC. The company has studied its
market carefully and improved the quality of its products as the market
demanded. But it has not built its distribution system in ASEAN countries nor
opened branches in regional markets.
My Hao Chemical and Cosmetics Joint Stock Company, a
company with long experience doing business on ASEAN markets, said local
products have faced strong competition in the ASEAN markets, though most
customers in ASEAN countries such as Malaysia, Thailand and Cambodia say
Vietnamese goods are of good quality, reported vietnamplus.vn.
In Thailand, for instance, Vietnamese companies such as
My Hao have sold products in locations around Bangkok but could not compete
with foreign rivals, a My Hao company representative said.
In the first seven months of this year, Viet Nam
experienced a trade surplus with markets on other continents and a trade
deficit with Asian markets, especially the ASEAN market, the Ministry of
Industry and Trade's Import and Export Department reported. On the ASEAN
markets, Viet Nam experienced a large trade deficit with Thailand, Malaysia
and Singapore.
The department said Viet Nam joined AEC but exports to
ASEAN countries did not increase as expected and local enterprises have
braved many difficulties in expanding market share in ASEAN countries.
Meanwhile, local enterprises have also faced fierce
competition with ASEAN companies in their home market.
Le Thi Thanh Lam, general director of Sai Gon Food
Commercial Joint Stock Company, said local companies have had difficulty
retaining their market share of the domestic market due to high competition
with foreign companies and their own financial, technological and other
weaknesses.
Dinh Thi My Loan, chairwoman of the Association of Viet
Nam's Retailers, said local companies, especially retailers, should have
close and comprehensive cooperation in production and business at home.
Comprehensive reform to improve competitive ability is also needed.
The association proposed that the State develop large
retailers strong enough to compete with foreign retailers, Loan said.
Deputy Minister of Industry and Trade Nguyen Cam Tu
said companies should take advantage of integration to join AEC to overcome
existing difficulties in production and business and to improve competitive
ability.
They should also build brand and quality standards for
large-scale business operations in the long term future, he said.
Meanwhile, experts said the Government should promote
administrative reform to create favourable conditions for trade activities,
especially with ASEAN markets.
The Government also should focus on attracting
investment in capital and technique, as well as focusing on attracting
foreign experts to promote technological transfer and to improve the quality
of Vietnamese goods and services.
Ba Ria - Vung Tau seeks to build
aerodrome
Authorities of the southern Ba Ria – Vung Tau Province
have proposed Prime Minister Nguyen Xuan Phuc consider a project to build a
specialised aerodrome in the province, be invested by Ho Tram Project Company
Ltd.
A specialised aerodrome is a small airport serving
passengers, baggage, goods, airmail and postal parcels.
If the project is approved, the province expects the
Government to add the aerodrome into the national aviation development plan
from now to 2020 with a vision to 2030.
The aerodrome was designed to cover 200 hectares, with
a 2.5km runway and capacity to receive aircraft such as Airbus A320, Airbus
A321 and Boeing 737. Its investment capital is estimated at US$100 million.
The aerodrome is proposed to be built in Loc An Commune
in Dat Do District, along the coastal road system in the province.
Deputy Chairman of the provincial People's Committee
Nguyen Thanh Long said if the project was approved, it would attract more
domestic and foreign visitors to the province.
In the province, Ho Tram Complex Tourism Project, which
is also being invested by Ho Tram Project Company Ltd, is a key project that
has attracted a great number of visitors.
The project's Zone A1, including a five-star hotel
block, entertainment area and international standard 18-hole golf course with
total investment capital of nearly $800 million, is in operation with about
200,000 visitors annually.
However, the project is far from Tan Son Nhat
International Airport so visitors have to travel to the area on road.
Vietcombank signs financing
agreement with Vietcomreal
The Joint Stock Commercial Bank for Foreign Trade of
Viet Nam (Vietcombank) has signed an agreement with the Viet Real Estate
Commercial Joint Stock Company (Vietcomreal) to finance the latter's real
estate projects.
Under the agreement signed on October 2, the bank will
fund total capital of nearly VND1.5 trillion (US$66.96 million).
Of the total capital, Vietcombank will finance nearly
VND800 billion for Vietcomreal's Viva Riverside real estate project, which is
located at HCM City's District 6, with total investment capital of some VND1
trillion. The project includes 567 apartments.
Under the agreement, customers who buy apartments at
the Viva Riverside project will be lent up to 70 per cent of the apartment's
value.
Truong Thi Thuy Nga, Vietcombank's deputy general
director and director of Vietcombank's HCM City branch, said to implement
instructions of the government and the State Bank of Vietnam, Vietcombank
has, so far, lent money to individuals and enterprises at 52 industries and
sectors.
In the real estate industry, Vietcombank lent funds to
customers in HCM City, Da Nang and Ha Noi, she said.
Singapore-based PropertyGuru invests
in VN real estate portal
Asia's leading online property group PropertyGuru has
become a major stakeholder of Viet Nam's No 1 real estate portal batdongsan.com.vn.
The company is eyeing expansion in the rapidly growing
Southeast Asian market where it can promote Viet Nam's property products to
regional investors.
The financial terms of Singapore-based PropertyGuru's
strategic investment in batdongsan.com.vn were not disclosed at yesterday's
press conference, held in Ha Noi.
With support from PropertyGuru, batdongsan.com.vn
expected to improve access to a wide range of property information for
home-seekers and investors in both local and overseas markets as well as
contribute to the development of Việt Nam's realty market, Le Xuan Truong,
executive director of batdongsan.com.vn said.
Steve Melhuish, co-founder and CEO of PropertyGuru,
which acts as a platform for some US$15 billion in transactions annually with
footholds in nine markets, said that Viet Nam's rapid economic growth, fast
growing population and urbanisation, together with its policy of opening up
the market to foreigners had made real estate an exciting and attractive
market.
Under its strategic partnership with batdongsan.com.vn,
PropertyGuru expects to promote property products in Viet Nam to regional
investors, Melhuish said, adding that he saw increasing interest among
foreign investors in Viet Nam's realty market. In addition, PropertyGuru
enables Vietnamese investors to gain access to property information in other
Southeast Asian countries.
Batdongsan.com.vn, officially launched in 2008, has
developed into the country's leading real estate portal, drawing huge traffic
of nearly 50 page views per month and more than 2 million regular users.
Vinacomin's member plans for trading
on UPCoM
Vinacomin Viet Bac, a member of the Viet Nam National
Coal-Mineral Industries Holding Corporation Limited (Vinacomin), has
submitted its portfolio for listing on the Unlisted Public Company Market
(UPCoM).
Vinacomin Viet Bac plans to trade 105 million shares
and be coded as MVB on UPCoM. The company's largest shareholder is Vinacomin,
holding more than 98 per cent of the miner's charter capital.
Vinacomin Viet Bac mainly operates in examining,
exploiting, processing and producing, and trading products made of coal and
other minerals, as well as producing and selling cement and other
construction materials.
The company holds more than 50 per cent of capital in
nine other sub-units such as Tan Quang Cement JSC, and possesses a 29 per
cent beneficiary stake in an associate firm in trading construction
materials.
Exchanges, depository strengthen
co-operation
HCM City and Ha Noi stock exchanges and the Viet Nam
Securities Depository will strengthen co-operation to achieve strategic goals
for the domestic stock market over the next five years.
Officials from the three parties signed a memorandum of
understanding in HCM City last week.
The exchanges and the Depository will share information
related to the market, enterprises and investors, and jointly develop new
products and sets of indices.
The aim is to provide more secure operations for the
local markets, in line with international benchmarks.
State Securities Commission chairman Vu Bang said the
collaboration will help market operators improve services, which will help
enterprises and other market members operate more efficiently.
This will create a better environment for investors,
improve public confidence in the markets and sustain development, he said.
Late last week, officials from HCM City and the Ha Noi
exchanges also introduced VNX Allshare, a joint index to cover stock
developments on both bourses. It is scheduled to be launched on October 24
and will begin at 1,000 points.
Award ceremony held to honor farmers
using information and technology
An award ceremony was held in Ha Noi on Sunday for a
contest entitled "Farmers with information and technology".
The contest honored those farmers with basic electronic
skills, including using the Internet, sending and receiving electronic mail,
seeking to sell in the market, and using information and technology in
agricultural production and the breeding industry.
According to the organizing committee, the contest
provided a first prize of VND30 million, two second prizes of VND20 million
each, three third prizes worth VND10 million each, and 57 consolation prizes
of VND3 million.
Speaking at the ceremony, Lai Xuan Mon, Chairman of the
Vietnam Farmers Association (VFA), said the VFA always identified IT as a
critical tool that aimed to help farmers improve their production to meet the
requirements of global integration. Amid this global trend, farm produces in
Viet Nam have to fiercely compete. Integration brings with it both
opportunities and challenges. The biggest challenge is in the field of
agriculture, in planting crops and in raising livestock. If farmers do not
gain access to information and technology, as well as advanced methods of
production to produce high quality agricultural products, their products may
not be competitive in domestic and international markets.
The contest is expected to help farmers, who account
for 70 per cent of the nation's population, have an opportunity to learn how
to use information and technology to their advantage in production, in order
to increase productivity and product quality.
Through the contest, the organizing committee seeks to
send a message to 15 million farming families across the country that
Vietnam's agricultural products are facing fierce competition worldwide due
to the country joining the Trans-Pacific Partnership (TPP).
In many countries, the use of IT in agriculture has
taken great strength to liberalise and improve labour productivity for
farmers, while developing agriculture into highly-valued goods. Agriculture
with ICT applications, also known as "smart agriculture", is
becoming a new trend, changing ways of organising production and
significantly improving productivity, as well as the quality of agriculture
in many parts of the world, he said.
Foreign sector moves to takeover
Vietnam property market
Singapore-based PropertyGuru has announced the
acquisition of a controlling interest in Vietnam real estate portal
batdongsan.com.vn in a strategic move designed to take over the Vietnam real
estate sales market.
Financial and other detailed terms of the deal to
acquire batdongsan.com.vn were not disclosed at the presser on October 3 in
Hanoi announcing the acquisition, other than its clear PropertyGuru is acting
as a front agent for the yet undisclosed true purchaser(s).
The deal, said Le Xuan Truong, executive director of
batdongsan.com.vn, at the presser, is expected to improve access for the
company to a wide range of property information for the company’s domestic
and foreign customers.
It’s clear from what little is known about the
transaction that San Francisco, US based TPG Capital is fronting a
considerable chunk of the funds to close the deal as is Emtek based out of
Indonesia.
TPG Capital is one of the largest private equity
investment firms globally, focused on leveraged buyouts, growth capital and
leveraged recapitalization investments in distressed companies and turnaround
situations.
Vinafood 1 subsidiary selling 34 per
cent stake
Vinafood 1 Flourmill & Trade, a subsidiary of
state-owned Vietnam Northern Food Corporation (Vinafood 1), is selling 8.2
million shares, a 34 per cent stake.
The shares will be auctioned at the initial price of
VND10,000 (45 US cent) per share on October 28. Domestic and foreign
investors are invited to register and submit the deposit by October 21 to
participate in the event.
Vinafood 1 Flourmill & Trade produces and processes
food, flour, and related products and produces and trades animal feed
production materials. Vinafood 1 Flourmill & Trade expects its chartered
capital to reach VND242 billion ($10.85 million) after going public, of which
Vinafood 1 is going to hold 65 per cent, employees 0.99 per cent, and other
investors 34 per cent.
Vinafood 1 Flourmill & Trade earned a revenue of
VND252 billion ($11.3 million) and a net profit of VND894 million ($40,000)
in the first half of 2016. As of the end of June, 2016, its total assets
value was VND316 billion ($14.1 million). The company targeted to pay a
dividend of VND200 (0.8 US cent) per share in 2017. The figures for 2018 and
2019 are VND220 (0.9 US cent) and VND240 (1 US cent), respectively.
At the moment, the company holds land use rights over
three plots of land, all in three major cities in Vietnam. One is the
headquarter at 94 Luong Yen street, Hai Ba Trung district, Hanoi with an area
of 408.3 square metres, the second is a 20,842-square metre plant in Vinh
city, and lastly, the 19,805-square metre flour production facility in Hai An
district of Haiphong.
In 2015, Vinafood 1 Flourmill & Trade earned a
revenue of VND527 billion ($23.6 million), down 29 per cent on-year, and
incurred a loss of VND2.7 billion ($121,000) in light of a net profit of
VND143 million ($6,400) in 2014.
Parent company Vinafood 1 expects to sell a part to the
public in 2017.
MoIT refuses to move polyester
import tax
The Ministry of Industry and Trade (MoIT) has refused
Vietnam Textile and Apparel Association (Vitas)’s proposal to move the 2 per
cent import tax to zero per cent on polyester synthetic fibre products.
Previously, according to PVTex Dinh Vu Joint Stock
Company (PVTex)’s proposal, one of Vietnam’s largest polyester fibre and yarn
producers, the Ministry of Finance (MoF) issued Circular 131/2015/TT-BTC
dated August 27, 2015 changing the preferential import tax rate imposed on
polyester synthetic staple fibres to 2 per cent.
However, according to Vitas, the 2 per cent can not
help PVTex maintain its operations in the context of its recent financial
problems.
Thereby, Vitas requested the MoIT to propose the MoF to
move the preferential import tax rates imposed on polyester synthetic staple
fibres.
However, the MoIT decided to maintain the preferential
import tax rates until the end of this year. Representatives of the MoIT said
that the interdisciplinary working group is still working on a resolution to
PVTex’s difficulties and is building plans to resume the operation of the
factory’s polyester synthetic fibre manufacturing line.
According to the latest movement, Vietnam's state-run
oil and gas group PetroVietnam is seeking prime ministerial approval to sell
its entire 74 per cent (or at least a 38 per cent) stake in PVTex, due to its
recent string of losses.
PVTex started commercial operation in May 2014 with a
capacity of 236 tonnes of polyester fibre and yarn per day, equalling 48 per
cent of its designed capacity. However, the factory had to suspend operation
numerous times due to unsold products piling up.
New fund offers cheap loans for SMEs
Small and medium enterprises (SME) can now take out
cheap loans from the Small and Medium Enterprise Development Fund (SMEDF), a
SME financing arm of the Ministry of Planning and Investment.
Speaking to the Daily on the sidelines of a seminar on
finances for SMEs in HCMC last week, Hoang Thi Hong, SMEDF chairwoman, said
the fund was set up by the Government in 2013 but it had just come on stream
because it had taken time to devise an operating mechanism and establish a
workforce.
Since its debut in April this year SMEDF has picked
three banks -- Vietcombank, BIDV and HD Bank -- to represent it to lend to
SMEs in need. It has just begun receiving borrowing requests from SMEs.
Bui Hoang Tung at the supervision and risk management
department of SMEDF said SMEs could borrow a maximum of VND30 billion each
with a maximum term of seven years or up to 10 years, and an annual interest
rate of 5.5% for a tenor of less than 12 months and 7% for medium and long
tenors. The interest is fixed throughout the loan term and the borrower would
have not to pay a fine for premature loan repayments.
The three assigned banks are responsible for evaluating
all borrowing requests transferred from SMEDF, disbursing money, managing all
loans and receiving borrowing proposals on SMEDF’s behalf.
SMEDF, Hong noted, would pick more banks in the coming
time and in the future, finances would come from banks rather than the State
budget while banks would have the opportunity to gain access to a new target
group of clients that are SMEs.
“Our goal is to diversify funding sources for
enterprises,” she said.
SMEDF currently has four lending programs for SMEs. The
first is to lend to SMEs with innovations, the second to SMEs joining the
production, processing and storage chains for agricultural, forestry and
seafood sectors, the third to SMEs in supporting industries in the
electronics and engineering sectors, and the fourth to SMEs
participating in waste and wastewater treatment and management
activities.
More information about SMEDF can be found at
www.smedf.gov.vn.
US$100 billion needed for public
investments in 2016-2020
Vietnam will need VND2,000 trillion (nearly US$100
billion) to fund public investment projects in 2016-2020 amid the
increasingly tight State budget.
According to a General Statistics Office (GSO) report
released last week, budget revenues amounted to VND665.2 trillion in the
first nine months of this year, or 65.6% of the full-year plan, while budget
expenditures totaled VND819.4 trillion, 64.4% of the 2016 estimate. This
means overspending stood at VND154.6 trillion in the nine-month period.
The country used VND109.8 trillion to pay foreign debts
in January-September, representing 70.8% of the plan.
By mid-September, disbursements for basic construction
projects had reached 51% of the full-year estimate while disbursements from
Government bond sales had met 40% of the plan.
According to a conclusion signed by Deputy Prime
Minister Vuong Dinh Hue on the 2016-2020 public investment plan, foreign
capital and proceeds from lottery sales in provinces in this plan must be
adjusted to reduce the central Government’s financial allocations for
provinces.
Hue ordered the Minister of Planning and Investment to
work with the Minister of Finance over budget deficit in provinces and the
use of proceeds from lottery sales to finance transport, irrigation and other
key projects.
Priority must be given to major projects such as the
North-South Expressway, coastal roads, border patrol roads and those coping
with climate change, drought and salinity.
The two ministries are told to cooperate to give the
Government advice on how to use VND10 trillion from sales of State stakes in
2015 to supplement capital for investment projects next year.
Disbursements for development projects have made up
smaller proportions in the State budget in recent years while regular
expenditures have accounted for 72% of the budget and debt payments have
edged up.
Vietjet wants to upgrade Chu Lai
airport
Local budget carrier Vietjet is seeking Ministry of
Transport approval to invest VND20 trillion (US$896.8 million) to upgrade Chu
Lai airport in the central province of Quang Nam into a transit airport for
local and international flights.
In a report sent to the ministry last week, Vietjet
said Chu Lai is a potential airport as it has abundant land for more
development and is located in the heart of the central region, and between
the nation’s two biggest economic centers, Hanoi and HCMC, where there are
many large-scale projects.
The airport currently has weak infrastructure with only
one runway while its passenger and cargo terminals are in the same place with
total floor space of 3,360 square meters.
Therefore, Vietjet is keen to upgrade the airport in
three phases to meet its development demand.
The first phase would lengthen the runway to 3,250
meters and widen it to 65 meters from now until 2020.
It would build a passenger terminal with an annual
capacity of two million people, a cargo terminal for two cargo transport
firms and two hangars for aircraft maintenance and repair.
Lasting until 2025, the second stage would expand the
passenger and cargo terminals to raise its passenger capacity to four million
people per year and allow it to serve four cargo transport enterprises.
For the third phase after 2025, Vietjet would develop a
second runway which is 3,250 meters long and 65 meters wide in the east of
Chu Lai airport.
In this final stage, the airline would construct the
second passenger terminal which can handle four million passengers per year,
and construct a cargo terminal to fulfill the need for transporting goods in
Quang Nam Province and nearby areas.
The Civil Aviation Authority of Vietnam (CAAV) under
the transport ministry said Vietjet’s proposal matches the already-approved
master development plan for airports.
Deputy Minister Nguyen Nhat has asked the airline to
draw up an investment plan for the project and submit it to the CAAV before
reporting to the ministry in November.
Joint effort proposed to combat
transfer pricing
Different ministries would have to make a concerted
effort to fight transfer pricing to cope with lost budget revenues if the
Government approves a Finance Ministry-drafted decree .
According to the draft, which is available on the
website of the General Department of Taxation, the tax authority would need
cooperation from the State Bank of Vietnam, and the ministries of finance,
planning-investment, science-technology, and information-communications.
Good communication and exchange of information between
these agencies would make the fight against transfer pricing more effective.
For instance, the draft requires the central bank to
provide the Ministry of Finance with details about monetary transactions
between related legal entities with a business, such as account holder,
content of transaction and persons involved.
The central bank would also have to give the tax
authority information about loans which local companies get from foreign
enterprises within a company that transact with each other. That information
includes loan value, ceiling, interest, term, principle, disbursement and
paid interest.
Similarly, the Ministry of Planning and Investment
would have to provide and exchange information with the tax authority in a
probe into suspected signs of transfer pricing.
Whether the crackdown on transfer pricing is successful
or not would depend largely on the level of coordination between ministries
and government agencies, but such coordination has so far been lax.
This would become the first Government decree governing
transfer pricing if it comes out.
There are a couple of ministerial circulars regulating
transfer pricing, such as Circular 66/2010/TT-BTC of the Ministry of Finance
which provides ways to determine market prices of transactions between
divisions of a company, and Circular 201/2013/TT-BTC which governs advance
pricing agreement.
HCMC tax officials, however, said when reached by the
Daily that the two circulars do not comprehensively cover all aspects of
transfer pricing, so they do not provide a sufficient legal corridor for
battling transfer pricing.
Meanwhile, transfer pricing has become sophisticated,
especially at a time when mergers and acquisitions (M&A) are growing
strongly. In some transactions, tax officials said stake sellers report no
profit while the tax authority has no evidence to prove otherwise.
The General Department of Taxation has taken steps to
clamp down on transfer pricing to arrest a rise in lost budget revenues,
including setting up transfer pricing inspection offices in Hanoi, HCMC, Dong
Nai and Binh Duong where a lot of enterprises are suspected of transfer
pricing.
Rigorous inspections into suspected transfer pricing
cases have paid off, with some lost tax revenue recovered.
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR
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Thứ Ba, 4 tháng 10, 2016
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