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BUSINESS IN BRIEF 13/5
Louis
Vuitton opens new store in Hanoi
Louis
Vuitton continues its journey in
While
staying true to the Malletier’s heritage of travel culture, craftsmanship,
creativity and innovations, this opening will also be the first store in
“Louis
Vuitton opened its first store in
The
Trang Tien store is the latest example of Louis Vuitton’s vision of
transforming store visits into inspiring journeys of discovery through three
different universes which will no doubt appeal to the city’s trendy and
fashionable crowd.
Since
1854, Louis Vuitton has accompanied the world’s most celebrated travelers,
defining, with each expertly conceived and painstakingly crafted creation, an
art de voyager. To celebrate the opening of the Trang Tien store, the Louis
Vuitton’s new four-wheel trolley “Zephyr”, together with the other new travel
products, will be in the spotlight to stay true to the Maison’s heritage of
leather craftsmanship, combining respect for tradition with daring modernity.
The
key highlight of this store is the exclusive "Made to Order” (Haute
Maroquinerie) Salon, a private space cladded in a contrasting bronze colored
silk fabric in which clients will be able to create their personalised Louis
Vuitton bag. Here, they will receive a unique experience to first select from
five different shapes; two most notable are the lockit, originally designed
in 1958 and the Milaris, a newly created shape. They then choose from eight
types of leather, twenty-six colours and two finishes for their bag, before
their uniquely personalized bag is made in the House's workshops in Asnieres.
The Trang Tien store is the only Louis Vuitton store in
Textile
shareholders break out the champagne
Textile
and garment sector shareholders are happy with a solid dividend payment amid
continuing economic hardships.
When
shareholders of many building material production companies were disappointed
with firms’ low business efficiency and their inability to meet dividend
payments, those at many textile garment firms were happy with these firms’
upbeat business results and high dividend payments.
Ho Chi
Minh City-based Viet Tien Garment Joint Stock Corporation offered
shareholders 25 per cent dividend rate in 2012 when the company reported
VND3.851 trillion ($476 million) revenue, surging 15 per cent on-year and
pre-tax profits VND170 billion ($8.1 million), up 13 per cent.
In the
north, Hanoi-based Garment 10 Joint Stock Corporation gave shareholders
relatively high dividend at 18 per cent.
Last
year, Garment 10 reaped VND1.503 trillion ($71.5 million) revenue, up 24 per
cent on-year and pre-tax profits over VND37 billion ($1.7 million).
Labourers’ incomes averaged VND5 million ($238) per month.
With
around VND2 trillion ($96 million) in revenue, up 19 per cent and pre-tax
profits of VND55.4 billion ($2.6 million), up 5 per cent on-year, Hoa Tho
Textile Garment Joint Stock Corporation, based in central Danang, paid 20 per
cent dividend in cash to shareholders.
According
to a Hanoi-based Textile Finance JSC (TFC) source, 2012 was a challenging
year for credit organisations and the banking system. Despite TFC only
achieving 86.7 per cent of the year’s plan the company still offered
shareholders a 9 per cent dividend which was still higher than current
ceiling deposit rate 7.5 per cent, per year.
In
2013, though the sector’s major export markets like the
For
instance, Viet Tien Garment set a minimal dividend rate of 20 per cent.
“With
a stable output market and customer base and big production capacity from 22
subsidiaries and affiliates, the target is within our reach,” said the
company’s general director Bui Van Tien.
Tien
said Viet Tien Garment would apply consistent measures to save costs, boost
labour productivity and improve environmental standards.
Besides,
the company is contemplating shifting production from the city to other
locations with favourable development conditions. One pivotal project is that
involving building Tan Thanh Tien garment complex in southern Ben Tre
province with more than 20,000 labourers.
The
project aims to take advantages of EU’s free trade agreement (FTA) or in the
near future the Trans-Pacific Economic Partnership Agreement (TPP).
As for
Garco 10, this year the company set a 12 per cent hike in revenue target to
reach VND1.688 trillion ($80.3 million), VND39 billion ($1.8 million) pre-tax
profits and 17 per cent dividend though additional costs were forecast at
VN56.5 billion ($2.7 million) due to rising input costs, according to the
company’s general director Nguyen Thi Thanh Huyen.
Hoa
Tho Textile Garment reportedly set a VND2.3 trillion ($109 million) revenue
target, a VND55 billion ($2.6 million) pre-tax profit and 20 per cent
dividend in cash and bonus shares.
TFC’s
2013 general shareholder meeting had approved business targets with VND190
billion ($9 million) revenue, VND90 billion ($4.3 million) pre-tax profits,
18 per cent return-on-equity (ROE) rate and 11.5-12 per cent dividend rate.
Customs
posts low tax revenues
The
local customs sector collected an estimated VND56.3 trillion from import and
export taxes as of the end of last month, shrinking over 5% from the same
period last year, though the total import and export value rose 17.5%.
As the
tax revenue is only equal to 23.7% of the year’s target, the customs has
adopted many measures to avoid tax revenue losses such as inspections after
customs clearance to fight fraud and boost anti-smuggling activity.
As per
a report of the General Department of Customs released last Friday, the
January-April revenue mentioned above is comprised of some VND19 trillion of
import-export taxes and special consumption and environment taxes and about
VND37.1 trillion of value-added taxes among others.
In
April alone, customs tax revenues were around VND15.5 trillion.
According
to the general customs department, the total import and export value of goods
amounted to nearly US$$79.65 billion in the first four months of the year, up
17.5% year-on-year, with export value increasing 16.9% and import spending
surging 18% year-on-year.
According
to the target assigned by the National Assembly, the Government and the
Ministry of Finance, the customs in 2013 is to collect VND237.5 trillion,
including some VND81 trillion of import and export taxes, special consumption
taxes and environmental taxes, and roughly VND156.4 trillion of value-added
tax.
The
customs forecast the nation’s tax collection targets to face difficulties in
the current gloomy global and local economic situations. The industry therefore
has resorted to several solutions to fulfill State budget revenues.
Specially,
to avoid tax losses, local customs agencies have been told to enhance
post-clearance inspections.
Also,
the industry finds it necessary to concentrate on fighting smuggling and
commercial fraud.
TKV
bemoans meager profits in coal export
The
local coal industry exported 5.2 million tons of coal in January-April or a
year-on-year growth of 16.4% but posted poor profits due to the export price
falling almost on par with the production cost.
Speaking
with the Daily on Tuesday, Bui Van Khich, deputy general director of Vietnam
Coal and Mineral Industries Group (TKV), said coal export prices have fallen
30-40% year-on-year, which are almost equivalent to production costs at present.
Local
coal products are mainly exported to
Prices
of coal exported to the above importers stay at only US$65-68 a ton, Khich
said, adding low-quality coal shipments for the Chinese market sell for
around US$65 a ton, shrinking some US$20 over the same period in 2012.
It is
impossible for TKV to reduce export prices to compete with other foreign coal
suppliers in the Chinese market as the current prices are equal to production
costs plus an export tariff of 10%.
Coal
output reached 14.92 million tons in the first four months of the year,
declining 2.6% over the year-ago period. Meanwhile, coal inventories had
amounted to some 5.9 million tons as of the end of last month, up one million
tons against a month earlier.
Despite
the shrinking profit margin, TKV still has to boost export of low-quality
coal for which local demand is low. In fact, exporting poor-quality coal is
aimed at having funds for importing higher-quality coal products in need at
home, according to TKV.
According
to the Ministry of Industry and Trade, coal exports are facing difficulties
due to price falls and slackened demand on global markets. At the moment, the
proportion of open-cast coal in the total volume is falling, thus pushing up
the overall production costs.
TKV
sold 45.5 million tons of coal in 2012, surging one million tons from one
year earlier, with local consumption of about 32 million tons and exports of
roughly 13.5 million tons.
TienPhong
Bank,
TienPhong
Bank and FPT City Danang Joint Stock Corporation have struck a strategic
cooperation agreement to provide financial products and services for
customers, including soft loans for buyers of
The
bank will offer home loan rates that are one to two percentage points lower
than normal levels, and other products and services for clients of
Customers
of this project are able to pay less than VND10 million a month over a period
of three to 10 years. The bank and the investor will apply preferential
interest rates and a grace period of 24 months for these loans.
Ministry
backs SBV’s gold imports, exports
The
Ministry of Finance has completed a draft government decision on giving tax
exemptions to raw gold exports and imports conducted by the State Bank of
Vietnam (SBV), which is seen as a move to legalize such activities of the
central bank.
However,
the regulations go against current tax policies imposed on gold.
According
to Government Decree No. 87 guiding the implementation of the Law on Import
and Export Tax, gold imported for processing for customers abroad is exempted
from import duty and processed products exported back to foreign parties are
also exempted from export duty. Gold imported for production and export is
also not subject to these tariffs.
For
the remaining cases, material gold with purity under 99.99% is subject to an
export tariff of 10% while that with purity above 99.99% enjoys a zero tax
rate but gold content evaluation certificates are required.
The
central bank has taken sole responsibility for gold bar production and export
and import of raw gold under Government Decree No. 24. The decree stipulates
that SBV’s raw gold exports and imports will be exempted from duties given
the Prime Minister’s decision.
While
the decision has not been issued, the Finance Ministry has asked for
permission to give tax exemptions to raw gold imports and exports carried out
by the central bank and this proposal has been approved.
Therefore,
the ministry has given guidelines to tax exemptions for gold bar and bullion
exports and imports mandated by SBV from February 4 to March 31. Since
April 1, SBV has stopped assigning credit institutions to export and import
gold and directly conducted raw gold imports and exports.
The
Prime Minister’s decision and the Finance Ministry’s move aim to intervene
and stabilize the gold market. However, the gold market has seen many
uncertainties while the gap between local and world gold prices has widened.
Banks
paid out VND300 trillion savings interest
Banks
paid savings interest of over VND300 trillion last year, and are now burdened
with several other costs, including a considerable risk provision.
Thus,
their profits are not as high as predicted, said Pham Xuan Hoe, deputy head
of the Monetary Policy Department under the State Bank of Vietnam (SBV).
He was
talking to the Daily on the sidelines of a conference on bank credit for
economic growth held in
Citing
State Capital Investment Corp. (SCIC) as an example, he said this firm earned
around VND1.5 trillion every year from VND19.5 trillion in its savings
account.
Besides,
most insurance companies entrust banks with their money because fund
management companies are underdeveloped in
Still,
the overwhelming part of the aforesaid interest sum, or more than VND280
trillion, was paid to corporate and individual depositors, said Hoe.
In
addition, banks have to bear several other costs, like product development,
labor, depreciation and especially risk provision. In 2012, they made a total
provision of about VND68 trillion and in the first quarter, they added some
VND4.3 trillion.
A
survey of the 102 banks that reaped profits last year reveals their profits
dropped more than 30% against 2011. Meanwhile, 22 banks incurred losses which
were seven times bigger than the figures in the preceding year, said Hoe.
Regarding
lending rates, he affirmed lending rate cuts only affect enterprises’
decisions on whether to take out loans or not, they did not affect credit
growth.
Consumption
has kept on shrinking, leading to a production slowdown and eventually lower
needs for credit. Citing the steel industry as an example, steelmakers are
suffering poor sales as domestic supply far exceeds demand, and thus they do
not need to borrow loans, he said.
“Obviously,
lending rates do not greatly affect credit growth, but aggregate demand and
capital absorptive capacity do,” he stated.
In
response to the Daily’s question on SBV’s policy to keep Vietnamese dong
attractive, Hoe said the governor had vowed to restrain the exchange rate
fluctuation at less than 2% in 2013. Exchange rate stabilization is an
effective way to tackle dollarization and bolster confidence in Vietnamese
dong.
The
interest rates for deposits in Vietnamese dong are currently 4.5-5% higher
than the rates for U.S. dollar deposits, making dong obviously more attractive,
he remarked.
Lotte
Mart to open two more supermarkets at year’s end
Lotte
Mart, an arm of
Speaking
with the Daily, an executive of Lotte Mart, said the retailer has been
licensed to open the two new stores and that they are being constructed in
Binh Duong and Binh Thuan provinces.
The
Lotte Mart Binh Duong project, which requires an estimated US$30 million,
covers more than 21,300 square meters in The Seasons Binh Duong urban area in
Thuan An District. The supermarket is set for operation in November this
year.
Similarly,
the Lotte Mart Phan Thiet project, located in Phu Thuy Ward in
With a
total floor area of 7,500 square meters, the project is designed with six
floors and will be put into operation. It will be up and running in December.
With
the two new projects that are under construction at present, the Lotte Mart
chain will have six stores nationwide, with two in HCMC’s District 7 and
District 11 and one in each of Dong Nai, Danang, Binh Thuan and Binh Duong
provinces.
Lotte
Mart in October 2012 acquired the entire stake from its Vietnamese partner in
the initial venture to become a wholly foreign-invested company. The retailer
has set a target of opening 60 supermarkets across the country by 2020.
GM
Vietnam launches Chevrolet deals
General
Motors Vietnam (GM Vietnam) has launched a promotional program to offer
discounts to buyers of the Chevrolet brand and also give them a chance to win
Chevrolet models this month.
Those
purchasing cars produced, imported and distributed by GM Vietnam including
Spark, Spark Van, Lacetti, Aveo, Cruze, Captiva, Orlando and
Besides,
when purchasing any Chevrolet cars at GM Vietnam’s official sales agents
until June 30, customers will be able to join lucky draws to snap up huge
prizes totaling up to VND1 billion.
The
program consists of a first prize of a Chevrolet Orlando LT priced at VND696
million and ten second prizes of Canon Powershot G15 priced at VND15.5
million.
Weighing
loss against gain is vital
In
2006, when the world’s largest chipset maker Intel decided to set up its
largest global factory in
Four
years later, South Korea’s Samsung Group also asked the Vietnamese government
for recognising the group’s first manufacturing complex in northern Bac Ninh
province as a hi-tech enterprise associated with the eligible highest
corporate income tax incentive of 10 per cent for the project’s lifespan as a
condition for the group to expand its investments to $1.5 billion in this
complex. After two years of negotiations, the Vietnamese government agreed to
recognise the electronics giant’s Bac Ninh complex as a hi-tech business,
thus granting it the best favourable tax breaks.
This
move is considered the key motivation for Samsung’s continued expansion in
The
cases of both Intel and Samsung inspired some other multinational companies
to ask for similar tax incentives when setting up shop in
Bosch
And LG
Group, another South Korean giant, is also expecting to get the nod from the
Vietnamese government within this quarter for the highest tax incentives that
would green light the firm investing an additional $1.5 billion in the
country.
In
reality however, not one of these projects met the criteria to be recognised
as a high-tech company under the Law on High Technology. The law regulates
that a company can only be recognised as hi-tech after three years of
manufacturing operations and after relevant governmental agencies confirm it
meets other criteria on research and development activities, average turnover
of hi-tech products, as well as environmentally friendly and energy-saving
solutions to production and product quality management.
So,
why did the Vietnamese government agree to go beyond the current regulations
to grant the highest tax incentives possible to these foreign investors?
One
important purpose of attracting foreign direct investment (FDI) projects is tax
collection. But for investments from Samsung, Intel, Nokia or LG, tax
collection was not the main purpose for the Vietnamese authorities, claimed
Nguyen Mai, chairman of the Vietnam Association of Foreign Invested
Enterprises.
While
other companies operating in Vietnam at present have to pay 25 per cent of
corporate income tax (CIT) on their profits each year, or 22 per cent in the
future if the National Assembly approves the amended Law on Corporate Income
Tax this month, the giant recognised hi-tech foreign investors just have to
pay CIT of a mere 10 per cent rate on their profits. Moreover, they are
exempt from the CIT for the first four years of operations with profits and
the rate is reduced by half in the following nine years.
In the
case of Samsung Electronics Vietnam, which runs the $1.5 billion
manufacturing complex in Bac Ninh, its total revenue during 2009-2012 was
VND436.239 trillion, or approximately $21 billion at the current exchange
rate, according to Bac Ninh Provincial Tax Department. The firm’s total
profit was VND35.526 trillion, or $1.7 billion. However, the firm’s total tax
contributions including CIT, personal income tax and value added tax till
April 26, 2013 were just around VND1 trillion, or $48 million, the department
reported.
Some
local economists criticised the government for giving the recognised hi-tech
foreign investors too strong incentives, for very little tax collection.
“This
is an issue, a real issue,” Minister of Planning and Investment Bui Quang
Vinh told VIR. But he said the government had to weigh the interest of the
foreign investors against that of the country to ensure “harmonisation.”
“Giant
foreign investors have the right to ask for good conditions for their
investments. We have to weigh what we benefit, if we give such preferential
incentives to foreign investors, and what benefits they gain. Overall, if the
investment plans are good for the country, we should encourage them to invest
here through offering preferential incentives,” said Vinh.
He
also advocated not accessing the overall impact of giant investment projects
to the country through tax collection alone.
In the
case of Samsung, up to August 2012, its Bac Ninh complex helped drawing in 53
foreign suppliers to invest in
In
addition, Vinh said, these investment projects also help change the structure
of the nation’s economy. Last year,
Job
creation is an important indicator for the Vietnamese government to offer tax
incentives to the recognised hi-tech foreign investors. Till the end of last
year, Samsung’s Bac Ninh complex created 23,000 jobs for local workers. The
firm announced it could also employ tens of thousands of local workers for
its under-construction Thai Nguyen complex. Meanwhile, Nokia has committed to
employ around 10,000 local workers for its Bac Ninh factory.
“Look
at those projects, just within an area of around 100 hectares, they could
create about 25,000 jobs and generate the export turnover worth tens of
billion dollars. These are our benefits,” said Vinh.
Mai,
who has studied FDI in
“We
will collect less tax from them, but it is still better than having nothing
if they leave for another country,” Mai added.
The
growth rate of industrial production in
The
city posted 3.8 per cent growth in its processing industry, with the highest
rates in the plastics and food processing sectors, beverages, garments,
footwear, chemicals and chemical products.
Growth
declined in the sectors of mining, tobacco, electronics, automobiles and
machinery and equipment, with the mining sector achieving 90.9 per cent of
the growth recorded during the same period last year.
In the
first quarter, nearly 5,000 HCM City-based businesses suspended operations,
or equal to 63.8 per cent of the number of newly registered businesses for
the same period.
Compared
to other localities nationwide,
The
number of private firms in
According
to the city's Statistics Department, most of the new businesses in the first
quarter were in the service sector, while new businesses declined
substantially in the industrial and construction sectors compared with last
year.
Many
manufacturing and trading companies still faced difficulties, such as capital
shortages, high volumes of inventory and high input costs.
As a
result, many businesses have cut staff and lowered production activities.
They have also tried to balance inventories while eliminating unnecessary
intermediary costs.
Nguyen
Van Sinh, director of Nguyen Sinh Co Ltd, said the company's sale of supply
materials and equipment for the engineering sector had dropped sharply,
despite the company's big discounts.
"Currently,
we are only working at a low level, processing orders made by regular
customers," he said.
Low
purchasing power and rising production costs, have caused difficulties for
manufacturing and trading enterprises.
Many
businesses have been focusing on their brand names while cutting costs and
raising labour productivity.
Nguyen
Van Lai, director of
He
said that only 30 per cent of small- and medium-sized enterprises in
The
remaining 70 per cent had to take out loans from other sources that required
high interest rates.
This
situation had led to low credit growth and declining effectiveness of the
banking system, as well as rising bad debt, he added.
Huynh
Van Minh, chairman of the HCM City Business Association, said many banks were
still offering loans at high interest rates.
In
addition, banks were continuing to ask for mortgages as collateral from
businesses. This requirement was especially difficult for small- and
medium-sized enterprises, Minh said.
Two
businesses caught violating food safety regulations
Two
businesses in Tan Phu District of Ho Chi Minh City were caught violating food
safety regulations while processing bean sprouts, by the Health Watchdog on
May 7.
Two
units in
At the
unit on
No
dangerous chemicals found in Chinese ginger
Health
watchdog in
Wholesale
markets in
Chinese
ginger is bigger and looks fresher and cleaner than the locally grown type,
and is therefore more popular with consumers despite its high price.
However,
Vietnamese consumers were recently shocked to learn, via a Chinese TV channel
earlier this week, that farmers in
The
pesticide is highly toxic and farmers had been using three to six times above
permissible levels.
Extended
consumption of the chemical can cause dizziness, blurred vision, nausea and
respiratory failure. The chemical exists for a long time in the soil and
water.
Nguyen
Xuan Hong, head of the Department of Plant Protection, said Chinese ginger is
imported mainly through border gates in the
The
department said that in April staff tested Chinese lemons and discovered it
contained excessive amounts of the chemical carbendazim, which is used to
kill insects.
Earlier,
the Ministry of Agriculture and Rural Development had announced that many
Chinese produce contained excessive amounts of dangerous chemicals.
Demand
for summer-autumn rice crop in jeopardy
Millions
of households in the Mekong Delta fear that fall in price and exports, along
with high inventory, will jeopardize the demand for their summer-autumn rice
crop, currently beginning to be harvested.
According
to the Ministry of Agriculture and Rural Development, the Mekong Delta has
seeded 1.2 out of 1.68 million hectares of summer-autumn rice.
Dong
Thap, Soc Trang, Long An and Kien Giang Provinces are reaping about 100,000
hectares. Harvested area is expected to reach more than 200,000 hectares by
mid May.
Vo Van
Duc, a farmer in Thap Muoi District in
Pham
Thien Nghia, secretary of the Party Committee in Thap Muoi District, said
that this is peak harvest time for 38,000 hectares of summer-autumn rice in
the district. However, local farmers are very anxious due to the low rice
price.
Farmers
have harvested 5,000 out of 22,000 hectares of summer-autumn rice in several
communes in Tan Hong District of Dong Thap Province.
Phan
Thanh Xuan, deputy head of the district Department of Agriculture and Rural
Development, said that farmers are insecure because rice price is too low.
Similar
conditions are in Tan Hung and
Rice
exports have slowed even though export rice prices have fallen to the lowest
level as compared to world prices.
Vietnam
Food Association said that businesses now have about two million tons of
unsold rice in stock. As a result, consumption of the estimated nine million
tons of summer-autumn rice is likely to be in jeopardy in the Mekong Delta.
Huynh
Van Ganh, director of the Department of Industry and Trade in
Farmers
have been unable to sell the winter-spring rice because of low prices over
the last few months.
Summer-autumn
rice crop has been ready for harvest to further increase the rice output
amidst the price drop.
The
provincial People’s Committee has proposed to concerned ministries to permit
them to purchase another 100,000 tons of rice for stockpiling, aimed to
reduce inventory.
While
local residents and authorities are very anxious, relevant ministries and the
Vietnam Food Association have not put forward any measures to consume
summer-autumn rice. The rice price is feared to continue to drop when the
Mekong Delta enters peak harvest season.
Dr. Le
Van Banh, head of the Mekong Delta Rice Research Institute, said that farmers
cannot stockpile rice themselves because they do not have warehouses and need
capital to resume production. As a result, they usually sell rice right after
harvest.
He
said that relevant ministries and departments should quickly put together
measures to consume rice in order to rescue rice growers from the current
difficult situation.
In the
long term, experts said that
Rice
supply is now higher than demand in the world.
BTS
invests in online-game website
BTS
Joint-stock Company on Wednesday clinched an agreement with the owner of the
bonus hunter website thomo.vn to invest VND25 billion in the operation and
the development of products and marketing activities of the website within
one year.
Nguyen
Thi Thanh Thao, director of BTS which specializes in making online games and
entertainment products, said her company decided to make investment into
thomo.vn because the website’s model is appropriate with its development
orientation.
Relating
to games and prizes of thomo.vn, Ngo Dinh Thu Nhan, leader of the website,
said information on prizes, ratings and winners is all publicized.
According
to thomo.vn, around 100,000 persons accessed the website during its two-week
trial operation, with 500 prizes totaling more than VND80 million finding
winners. Specially, thomo.vn has raised the total value of its prizes to
VND300 million this month.
An
executive of BTS said thomo.vn had been granted a license by the Ministry of
Information and Communications already.
ADB,
EIB agree to fund metro line No.5 project in city
The
Asian Development Bank (ADB), the European Investment Bank (EIB) and the
Spanish government have agreed to provide loans for the first stage of the
Metro Line No.5 project in HCMC.
This
is the most noticeable information in the report submitted by the Management
Authority for Urban Railways (MAUR) to the city’s government this week.
As
such, among 857.56 million euros required for the project’s first stage
stretching from Bay Hien Intersection in Tan Binh District to Saigon Bridge,
ADB will provide 330 million euros or around US$429 million and EIB will give
200 million euros.
“The
Spanish government earlier had committed to financing the project with 500
million euros in official development loans (ODA), which recently was scaled
down to only 200 million euros due to the EU nation’s financial constraints.
MAUR therefore has had to seek funds from other sources,” Le Khac Huynh,
deputy head of MAUR, told the Daily.
The
local authorities on March 28 petitioned the Ministry of Planning and
Investment to propose ADB to put the scheme into the financing plan for
2014-2016. At the same time, the city’s counter capital has also been revised
to 127.56 million euros.
To be
developed under the engineering, procurement and construction (EPC) format,
the whole Metro Line No.5 requires an estimated cost of some US$1.85 billion.
The project in the first stage extends 8.9 kilometers from Bay Hien
Intersection to
The
second stage which connects Bay Hien Intersection with Can Giuoc Coach
Station in the Mekong Delta
Saigontourist
wants to develop tourist boat terminal
Saigontourist
Holding Company has roposed the HCMC government to turn the flower garden and
Thu Thiem ferry station at
After
being assigned with the garden and the ferry station, Saigontourist will
invest in facilities such as waiting area, pier and trading office as well as
promote HCMC’s river tourism. These are what the city has not made sufficient
investments in.
According
to HCMC vice chairwoman Nguyen Thi Hong, the city will introduce its seven
river tours to tourists, and Saigontourist will prepare boats for such tours.
Tra
fish price freefall breaks usual rule
In the
past, raw tra fish prices picked up and went down several times with each
cycle lasting for just a few months, but such a rule has been broken as fish
prices have kept falling for the past two years.
Two
reasons are given for the prolonged tra fish price slump, namely the change
in material production profile and the competition among exporters.
Nguyen
Van Kich, vice chairman of the Vietnam Tra Fish Association (VN Pangasius),
said: “It is because farmers have lost their right to negotiate deals between
them and tra fish exporters.”
Previously,
tra fish raised by export-processing firms only satisfied 40% of the demand
among importers. Therefore, they had to buy a large volume from farmers, so
farmers held the initiative in negotiations over fish prices.
However,
in recent two years, the volume of fish raised by enterprises has risen
sharply, making up 70% of the annual export volume. Meanwhile, farmers have
been suffering shrinking output and constant losses, and thus they no longer
have the right for price negotiation.
Nguyen
Van Dao, general director of Godaco-Tien Giang Joint Stock Company, cited
another reason for tra fish price drop.
“Some
cash-strapped companies are now willing to sell fish at any price to soon
recover capital, or reduce the product quality for lower prices to win the
market. This prevents raw fish prices from moving up,” he stressed.
Nguyen
Viet Thang, chairman of VN Pangasius, suggested farmers should only raise tra
fish when receiving orders from processors. VN Pangasius will soon send a
proposal to the Government and the central bank, seeking preferential loans
for tra fish farmers, he informed.
Meanwhile,
according to the Department of Agriculture and Rural Development of Vinh
Long, the province is encouraging tra fish farmers to switch to other types
of fish whose feeds are available in the wild and prices are relatively
stable.
In the
first quarter of 2013, some 28.5 among the total 323 hectares of tra fish
farming in Vinh Long was used to raise other aquatic species.
Dao of
Godaco-Tien Giang Co. said tra fish production, processing and export should
be reorganized in a bid to revive the industry. “VASEP has been playing the
leading role in rearranging export activities and looking for the Government
support, but the results are not as good as expected,” he said.
The
Government has provided tra fish farmers and processors with a VND9-trillion
support package and gave enterprises access to foreign currency loans at low
interest rates. However, the tra fish industry is still in crisis, with more
and more farming households going bust.
A
senior agricultural official in the Mekong Delta said: “I think we should let
it (the tra fish industry) and the market decide their own fate. The more
supports are given, the more serious the problem becomes.”
Outlook
bleak for real estate sector
The
Vietnamese property market is expected to continue struggling for the rest of
2013, with hopes of a quick rebound looking increasingly unlikely.
Experts
at a conference organised by the Viet Nam Investment Review newspaper
yesterday urged a re-evaluation of the current market, so that the root
causes of the continuing slump could be fully uncovered and an appropriate
clear-cut solution found.
Authorities
had expected that a Government support package worth VND30 trillion (US$1.43
billion), offering preferential loans to enterprises and low-income families
to purchase a house, would help unfreeze the real estate market.
The
director of the State Bank of
However,
many experts and real estate developers have raised their concerns about the
package.
According
to Nguyen Tri Hieu, member of OceanBank Board of Directors, the proposed
interest rate of 6 per cent offered to home buyers for three years was not
reasonable.
He
estimated 90 per cent of low-income earners must seek loans to buy a house of
around VND600 million ($28,500).
He
suggested that a more effective policy would be to lower the interest rate to
5 per cent and keep it stable for around 20 years to encourage buyers, citing
that in the
Pham
Truong Son, chairman of HUD 3 Investment and Construction Joint Stock
Company, commented that the package was only focused on providing support for
interest rates but interest expenses accounted for less than 10 per cent of a
project's total capital.
Buyers
waiting for further price cuts, which are widely predicted due to enterprises
failing to sell their apartments, would cause huge damage to the economy,
said Le Quoc Chinh, sale manager of an apartment complex project supported by
South Korean investors.
He
urged clear and consistent policies from the Government to raise consumer and
developer confidence in the property market.
Dang
Hung Vo, former Deputy Minister of Natural Resources and Environment, said
that measures to clear high inventories in medium and high-priced apartments
were needed.
Experts
at the conference agreed that the real estate market needed support from the
Government to get back on the right track. They stressed two key problems to
be tackled: non-performing loans and a low supply of affordable social
housing.
According
to Hieu, the real estate market might hit rock bottom at the end of this
year, and stay there for up to three years. He said he did not expect the
market to recover soon unless bad debts were resolved imminently.
Developers
should not be allowed to mobilise capitals from buyers, Hieu argued, pointing
out that contributors were reluctant to enter the market due to fears about
the lack of regulations controlling how investors use money.
Vo Dai
Luoc, former director of the
He
added that transparency of the support package must be enhanced to ensure no
party would be influenced by self-interest.
Vu
Xuan Thien, Deputy Director of the Real Estate Market and Housing Management
under the Ministry of Construction, said his department has asked localities
to check real estate projects, report inventories and halt developments that
are infeasible.
Nguyen
Mai, former Deputy Chairman of the State Committee for Co-operation and
Investment, urged the Government to introduce long-term solutions.
Regarding
forecasts of the real estate market recovery, Cushman&Wakefield said that
there was "no quick fix" solution because confidence remained weak
and would take time to recover.
Asia-Pacific
kickstarts first talks in bid to create trade super bloc
Sixteen
Asia-Pacific nations including Japan and China held the first round of
negotiations yesterday toward the creation of one of the world's largest free
trade blocs.
During
the five-day meeting through Monday in
The
RCEP, if realised, will account for over 3 billion people, or about half of
the global market, and a third of global economic output, according to the
Japanese government.
In
addition to a committee of senior officials, the 16 countries will launch
working groups, which pertain to trade in goods, trade in services, and
investment, in the
The
RCEP talks began at a time of progress for other multilateral free trade
negotiations, including the US-led Trans-Pacific Partnership, with
Japanese
Prime Minister Shinzo Abe and senior government officials have said the TPP
could become the foundations for the RCEP and an even greater free trade
agreement called the Free Trade Area of the Asia-Pacific.
But
concluding the RCEP negotiations by 2015 does not appear to be an easy task,
given that the Asia-Pacific nations are aiming for a deal that involves
deeper engagement than existing ASEAN free trade agreements.
The
ASEAN countries are
Also
involved in the RCEP talks are
Ministry
of Justice rules on exclusive gold bar production
The
Ministry of Justice has replied to inquiries from National Assembly deputies,
clarifying the position on the State monopoly of gold bar production.
Deputy
Tran Thi Quoc Khanh of Ha Noi said prime ministerial Decree 24/2012/ND-CP
released in April last year, did not specifically designate any business to
produce gold bars.
However,
Decision 1623/QD-NHNN released by the State Bank in August exclusively
designated the Saigon Jewellery Joint Stock Company (SJC) to produce gold
bullion, reports Vietnam Economic Times.
Khanh
said decision 1623 raised concern among businesses and NA deputies that the
central bank may have violated the Constitution and Law.
In
response to a petition to deputy Khanh, the Ministry of Justice confirmed
that the SBV decision was legal.
According
to the Ministry of Justice, Clause 3 of Article 4 in Decree 24/2012/ND-CP
stipulates that the State holds the monopoly on gold bar production, and the
export and import of gold to produce bars.
In
addition, Clause 3 of Article 16 issued in Decree 24 stipulates that it
controls the organisation of gold bar production.
Therefore,
the State Bank issued decision 1623 designating the Saigon Jewellery Joint
Stock Company (SJC) to produce gold bullion.
SBV
Governor Nguyen Van Binh said that under the new regulations, the State would
exclusively produce gold bars, therefore it considers the SJC brand as the
State brand.
In
another development, the State Bank sold 19,600 gold taels at auction
yesterday for between VND41.52-VND41.56 million per tael (1 tael is about 1.2
ounces). This was the smallest amount in the last 15 auctions.
The
central bank is expected to sell about 10 tonnes of gold in the near future.
On
June 30, commercial banks will be forced to close gold sales. If market
demand is still high, the SBV is expected to continue selling gold until
supply meets demand.
The
central bank has sold a total of about 412,500 gold taels (16 tonnes) of the
total 458,000 taels offered since March 28 in an effort to stabilise the
market.
It
estimates that commercial banks need to buy another 20 tonnes of gold to
close their positions.
MoF
increases fuel tariffs
The
Ministry of Finance increased the preferential tariff of some fuel products
yesterday for the second time in the last ten days.
Circular
58/2013/TT-BTC, signed yesterday, increased the import duty for petrol from
16 to 19 per cent, diesel from 12 to 14 per cent and natural oil from 14 to
15 per cent.
Previously,
the ministries of Finance and Industry and Trade also asked enterprises to
reduce the fuel price in the market in order to stabilise the local price.
This
time, there has not yet been a request for price reductions in the market,
said Tran Minh Ha, sale manager of Saigon Petrol.
Source:
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Chủ Nhật, 12 tháng 5, 2013
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