BUSINESS IN BRIEF 8/2
Hoa Phat to build iron and steel production complex
The Dung Quat Economic Zone Authority (DEZA) and Quang Ngai Industrial Park Management Board on Monday granted an investment certificate for the Hoa Phat Dung Quat iron and steel production complex to the Hoa Phat Group.
Construction will resume on the Guang Lian Dung Quat steel project, which had its investment certificate revoked in early September. It will take up 372.7 hectares with a total investment capital of VND60 trillion (US$2.65 billion).
Of the area, nearly 340 ha will be used for building factory and 27 ha for building a specialized port.
The project was designed to have an annual capacity of four million tonnes of steel products, including steel for construction and rolled steel. It is expected to be completed in four years.
The project, divided into two phases, will be equipped with modern and environmentally-friendly technologies.
The annual capacity of the first phase will include one million tonnes of steel for construction and one million tonnes of high-quality rolled steel. The second phase is designed to produce two million tonnes of hot-rolled steel flat bar for machinery manufacturing.
Hoa Phat Group expects to earn US$2 billion in revenue per year and contribute VND4 trillion to the State budget after the project comes into operation.
An estimated 8,000 jobs will be created for local residents.
Speaking at the certificate granting ceremony, Chairman of Quang Ngai People’s Committee Tran Ngoc Cang said the province would create favourable conditions for investors to complete its investment.
Cang required the DEZA, management boards of IPs and authorities of Binh Son District to support the investor and solve arising problems if it occurred to help the investor carry out the project following its set progress.
The project will be conducted over 50 years. It is part of the plan to develop a steel production and distribution network from now to 2020 and in a vision to 2025 approved by the Ministry of Industry and Trade.
It was approved by the Prime Minister on January 25.
Export businesses sanguine, make frenetic start to 2017
After the Tet (the Lunar New Year) break, employees of Intimex Group Joint Stock Company are scrambling to fulfil export orders.
The company achieved export revenues of US$60 million last month and is expected to exceed the $100 million mark in the first two months of the year, much higher than in the same period last year.
Do Ha Nam, the company’s chairman and general director, said: “Orders to export rice to China are much higher compared to the same period last year. Meanwhile coffee export has entered the main season with many large contracts.
“Exports of rice and coffee may face difficulties this year, but the signals at the beginning of the year are rather positive.”
Pham Thai Binh, director of the Can Tho city-based Trung An Hi-Tech Farming JSC, a major rice exporter, said his company officially resumes work on February 6, but its staff began to work on the 31st to carry out export orders.
His company is rushing to fulfil two orders for high-grade rice from China and Malaysia, with 6,000 tonnes to be shipped to China, he said.
China and Malaysia are traditional customers, he said.
Though this year rice exports are set to face more difficulties due to a global glut, Trung An has set itself a target of 30 per cent export growth this year, with focus on high-grade rice products, he said.
The company has established a closed rice value chain from growing to exports and obtained certification from the International Federation of Organic Agriculture Movements, he added.
Tran Van Linh, chairman of Thuan Phuoc Seafood and Trading Corporation, said his company’s order book is full until the end of the first quarter.
It resumed work on February 2 to fulfil those orders, he said.
In the case of the garment and textile sector, many insiders forecast exports to be modest this year, but Garmex Sai Gon Joint Stock Company targets higher export growth than last year.
Le Quang Hung, its chairman, said the company achieved export revenues of nearly $6 million last month.
The US is the company’s key export market, accounting for 50 per cent of exports, he said, adding that Garmex Sai Gon is actively seeking new partners to expand its markets.
The US withdrawal from the Trans-Pacific Partnership trade deal is expected to affect Viet Nam’s export growth eventhough Viet Nam’s exports to the US climbed 15 per cent to $38.5 billion last year.
According to the Ministry of Industry and Trade, Viet Nam took advantage of many free trade agreements to boost exports last year.
The Viet Nam-Korea FTA, for instance, helped Viet Nam’s exports to South Korea rise by 29 per cent last year, it said.
It added it would step up trade promotion activities to help companies expand their export markets and increase exports to countries that have FTAs with Viet Nam.
National retail trade sales see increase in January
The total revenue from retail trade and services saw a year-on-year rise of 10 per cent, to US$15 billion in January, according to the General Statistics Office (GSO).
Excluding inflation, the amount marked a yearly increase of 6.7 per cent, GSO said.
Vu Manh Ha, a GSO statistician, attributed the strong growth in January’s retail trade to stable prices despite local people’s high consumption power in preparation for the Tet holiday and supermarkets’ sufficient sources of consumer goods for the country’s biggest festival.
Retail sales of goods, which accounted for more than three fourths of total sales, reached $11.5 billion in January, surging 6.5 per cent against the previous month and 11 per cent against the same period last year.
Several sectors recording a positive revenue increase included food and foodstuffs (up 13 per cent); textile and garments (up 11.5 per cent); transport services (up 11.2 per cent) and home appliances (up 7.8 per cent).
Meanwhile, retail sales in accommodation, restaurant and catering services, which made up 11.3 per cent of the total, topped more than $1.64 billion, representing a modest yearly rise of 3 per cent.
Some localities that posted encouraging accommodation, restaurant and catering retail sale growth included Ba Ria- Vung Tau with 12 per cent, Thanh Hoa (8.6 per cent); Kien Giang (7.4 per cent); Ha Noi (5.7 per cent) and Da Nang (5.2 per cent). Several others, however, witnessed a sales reduction, such as Quang Binh, down by 12.4 per cent and HCM City and Nam Dinh, down by 5.3 per cent.
In the first month of this year, revenue from tourism services also saw significant growth of 30.7 per cent to $155 million with some provinces and cities recording strong growth, such as HCM City and Ba Ria – Vung Tau (33 per cent) and Quang Ninh (23 per cent).
The reviewed strong increase was attributable to seasonal factors and a growing tendency of Vietnamese travelling abroad during the Tet holiday, GSO noted.
The sales of other services during the month reached over $1.67 billion, a hike of 9.3 per cent compared to a year ago.
Cost estimates for construction projects to be slashed
The estimated initial cost of State-funded construction projects in 26 provinces and cities could be cut as much as VND10.2 trillion (US$451.6 million) compared to early projections. The findings were made by the Ministry of Construction in a recently conducted cost review.
Reviews of 9,129 construction projects found that VND9.6 trillion ($424 million) could be trimmed from the total initial estimated cost of VND163 trillion ($7.2 billion). A review of an additional 1,369 construction projects scaled back another VND624.8 billion ($27.6 million).
Deputy Minister of Construction, Do Duc Duy, said the governing of construction investment has been undergoing positive reforms in line with the Law on Construction and related guiding documents, leading to a substantial boost in construction quality, loss and waste prevention, and improved efficiency of capital usage.
Generally speaking, Duy added, competent authorities have paid due attention to the evaluation of project planning, design and estimated cost. The more stringent evaluation processes are, the better the works’ quality and the fewer the risks, he said.
In 2017, the Ministry of Construction will step up the inspection of State management agencies in terms of their designated responsilities, as well as the adherence of entities involved in construction activities to laws and policies.
Over 20 million foreign investors granted trading codes
The Vietnam Securities Depository (VSD) granted trading codes to more than 20 million foreign investors by the end of January.
Of the total, 3,164 were institutional investors and 17,208 were individual investors.
In January alone, 113 foreign investors were granted trading codes, of which 12 were institutions and 101 were individuals.
In the period, VSD also approved information changes for 30 foreign investors (10 institutions and 20 individuals).
Province to attract significant capital to EZs, IPs
Central Thừa Thiên- Huế Province aims to attract 20 projects to its economic zones (EZs) and industrial parks (IPs) with total registered capital of some VNĐ6 trillion (US$264.3 million).
To this end, the province’s Economic Zone and Industrial Park Management Board will launch investment promotion programmes that focus on fostering partnership with investors having adequate financial resources in infrastructure, Nguyễn Quế, deputy head of the board, said.
According to Quế, currently, the board is working with major domestic firms, including FLC Group, VinGroup, Bitexco and Viglacera, and strengthening coordination with foreign partners, including JICA, KOICA and JETRO, in investment promotion.
For projects being implemented in the Chân Mây-Lăng Cô EZ, provincial authorities have been assisting in the construction process and in capital disbursement, including the second phase of the Lăng Cô Laguna, Minh Viễn Lăng Cô Resort, Wharf 3 at Chân Mây Port; infrastructure of Viglacera’s industrial park; Bitexco’s Lập An eco-tourism project; and infrastructure of Sài Gòn-Chân Mây industrial and non-tariff zone.
According to Nguyễn Văn Cao, chairman of Thừa Thiên- Huế People’s Committee, the province has implemented a number of measures to boost investment, such as improving investment and business environment and addressing issues in the aftermath of the sea environment incident that occurred last year.
In the future, Thừa Thiên Huế will also enhance the quality of business associations and trade organisations for better connectivity among enterprises. The province will invest over VNĐ2 trillion in socio-economic infrastructure and industry development programmes in 2017.
At the same time, this central province will also restructure its vocational training system and step up administrative reform, striving to conduct over 50 per cent of its administrative procedures online, and apply the one-door model at the provincial and district administration centres, thus raising the satisfaction rate for implementing administrative procedures among residents and businesses to over 80 per cent, Cao said.
Last year, local EZs and IPs attracted 14 projects with total investment of nearly VNĐ4.9 trillion, bringing the total number of projects located in their facilities to 140, worth over VNĐ63.7 trillion. Of the projects, 36 are run by foreign investors, with registered capital almost reaching VNĐ31.2 trillion.
SOEs told to improve information dissemination
A report by the Ministry of Planning and Investment has found that a number of State-owned enterprises (SOEs) failed to comply with regulations on disseminating information.
Just more than 38 per cent of 620 SOEs which were required to publish information under the Government’s Decree No 81/2015/NĐ-CP made public their information, but their dissemination was not adequate as requested, the report said.
Sectors with the most firms that failed to disseminate information included irrigation, forestry and lottery.
Member companies of giant SOEs also failed to publish information, such as five under the Việt Nam Oil and Gas Group, two under the Việt Nam National Chemical Group, six under the Việt Nam Coal-Mineral Industries Group and four under the Việt Nam Rubber Group.
The decree required firms to regularly make public nine reports, but on average, firms just announced four.
Deputy Prime Minister Vương Đình Huệ in October last year gave a push to the information dissemination of SOEs. Accordingly, the Ministry of Planning and Investment has been told to list companies which did not make public their reports as required and raise measures for handling.
US dollar devalued against dong
After rising against the Vietnamese currency ahead of Tet, the US dollar devalued against the dong on the first working day of the Lunar New Year.
On Monday, domestic commercial banks devalued the dollar against the dong by VND20-40 per dollar in comparison with the last weekend.
Vietcombank and Vietinbank quoted the dollar/dong exchange rate at VND22,565/22,635 for buying and selling, down VND20 and VND25, respectively.
Eximbank made a stronger cut by VND40 to list at VND22,520/22,620, while the cut at BIDV was VND30 to VND22,560/22,630.
The dollar strengthened against the dong ahead of Tet, during which time the demand for the dollar was high to meet payment and import requirements.
Resolution to improve business climate issued
The government issued Resolution No.19 on February 6 on tasks to improve the business climate and national competitiveness this year with a vision to 2020.
Vietnam is aiming to reach the level of ASEAN 4 countries (Singapore, Malaysia, Thailand and the Philippines) later this year in terms of business environment; become one of the top 70 and 80 countries in terms of start-ups and protection of minority investors, respectively; and among the top 30 countries listed by the World Bank in transparency and access to credit.
By 2020, the country also targets being among the top 40 countries ranked by the World Economic Forum in access to loans, achieving the average level of ASEAN 4 countries in competitiveness and that of ASEAN 5 (Malaysia, Vietnam, Indonesia, Thailand and the Philippines) in terms of the Global Innovation Index released by the World Intellectual Property Organisation.
On e-government, comprehensive reform will be conducted in telecommunications infrastructure, human capital and online service indexes, so that the country will be rated among the top 80 countries in the UN e-government ranking.
By the end of this year, most public services involving citizens and businesses will be launched at Level 3 and Level 4 which allows online payments and applications.
The government asked ministers and leaders of ministry-level agencies, government units, centrally-run municipal and provincial People’s Committees to devise action plans before February 28 to execute the resolution.
The Ministry of Planning and Investment was directed to work with the Ministries of Finance; Labour, Invalids and Social Affairs; and Vietnam Social Insurance to improve indexes on start-ups and investor protection, partly by cutting administrative procedures
It must also liaison with the Ministry of Justice and Government Office to build a decree on amendments and supplements to existing legal documents in order to clear business obstacles.
The Finance Ministry will adopt technological advances to manage imports-exports, and improve the efficiency of inspection at border gates and electronic customs clearance.
The Government asked the Vietnam Chamber of Commerce and Industry (VCCI), the Vietnam Lawyers’ Association, the Vietnam Bar Federation and business associations to conduct surveys on the implementation of administrative procedures and make relevant recommendations to the Government.
The VCCI will also work to improve the quality of the provincial competitiveness index (PCI) rating and collect feedback from the business community to report to the National Council on Sustainable Development and Competitiveness and the Government Office.
Municipal and provincial authorities were requested to launch one-stop shop models to simplify and shorten time for administrative procedures involving taxes and fees.
Construction ministry to finish equitising 16 big SOEs by 2020
The Ministry of Construction (MoC) plans to finish equitising 16 State-owned enterprises (SOEs) under its management by 2020.
The information was released by MoC Minister Pham Hong Ha at a working session in Hanoi on February 6 with relevant agencies on the re-organisation of SOEs and companies with State capital managed by the MoC.
The firms include Development Investment Construction JSC (DIC), Song Hong Corporation, Bach Dang Construction Corporation, VIGLACERA Corporation, Vietnam Water and Environment Investment Corporation (VIWASEEN), Hanoi Construction Corporation, LICOGI Corporation, LILAMA Corporation, Construction Corporation No.1 (CC1), FiCO Corporation, Vietnam Construction Consultant Corporation (VNCC), Construction Machinery Corporation (COMA), Housing and Urban Development Corporation (HUD), Song Da Corporation, Vietnam Urban and Industrial Zone Development Investment Corporation (IDICO), and Vietnam Cement Industry Corporation (VICEM).
Twelve of the companies have begun the equitisation process while four others (Song Da, IDICO, HUD and VICEM) were recently added to the list of SOEs subject to re-organisation between 2016 and 2020.
Minister Ha said these enterprises own a huge amount of assets while employing hundreds of thousands of workers.
The ministry proposed the rate of State capital at LICOGI be unchanged and the State-owned stake in the company be transferred to the State Capital Investment Corporation (SCIC) in the first quarter of 2017.
For LILAMA, VICEM, Song Da, VIGLACERA and HUD which are either holding a large amount of assets or are building key national projects, the rate of State capital will be reduced to 51 percent to ensure the State’s controlling stake there through 2020. The State stake in those five will be further reduced in the following years.
In the remaining ten corporations and joint stocks companies, the State-owned stake will be reduced to 36 percent which will be transferred to the SCIC or designated agencies to manage in 2018 and 2019.
Ha said the ministry will continue to instruct the divestment of State capital from affiliates and associated companies of its corporations in the next four years.
At the session, Deputy Prime Minister Vuong Dinh Hue, head of the Steering Committee for Enterprise Reform and Development, asked the MoC to complete a roadmap for divesting and transferring the right to represent State ownership at SOEs to fully protect the State’s interests.
He also instructed the MoC to bring the State stake in LILAMA, VICEM, Song Da, VIGLACERA and HUD to below 51 percent by 2019 by the latest, while the sale of all State capital in the other 10 corporations and joint stock companies should be completed in 2018.
Hue also requested the ministry accelerate the listing of equitised businesses in the stock market.
Phu Quoc develops hi-tech agriculture
Phu Quoc island district in the southern province of Kien Giang plans to develop hi-tech agriculture from now to 2020, with a vision towards 2030, to create clean, safe and high-value-added products.
The district aims to grow 2,500 hectares of vegetables by 2020, including 150-200 hectares using high technology in Cua Duong, Ham Ninh and Duong To communes.
It will also zone off areas to grow sweet potato, flowers and fruits and environmentally-friendly animal husbandry models, including raising 25,000 chickens in Cua Duong, Cua Can, Bai Thom and Ganh Dau communes by 2020.
Vice Chairman of the district’s People’s Committee Huynh Quang Hung said the district is also developing urban agriculture models.
He added that local authorities are encouraging economic sectors to invest in hi-tech agriculture.
The district will create favourable conditions for businesses, organisations and individuals to cooperate with partners in other cities and provinces such as Ho Chi Minh City, Lam Dong and Binh Duong, he said.
Located on the Vietnam-Cambodia-Thailand marine economic corridor, Phu Quoc district covers more than 593sq.km with a population of more than 100,000. Itcomprises 27 islands with Phu Quoc the largest.
Exports to India on upward trend
Vietnam exports to India in 2016 grew 8.7% to more than US$2.68 billion against the previous year, according to Vietnam Customs.
Vietnam-India total trade increased from US$1.01 billion in 2006 to around US$5.5 billion in 2016 while Vietnam exports to India jumped 19.34 times with an average growth of 253%.
2016 was the first year Vietnam enjoyed a trade surplus of US$70 million with India.
Structural changes have been seen in import and export trade. In the past, bilateral trade involved animal feed, corn and pharmaceuticals sectors only, with Vietnam was often the importer. However, the import-export business has been diversified, covering agricultural products, seafood, electronics, telephones, components, machines, equipment, pharmaceuticals, chemicals, garment, fibres and cars.
Most Vietnamese products exported to India obtained a growth last year. Telephones and components ranked first with an export value of US$379.15 million, followed by machines, equipment and tools (US$354.11 million) and base metal (US$238.94 million).
However, some export products saw a decline including rubber (down 0.4%), pepper (down 5.7%), confectionary and cereal products (down 51.6%), wood and timber products (down 47.2%) and plastics (down 34.4%).
WB: Prices of key Vietnam farm products forecast to surge
Prices of some of Vietnam's major agricultural goods are forecast to rise this year, according to the World Bank's (WB) Commodity Markets Outlook report.
The report, which provides detailed market analysis for major groups of commodities, releases price forecasts for 46 commodities until 2030.
Vietnam is the world's largest Robusta coffee grower, said the WB. The price of Robusta beans last year stood at US$2.08 a kilo but is expected to rise to US$2.32 this year but slightly drop to US$2.25 in 2019. By 2030, the price would decline to around US$1.66 a kilo.
For rice, the WB chose Thailand’s 5% broken rice as the benchmark for price forecasting. This type of rice this year is estimated at US$406 per ton, down from last year's US$422. The price would slip to below US$400 in the coming years and US$365 by 2030.
Thailand is the world’s leading rice exporter, so its rice prices are often referred to by importing countries to negotiate rice prices with exporting nations such as India, Pakistan and Vietnam. The Vietnam Food Association (VFA) has long given Thai rice price updates to member enterprises.
Regarding seafood, the WB forecast shrimp would rise to its highest price of US$12.65 per kilo this year before a steady fall in the coming years. Prices of agricultural materials including DAP and urea fertilizer are projected to edge down sharply in the years to come.
The price of rubber would surge in the coming years. RSS3 rubber could rise sharply to US$2.21 per kilo this year from US$1.71 last year. This level would remain above US$2 in the following years, and only at US$1.99 per ton in 2030.
The WB based its forecasts on 2010 prices.
Car sales forecast to slow this year
Vehicle sales are forecasted to drastically fall in 2017 as customers await lower prices in 2018 when tariffs on car imports from ASEAN countries will be fully removed.
Car prices in Vietnam are much higher than those in regional countries due to higher taxes. Currently, a vehicle which is produced in Thailand or Indonesia is priced at just VND250 million (USD11,360), however, it is sold at up to around VND600 million after being imported into Vietnam due to the country’s high taxes.
Following the ASEAN Trade in Goods Agreement, Vietnam will fully remove tariffs on imported cars from ASEAN countries from 2018. It is forecast that prices of vehicles worth less than VND1 billion will decrease sharply in 2018. The price of a current VND600-million car will decrease to VND400-450 million in 2018.
This will probably mean lower car sales this year.
Minoru Kato, General Director of Honda Vietnam, said that 2017 would be a tough time for car manufacturers. The Vietnam Automobile Manufacturers' Association believe the Vietnamese car market would see growth of 10% compared to 2016.
However, many people said that the prices of ASEAN-imported autos will not fall as expected in 2018 as the government would increase special consumption and value-added taxes to cover the car import tariff removal. This is also aimed to protect the domestic car industry.
Regarding this concern, lots of other people still believed that ASEAN-imported car prices in Vietnam would be much slashed in 2018 despite the government’s tax increases. At least USD3,000 worth taxes are raised for each vehicle imported from ASEAN countries so prices in 2018 could be as high as they are now.
Viet Tien Garment recorded high profits
Viet Tien Garment Joint Stock Corporation has recorded high profits since its equitization, up 59 per cent compared to its target set for 2016.
Viet Tien JSC has announced its financial report for the fourth quarter and for all of 2016. The company’s net revenue for the fourth quarter was over VND1.8 trillion ($79.2 million), up 11 per cent compared to the same period of last year.
Its pre-tax profit stood at VND143.7 billion ($6.3 million) and its profit after tax was VND119.3 billion ($5.2 million) for the fourth quarter, up 53 per cent year-on-year.
For all of 2016, the company’s net revenue reached over VND7.5 trillion ($330 million), up 17 per cent year-on-year and 12 per cent compared to its target.
The corporation’s pre-tax profit reached VND485 billion ($21.3 million), up 18 per cent year-on-year and 59 per cent compared to its target. Its profit after tax reached VND402.4 billion ($17.7 million), of which the parent company’s profit accounted for VND380 billion ($16.7 million).
By the end of 2016, the total assets of the corporation had increased from VND420 billion ($18.4 million) to VND3.8 trillion ($167.2 million).
Viet Tien Garment listed 28 million shares on UPCoM on March 10, 2016. The corporation has four subsidiaries: Thuan Tien Garment Ltd (where it holds 82.5 per cent of charter capital), Tien Thuan Garment Ltd (85.9 per cent), Nam Thien Ltd (83.6 per cent), and Viet Tien Meko Ltd (51 per cent).
Vietnam’s textile and garment exports have failed to reach the targeted $29 billion in export turnover that was set for 2016.
Export turnover is estimated at $28.5 billion, up 5.4 per cent year-on-year, according to Mr. Le Tien Truong, CEO of the Vietnam National Textile and Garment Group and Chairman of the Vietnam Textile and Apparel Association. However, it’s just short of the $29 billion target for the year, which was previously $30-$31 billion. “Growth is at its lowest since 2010,” Mr. Truong told VET, “but growth in absolute value was higher than in previous years.”
The decline stems from difficulties in global markets. Total global demand in 2016 did not increase and key markets for Vietnam’s major imports fell. In the US they fell by 4.5 per cent and in the EU by 3 per cent. Only Japan had an increase with more than 1 per cent.
Vietnam’s textile and garment sector was to be a major beneficiary of the TPP, but the future of the trade deal is now uncertain. This has raised concerns among some enterprises but many others believe that they will benefit with or without the TPP.
Exports to the US and Japan are still on the increase, at $11 billion and $3.5 billion, respectively. “Even without the TPP, Vietnam’s textile exports are still on track,” Mr. Truong said. “Vietnam also has other free trade agreements with the EU, South Korea and Japan, which are expected to bring benefits to textile and garment enterprises.”
JUMBO Seafood outlets to open in Vietnam
JUMBO Group Limited (JUMBO), one of Singapore’s leading multi-dining food and beverage (“F&B”) establishments, announced that it had entered its first franchise agreement to bring JUMBO Seafood to Vietnam.
The franchise agreement was inked by JUMBO’s wholly owned subsidiary, JUMBO Group of Restaurants Pte Ltd., and Nova Bac Nam 79 Joint Stock Company for rights to operate JUMBO Seafood restaurants in Ho Chi Minh City and Danang.
Plans are in the pipeline to open 3 JUMBO Seafood outlets in Ho Chi Minh City and Danang over the next 2 years, the first of which is expected to open in Ho Chi Minh City in mid-2017.
Mr. Ang Kiam Meng, CEO and Executive Chairman, said: “We are excited to bring our iconic JUMBO Seafood brand to Vietnam. With JUMBO Seafood’s strong brand name, we aim to tap the potential demand for quality Singaporean seafood in the Vietnamese market together with our franchise partner.
This first franchise agreement for the JUMBO Seafood brand also marks a key milestone for the group and is in line with the group’s strategy to pursue franchising opportunities to diversify and grow our business offerings and geographic markets,” added Mr. Ang.
The agreement is for an initial term of 10 years, which may be renewed for a further 10 years subject to certain conditions.
The group currently owns and operates 5 JUMBO Seafood outlets in Singapore, and 3 JUMBO Seafood outlets in Shanghai, China. Meanwhile, the Group is also growing its Singapore-based business presence, with the opening of a new NG AH SIO Bak Kut Teh outlet at the Food Village (Takashimaya Food Court) in Ngee Ann City. This brings the total number of NG AH SIO Bak Kut Teh outlets in Singapore to 6.
VN exporters need to prove no harm to U.S. shrimp industry
The domestic shrimp sector must prove they are causing no injury for American shrimp farmers if it wants the U.S. government to revoke the anti-dumping duty on frozen warmwater shrimp imports from Vietnam.
This recommendation was made by General Secretary Truong Dinh Hoe of the Vietnam Association of Seafood Exporters and Producers (VASEP) in a talk with the Daily. The U.S. Department of Commerce (DOC) in a conclusion on the second sunset review on the anti-dumping tariff for frozen warmwater shrimp decided to continue imposing the duty on imports from Vietnam.
The final results of this sunset review are expected to come out this May, Hoe said.
Pending a final say by the International Trade Commission (ITC), the anti-dumping duty will continue to be levied as in the previous administrative reviews. “This procedure is carried out every five years to see if Vietnam’s shrimp exports to the U.S. cause injury for the American shrimp industry and if they don't, the U.S. government will lift their anti-dumping duty,” said Hoe.
In case imports from Vietnam threaten the U.S. shrimp farming industry, the anti-dumping tariff would continue to be in place as in the past 10 years.
The annual administrative review is to determine an official dumping margin for each particular business.
VASEP last Friday said the DOC in September 2016 published a final conclusion on the tenth administrative review (POR10) on shrimp imports from Vietnam in the period from February 1, 2014 to January 31, 2015.
As a result, Minh Phu Seafood Corp. is exempt from the duty as in a number of the previous reviews, although the March 2016 preliminary results showed this firm would be subject to a duty of 2.86%.
The voluntary rate for 31 other shrimp exporters of Vietnam is 4.78%, up 0.91 of a percentage point over the previous preliminary results. Stapimex faces 4.78%, unchanged from the preliminary results.
Meanwhile, the preliminary tariffs during POR11 published in November 2016 for shipments from February 1, 2015 to January 31, 2016 are essentially the same as in POR10. A duty of as high as 25.75% is imposed on those importers not participating in the review.
Preferential interest rates offered to lure homebuyers
A couple of realty developers have launched programs in which their customers can take out home loans with annual interest rates of 5-6% even though the Government-endorsed VND30-trillion credit package ended last year.
Hai Phat Investment JSC, the investor of The Vesta project, has started a program for 2017 to enable its clients to buy budget homes with an annual interest rate of 5% and the term of a loan can last up to 15 years.
Purchasers of The Vesta homes, which cost VND13.5 million (some US$597) per square meter or above, can take out loans equivalent to 50% of the value of a house with a fixed annual rate of 5% in 15 years.
Since the end of last year Hoang Quan Consulting-Trading-Service Real Estate Corporation has helped customers buy homes at projects where it is the investor or a shareholder.
The company will cover the difference if the interest rate at commercial banks is higher than 6%. Hoang Quan said this program would be in place until a new financing mechanism under the Government’s Decree 100/2015/ND-CP on development and management of budget homes is out.
Hoang Quan has estimated that around 5,000 homebuyers would benefit from the program with disbursements of a combined over VND2 trillion. It said it would have to pay the interest rate difference totaling VND60-80 billion a year.
The VND30-trillion home loan program ended in June last year.
The Prime Minister then signed Decision 1013 on June 6, 2016 ordering the Vietnam Bank for Social Policies to apply an annual rate of 4.8% to social housing loans until the end of the same year. However, no homebuyers could take out such preferential loans last year.
According to the Government’s Decision 48 dated January 13, 2017, credit institutions shall apply an annual interest rate of 5% to loans for low-cost homebuyers this year with the lending term of at least 15 years.
Low-income people in cities and those benefiting from State support need such cheap loans.
Ministry looks to larger housing area per capita
The Ministry of Construction has set a target of increasing the average housing area nationwide to 23.4 square meters per person this year from 22.8 square meters in 2016.
To realize the target, the ministry said it will speed up housing developments with a focus on social home projects as part of the national strategy to better meet demand of residents.
The ministry will improve its controls over zoning and use of available land in urban areas for social housing development as well as the quality of such homes and relevant infrastructure.
In 2016, some 500,000 square meters of social housing was developed in urban areas, bringing the total area for this purpose to 3.3 million square meters. However, the ministry said social housing supply has yet to meet demand, supporting programs for social housing projects have been executed slower than scheduled, and funding has remained inadequate for those projects.
Supporting policies for housing projects have not produced as good results as expected due to tight budget and many investors have not been interested in this segment because of low profit and of a lack of workable measures and cleared land.
The Prime Minister signed Directive 03/CT-TTg ordering ministries, agencies and localities to support social housing projects so as to help achieve the targets in the national housing development strategy until 2020 with a vision towards 2030.
The PM told local authorities to create favorable conditions for investors of social housing projects in terms of land and administrative procedures, especially those for workers in economic zones and industrial parks. Provinces and cities were urged to review and adjust the zoning plans for industrial parks in a view to setting aside more land for social housing development.
Vietnam urged to spur trade facilitation
Vietnam needs to speed up trade facilitation by improving logistical services and shortening the time of goods transport, according to Herb Cochran, executive director of the American Chamber of Commerce (AmCham) in HCMC.
At present, it is time consuming to transport goods as it takes at least 15-16 days to carry goods from the U.S. to Vietnam and Vietnamese customs clearance procedures require an additional 21 days.
Vietnam and the U.S. are expecting a time reduction to 48 hours in 2018 and a commercial fee cut by 20% for exporters and importers. The two sides have struck a trade facilitation agreement but it is not easy to put the deal on fast track.
Vietnam should make full use of trade facilitation to prop up exports, instead of looking to the Trans-Pacific Partnership trade agreement. Late last month, U.S. President Donald Trump signed an executive order formally withdrawing the U.S. from the multinational trade deal, which was signed by the U.S., Vietnam and 10 other Pacific Rim nations in New Zealand in February last year.
Vu Thanh Tu Anh at Fulbright Vietnam University said at a recent event that Vietnam should embrace reforms whether there is the TPP trade deal or not as reform pressure is mounting due to widening budget deficit, swelling public debt, population aging, low labor productivity and climate change. The country should manage to weather the impact of uncertainties for the world economy.
The Vietnamese Government has take measures to support businesses, improve growth quality and productivity, boost renovation and innovation, and achieve sustainable growth. The Government has pledged not to attain growth targets at any cost.
Anh called for domestic enterprises to keep a close eye on the current situation and adopt appropriate measures to pull themselves out of troubled times.
Vietcombank honoured by Global Finance magazine
The Bank for Foreign Trade of Vietnam (Vietcombank) is named among the 55 country winners of Best Treasury and Cash Management Banks and Providers by the Global Finance magazine, announced a representative of the bank on February 7.
Global Finance has recently released the rankings for its 17th annual Best Treasury and Cash Management Banks and Providers by category, region and by country.
A variety of subjective and objective criteria were considered, including: profitability, market share and reach, customer service, competitive pricing, product innovation and the extent to which treasury and cash management providers have successfully differentiated themselves from their competitors around core service provision.
A multi-tiered assessment process was used, which included a readers’ poll, input from industry analysts, corporate executives, technology experts and independent research, to select the best providers of treasury and cash management services.
Vietcombank’s goal is to become Number 1 bank in Vietnam in 2020 and among the world’s 300 largest banking financial groups managed by best international practices.
The bank is included in the list of the world’s 500 leading brands of the Brand Finance, an independent branded business valuation and strategy consultancy. It is also the first and only bank in Vietnam voted among Top 500 world leading banks by The Asian Banker.
Dak Lak moves to foster coffee processing industry
The Central Highlands province of Dak Lak plans to raise the rate of processed coffee products such as powder coffee and instant coffee to 15 percent of the local coffee bean output by 2020.
It expects to increase the rate to 20-30 percent by 2030 to improve the added value of products from coffee – the biggest foreign currency earner in Dak Lak, according to Chairman of the provincial People’s Committee Pham Ngoc Nghi.
To that end, the province has moved to create a favourable investment climate for both domestic and foreign businesses, particularly those specialising in roasting and grinding, to attract investment in processing factories.
The provincial authorities plan to assist coffee processors in applying advanced post-harvest and processing techniques, as well as modern corporate governance process. The province also offers support to organisations, enterprises and cooperatives to build brands, trademarks or geographical indications for processed coffee products, Nghi said.
Dak Lak has nearly 204,000 hectares of coffee and produces at least 450,000 tonnes of coffee beans each year – the biggest area and output of coffee in Vietnam. However, there are only 145 processing facilities in the province with combined design capacity of over 32,100 tonnes, accounting for 5.55 percent of the local coffee bean output.
In 2016, Dak Lak produced only 28,000 tonnes of processed coffee products, including 23,000 tonnes of powder coffee and 5,000 tonnes of instant coffee. It exported 4,520 tonnes of instant coffee, making up 2.3 percent of total coffee bean export volume, bringing home more than 26.8 million USD which accounted for 7.5 percent of the province’s coffee export revenue. The remaining processed coffee was sold in the domestic market.
Nghi acknowledged that most locally-based processing companies are private firms whose market access and product advertising capacity remains modest. Meanwhile, local policies are not attractive enough to persuade Vietnamese and foreign enterprises to invest in coffee processing plants.
Newly-established firms register high capital in January
Up to 8,990 firms were established nationwide with a total registered capital of 90.3 trillion VND (3.92 billion USD) in January, up 8.1 percent in number and 52.3 percent in capital value, according to the General Statistics Office.
The total amount of registered and additional capital hit 204.9 trillion VND (8.9 billion USD) during the month, it said.
The new firms operating in arts and entertainment saw a 2.4 percent rise in number and a 65.8 percent surge in registered capital.
Up to 5,564 firms resumed their operations in the month, up 14.2 percent year-on-year.
Meanwhile, 1,583 enterprises completed dissolution procedures, marking an 18.3 percent increase from 2016’s January. As many as 13,289 others halted their operations, up 6.7 percent against the same period last year.
A representative from the Ministry of Planning and Investment’s Business Registration Management Agency said most of them registered a term halt and will return to their business later.
The number of firms which temporarily stopped working or awaited dissolution fell year-on-year, including those operating in agro-forestry-fisheries (down 54.3 percent), lodging and catering services (down 38.4 percent), mining (37.5 percent), transport and warehouse (30.8 percent), and construction (28.3 percent).
Vietnam enjoys increasing trade surplus with Canada
Vietnam enjoyed a trade surplus of nearly 3.089 billion USD with Canada as of the end of November, 2016, an increase of 24.6 percent against the same time in 2015, according to Statistics Canada.
In the period, the two-way trade value reached 3.826 billion USD, a year-on-year increase of 10.6 percent. It comprised Vietnam’s exports worth 3.457 billion USD, up 16.4 percent and its import value of 368 million USD, a drop of 25 percent.
According to Hoang Anh Dung, Vietnam's commercial counsellor in Canada, Vietnam leads the ASEAN nations in export value to Canada.
It was followed by Thailand with 2.17 billion USD, a drop of 3.2 percent; Malaysia with 1.789 billion USD, down 7 percent; Indonesia with 1.134 billion USD, down 7.6 percent; the Philippines with 934 million USD, down 9.8 percent; and Singapore with 666 million USD, down 3.5 percent.
Canada spent 1.174 billion USD on Vietnam’s electronic products and accessories, up 56.5 percent; 355 million USD on footwear, up 15.5 percent; 108 million USD on sportswear, up 25 percent; and 54 million USD on children toys, up 24 percent, among others.
Among Vietnam’s export goods, mobile phone recorded the highest increase by 67.9 percent, to 827 million USD.
HDBank becomes successful case in VN’s bank restructuring
HDBank continuously posted record high profit in 2016, making it the most successful case in the country’s bank restructuring.
The bank’s pre-tax profit in 2016 surged by up to nearly 63 per cent against the previous year to VNĐ1.282 trillion (US$51.9 million).
For the past three consecutive years, HDBank made high profits following a merger with DaiABank and the acquisition of Société Générale Viet Finance (SGVF) a few years ago.
The bank’s total assets by the end of 2016 doubled against 2014 to more than VNĐ152 trillion. Its non-performing loan ratio was also controlled at 1.65 per cent.
The bank’s representatives attributed the success to its merger with a good bank and effective business strategies, including the acquisition of a finance company.
Following the merger with DaiABank, HDBank has become a medium-sized bank, with total assets of some VNĐ70 trillion and a network of 220 counters.
Right after the merger, HDBank also successfully set up effective business strategies with the acquisition of a foreign wholly-owned finance company and then co-operated with a Japanese partner to boost a finance company called HD Saison that currently has more than 6,000 counters nationwide.
The HD Saison finance company enabled HDBank to earn profits of VNĐ175 billion in 2014, VNĐ280 billion in 2015 and more than VNĐ440 billion in 2016.
Owing to the good business performance, the State Bank of Việt Nam allowed HDBank to pay dividends of 5 per cent in 2014 and 10 per cent in 2015.
In 2017, HDBank has targeted increasing total assets to VNĐ193.3 trillion and profit to VNĐ1.64 trillion. It also expects to lower bad debt ratio to 1.5 per cent.
Ha Noi attracts $366m investment in January
Ha Noi has presented investment licences for 43 new projects with total registered capital of US$31.7 million, the municipal Department of Planning and Investment said.
The city has also adjusted the investment plan of 15 current on-going projects, raising their investment capital to over $334 million, and bringing total investment capital into Hà Nội during January to nearly $366 million.
Also in January, the city granted business registration certificates for 1,414 newly-established enterprises with registered capital of VND13.1 trillion ($580 million), bringing the total number of businesses operating in the city to over 209,500 firms.
Ha Noi has set Gross Regional Domestic Product (GRDP) growth targets of 8.5 to 9.0 per cent for 2017.
To achieve these targets, the city will focus on some key tasks including economic development. Ha Noi will implement measures to improve competitiveness and its provincial competitiveness index (PCI), improving the business and investment environment, and encouraging entrepreneurship and enterprise development.
Ha Noi will also focus on innovation and improvements in market forecast management quality, strengthening trade promotion and boosting exports while enhancing investment promotion, and mobilising domestic and overseas resources for development.
Chairman of Ha Noi People’s Committee, Nguyen Duc Chung, has assigned relevant agencies to urgently study and propose specific measures to attract investment to the city, before submitting them to the Prime Minister for consideration and preparing for the Investment Promotion Conference in Ha Noi to be held in April.