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BUSINESS IN BRIEF 7/5
Enterprises seek
funds to bid for gold
The Vietnam Gold Business Association has written to the State Bank of Vietnam (SBV), proposing loans for enterprises to buy gold via auctions. SBV has specified the minimum gold volume to bid for is 1,000 taels, requiring bidders to have abundant working capital. However, gold trading businesses are not as financially strong as banks, says a dispatch sent from the association. “The above requirement has created an unfair competition, eliminating many gold trading enterprises, especially the medium-sized ones, from gold auctions, going against the Government’s policy for helping businesses overcome the current tough times, with the most practical solution being preferential credit packages,” says the dispatch. Many gold trading enterprises have extensive networks across the country, with deep knowledge and long experience in the industry. They can help increase gold supply for the domestic market, satisfying the goal of the Government and SBV, said the gold association in its dispatch. It is reasonable that businesses in general and gold trading businesses in particular want to borrow loans for their operations. In addition, those licensed to trade gold bars have met all the requirements and have established trading relationships with the central bank. However, Document 1889/NHNN-QLNH dated March 21, 2013 does not allow credit institutions to give their clients loans to buy gold, unless the SBV Governor gives nod to loans for production and processing of gold jewelries. The document also restricts lending for purchase of materials for jewelry production. “Such regulations have created a sub-license, contrary to the Prime Minister’s request for simplifying administrative procedures and eliminating unnecessary licenses,” says the dispatch. The gold association suggests SBV permit experienced banks to lend gold to qualified jewelry producers. “The restriction on gold loans for jewelry makers is spelling much trouble for them, especially when there is a considerable gap between the local and global gold prices,” says the dispatch. The chance for businesses to participate in gold auctions is getting slimmer because the amount of capital needed for each session is too large, over VND40 billion for 1,000 taels, said a source from a company joining the previous gold auctions. He suggested the minimum volume to bid for should be 100 taels. To have money to buy gold, enterprises are borrowing bank loans in the form of “loans for trading other items” to evade the law, said the source. SBV has announced it would check whether the units that had bought gold via auctions had got money from legal source or not. If found using money from improper sources, they would face punitive sanctions. After 12 auctions, SBV has sold 12.8 tons of gold for approximately VND14.3 trillion, based on the lowest winning bid price. There is a possibility that enterprises use the money earned from selling the auctioned gold to bid for more. Many local firms in race to expand distribution networks Many Vietnamese companies, especially those in the consumer goods sector, are racing to make strong investment into their distribution channels to prepare themselves for competing with large foreign corporations. Vinamilk has expanded its retail system nationwide to nearly 200,000 points as of now and still continues to open more stores at the moment. The giant dairy company also invests heavily in the distribution system. Mai Kieu Lien, general director of Vinamilk, said her firm now has about 250 distributors along with some 2,000 staff members. Vinamilk and the information technology solution provider Viettel are deploying a sales management system under which staffs of retailers selling Vinamilk’s products are equipped with tablet computers connected with 3G services to do their jobs. As such, the whole sales process of Vinamilk is supervised via the Internet and the firm’s managers are kept abreast of changes, including inventory volumes and debts as well as activities of staffs to map out production strategies more effectively. According to Lien, Vinamilk’s strategy is to build on its own more stores selling its products, with some 500 outlets of the same model to be opened in the next five years, much higher than the current 60 stores. Similarly, Masan Group has poured a lot of money into expanding its retail system, with its subsidiary Masan Consumer having products sold at more than 176,000 outlets across the country now, including modern channels, convenient stores and groceries. The group is operating five distribution centers at strategic locations in HCMC, Binh Duong, Danang, Hung Yen and Hai Duong provinces to deliver goods to distributors within 24 hours upon the receipt of orders. Other firms like Vissan and Lien Thanh have also heavily invested in distribution systems and outlets to introduce their own commodities. Nguyen Anh Nguyen, former deputy general director of Unilever For instance, Vinamit will make ties-up with Chinese large distributors as its strategic shareholders in the near future. Many local entities will even turn their own sales staffs and outlets into shareholders soon, Nguyen noted. Proper investment into distribution systems will considerably help businesses manage inventories and debts, reduce expenses and monitor market moves, Nguyen insisted. Families are cutting costs by renting out large homes in areas where business rentals can bring in much needed cash. Nguyen Phuong Thao from a law firm in They hired a three-storey house at Le Minh Hung who works at the Ministry of Justice decided to deposit VND1 billion, instead of using it for buying a house. “If you have VND1 billion, you’d end up only being able to afford a house in the suburbs. However, with this amount of money you can get interest of VND10 million per month and which is enough to rent a house in the city centre and of course there’s no mortgage,” he added. Many families in My Dinh and However, there can be risks when renting out a home. “There are problems with renting, as the market hasn’t really matured yet, sometimes tenants find themselves evicted as the owner of the property wants to sell the house when the prices rise,” said Pham Sy Liem, Vice Chairman of the Vietnam Construction Association said. According to Mr. Liem, it would improve the market if houses which are currently lying empty and awaiting sale were rented to low-incomes earners, particularly people working in industrial estates. Nguyen Manh Ha, the Ministry of Construction's Housing and Real Estate Market Department said rental properties were an obviously solution for people who couldn’t afford to buy. The government would consider preferential value added tax and corporation income tax rates and cheaper interest rates for developers considering these kinds of projects. Electronic traders target innocent rural residents Unscrupulous electronic traders have been travelling to rural areas of Their targeted consumers include elderly and retired people who have pensions or medium living standards. Such people can afford to buy their products but don’t have much chance to check the accuracy of their information or prices. Products offered for sale are often healthcare equipment and air and food purification machines for households. Do Vuong, a man from Hanoi’s Dong Anh Street, was surprised that his mother, who lives in the northern province of Thai Binh, bought a Chinese-made Digital Therapy Machine at VND600,000 (USD28.64), when the prices for such items in Hanoi cost from VND110,000-VND130,000 (USD5.25-USD6.20). “My mother said she was totally persuaded by the trader’s attractive introduction on the machine’s features. Several retired people in my hometown bought the machine without any doubts about the price and its real usefulness,” Vuong commented. Nguyen Ngoc Son, a man from They intended to buy a food purification equipment at VND2 million (USD95.50) while the prices of device of the same kind are only VND500,000 (USD23.87). “The trader said the equipment was made by a military-run factory so we trusted them. They have set up a guarantee office in the nearby village,” Son’s mother said. Firms urged to fulfill social responsibility Despite the potential for better opportunities in the global market, many Vietnamese enterprises struggled to fulfill their corporate social responsibility (CSR), according to a leading business development figure. Speaking at a recent workshop themed “Responsibility and Sustainable Operation – a Continuing journey”, director of the Vietnam Chamber for Commerce and Industry’s Office for Business Sustainable Development Nguyen Quang Vinh said small- and medium-sized enterprises (SMEs) have a lot of ground to make up. He claimed the firms, which make up 97-98 percent of total enterprises in the country, still lack proper understanding, vision and resource to observe CSR properly. "Insufficient awareness over CSR is the biggest challenge that Vietnamese enterprises are facing," Vinh said, listing examples of malpractice including business fraud, environmental damage, salary violations and poor labour safety. They usually believed that social responsibility solely means arranging charity activities, Vinh said, noting that CSR also includes activities to ensure efficient economic growth, legal operation and community participation. Secretary of the Vietnam Textile and Apparel Association Dang Phuong Dung said enterprises pay little regard to social responsibility as they do not see the benefits or opportunities that CSR can bring them. "It's difficult for textile enterprises to observe social responsibilities as exporters, because they now have to follow various codes of conduct imposed by different importers," she said. She added that SMEs with limited staff and financial capacity will find it particularly tough to meet the various evaluation systems of their partners. Many enterprises have so far ignored their social responsibilities, because until now, Experts noted at the workshop that big companies took social responsibilities more seriously as part of their efforts to meet partners' requirements. Bryan Fornari, a representative from the EU Delegation to He warned that as consumers increase their expectations, companies which do not fulfill their CSR can lose opportunities to access the market. Vinh said that if Vietnamese enterprises want to become multi-national, they have to find a way to effectively fulfill their social responsibilities. "It's key for sustainable development, not just an added burden for enterprises," he said. The workshop was part of a three-year project entitled "Helping Vietnamese SMEs adapt and adopt CSR for improved linkages with global supply chains in sustainable production", which focuses on saving energy, improving worker skills to match new technology line, as well as avoiding child labour and counterfeiting products. With an overall budget of more than 2.63 million USD, the project was led by the United Nations Industrial Development Organisation and its governmental counterpart the Vietnam Chamber of Commerce and Industry in cooperation with eight additional partners. Chief technical advisor Florian Beraneck said the project was launched in 2010 as one of several CSR facilitation programmes in Over the past three years, thousands of workers and hundreds of businesses have improved their understanding of CSR through more than 100 events which have included forums, workshops and training courses, he said. National Finance Supervisory Commission proposes lower interest rate In a report to the government, the National Financial Supervisory Commission has proposed further lowering of the interest rate to 9-10 percent, to help businesses get back on track in the prevailing economic conditions. According to the Commission, production is continuing to face many difficulties, input costs are high, consumption is slow and businesses are burdened with high inventory. To ease the situation, drastic measures must be put in place to curb inflation to 6-6.5 percent and achieve Gross Domestic Product growth rate of 5.5 percent this year. Monetary policies should be made to tackle and resolve bad debts and offer preferential interest rate packages to the construction and real estate sector. Financial policy should hasten capital disbursement for investment and development projects, especially for projects scheduled to complete by this year. Economic downturn doesn’t dissuade developer Aeon Aeon, Japan’s leading retail developer, will start construction of its first project in Hanoi within the next few months, and it is considering developing two more shopping venues in the capital city to catch the potential market expansion. The first project in According to AeonMall This project will comprise a four-story building, of which the three floors are reserved as a shopping centre with an Aeon supermarket, fashion shop and food and drink restaurants. The fourth floor will be an entertainment centre with cinemas and sport facilities. “We will invite tenants from “We will build an outstanding shopping centre in Since entering The second store of Aeon is located in Binh Duong, about 20 kilometres from In “The Vietnaese market is growing rapidly, so we cannot delay our plans. We believe in achieving positive results in this market with the upcoming AeonMall projects,” said Yukio Konishi, chairman and general director of AeonMall Even though “We always look long term. If we are too careful waiting for the strong recovery of the economy, we could lose opportunities,” said Konishi. At this time, AeonMall is discussing with partners to develop two more projects in “The first project in Microsoft partners with Intel to entice SMEs in Thousands of small and medium enterprises (SMEs) all over This involves a multi-pronged approach involving a webcast with Intel and Forrester Research, special 15 per cent discount on Windows 8 and Office 2013 through the Open License volume programme, Windows 8 Pro notebooks and tablet hardware upgrade offers as well as an SME IT Makeover contest in Through these initiatives, Microsoft hopes to promote the benefits of and provide incentives for SMEs to upgrade their IT operations. Pham Tran Anh, director of Small, Medium Business & Partner Group at Microsoft “Our goal through this multi-pronged effort, is to make it more compelling for SMEs to modernize by moving away from old technologies like Windows XP or Office 2003 so they can truly realise new levels of productivity, be more secure and take advantage of cloud services cost effectively,” he added. In a recent study by IDC, 75 per cent of Asia Pacific companies have adopted or are planning to adopt enterprise social tools to increase collaboration and reduce operation costs. New collaboration and communications features found in the new versions of Office and Windows have been designed to support the needs of the fast growing population of mobile workers. IDC expects mobile workers in Asia Pacific to grow from 601.7 million in 2010 to 838.7 million in 2015. In addition, SMEs running Windows XP and Office 2003 need to be aware that these products will no longer receive support from Microsoft, which means they will be exposed to security and privacy risks, software incompatibility, will not have anyone to call, may experience downtime and higher total cost of ownership. Microsoft’s Security Intelligence Report, Volume 14, which was released in April 2013, highlighted that PCs running Windows XP with SP3 are 2.5 times more vulnerable than Windows 7 SP1, and about 14 times more vulnerable than Windows 8. More recently released versions of Windows also feature a number of security improvements, including Windows Defender, Early Launch Anti-Malware and SmartScreen Filter on Windows 8. These new features assist users in securing their information and protecting PCs against risk that could be detrimental to business operations. Trinh Khac Toan, Windows Client Product Marketing manager, Microsoft On this occasion, Microsoft and Intel will host an As part of the campaign, Microsoft will be rolling out Get2Modern upgrade promotions targeted at SMEs in Microsoft has also most recently launched an Upgrade Centre website for Over 2.4 mil int’l visitors to VN in four months Foreign tourists visit ancient town of Of the total, 1.5 million arrived in the country for holiday, 407,000 for business purposes (down 5.4%), and 401,000 for visiting relatives (down 9.1%) and 120,000 for other purposes. Trade deficit recurs in April Viet According to the Ministry of Industry and Trade’s Import-Export Department, last month, the country’s exports reached US$9.7 billion while its imported amounted to US$10.7 billion. In the first four months of 2013, Experts attributed the trade deficit to increasing imports by domestic firms, mostly of machinery, equipment and materials. They emphasized the urgent need to control imports and issue suitable policies to develop support industries. The government should promote investment, especially in projects serving exports and creating products replaceable for imported ones, they suggested.- Delta Dialogue 2013 to open in HCM City The Ministry of Natural Resources and Environment (MONRE) will coordinate with the US Wetland Foundation, the Embassies of the Netherlands and the US to organise the Delta Dialogue 2013 in Ho Chi Minh City from May 19-23. According to the Vietnam Governmnet Portal (VGP), the dialogue aims to improve the international community’s awareness on sustainable utilisation and management of the Mekong sub-region, call for developed countries’ support, and affirm The MONRE is asked to work closely with the Ministry of Foreign Affairs (MOFA), the According to the MOFA, the conference will focus on discussing issues related to sustainable management and utilisation of water resources and sustainable development in the Mekong Delta provinces are deploying an array of projects to improve the quality and competitiveness of rice in the world market with top priority given to modernising post-harvest technologies. The projects are expected to help local farmers cut rice production costs by 30,000 VND per tonne and increase their revenues from rice by more than 500 billion VND per year. Between now and 2020, the localities will purchase an additional 20,000 to 25,000 harvester-threshers and rice dryers in order to ensure that at least 80 percent of rice farming acreage is collected and dried mechanically. By 2015, the region will equip export rice processing centres with 70 modern drying systems with a combined capacity of 10-30 tonnes of rice per hour. Meanwhile, a storage system capable of storing up to 4 million tonnes of paddy rice is also expected to be operational by the end of this year, after three years of construction. Located in 52 places in 13 Mekong Delta provinces and cities and Ho Chi Minh City, storages will be operated mechanically and automatically to increase productivity and control technical parameters during the process of rice preservation.- VN firms to shine at ICT exhibitions Three international IT exhibitions to be held in Singapore in June will give Vietnamese businesses an opportunity to showcase their products and gain visibility into foreign markets. The CommunicAsia, EnterpriseIT and Broadcast Asia exhibitions will feature a wide array of the latest technology innovations and business updates across the ICT and broadcast industries on June 18-21. Organised by the Last year's event attracted nearly 2,000 exhibitors and more than 50,000 professional attendees from around the globe. According to the Viet Nam 2012 ICT White Book issued by the Ministry of Information and Communications, the country's ICT sector saw total turnover of US$13.7 billion in 2011. The figure was a year-on-year increase of 79 per cent. By the end of 2011, mobilephone subscribers reached 127.3 million and internet users 30.5 million. In 2011, more than 16 million people used 3G mobile networks in G-bond sales depend on bank credit, asset growth Government and Government-backed bond sales in the first four months of the year were looking positive but achieving the target for the year will depend on credit expansion and the growth of total assets of credit institutions. The State Treasury has set a target of VND150 trillion (US$7.14 billion) worth of Government bonds (G-bonds), while the total value of Government-backed bonds will be capped at around VND58 trillion ($2.77 billion). As of April 25, the total capital via G-bonds and Government-backed bond sales reached nearly VND81.9 trillion ($3.9 billion), accounting for 39.3 per cent of the 2013 plan and up 35.1 per cent on the same period last year. Of the total, VND67.9 trillion ($3.23 billion) was raised through G-bonds, up 179.6 per cent year-on-year and fulfilling 45.3 per cent of the 2013 plan. However, capital raised via Government-backed bonds fell 39 per cent from the same period of last year, reaching nearly VND14 trillion ($666.7 million), or 24.1 per cent of its 2013 plan. Successful bids focused on the short-term bonds (2-5 year terms) which accounted for 22.5 per cent, 33 per cent and 21.1 per cent of the total value respectively. The 10-year bonds only made up 3 per cent of the total. Interest rates paid on bonds were decreasing. Yields of bonds issued in the most recent bid decreased 179 points compared to the first issue this year for 52-week bonds, 155 points for 2-year bonds, 135 points for the 3-year bonds and 120 points for five-year bonds. Market insiders attributed such a high success rate to the abundant liquidity of banks, which was due to low credit growth in recent years. In addition, reduced interest rates helped push investors to G-bonds. However, analysts say the sale of G-bonds and Government-guaranteed bonds towards the end of this year will depend heavily on the monetary policy: including interest rates, credit growth of banks and expansion of total assets of the whole banking system. Commercial banks were the main holders of G-bonds and Government-backed bonds whose holdings were estimated at 85-90 per cent of the total market value. Investments in these papers usually occupied 5.7-8.6 per cent of their total assets. According to the State Bank of Analysts were concerned that with such a low growth rate in both credit and bank assets in the first months of the year, it would be a difficult task to fulfil the 2013 government bond fund target. The key factors now, they said, were that the Government should maintain stable macro economic conditions and a steady or declining interest rate policy, ensure credit growth of 10 per cent and growth in total bank assets of 10-15 per cent; and regulate a balanced monetary policy to ensure bank liquidity. Expo sees thousands of contracts signed Over 10,600 memorandums of understanding (MoUs) and contracts were signed at the Mekong Expo Viet Nam 2013, which closed in Can Tho on Thursday. During the six-day event, businesses sold 30 per cent more retail goods than expected. Local porcelain, pottery and handicrafts attracted the enthusiastic interest of consumers. The expo featured 370 stalls put up by 200 domestic and foreign joint venture businesses, drawing over 110,000 visitors. Malaysia anti-dumping tax on VN packaging Malaysia has levied anti-dumping taxes on Viet Nam's Biaxially Oriented Polypropylene (BOPP) film, a kind of polypropylene film used for packaging processed foods, according to the Viet Nam Competition Agency (VCA) under the Ministry of Industry and Trade. The taxes, which range from 2.59 per cent to 12.37 per cent, were imposed by Malaysia's Ministry of International Trade and Industry (MITI) and are effective between April 23, 2013 and April 23, 2018. Anti-dumping duties were also imposed on BOPP imports from Taiwan, Thailand, Indonesia and mainland China. Malaysia initiated an anti-dumping investigation into imported BOPP in 2011 after San Miguel Yamamura Plastic Films complained that foreign dumping was hurting the Malaysian BOPP industry. Singapore firms eye investment in Da Nang Businesses from Singapore are eying Da Nang as a potential investment destination in central Viet Nam, especially in the fields of health care, advanced technology and tourism, Singapore's ambassador Ng Teck Hean said at a meeting with Da Nang city administration. "Many private hospitals in Singapore wish to co-operate with public hospitals in providing healthcare services in Da Nang in the near future," the ambassador said, adding that Singapore had also set up industrial parks in Binh Duong, Hai Phong, Bac Ninh and Quang Ngai. Chairman of the city's people's committee called on Singaporean businesses to invest in the 1,010-ha Hi-Tech Park and new Information Technology Park in the west of the city.- SeABank wins best cloud prize Asian Banker magazine awarded the Best Cloud Based Project in Viet Nam prize to Southeast Asia Commercial Joint Stock Bank (SeAbank). The prize was announced during the Asian Banker Summit in Jakarta, Indonesia. SeaBank was one of the first banks in Viet Nam to apply cloud computing. Ha Noi-based insurer increases capital by 10 per cent Insurer PVI Holding (PVI) succeeded in increasing its charter capital from nearly VND2.13 trillion (US$101.4 million) to over VND2.34 trillion ($111.4 million) last year, the company announced. The increase was made through private offerings by the insurer's German partner HDI-Gerling Industrie Versicherung AG of Talanx Group. It also reported earning VND549 billion ($26.1 million) in gross profits last year, rising 17 per cent over 2011. PVI aims to achieve a gross profit of just VND309 billion ($14.7 million) this year.- Foreign fund plans to invest more in Viet Nam Mutual Fund Elite, an Asian-oriented fund belonging to Finnish PYN Fund Management, plans to increase its investment in the Vietnamese market. Its activities in Viet Nam currently account for 29 per cent of its portfolios. The fund includes large shareholders of small – and medium-sized businesses such as Truong Thanh Furniture (TTF), Ha Noi Educational Book (EBS), Phuong Nam Education Investment and Development (SED), Tay Ninh Cable Car Tour (TCT) and Khang Dien House (KDH). It also purchased 1.5 million shares of Phu My Fertiliser (DPM) worth VND60 billion (US$2.8 million). The fund also holds 4.4 million fund certificates for VinaCapital's Viet Nam Opportunity Fund – its largest investment in Viet Nam. Securities firm SSI sets high profit goals for 2013 Shareholders of stock broker Saigon Securities Inc approved the year's turnover and gross profit targets of VND995.5 billion (US$47 million) and VND490 billion at the recent annual general meeting. The figures are up from VND849 billion and VND487 billion last year. The company has also set itself the goal of wresting back the position of top broker in HCM City after losing it to the HCM City Securities Company (HSC) last year. It hopes to do so by diversifying products, improving service, and widening its network. SSI has almost 60,000 trading accounts, including around 100 belonging to local and foreign institutions. It leads in brokerage services for foreign investors with a market share of over 30 per cent.- KDC to increase charter capital by issuing shares Shareholders of Kinh Do Corp have approved an increase in charter capital this year to over VND2 trillion (US$95.5 million) from the current VND1.665 trillion. For this, the company will issue 33 million shares, including 6.5 million to be sold to employees at VND18,000 per share. Another 1.1 million shares will be used for swapping with shares of affiliate company Vinabico which will merge with KDC this year at the ratio of 1:5. The company targets gross profit of VND9.6 trillion ($457 million) on a turnover of VND95.2 trillion ($4.5 billion) this year, up 22.5 per cent and 21.5 per cent from 2012. It is likely to pay a cash dividend of 20 per cent for 2013.- Cement producer will delist shares next month due to losses Song Da Cement (SCC) will be forced to delist 1.98 million shares from the Ha Noi Stock Exchange on May 23 due to three successive years of losses, which total about VND7.7 trillion ($366.6 million), according to the exchange. Property trading floors to make monthly reports on sales transfers Real-estate trading floors must report sales of houses and land-use-right transfers to the provincial and municipal departments of construction and the Ministry of Construction on the 25th day of every month. According to a draft circular from the ministry, the report must include transactions involving leased houses, apartments, offices and land in industrial zones. Those who fail to comply will have their names publicised on ministry and real-estate trading floor websites. Those who break the rules twice will face suspension. If approved, the new system will take effect at the beginning of the third quarter of this year.- Ha Noi apartments to sell for less than $40,000 Apartments in the CT6 building in Dang Xa Urban Zone in Ha Noi's Long Bien District will be put on sale this weekend at prices ranging from VND500-800 million ($23,800-38,000) per unit. According to the developers, Southern Dat Xanh Real Estate Company, most apartments in the nine-floor building are from 46.9sq.m to 69.6sq.m. The building is expected to be completed in the first quarter next year. CT6 apartment building covers an area of nearly 8,000sq.m. Developers told to speed up land clearance and compensation The People's Committee of HCM City's District 2 has asked investors in the Binh Trung Dong–Cat Lai residential area to speed up land clearance and compensation. To date, 59 out of the 67 necessary documents remain to be completed. The project, covering an area of more than 66,586sq.m has not yet been approved by the People's Committee due to slow compensation for site clearance. Demolishing of skinny houses proves slow and difficult About 250 super-slim or poorly built houses are waiting to be demolished or combined with neighbouring buildings. To date 45 buildings have been pulled down or converted. According to the Ha Noi Department of Construction, there are 69 slim houses in Ba Dinh District alone. The department said that the work was slow and difficult due to disagreements about compensation and complicated bureaucratic procedures. The deadline for the demolishment of slim houses may now be advanced to the end of the second quarter.- More low-income housing projects to be developed Twenty-four commercial housing projects containing more than 24,860 apartments have so far been registered for conversion to low-income housing, according to the Ministry of Construction's report. Of them, six projects with a total of 8,000 units are in Ha Noi and 16 with a total of 12,000 units are in HCM City. According to the ministry, investors remain hesitant about converting their properties due to complicated and overlapped procedures. The ministry has said it would provide incentives to encourage developers to focus on social housing. It also said the Bank for Investment and Development of Viet Nam would implement a loan package worth VND30 trillion (US$1.428 billion) for housing over the next two years. Real estate sector sees falling investment The real estate market, which has now been frozen for years, is increasingly causing difficulties for investors. Nguyen Ngoc Binh, chairman of the Viet Nam Mechanisation, Electrification and Construction Joint Stock Company (Meco) estimated that his company was forced to pay as much as VND70 billion (US$3.34 million) per year in interest. This became a burden when the company's properties remained unsold or could not be completed, he said. A project run by the Malaysian Berjaya group to build a Viet Nam finance centre was granted an investment licence in February 2008 with a total capital of US$930. However, due to the declining market and the current high supply of offices for lease in HCM City, the design for the building changed significantly and the project was downsized, with the investment reduced to $460 million, Dau tu Tai chinh (Financial Investment) reports. According to Nguyen Hoai Nam, director of Berjaya Viet Nam, the drop in investment was unavoidable due to the declining market and the scarcity of buyers, The same situation is facing many other real estate companies with high inventories, especially at a time when the real estate sector is saddled with bad debts. According to Ministry of Construction statistics, as of the end of last year, more than 17,000 of 55,870 existing enterprises operating in the construction and real estate sector reported losses. The percentage of enterprises incurring losses has increased strongly over the last three years, from 19.4 per cent in 2010 to 30.4 per cent last year. Statistics released by real estate company CB Richard Ellis Viet Nam showed that about 95 per cent of units launched during the first quarter of this year were priced lower than US$1,000 per square metre. The rate over the same period last year was 26 per cent, suggesting that developers are now adapting to the new market demands. Le Thanh Than, the director of Lai Chau Construction Company No 1 said they recently sold living space in a major project for below $700 per square metre and attracted many buyers. Than said that high costs for unnecessary procedures were pushing enterprises into difficulty and suggested that many companies were also burdened by high interest rates because their capital mainly came from loans. He argued that property developers should rely on collecting capital from equity and from buyers, rather than bank loans. Finland open to more trade with Viet Nam Vietnamese businesses are being encouraged to export more textiles, furniture, footwear products and ICT equipment to Finland. This was announced by the Finnish Ambassador to Viet Nam, Kimmo Lahdervirta, at a conference in central Thua Thien Hue Province yesterday. Lahdervirta said the two countries were looking for new ways of co-operation, including partnerships between companies and institutions. In the 40 years of Viet Nam-Finland diplomatic relations, Finland has assisted the country with about US$400 million in development programmes. According to Lahdervirta, the countries have strong potential for trade as the EU-Vietnam Free Trade Agreement is being negotiated. Vietnamese exports of footwear, furniture, textiles and clothing products, and Information and Communication Technology equipment to Finland rose 18 per cent in 2012. Meanwhile, imports of Finnish forestry-related and machinery products rose 10 per cent. The ambassador said Vietnamese businesses and institutions should contact Finnish agencies and the 100 Finnish businesses already represented in Viet Nam for co-operation in new fields, including renewable energy and clean technology. He added that Finland could act as a Vietnamese bridge to other Nordic countries. The central province has invited Finnish partners to its tourism, education, and healthcare sectors as well as to its Chan May deep seaport and Phu Bai Industrial Park. Forty local businesses attended the conference. A similar conference will be held in central Da Nang City on Monday. Second commodity exchange opens in Vietnam The Ministry of Industry and Trade on May 3 issued a licence to the INFO Commodity Exchange (INFO) owned by Ocean Group. The INFO exchange, the second of its kind in the country, will trade in steel, rubber, coffee and agricultural goods. It will provide a direct channel between manufacturers and the market to end speculation of goods prices. It will regulate commodity standards, link the domestic and international markets, and integrate the Vietnamese goods market globally. INFO will help Vietnamese businesses, in particular farmers, boost production and their competitive capacity in the global market. The world’s first commodity exchange was established in 1948. There are 50 exchanges in the world, 30 from Asia. Vietnam’s first commodity exchange is in Ho Chi Minh City. Southern city receives more foreign investment Four projects in seafood processing and waste incineration worth nearly US$10 million have been approved in southern Can Tho city, increasing the total number of valid project in the city to 204. These valid projects, currently leasing 564.9 hectares of industrial land, have registered capital of US$1.8 billion, and already disbursed more than US$805 million. Creating 33,000 jobs for local people, the industrial zones in Can Tho are considered to be the most productive in the Mekong Delta region. During the first four months of this year, the zones generated US$528 million including US$380 million from industry, a year-on-year increase of 1.8 percent; and US$167 million from exports, an increase of 1 percent over the same period last year. In order to attract investment, the city has reformed its administrative procedures, reducing the licence authorisation term to five days. Can Tho has also improved its infrastructure, expanded industrial zones, invested in a sewage processing system, and strengthened trade promotion activities. In addition, the city has created a more favourable investment environment for businesses by cutting taxes and introducing interest support policies and professional training. Particularly, BOT (Build-Operate-Transfer), BTO (Build-Transfer-Operate) and foreign invested projects will be exempt from the land lease tax, land use tax and corporate income tax for 8-15 years. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR |
Thứ Hai, 6 tháng 5, 2013
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