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Electricity price hike predicted
By Bich Diep | dtinews.vn
If
the inflation rate is kept stable electricity prices may increase by
15% this year, said the National Financial Supervisory Commission
(NFSC).
In their report, the NFSC said that,
though the CPI in June has risen by 0.05% so far, it is relatively
stable. The prices of home appliances and construction materials are on
the decline while the cost for medicine and medical services and
education continue to be high.
"If the cost of medicine, medical
supplies and treatment as well as educational services did not show an
increase. Also, the inflation rate may reduce," according to the report.
In the last six months of the year,
the global prices for commodities is forecast remain stable and
consumption will gradually increase. If nothing major is changed, the
NFSC remarked, inflation in Vietnam could be expected to be only 5%;
lower than government's goal of 6-6.5%.
The report said that if the
electricity price were to be raised by 1%, the CPI would increase by
0.07%. Based on these calculations, electricity prices could reasonably
be raised by 10-15%.
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Chủ Nhật, 30 tháng 6, 2013
The District 1 People’s Committee,
the local government, has proposed that the city administration expedite
implementation of a plan to establish pedestrians-only streets, including Bui
Vien and Pham Ngu Lao, the two main streets in the area dubbed Pho Tay
(Westerners’ Quarter).
Pham Ngu Lao Ward has emerged as a
popular hangout for visitors from all continents and they mostly gather there
after 9 p.m. It is therefore necessary to rearrange the services more
“logically” and avoid nuisance to local residents at night, the district
administration said.
It proposed that the city convert a
part of the September 23 Park into a night food court.It has also instructed
the Pham Ngu Lao Ward to crackdown on bars that cause excessive noise until
early morning, news website VnExpress said in a report Saturday.
District 1 authorities have inspected
47 facilities in the area and found six bars generating between 70-78 dB,
almost one and a half times the allowed noise levels. They are considering
punitive measures against these clubs.
Pham Ngu Lao Ward officials recently
summoned owners of more than 40 household businesses on Bui Vien, De Tham and
Do Quang Dau streets and ordered them to stop violations including occupying
sidewalks and streets, and causing excessive noise and pollution.
The ward has fined several eateries
for violations including encroachment of streets, failure to sign labor
contracts with employees, pay social insurance for them and give them
regular medical checkups, VnExpress said.
By Thanh Nien News
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Rescue
the rich or the poor?
After publishing the article “What Vietnam gets after
24 years as a rice exporting power?,” there were hundreds of enthusiastic comments
from readers have been sent to VietNamNet. We may see this as a good sign,
showing that the agricultural sector and farmers have received a lot of
attention and sharing.
Foretold death
Most of readers agreed that the difficulties and
barriers for farmers come from all aspects, from production to the market for
agricultural products. Reader Cao Tien summarized: "At the beginning of
renovation, agriculture was considered to be the fuse for renewal. When the
country reaps achievements, agriculture goes down. Have we turned our back to
the farmer?"
“The prices for seed, fertilizer, electricity, gas,
etc. - the cost of inputs for agricultural production - are constantly
escalating. Moreover, the problem of fake agricultural inputs, notably
fertilizer, seed, is still more serious," indicated a reader at
newriver@gmail.com.
Reader Nguyen Anh Minh analyzed: "A country with
70 percent of the population engaged in agriculture but
It is very difficult for the farmers to access to loans
for production development. "In theory, farmers are still supported
largely by the state through soft loans but in fact, each ten farmers, only
one can have access to soft loans," commented a reader at windsofheaven
... @ gmail.com.
It is more difficult for Vietnamese agricultural
products to go to the market. "A loose market, Chinese goods are
uncontrolled or loosely controlled so that toxic Chinese goods are also
labeled as Vietnamese products. The death of agriculture is foretold,"
warned a reader at ... rau@yahoo.com.
Another reader with email address quanhay@ ... pointed
out: "Exports of agricultural products face difficulties because
exporters do not try to find more customers. With many intermediate traders,
the costs and production costs of agricultural products are very high,
affecting the competitiveness. Farmers are forced to sell their products at
low price."
Meanwhile, the farmers do not have a rightful place in
the country’s policy and economic development orientation. Inequality in
giving the state’s priority and support for the agricultural sector compared
with other sectors still exists.
Reader Nguyen Van Bao said: "The income from one
ton of rice is not enough to pay tuition fees for a university student so how
farmers live with rice? Why we do not have "minimum wage" for
farmers? If they do not reach the minimum earning, they should be
subsidized."
"Sadly, when the real estate and banking sectors
encountered little difficulty, all screamed but when farmers face difficulty,
who pay attention to their concerns?" wrote reader at the email
2011@yahoo.com ...
"Farmers work very hard but they will loss all if
there is a storm but food trading firms still earn profit," reader named
Minh wrote.
Vu Ba Tien wrote: "The total investment in the
agricultural sector, which is seen the pillar of the national economy
accounts for a very low percentage. Why? Because they are big in number but
their voice is less important than a few estate, banking and finance, stock
tycoons..."
"All our policies just focus on the recovery of
land for industrial and estate projects. The fate of farmers and the market
for agricultural products depend on the market with a lot of pressure,"
commented a reader named Hung.
Reader Le Xuan An wrote: "Why the people who do
not know how to do business are given the exclusive rights to export rice and
why they always complain about losses. It is true that only the rich are
saved and nobody saves the poor and it is also true that interest groups
manipulate state policies."
"It is sad that while the state launched the real
estate bailout, agriculture and farmers are abandoned. With 70 percent of the
population are farmers, this is a failure of policy," reader Quang Hong
wrote.
Take action before it's too late
Several readers pointed out the biggest problems of the
agriculture and suggested solutions.
Reader Dang Quang indicated: "How can we perform agricultural
industrialization and modernization when agricultural land is dispersed and
farmers can plant anything they like? It would be unrealistic to expect that
millions of farmers to join an association."
"Currently, the agricultural authorities are less
concerned with their functions and duties. The apparatus of the agricultural
sector at grassroots level is mainly passive, waiting for budget allocation
and do small things," commented a reader at email ... hv@gmail.com.
The reader recommended: "Minister Phat should
restructure the agricultural management agency and the staff working in
agriculture before restructuring others."
"The leaders generally no longer consider
agriculture as the leading front and thus investment in agriculture is too
modest. Therefore, we need to look at the truth that to make our country
become an industrialized country is not as easy as everyone thought.
Agriculture must be put into the true place. Farmers must be more respected
and have bigger voice," a reader at email kien ... @ gmail.com,
suggested.
Many readers proposed to develop agriculture based on
the law of value and the law of supply and demand. Agriculture development
orientation should be integrated with the world.
Rreader Minh Tien wrote: "It is time to put aside
our strategy on ensuring food security to move to commodity production and
market economy. Because we are driven to ensure food security so improving
product quality and building the rice export market is forgotten.”
"We should not produce more rice when the world
does not produce rice because of low economic efficiency. We should plant
other crops of higher value and can be exported to the world," Nguyen
Thang suggested.
Frustrated with the monopoly in rice export, Phan Thanh
Lam said: "Why don’t we allow private firms to export rice instead of
relying on the Vietnam Food Association. Because of rice export monopoly,
like petrol import monopoly, our farmers suffer."
Some readers suggested that
"Let’s look to
At the same point of view, Le Hoang said that "
Compiled by Hoa Tran
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BUSINESS IN BRIEF 1/7
Authorities in
The city, which
sees the industry as one of its five key exports from 2011 to 2015, has asked
manufacturers to expand production, improve product quality and find new
markets.
In a report
released on Tuesday, the Thoi Bao Kinh Te (Viet Nam Economic Times) said that
most garment and textile factories had moved to rural areas, which there is a
rich source of manual labourers.
In recent years,
garment companies in
As a result, many
companies such as Anh Phuoc, Thai Tuan, Viet Thy, Viet Thang and Phong Phu
have increased their market share in the country.
A draft plan calls
for more local production of materials used in the garment and textile
industry, including cloth and accessories like zippers. Currently, most raw
materials are imported.
The plan targets
increasing the amount of locally produced raw materials from 45 per cent to
65 per cent by 2020.
The city's
five-year plan drawn up for the industry also calls for a design centre, a
factory to produce accessories for the industry, and a plant to produce
machinery for garment factories.
Currently, more
than 5,400 garment and textile manufacturing and trading companies are
operating in
The output of the
city's industry accounts for 37 per cent of the total figure nationwide.
According to the
city's Department of Industry and Trade, the local garment industry has maintained
growth despite many challenges during tough economic times.
Last year, the
industry's export turnover reached more than $4.3 billion, a year-on-year
increase of 11.5 per cent.
Inquiry
launched into tax-free car scam
Phuong Nam Company
in
The law allows
overseas Vietnamese settling down here to import their used cars or
motorbikes without paying import and value-added taxes.
The cars in
question, including three Lexus LX 570, one Lexus GX 460F and one Lexus RX
350, were sent to Phuong Nam Company from
In letters sent to
the Da Nang Customs Office, the company said that the cars were sent to the
wrong address.
The case is being
investigated by the General Department of Customs and Investigation Police
Agency of the Ministry of Public Securities.
If the importers
fail to prove the cars were the "used" assets of overseas
Vietnamese settling down in
The office said
that if the cars had been imported under normal rules the State would have
collected tens of billions of dong in taxes.
At present, 21 cars
registered as assets of returning Vietnamese are being held at
Customs statistics
show that 178 used cars imported by overseas Vietnamese are being held at
ports around the country.
Deputy Director of
the Viet Nam Customs Nguyen Van Can said those found to have abused car
import rules will be reported to Customs' Anti-smuggling Investigation
Department.
Can said those who
forged papers to import cars would be charged criminal liability. The
imported cars may also be confiscated.
VF1 to
become open-ended fund
The investors of
the Viet Nam Securities Investment Fund (VFMVF1) decided to convert from a closed-end
fund to an open-end fund at an extraordinary investors' meeting yesterday.
VFMVF1, which was
the first closed-end public fund, will have its final trading day on the
Transactions will
be carried out two times a month.
The net asset value
(NAV) of the fund ending March reached over VND1.734 trillion (US$82.6
million) with first-quarter profit of VND214.5 billion ($10.2 million).
As of June 20, investments
in listed stocks made up 67 per cent of the portfolio, with 64 per cent
focusing on large-cap stocks. Cash occupied 31 per cent of the fund's assets.
The fund will
continue its balanced investment strategy, allocating 80 per cent of assets
to stocks and this proportion can increase to 90 per cent in case of an
optimistic market outlook. Another 20 per cent will be assigned to Government
and corporate bonds and cash.
According to the
fund, foreign ownership in an open-end fund will not be capped at 49 per
cent. This means that through capital contribution, foreign investors can
increase their holdings in major companies in which the room for foreign
investment has been almost exhausted.
"Converting
the fund is a good option to satisfy the diverse investment demand of
investors," the fund's representative said.
Taxation imposed on
fund share transactions is no different between the two types of funds.
Open-end funds are
popular schemed around the world, but were only introduced to
An open-end fund is
deemed to offer a more flexible investment option as investors can buy and
sell shares directly from the fund itself.
It contrasts with a
closed-end fund which typically issues all the shares at the outset, with
such shares being tradable between investors thereafter.
Snail-paced
projects revoked in Quang Ngai
Licences for 42 out
of 117 snail-paced projects in central
The revoked
projects, including 11 in Dung Quat Economic Zone and eight in provincial
industrial zones, had made no progress since the day of licensing because of
financial shortages.
By the end of 2012,
the province had 262 projects licensed, worth VND190 trillion (US$9 billion).
Firms told
not to rely on banks
Small- and
medium-sized enterprises must try to generate more capital on their own and
not rely on bank loans, a seminar heard yesterday.
The seminar, which
discussed cash flow solutions for SMEs, was organised by the HCM City Union
of Businesses Association in collaboration with banking portal laisuat.vn
under the sponsorship of SeABank.
Dang Bao Khanh,
general director of SeABank, said economic growth had relied on loans from
commercial banks and that enterprise-owned capital represented only 20 per
cent of total needed capital for business.
Banks are also
businesses and must preserve their capital, he said, adding that banks and
businesses need to work together to unfreeze capital flows.
SeABank's current
liquidity is high and the bank is ready to support funds for enterprises, he
said.
But companies need
to demonstrate that their projects are feasible and prove they can generate
cash flow to convince credit institutions to approve loans.
To support SMEs,
the bank is offering a credit package worth a total of VND2,000 billion with
preferential interest rate of 9-11 per cent per year between March 15 and
December 31. At least VND200 billion of that amount has been disbursed to
businesses.
In addition to the
provision of support to enterprises in urban areas, SeABank is also focusing
on business households in the rural areas with small loans and preferential
interest rates.
Nguyen Trung Kien,
manager of the
The current loan
interest rate has fallen by 3-4 per cent to 8-10 per cent per year for
sectors such as agriculture, exports, support sector, hi-tech and SMEs.
The interest rate
is equal to that in the 2005-06 period and lower than in 2007, he said.
In the coming time,
the SBV will ask commercial banks and credit institutions to settle bad debts
and restructure their organisations to support businesses, especially SMEs.
Tran Du Lich,
member of the Economic Committee of the National Assembly, said "the
development of SMEs is a key condition in promoting a sustainable
economy".
He pointed out that
SMEs should not depend heavily on commercial banks.
Currently, in
"Challenges
continue to face both the global and local economy, but opportunities do
exist for businesses who know how to recognise and grasp them," Lich
said.
Despite a mixture
of opportunities and challenges, it is a good time for businesses to
restructure and develop in a sustainable way, contributing to a healthier
market, he added.
The Vietnamese
economy can recover by the end of the year if the Government's resolutions No
1 and No 2 and support package of VND30 trillion for the property sector are
implemented effectively.
The country's
growth rate is expected to reach 5.5 per cent by the end of this year and 6
per cent next year.
To reach those
goals, inflation should be controlled and trust in the market should be
restored.
Lich also suggested
that the inflation rate should be maintained at 7 per cent from now to 2015.
PetroVietnam
exploration arm surpasses oil and gas target
The PetroVietnam
Exploration and Production Corp (PVEP) tapped 1.8 million tonnes of oil and
701 million cu.m of gas in the first half this year, surpassing its targets
by 6 per cent and 17 per cent respectively.
In the period, PVEP
also signed two new oil and gas contracts with domestic partners and put four
new oil fields into operation.
In the remaining
half of this year, PVEP needs to make every effort to complete its output
targets.
This could be a
challenge for the corporation because reserves in existing fields are falling
sharply while new, smaller fields are likely to fall behind schedule.
Supermarkets
in
Supermarkets in
Sai Gon Co.op has
cut prices by up to 45 per cent on more than 2,000 items, mainly essential
goods, until July 14 at all of its outlets – Co.opmart, Co.opFood and
Co.opXtra Plus Thu Duc.
To celebrate the
Viet Nam Family Day and mark its own 15th anniversary, the Big C supermarket
chain is offering discounts of 5- 50 per cent on 1,200 products including
fresh and processed food, dry food, household appliances, fashion items,
cosmetics, electronic products and other goods until July 1.
Under its "Am
ap gia dinh Viet" (Warming Vietnamese family) programme, the VinatexMart
supermarket chain is also offering big discounts on garments and other
products until July 11.
Banks push bad debt
reforms
The State Bank of
Viet Nam (SBV) should reduce the 65 per cent rate of real estate collateral
for loans being sold to the Viet Nam Assets Management Company (VAMC),
bankers said in a Ha Noi meeting on Wednesday.
According to the
SBV draft circular on the VAMC's operation, the assets firm will only buy
non-performing loans (NPLs) backed by collateral, while at least 65 per cent
of the collateral value must be real estate.
At the meeting to
make recommendations for the draft circular, representatives from banks said
the 65 per cent rate was too high, hindering banks from selling NPLs to the
VAMC as intended by the central bank.
Agribank said loans
with 65 per cent collateral in real estate were only held by real estate
businesses. For other production companies, which preferred investing in
machinery and factories to land, this ratio was insignificant.
Deputy head of
Vietcombank's Debt Capital Market Division Nguyen Thi Kim Oanh said the rate
was typically 50-60 per cent at his company, adding that 65 per cent was unfeasible.
The central bank
should lower the rate to roughly 40 per cent so banks could realistically
sell loans to VAMC, Vietcombank suggested.
Director of the
Bank for Investment and Development of Viet Nam (BIDV)'s Legal Division Bui
Minh Khai pointed out that the draft circular did not regulate who – VAMC or
credit institutions - would appraise real estate collateral for loans.
Vietcombank's Oanh
posited that VAMC would decide the appraisal of collateral after obtaining
recommendations from independent advisory companies.
Bankers also
proposed reconsidering the provision that VAMC will only buy individual loans
worth more than VND1 billion (US$47,200).
Banks, especially
Agribank, could not sell bad debts lent to household businesses and
producers, as most of the loans were less than VND1 billion, BIDV's Khai
added.
Seafood
exporters face net of red tape
The draft circular
on controlling the quality of seafood exports, from raw materials through to
the finished products, presents many challenges to seafood exporters, says
the Viet Nam Association of Seafood Exporters and Producers.
The draft contained
many amendments to existing Circular 55 and would not only focus on the
control of quality of finished products before shipping.
If the draft was
accepted, the department would assess the quality of the entire production
chain, as well as batches of the finished product, the National Agro Forestry
Fisheries Quality Assurance Department said.
However,
association deputy general secretary Nguyen Hoai
The draft
stipulated firms must stop exporting products if they had more than three
batches of similar products that failed to meet the quality and food safety
standards of export markets.
Viet Nam
the second biggest SE Asia market for Bosch Group last year
The Vietnamese
market generated US$286.4 million in turnover for Bosch Group last year,
accounting for 31.3 per cent of the group's turnover in
The news was
announced by the world leading technology and service supplier in
The German firm
said its global revenue last year hit $68.3 billion, an increase of 1.9 per
cent, including $16.4 billion sales in
Vo Quang Hue,
General Director of Bosch Viet
Last year, despite
the difficult economic situation, Bosch Viet
Vinatex
plans to plant 10,000ha of cotton in Quang Tri by 2015
The Viet Nam
National Textile and Garment Group (Vinatex) has set a target of planting
10,000ha of cotton in the central
To realise this
target, the group plans to implement a 2,000ha project in Trieu Phong District
in the 2013-14 period.
The provincial
Department of Planning and Investment and relevant departments have been
asked to help Vinatex carry out a feasibility study on the project.
The district
People's Committee will work with the Departments of Agriculture and Rural
Development, and Natural Resources and Environment to allocate land to
Vinatex for a trial plantation.
Seafood
exports expected to earn US$6.5 billion this year
The Vietnam
Association of Seafood Exporters and Producers (VASEP) says seafood export
turnover already reached roughly US$2.88 billion in the first six months of
the year, up 0.9 percent against the same period last year.
In the first five
months of the year, the country earned US$470.4 million from exporting
aquatic products to the
Its aquatic exports
to
VASEP general
secretary Truong Dinh Hoe says there are promising prospects for exporting
seafood products to the
From now until the
end of this year, domestic businesses hope to enjoy lower interest rates or
bank loans.
Deputy Director of
the Department of Fisheries Nguyen Huy Dien says the seafood sector is trying
its best to achieve the export target of US$6.5 billion.
Deputy Minister of
Agriculture and Rural Development Vu Van Tam says that in the remaining
months of the year, the agricultural sector will focus on exporting shrimp to
make a higher profit as other nations in the region are facing difficulties
in export because of shrimp disease.
Vietnam-China
Border Trade Fair to open in November
The 13th Vietnam-China
Border Trade Fair, themed “Cooperation-Friendship and Integration –
Development,” will take place in the city of
As part of the
national trade promotion programme for 2013, the fair is expected to
accommodate 650-700 stands run by 500 enterprises from both countries.
The fair is
organised annually, alternating between Lao Cai province and
On display at this
year’s event will be a wide range of commodities such as agro-forestry,
seafood products, machinery, electronic and electrical devices, handicrafts,
fine art products, pottery and wooden furniture.
Several tours in the
economic corridor, which links
According to Le
Tien Dung, Director of Lao Cai province’s Trade, Investment and Tourism
Promotion Centre, his province and
Price of
poultry and pork falls, feed hikes
While feed price
has seen a continuous rise in the last six months, price of poultry and pork
has fallen by 40-46 percent compared to the beginning of the year, said the
Ministry of Agriculture and Rural Development on June 25.
According to the
Ministry, the breeding industry has faced much difficulty in the last six
months, especially in the southern region. Selling price has been lower than
cost price causing huge losses to breeders.
A kilogram of
industrial chicken fetched VND32,500 in January but has now dropped to only
VND17,000-19,000 a kilogram in the southern region.
Egg price has
plunged from VND24,000-27,000 per pack of ten to VND18,000-19,000.
While raw material
for feed production has escalated by 24-42 percent.
Millions no
longer under personal tax bracket after July
Once the new threshold
for personal income tax is increased to VND9 million (US$430) per month
starting July 1, millions of people will no longer come under the personal
income tax bracket.
The Ministry of
Finance is submitting a plan to the government asking for amendments to the
tax law and raising the threshold of personal income tax from the current
VND4 million ($190) to VND9 million per month and deduction for families from
the current VND1.6 million to VND3.6 million per dependant per month.
This means that
only single persons who earn less that VND9 million per month and people with
one dependant who earn less than VND12.6 million will not be obliged to pay
tax from July 1.
With the new
threshold, the state budget revenue will decrease by VND5,200 billion
($247,000) and about 2.8 million people will no longer pay tax on their
income starting next July.
In addition, there
will be other allowances such as toxic allowance or for people who have
contributed in wartime, and tuition fee for laborers’ children who study in
oversea countries. These will all be exempt from tax.
Income from
transfer property assets between husband and wife, parents and children,
parents-in-law, meal wages, night shift wages and overtime work wages will
also see tax exemption.
The new tax law
also provides for reduction of tax if people face natural disasters, fire,
illnesses and such accidents.
The Ministry of
Finance also announced that taxpayers and their dependants will receive
reduction only if they have a tax code, without which they cannot file for
exemption. Taxpayers have three months to submit documents of
dependants to the Ministry.
Nguyen Van Phung
from the Ministry said organizations and companies have been instructed with
procedures to follow and the Tax Department said it will issue a tax code to
taxpayers after July 1.
Foreign firms which
want to invest in
The HCM City
Investment and Trade Promotion Centre joined with some local departments to
hold a dialogue on June 26 between municipal authorities and enterprises in
the city.
According to Dung,
many foreign companies plan to invest in the Vietnamese advertising sector,
however, complicated administrative procedures discourage them. They have
requested to submit their application documents to the city’s Department of
Planning and Investment which will seek approval from the ministries of
planning and investment, industry and trade, culture, sports and tourism and
information and communications. Therefore, businesses have to wait at
least two months for this stage.
Then enterprises
are suggested to directly come to
“A number of
consulting firms charge between USD10,000 and USD20,000 for an investment
license, including bribes. Many foreign advertising companies complained to
us about the high fees, meanwhile the registered capital for an enterprise in
this sector is around USD100,000,” he noted.
Nguyen Hoang Minh,
Deputy Director of the HCM City Department of Planning and Investment said
the department is seeking measures to support enterprises but due to
licensing relating to many agencies at different levels, speeding up the
processing of the applications was beyond their control.
Minh added that his
department had informed the city People’s Committee of the licensing issues
and also raised them at ministries and agencies meetings. However to date no
solution has yet been worked out.
Truong
Thanh sells 20% stake to foreign partner
Truong Thanh
Furniture Corporation (TTF) intends to sell a 20% stake to a foreign partner
as part of its charter capital increase plan.
Vo Truong Thanh,
chairman and general director of TTF, said that the stake purchase with a
partner from an East Asian country aimed to increase charter capital and
reduce dependence on bank loans. He declined to give the foreign partner’s
name, however.
According to Thanh,
TTF plans to have two share issuances, with 14.4 million shares priced at
VND5,000 each and issued for existing shareholders in the first phase.
Meanwhile, the second share issuance will be for the foreign partner.
The management
board presented to shareholders the share issuance plan of issuing 14.4
million shares to increase charter capital from VND590.6 billion to VND735
billion at a meeting in April. The expected time for first issuance is in the
second or third quarter.
Thanh said that the
in-principle deal has been signed. If it works, the stake proportions at TTF
will have a big change, with equal stake amounts seen among the three groups
of Thanh’s family, local shareholders and foreign shareholders.
TTF entered its
difficult period in last year’s second quarter when many banks lowered credit
limits and the firm was in need of stable working capital to meet the
increasing production demand.
The credit limit
reduction at banks has interrupted the firm’s cash flow, resulting in weaker
production. After that, banks have continued to cut credit limits when seeing
lower business results at TTF.
TFF earned only
VND2.5 billion in after-tax profit last year while the figure obtained in
this year’s first half is VND5 billion.
Vinacomin
warns of State loss on coal export tax hike
As the export
tariff on some types of coal is now raised to 13%, coal exports in the second
half of the year may be only three million tons instead of seven million,
causing a loss of some VND500 billion to the State budget, said the
State-owned coal corporation.
Vietnam National
Coal and Mineral Industries Group (Vinacomin) gave such a warning after the
Ministry of Finance issued Circular 71/2013/TT-BTC on coal export tariff
hike. From July 7, the tariff on stone coal, briquette, coke, semi coke,
lignite and peat, whether agglomerated or not, will be raised from 10% to
13%.
Nguyen Van Bien,
deputy general director of Vinacomin, told the Daily that Vinacomin in the
year to date had exported seven million tons of coal.
Initially, the firm
expected an additional seven million tons would be exported in the rest of
the year. However, the increase in coal export tariff may slow down coal
export.
To avoid losses,
Vinacomin will have to raise export prices. Thus, many buyers may switch to
other countries with more competitive prices, he said.
He forecast only
three million tons of coal would be exported from now to the year’s end, down
four million tons from the initial expectation.
If three million
tons of coal was exported with a tax rate of 13%, export tax revenue would
rise by VND130 billion. However, revenue from natural resource tax, value
added tax and environment fee would drop by an estimated VND500 billion, he
said.
Regarding the price
of coal sold to power plants, he said the price must be hiked further because
it currently stood at only 85-87% of the cost of coal production in 2013.
Therefore, the price of coal sold to the power sector will soon be adjusted
to match the production cost and follow the market mechanism.
On April 20,
Vinacomin increased the price of coal sold to the power industry by 27%,
dealing a hard blow to power plants because coal price now makes up 50-70% of
the total cost of electricity production at coal-fueled power plants.
Dairy
products lead FMCG sector
Dairy products
continue to record healthy growth and lead the fast-moving consumer goods
(FMCG) sector, according to a report by Kantar Worldpanel
Dairy products have
achieved 12% growth in urban areas and 20% in rural areas, gaining top spot
in the local FMCG industry.
Experts have
remarked the local dairy market is in a hot growth period, with an average
growth rate of some 20% per year.
Dairy products take
a major part of the spending on FMCG in urban areas. Recently, this group of
items has made a significant breakthrough in rural areas, says the report.
In urban areas, the
average monthly spending on FMCG is VND1.13 million per household, in which
VND372,000, or 32%, is spent on dairy products.
Meanwhile, in rural
areas, an average VND515,000 is spent on FMCG every month, with spending on
dairy products reaching VND114,000, the third largest part of the total sum,
only after food and beverages.
As per the report,
growth in the FMCG market is slowing down in both urban and rural areas. Most
shopping channels in urban areas have recorded modest growth due to the
overall market decline.
Currently, about 60
dairy producers are competing in the local market, mainly in the fresh milk
segment.
The powdered milk
segment also witnesses fierce competition, with a profit margin of up to
40-50% for producers, said Tran Bao Minh, managing director of International
Dairy Products Co. (IDP).
In this segment,
there is a wide gap of some 50% between the prices set by local dairy
producers like Vinamilk and Nutrifood and those quoted by foreign dairy
firms, meaning locally-made powdered milk is currently half the price of
foreign milk. Yet, their quality is essentially the same, Minh noted.
Local and foreign
powdered milk are made from ingredients of the same source with the same
formula applied, produced in equally modern production lines, and contained
in the same kind of package. Foreign milk has higher prices because
Vietnamese consumers still prefer foreign products and marketing strategies
of foreign dairy firms are very good, he said.
Vinamilk is
competing fairly with foreign rivals and gradually shifting to production of
high-quality products.
Last year, Vinamilk
sold around four billion units. The sales volume will rapidly increase when
the company starts operating two new factories with much higher capacity in
Binh Duong.
Vinamilk said its
revenue target of VND32.5 trillion for 2013 was attainable because the
company so far had accomplished half of its goal.
Private
firm opens advanced rice dryer in Mekong Delta
Nam Nha Private
Enterprise on Wednesday inaugurated the demonstration model of an automatic
fixed-bed rice dryer in
The model worth
over VND5 billion is sponsored by the Danish Embassy to
Such a rice dryer
is suitable for the Mekong Delta. It minimizes labor and operating costs, and
thus increases corporate profits.
In addition, the
rice dryer saves construction space. Its capacity can be raised at just a low
cost.
Duong Xuan Qua,
director of Nam Nha, said his firm had received eight orders for this rice
dryer from individuals and businesses in the Mekong Delta.
Nam Nha will seek
ways to further lower the cost of installing such a facility to meet the
affordability of rice mills. In addition, the enterprise will give advice on
efficient use of husk and electricity as fuels.
Huynh The Nang,
vice chairman of An Giang Province, said An Giang currently had the largest
number of rice dryers in the Mekong Delta. The fixed-bed rice dryer
manufactured by Nam Nha is considered the most advanced one in
Animal feed
imports rise despite troubled livestock sector
The country in the
year to date has imported US$1.21 billion worth of animal feeds and
ingredients, up 48.2% year-on-year, although the local livestock industry is
still in trouble.
The livestock
industry since early this year has been struggling with rampant diseases and
shrinking output. Many households cannot continue farming due to the lack of
funds.
In this context,
foreign-invested livestock firms have expanded operations to increase their
market shares. This is the reason why animal feed imports have surged by
nearly 50% even though local farming households are facing multiple problems,
said experts.
Foreign-invested
enterprises (FIEs) with industrial livestock farming have imported a large
volume of animal feeds in the first six months. In addition, they have
boosted imports of animal feed ingredients from their parent companies to cut
costs, leading to a strong rise in imports of this item.
Meanwhile, animal
feed production at enterprises catering to household husbandry is on the
decline.
An animal feed producer
in Lai Thieu, Binh Duong, said the sales volume of his company in the year’s
first half had dropped by nearly 50% over the same period last year.
“We are focusing on
recovering old debts and thus do not prioritize production. The purchasing
power has significantly weakened because many livestock farmers in the
southeastern region have stopped farming.”
“In such a
difficult situation, there’s hardly any animal feed producer able to achieve
growth. Therefore, it is unlikely that animal feed makers increase imports of
animal feeds and their ingredients,” he said.
Pham Duc Binh, vice
chairman of the poultry association in Dong Nai, remarked the livestock
industry had begun to eliminate the players with limited experience and
financial capability. These businesses may go bankrupt and small-scale
livestock farming can hardly survive in the future.
This is both a
challenge and an opportunity for the livestock sector to overcome the current
difficulties and progress to industrial farming for better control on
diseases and production costs, he said.
Cement
exports rise sharply
Cement exports
totaled nearly 5.2 million tons in the year’s first half, much higher than
3.2 million tons in the same period last year, with Taiwan, Singapore and
Indonesia as major buyers of Vietnam’s cement, said the Ministry of
Construction.
The ministry in a
recent report states that cement sales have amounted to 27.9 million tons
this year, posting growth of 18.3% year-on-year. Of which, cement export
volume was around 5.2 million tons, jumping 70% over the-year ago period.
Due to slackened
demand at home, many companies in the industry have focused on shipping
products abroad, said Tran Van Huynh, chairman of the Vietnam Construction
Materials Association. The cement industry expects to export over 10 million
tons of products this year, or 15% of the nation’s total output, he informed.
Taiwan, Singapore,
Indonesia and Cambodia are the major buyers of Vietnamese cement products,
with the export price ranging from US$40 to US$42 a ton, some US$8-10 a ton
lower than the global average price, Huynh told the Daily.
Exports have helped
reduce this month’s inventories compared to last month, at around 2.6 million
tons only, with the unsold volume of Vietnam Cement Industry Corporation
(VICEM) accounting for a half, the construction ministry reports.
There have been no
changes of cement selling prices in the market in the first six months
despite the higher coal, power and fuel prices which have pushed up
production costs and caused difficulties for industry players. The gap
between cement supply and demand is seen as inconsiderable at home.
The cement industry
turns out a combined 66 million tons annually while this year’s total cement
consumption volume is forecast at 56-57 million tons.
Bulk of FDI
flows into processing-manufacturing
The first half of
the year has seen positive results in foreign direct investment (FDI)
attraction, with the processing and manufacturing sector the strongest FDI
magnet.
In the year to
date, 554 new FDI projects have been granted investment certificates with
total pledged capital of more than US$5.8 billion, a rise of 3.7% over the
same period last year. Better still, 217 ongoing projects have increased
capital by US$4.66 billion, up 35.7% year-on-year.
Overall, the
country has lured over US$10.47 billion of FDI, up 15.9% compared to the same
period in 2012, said the Foreign Investment Agency (FIA) under the Ministry
of Planning and Investment.
Notably, the
majority of such FDI inflow has gone into the processing and manufacturing
sector. Some 260 processing and manufacturing projects have received more
than US$9.3 billion of fresh and additional FDI, accounting for 88.9% of the
total FDI inflow so far.
Most of the
projects in this sector have large registered capital. For example, Samsung
Electronics Vietnam Co. Ltd. has pledged US$2 billion for a project for
manufacturing and assembly of electronic products in Thai Nguyen.
Meanwhile, Bus
Industrial Center Co. Ltd. of
Real estate despite
many difficulties comes in second place with total fresh and additional FDI
of nearly US$420 million, making up 4% of the total.
The third place
goes to wholesale, retail and repair, with 79 new projects and total
newly-registered and additional capital of more than US$178 million.
Another highlight
in the FDI attraction picture is stable disbursement, said FIA. So far, an
estimated US$5.7 billion has been disbursed, up 5.6% year-on-year, which is
described as a fairly high growth rate in the context of economic woes.
With such good
results, analysts said the target for total FDI inflow of US$13-14 billion
and realized capital of about US$10.5-11 billion set by the planning ministry
was within reach and might even be exceeded.
In the year to
date,
The project of Nghi
Son Oil Refinery and Petrochemical Co. Ltd. in Thanh Hoa with a capital
increase of US$2.8 billion contributes the most to the total FDI inflow in
the first six months, followed by the US$2-billion project of Samsung in Thai
Nguyen.
M&A
outlook still bright
Although the value
of merger and acquisition (M&A) deals in
In the first
quarter of 2013, the market recorded 14 M&A deals worth US$676 million,
versus some US$1.5 billion in the same period last year, says the
Ten of these 14
deals involved foreign entities. Among them, the most prominent deal is the
U.S.-based private equity firm KKR pouring US$200 million into Masan
Consumer, raising its stake in this company from 10% to 18%.
In March, Mekong
Capital sold part of its stake in Thegioididong to a strategic financial
investor at US$110 million, and thus its shareholding fell from 32.5% to
25.8%. Two months later, Thegioididong introduced two new investors, namely
Robert A. Willet, former CEO of BestBuy International, and CDH Electric Bee
Limited.
Thai firms
continued to be dynamic in M&A activity in the first quarter. Minor
International Hospitality Group acquired Life Heritage Resort and Life Resort
Quy Nhon at US$16 million, while Berli Juker took over Ichiban, a soybean
company, via a US$4.7-million transaction.
According to
Stoxplus, M&A deals in 2012 totaled US$4.9 billion, sharply down from
US$6.3 billion in the preceding year. Such a decline is ascribed to less
active local investors, while foreign investors remained aggressive, making
deals worth about US$3.5 billion, equivalent to the same period in the
previous year.
Japanese investors
kept flocking to
So far, there has
been no official report on the number of M&A deals in the first half of
the year. The figure will be revealed in August, when the
M&A has been a
thriving market in recent years. However, it seems indirect investment has
not been recorded by State agencies and has not accounted into the total
foreign investment inflow.
Despite the M&A
value decline, experts at Stoxplus still believe the M&A market will
remain lively in the coming time and there will be a shift from FDI to
M&A.
In the construction
industry, the companies stuck in the frozen property market will be
attractive targets for foreign investors.
The silence in the
financial and banking sector will be broken when restructuring begins, with
the number of banks to be reduced from 39 to around 13-15 by 2017.
Among the 39
existing banks, only 15 have foreign strategic investors. The fact that
foreign investors are now allowed to hold higher stakes in banks is expected
to stimulate M&A activity in the banking sector.
Sources said
foreign food and beverage giants like Asahi,
Poor
labourers offered chance to work abroad
The administration
of
Under the city’s
3.3 billion VND (145,000 USD) programme, these people will be provided with
free vocational training and instruction in foreign languages.
According to the
city’s Department of Labour, War Invalids and Social Affairs, the city will
also continue to operate a programme that offers soft loans of up to 100
million VND ( 4,700 USD) to poor individuals.
The loans are
sourced from the Fund for the Poor, the Social Policy Bank, and the Bank for
Agriculture and Rural Development.
The department has
assigned the Overseas Manpower Service Company (Suleco) to implement the new
programme through the end of the year.
Tran Hieu Liem,
deputy head of the department’s Labour, Wage and Salary Division, said that
about 600 labourers would be send overseas by the end of the year.-
Treasury
collects budget from Gov’t bonds
The State Treasury
mobilised 2.115 trillion VND in Government bonds through a tender organised
by the Hanoi Stock Exchange (HNX) on June 27.
The HNX put forward
Government bonds worth 6 trillion VND in total for tender on the day.
The mobilised funds
include 1.1 trillion VND in two-year bonds with an annual interest rate of
6.78 percent, 200 billion VND in three-year bonds with an annual interest
rate of 7 percent and 815 billion VND in 10-year bonds with an interest rate
of 8.9 percent.
Five-year bonds
worth 600 billion VND failed for tender as the annual interest rate offered
was as much as 8.5 percent higher than the ceiling interest rate imposed by
commercial banks.
The State Treasury
has so far this year mobilised nearly 94 trillion VND in Government bonds via
tenders.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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