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BUSINESS IN BRIEF 27/6
Agricultural
exports decline
Agricultural
exports from
Most worthy of note
is coffee (by 24.2% and 22.4%, respectively), followed by cassava (19.4% and
15%), rubber (5% and 20%) and rice (7% and 10%).
Nguyen Thi Hong,
Head of the Planning Department under the Ministry of Agriculture and Rural
Development, said the agro-forestry and fisheries sector has achieved a high
growth rate in recent years, mainly due to its abundant supply. But since
mid-2012 many agricultural products in the world have dropped in prices.
In addition, the
weak purchasing power of domestic consumers and low prices remain a stumbling
block to farmers’ production and income levels.
The Minister of
Agriculture and Rural Development Cao Duc Phat has urged relevant agencies to
coordinate in removing an helping enterprises promote export business to
major markets, such as Japan, the EU, the Republic of Korea, Russia and China
while intensifying their control of agricultural products imported to Vietnam
on account of food safety.
Exports in the
first half of this year were estimated at US$13.53 billion, down 1.7 percent
over the same period last year. Of the figure, major agricultural products
fell by 10.7% to US$7.59 billion and trade surplus by 18.5% to US$3.7
billion.
Exports to
According to the
General Department of Vietnam Customs, phones and components topped the list
of consumer items, earning a monthly record of US$40.2 million, 4.5 times
higher than the previous month and up 7.6 times than the same month of last
year.
However, the total
earnings from phones and components exported to
The turnover
difference between these two groups of products has been narrowed
considerably from US$155 million in 2011 to US$140 million in 2012 and
US$14.7 million in the first five months of this year.
SMEs to get
support from eco-consulting centre
Eight small- and
medium-sized enterprises (SMEs) in
Sponsored by the
ASEM SMEs Eco-Innovation Centre (ASEIC), the project aims to strengthen the
green competitiveness of SMEs in ASEM-member countries, especially in
developing countries, by disseminating and utilising green management and
technology in their business.
In 2011, ASEIC
launched its first ASEM SMEs Eco-Innovation Consulting Project for 33 SMEs in
Hyun Ae An, manager
of ASEIC's Green Business and Technology Support Department said 16 SMEs in
northern Vietnam, which took part in the project in 2011 and 2012, have
improved their environmental awareness as well as production efficiency.
"This year is
the first time the project is implemented in the south, from June to
October," she said. "As of today, more than 30 SMEs have registered
to take part in the project, but we will choose eight firms to provide
specific consulting services."
Under ASEIC's
consulting process, after selecting eligible SMEs for the programme, ASEIC in
collaboration with the Small and Medium Enterprises Development Support
Centre 2 in
Based on the
assessment, both short- and long-term environmental management and cleaner
production strategies will be established.
FDI hits
nearly US$10.5 billion in six months
In the first half
of this year,
In the same period,
around US$5.7 billion was disbursed, up 5.6% compared to last year’s figure
and more than US$9.3 billion poured into the processing and manufacturing
industries, accounting for 88.9% of total FDI.
Topped the list of
45 countries and territories investing in Vietnam was Japan with nearly US$4
billion accounting for 38.1% of the funding, followed by Singapore with
US$3.41 billion, making up 32.6% and Russia with US$1 billion, equal to 9.7%.
Among FDI projects
operating in 46 provinces and cities nationwide are the Nghi Son Oil Refinery
in Thanh Hoa province with an additional capitalisation of US$2.8 billion
from
Export earnings
from the FDI sector, including crude oil, in the first six months rose 24% to
US$41.1 billion from a year earlier, accounting for 66% of
US pursues
tra, basa fish investigations
Vietnamese tra and
basa fish will continue to face challenges in the
The Vietnam
Association of Seafood Exporters and Producers (VASEP) said that the US
Senate adopted its 2013 Farm Bill on June 10. However, the bill did not
include some key proposals on food safety by Senator John Mc Cain from
Arizona and Senator Jeanne Shaheen from New Hamshire regarding the United
States Department of Agriculture (USDA) halting its controversial
investigations into Vietnamese tra and basa fish.
Last year, Senators
John McCain and John Kerry from
This year, many
Senators have voiced strong support for removing the investigations. As a
result, a similar draft bill was proposed in the House of Representatives and
later adopted by the Agricultural Committee of the House of Representatives
at the end of May 2013.
Ten more
congressmen have rejected the investigations. In his draft financial budget
for 2014, President Barack Obama also recommended waiving the investigation
to avoid overlapping management among the Food and Drug Administration (FDA),
the National Marine Fisheries Service (NMFS), and the USDA, which would save
US$14 million next year.
A number of
congressmen warned that the investigation of tra and basa fish may lead to a
similar reaction against US beef exports in foreign markets.
VASEP Secretary
General Truong Dinh Hoe said the Senate’s latest vote demonstrates
inconsistency among US lawmakers.
In the first half
of this year, tra export earnings are estimated at US$$800 million, which is
lower than the shrimp export value, and local seafood exporters will face
more difficulties in the second half of this year,according to the VASEP.
15
businesses certified “Dolphin Safe”
Fifteen Vietnamese
tuna fishing businesses have been certified as being “Dolphin Safe” and they
can label their tuna exports to the EU, US and
The Vietnam
Association of Seafood Exporters and Processors (VASEP) said the Earth Island
Institute (EII) has asked Vietnamese tuna exporters not to use gillnets to
catch tuna, based on a report from the Western and Central Pacific Fisheries
Commission (WCPFC) on tuna exploitation in Vietnam’s Binh Dinh, Phu Yen and
Khanh Hoa provinces.
The EII warned that
Vietnamese tuna exports might not be granted the “Dolphin Safe Tuna” label
any longer for fear that the use of gillnets affects dolphins’ living
environment and the marine ecosystem.
The 15 Vietnamese
tuna exporters confirmed that they do not use gillnets because tuna caught
with them does not meet the criteria for exports.
The VASEP said if
Vietnamese businesses are not granted the “Dolphin Safe” certification
Vietnamese tuna cannot be sold in the major markets.
EII also
recommended that Vietnamese tuna exporters label all their tuna products with
State certifications.
Mixed
reaction to VN trade deficit figures
The nation ran a
trade deficit of US$1.4 billion in the first six months of this year,
equivalent to 2.3 per cent of the country's total export turnover.
The country's total
export turnover in the first half of the year reached $62.053 billion, a rise
of more than 16.1 per cent over the same period last year. Total import
turnover jumped 17.4 per cent, reaching $63.456 billion.
The foreign direct
investment (FDI) sector continued to surpass the domestic sector in both
exports and imports, said Le Minh Thuy, director of the General Statistics
Office (GSO)'s Trade Department.
The FDI sector
contributed up to $41.14 billion to the total export turnover, a rise of 24.7
per cent over the same period last year, while the domestic sector saw a
slight increase of only 2.2 per cent.
The FDI sector also
saw imports increase by 27.8 per cent to $35.726 billion, significantly
higher than the domestic sector's 6.3 per cent increase.
In the first half
of the year, the FDI sector recorded a trade surplus of up to $5.414 billion.
June alone accounted for $2.55 billion of that surplus.
FDI enterprises
mainly exported phones, electronics and garment-textile products and imported
mainly raw materials for production.
According to the
GSO, imports from
The excess of
imports over exports hit nearly $11 billion, increasing up to 64.3 per cent.
Products imported
from
According to the
Ministry of Industry and Trade, the domestic industrial production sector was
recovering, estimated to rise 5.3 per cent and see a long-awaited decrease in
inventories.
However, Thuy
cautioned that it was still not certain domestic enterprises would be able to
recover production, as their imports saw low growth of only 6.3 per cent in
the year's first half.
Modern
gantry cranes gives Hai Phong port a lift
A system of four
rubber-tyred gantry (RTG) cranes and a new container station have recently
been put into operation at the Tan Cang Dinh Vu Port in the northern city of
This upgrade is
part of the port's modernisation scheme to increase its capacity so it can
meet the growing demand for cargo transport and reach international standards
in the near future.
With a total
investment of VND100 billion (US$4.76 million), the four RTG cranes
manufactured by Japan's TCM Corporation were completed and put into service
along with a new 196,250-square metre container station.
The new system will
enable the port to manage container goods more effectively and increase its
capacity.
PVFC
announces merger plan with Western Bank
The PetroVietnam
Finance Joint Stock Corp (PVFC) have announced a merger plan with Western
Bank which is facing financial difficulties and need urgent restructuring.
The plan will be
discussed in detail in a shareholders meeting on July 26. The outlines for
the merger have already been approved by the shareholders.
Currently, PVFC has
VND6 trillion (USD288 million) in charter capital and Western Bank has VND3
trillion.
The PVFC's
shareholders meeting in May, saw a majority agree to a plan that will turn
PVFC from a finance corporation into a joint stock commercial bank.
After the merger,
PVF shares on HCM City Stock Exchange (HSX) will be de-listed. In addition
the National Oil and Gas Group's (PVN) stake in PVFC will be reduced from 78%
to 52%.
PVFC has recently
divested from many companies. For example, they sold 5 million shares of
PetroVietnam Construction JSC or tried to sell 5 million shares of Pha Lai
Thermal Power JSC.
In the first
quarter, PVFC's revenue was 43% lower than the same period last year.
Meanwhile the cost to prevent credit risks increased by VND132 billion because
the loans to Vinashin and Vinalines turned into over VND2 trillion of bad
debt.
Western Bank is
also facing problems from VND1,118 billion overdue interbank deposits in
First Commercial Bank, Saigon Bank, Vietnam Tin Nghia Bank and Trust Bank.
Their equity
decreased to VND2.31 trillion, less VND690 billion than the required charter
capital.
Despite being
established in 1998, Hoa Lac High-tech park’s site clearance has not yet been
finished.
Chairman of the
Hanoi People’s Committee, Nguyen The Thao, has decided to set up a steering
board for the site clearance of the park, as well as the
At a meeting to
review the progress on the site clearance of these two projects, Thao said
that it was a very large job and involved a number of complications, which
was the reason that the pace was slower than that set by the government.
Chairman Nguyen The
Thao attributed to the stagnant site clearance to the limited capacity of
commune-level cadres and weak cooperation between agencies.
He requested that
the steering board send a report on the allocated site clearance capital
source for 2013 to the People’s Committees of districts where land was
revoked and the municipal People’s Committee as well as estimate the
supplementary capital needed to speed up the work no later than June 29.
Hoa Lac High-tech
park is expected to become a "national scientific city" which would
hopefully attract around 100,000 scientists, students, engineers and skilled
workers.
The 1,586-ha
project has various functions, including a 76-ha area devoted to software
development area, a 229-ha R&D area and a 549.5-ha high-tech industrial
area.
The Deputy Minister
of Sciences and Technology, Nguyen Van Lang, admitted that the global
economic downturn has slowed down the process, as investment has slackened.
The other main problem, he said, was slow site clearance. The entire capital
invested for the project is only VND2.6 trillion (USD123.8 million).
CPI growth
lowest in decade
The General
Statistics Office (GSO) announced on June 24 that the figure in June and in
the first six months of this year saw year-on-year rises of 6.69 percent and
6.73 percent respectively.
Prices in June
increased by 0.02-0.42 percent in eight out of 11 commodity categories used
to calculate the CPI. The highest rise during the month was recorded in the
group apparel-headwear-footwear, while the housing and building materials
category experienced the lowest price increase.
A decrease was seen
in restaurant services, transport, postal services and telecommunications.
The rapid fall in the price of rice resulted in a 0.62 percent decrease in
food prices.
The GSO also
announced that the country’s two largest cities,
According to Nguyen
Duc Thang, head of the GSO’s Price Department, the 2.4 percent increase in
the first half of 2013 is a positive sign that the country can keep inflation
below 8 percent as set by the National Assembly.
More importantly,
if the CPI remains stable, the State Bank of
Veka charts
a course to help Vinashin get on its feet again
Vinashin has just
asked the Vietnamese government for approval to sign a memorandum of
understanding with Veka Group to invest in shipbuilding projects in
“The Ministry of
Transport (MoT) directs and guides Vinashin, which nearly was bankrupted in
2009 due to financial mismanagement, to cooperate with Veka Group based on
market demand and the actual financial situation of the group [Vinashin],”
Deputy Prime Minister Hoang Trung Hai said in the announcement.
Veka Group last
year studied investment potential in
The cooperation of
Veka Group with Vinashin, if it is implemented, maybe significant for the Vietnamese
shipbuilder to recover from financial troubles as Veka Group, established in
1988, is a global experienced shipbuilder.
Vinashin was
supposed to be the tip of the spear in helping the local shipping industry
penetrate the global market. However, the state-run shipbuilder almost
collapsed in 2009 and required drastic restructuring.
The National
Assembly’s Standing Committee reported the amount of money that Vinashin owed
commercial banks or other financial institutes were 10.9 times higher than its
ownership capital.
Siemens
marks anniversary with hybrid bus unveiling
Siemens yesterday
launched the first hybrid bus in
Siemens' ELFA technology
has helped urban buses reduce their fuel consumption by as much as half,
easing the impacts on the environment. The hybrid bus was the result of the
nine months' joint work between Siemens and Vinamotor.
Roland Busch,
member of Siemens AG Executive Board said that Siemens hoped to further
co-operate with
Siemens, which
entered
Forbes
releases first edition for Vietnamese market
Forbes Viet
The magazine is
published under a licensing agreement between Forbes Media LLC and
Interactive Media, an IDG Ventures Viet Nam portfolio company.
Forbes Viet
Data on
fuel stabilisation fund to be publicised
The Ministry of
Finance will publicise the usage of fuel stabilisation fund and be more
effective in budget spending.
The new minister of
Finance Dinh Tien Dung has said during questions from the public on June 23.
"The fuel stabilisation fund is set up from taxpayers' money so people
have the right to ask for a transparent system." he said.
Dung said they will
publish the management and usage of the fund on the Ministry of Finance's web
portal during the first month of each quarter. Dung said, "People can
supervise the fund and the fuel prices."
The stabilisation
fund is set up to help enterprises to minimise losses without raising fuel
prices too much when domestic prices are lower than global prices. However, in
the past, even when the world price fell, firms were still being compensated
from the fund.
On June 14, the
Ministry of Finance allowed firms to increase fuel prices by over VND400 per
litre and were compensated from the fund as world prices had been on the
rise.
This has raised
doubt and concerns from public. Many experts said consumers are only
protected when the calculation on fuel prices and commission rates for
retailers are controlled and publicised in detail.
Dung also mentioned
about measures should be taken to ensure a healthy state budget while firms
are in difficulties.
He said in the
first five months of 2013, the budget only reached VND299 trillion (USD14
billion), about 36.6% of the expected goal. To deal with the problem, Dung
suggested to lower tax duties for VAT, corporate income tax and personal
income tax.
As of June 19, the
National Assembly agreed to lower the corporate income tax from 25% to 22%
start on January 1, 2014. This is said to be the lowest rate in the region.
"The budget will have a deficit of VND7 trillion this year and VND36
trillion next year. However, this money will become government capital given
to firms so that they'll contribute more to the budget after the tough
times." he said.
Tighter control
over tax evasion activities such as smuggling or transfer pricing was
mentioned along with government's request for authorities to prevent
wastefulness.
Wood firms
safeguard sustainable growth
The Handicraft and
Wood Industry Association of HCM City (HAWA) plans to take several steps to
improve the sustainability of the industry and help its members increase
exports.
The association
held its sixth congress last Sunday to review the 2010-13 period and set
plans for the next three years.
Speaking at the
event, HAWA Chairman Nguyen Chien Thang, said the wood and handicraft
industry continued to have significant growth, despite the recession of the
last three years.
During that period,
the association held professional training courses, trade promotions and
seminars for its members.
As a result,
companies had improved their designs as well as management competence, he
said, adding that they had also learned about importing requirements of other
countries.
In addition, to
help its members improve competitiveness and enter global markets, HAWA has
signed a number of cooperation agreements with international organisations.
Tran Quoc Manh,
deputy chairman of HAWA, said that the association's website had also become
a key source of information for businesses.
Manh noted that
businesses in the next few years would face a fall in demand in local and
global markets as well as higher input costs and more trade barriers imposed
by importing countries.
In order to ensure
the industry's sustainability, he said that HAWA would continue to hold more
seminars, fairs and training courses in collaboration with local and foreign
partners.
It also plans to
organise more trade promotions and work with local agencies to improve those
programmes.
Moreover, better
communications between the Government and businesses, as well as between HAWA
and its members, will also be a major goal.
Wooden-product
exports in the first half of the year are estimated to reach US$2.2 billion,
up 10 per cent over the same period last year, according to Nguyen Ton Quyen,
vice chairman-cum-general secretary of the Viet Nam Timber and Forest
Products Association (Vifores).
Speaking to Viet
Nam News on the sidelines of the conference, Quyen said that export growth
this year had slowed considerably, especially compared to the first half of
2012, when it rose by 17 per cent over 2011.
He attributed the
slower growth in exports this year to a drop in demand from the EU market,
one of the major import markets for Vietnamese wooden products.
"Exports are
expected to go up in the remaining months of the year, especially starting
from September," he said.
However, some
companies have been forced to cancel year-long export contracts because of
financial difficulties and a labour shortage.
He said Vifores
would petition the Government to take measures to help struggling companies.
This year,
wooden-product exports are expected to top $5.2 billion, up 10 per cent over
last year.
Last year, the
country earned $4.7 billion from wood and wooden-product exports, a
year-on-year increase of 17 per cent.
GSO
releases encouraging first six month figures
The total revenue
from retail trading and the service sector during the first six months of
this year is estimated at VND1.27 trillion (US$60.6 million), a surge of
11.94 per cent year-on-year.
Figures released by
the General Statistics Office (GSO) show that retail sales this month were
VND212.2 billion ($10.1 million), a slight fall of 0.25 per cent over the
previous months.
The industrial
sector accounted for the largest amount of the increase in this period,
recording 77 per cent, followed by hotels, restaurants and services.
Co-operatives
posted the highest decrease of 0.46 per cent, following by foreign invested
and private firms with 0.38 and 0.35 per cent respectively.
Tourist sector saw
the biggest decrease of 1.02 per cent.
The department also
estimated that Ha Noi had 6,192 firms register to cease operating during
January-May this year, down 20 per cent from the same period last year.
Of the total, 222
firms have finished operating, a 27 per cent increase over the same period
last year, while 1,266 firms are preparing the necessary documentation for
closing.
More than 2,800
establishments have left their business registration addresses, a drop of 2
per cent and 1,900 firms have registered to cease their temporary operations,
representing a 49 per cent year-on-year decrease, the GSO added.
In the first
quarter of this year, over 7,000 new firms have been set up with a total
registered capital of VND52.3 trillion ($2.48 billion), a drop of 9.5 per
cent in quantity but a rise of 13.2 per cent in capital when compared with
the corresponding period last year.
The
Head of the
department's business register chamber Pham Dinh Huong said the enterprises
had breached the Law on
Most were working
in construction, mining, trade and tourism, including 55 in
The enterprises
would have to complete dissolution procedures and return official stamps to
their local authority within six months.
Samsung
increases investment in Bac Ninh Province
The Industrial
Parks Authority in the
By adding $1
billion, the company’s registered capital in
The $1 billion
project mainly focuses on researching and developing high-tech products, such
as mobile phones, telecom devices, spare parts and other electronic products.
Hanoi Stock
Exchange (HNX) has approved Binh Duong PP Pack Making Joint Stock Company’s
(HBD) request to cancel listing of its VND1.53 million shares on the northern
bourse from June 28 this year.
According to
business results in the second quarter of this year, HBD’s revenue was
estimated at VND3.85 billion and post-tax profits were at VND200 million.
Earlier, in the
first quarter of the year, the company revenues reached VND6.18 billion, and
post-tax profits were at VND360 million.
Farmers in
Thunderstorms in
the Mekong Delta Region this year have flattened vast areas of standing rice
crops and farmers now must use manual labor to harvest as combine harvesters
will no longer work.
The Region,
however, has seen a bumper harvest this year, resulting in shortage of labor
and high wages. A hectare costs VND4 million (US$190) if farmers use combines
to harvest, while manual labor costs VND5 million a hectare.
All together, costs
can go upto VND8 million a hectare which is too high while paddy prices are
too low, ranging from VND3,800 a kilogram for fresh unhusked rice and
VND4,200 per kilogram for fresh long unhusked grain.
Farmers are
therefore distressed despite having a bumper harvest this year.
Le Minh Duc,
director of the Department of Agriculture and Rural Development in the Mekong
delta province of Long An said around 20,000 hectares of summer-autumn crops
are being harvested. He urged enterprises to purchase 91,000 tons of rice as
directed by the Vietnam Food Association (VFA).
According to VFA,
since the beginning of the year, enterprises have exported nearly three
million tons of rice, earning revenue upto $1.28 billion.
Farmers in
Many farmers in the
Mekong Delta are facing amounting challenges and losses from growing rice as
they are not properly protected and supported by the government's policies.
Even though rice
plays an important role in
Over the past three
years,
The World Bank’s
research in 2011 and Oxfarm’s research in 2012 showed that incomes of rice
growers in
Farmer households
in the Mekong Delta region earn an average of only VND535,000 (USD25.43) per
person per month, the reports said.
“Farmers’ incomes
heavily depend on rice export prices. Export price falls mean further losses
for rice growers,” said Dr. Dang Kim Son, Director of the
Nguyen Dinh Bich, a
rice expert said, “Statistics on rice exports showed a paradox that
Bich emphasised the
necessity to reconsider rice export policies and strategies.
“Several rice
policies are inadequate as they have just ensured food security and market
stability instead of paying proper attention to improving rice export
efficiency. Several policies still have yet to concentrate on farmers as
farmers don’t benefit from 30% of rice revenues as required by the
government,” Dr. Nguyen Cong Thang, from IPSARD said.
The current rice
price mechanism is inadequate as well because farmers can’t directly sell
their rice to rice exporters but through traders as mediators.
“Areas specialised
for rice production should be linked together to call for investment and
ensure rice quality. However, such model has yet to receive proper attention
and support from the government,” Thang noted.
As the result, many
families are discouraging their children from doing farm work.
Huynh Kim Hai, from
His six-member
family earned a combined VND52.8 million (USD2,509) from two harvests of this
year. This means a per capital income of VND733,000 (USD34.84) per month.
“Since 2008,
farmers’ incomes have continued to fall due to falling rice prices and rising
prices of fertilizer and pesticides. Almost all farmers have to get bank
loans for their rice cultivation. My family borrowed VND100 million
(USD4,753) at an interest rate of 1% for this crop.” Hai said.
Currently, the
Vietnam Food Association (VFA) has the monopoly to define rice buying prices
for farmers. This policy has helped ensure stability in the market but has
brought much of profits for VFA instead of farmers, he said.
“VFA benefited from
the disparity of rice prices applied for farmers and rice export prices, so
they have tried to buy rice from farmers at as low prices as possible. They
don’t pay proper attention to store investment and rice trademark development
either,” he commented.
He proposed that in
order to ensure profits for farmers it’s necessary to increase rice export
prices and lower fertilizer and pesticides prices.
“If my children
need capital to set up their own business I’ll sell my rice field. As I have
no other choice I won’t lease my field until I can’t do farm work anymore,”
he added.
Credit
institutions suffer losses
Though business for
the banking sector improved during the first five months of this year, 24 out
of 124 credit institutions reported losses during the period, according to
the State Bank of
The remaining 100
credit institutions posted profits in the January-May period, however, 57 of
them reported lower earnings than the same period in previous years.
Cumulative
differences in income over spending in the entire banking sector during the
period reached VND18.2 trillion (US$866.6 million), up 9 per cent over the
same period last year but down 12 per cent and 39 per cent against the same
period in 2010 and 2011.
This figure would
have fallen even further with outstanding income reduced to only VND3.8
trillion ($180.95 million) if debts of credit institutions had not been
restructured in accordance with Decision 780/QD-NHNN on classification of
rescheduled loans. The decision helped institutions avoid having to make an
additional provision of VND14.4 trillion ($685.71 million).
According to the
central bank, non-performing loans of banks accounted for 4.65 per cent of
total loans by the end of May this year. Thirty out of 124 credit
institutions reported their bad loans to exceed 3 per cent of their total
lending.
The 30 lenders will
have to sell their toxic loans to the Viet Nam Asset Management Company,
which will be operational by July 9, or else they will be inspected by the
central bank.
The decline in
business performance results of credit institutions during the first five
months was also partly due to a relatively low interest rate spread, which
currently stays at roughly 3.03 per cent. The spread after provisioning drops
to 1.93 per cent against 2.33 per cent in late 2012.
Besides warning of
a possible interest rate race, the central bank also cautioned credit
institutions on risks related to their investments in corporate bonds,
explaining that the investment may increase risks to banks as the capital
primarily flows in real estate and construction firms (more than 50 per
cent), or for the purpose of increasing scale and restructuring debts (30 per
cent).
During the first
five months, outstanding loans grew by only 2.87 per cent, while investments
in corporate bonds rose 4.14 per cent.
Parts
producers told to improve performance
There remained a
large gap in production capacity and technology between Vietnamese parts
producers and those from regional countries, says Ha Noi Department of
Industry and Trade deputy director Dao Thu Vinh.
Few local firms had
won contracts to supply their products to foreign-invested enterprises in
Ha Noi Trade
Promotion Centre director Nguyen Thi Mai Anh said the priority was to help
firms become parts suppliers to foreign companies and then participate in the
global production chain.
The city planned to
establish a data system of local parts firms and then introduce them to
foreign companies.
Training courses
and financial assistance to join domestic and overseas exhibitions would be
included, she said.
Already, 15 Ha Noi
support industry companies had received help to show their products at
Reed Tradex Co
managing director Chainarong Limpkittisin, the event's organiser, said there
were four main areas at the expo: plastics and rubber manufacturing, mold and
die manufacturing, auto parts manufacturing and industrial automation and
assembly technologies.
Two other events,
Nepcon Thailand 2013 – showcasing new technology for electronics parts – and
Furnitech 2013 – offering exhibitors and networking opportunities for
furniture manufactures – were held at the same time, Chainarong Limpkittisin
said.
Vietnamese
companies displayed support industry products, including auto and electronic
parts, at the Viet Nam Pavilion.
These events
provided a chance for Vietnamese parts producers to update their technologies
and access advanced production methods to sharpen their competitiveness.
Domestic businesses
could introduce their products to foreign clients and foreign buyers could
discover reliable parts producers, Vinh said.
Opportunities
open to buy distressed assets
The time is ripe
for developers and other buyers to find ways to take over distressed assets
in
As the market has been
stumbling, the lack of capital resources has pushed many developers to
restructure their portfolios to focus on core and important projects.
Moreover, the
market is under pressure to get rid of its nonperforming loans.
The actual ratio of
nonperforming loans is believed to be greater than the reported 6 percent, 70
per cent of which are attributed to the real estate sector, according to some
experts.
However, bad debts
and their assets have not been available for investors to acquire openly from
banks or investors.
Unless both banks
and investors move quickly to deleverage, then the recovery will be a lot
slower and more painful, experts have warned.
"There are
clear signs of distressed property assets all over
Only a limited
number of investors and developers survived more than one property cycle, and
Casualties are
unavoidable, but other organisations will come out of it in much better shape
to take on the next upward swing, he noted.
There is a
perception among some Vietnamese owners and investors that "the vultures
are circling" and all of their assets will be picked off by foreign
investors over the next two to three years.
Many foreign
investors, however, still see
During the recent
market downturn, many of them were hurt and will not return to the Viet Nam
market soon, Brown said.
Until there is a
downward shift in land prices or a release of distressed assets, foreign
investment will still overshadow that of local property investment.
The presence of
more experienced and diligent investors in the market with a lot of
fly-by-night operators taken out of the equation by the downturn should bring
about a healthier and more professional market for the future.
Regional Asian
countries that have a track record of investing in Viet Nam are most
interested in distressed assets in the country, since they understand the
investment landscape. Those include the Japanese, Taiwanese, Singaporeans and
Koreans.
There is an
increasing amount of interest as well from Middle Eastern and Russian groups,
but they generally focus on prime properties or prime development
opportunities in Ha Noi and HCM City. These are picked off first in a
"flight to quality".
Operating assets
and development sites at strategic locations are the most favoured.
Distressed assets
most hunted by developers are the ones that are clean, have a good location,
reasonable ownership structure and attractive and competitively priced
assets.
Those properties in
poor locations, with little market demand and with complicated ownership
structures in place, will see the least amount of attention.
Vietnamese
firms invest in Airbus planes
The national flag
carrier Vietnam Airlines and the Vietnam Aircraft Leasing Company (VALC)
signed a contract in Ha Noi on Friday to buy 30 Airbus planes.
Vietnam Airlines
will buy 10 A350s and 10 A321s, while VALC will take another 10 A321s.
A memorandum of
understanding had been reached in early October under the witness of Prime
Minister Nguyen Tan Dung during his official visit to France .
Airbus plans to
hand over the first A321 to Viet Nam in 2012 and an A350 in 2016.
The purchase was a
step by Vietnam Airlines and VALC to develop their fleets.
"With the
strong development of the domestic and regional aviation markets, the demand
for air travel in Viet Nam's big cities and between the country and overseas
destinations will also increase," said Vietnam Airlines General Director
Pham Ngoc Minh.
VALC General
Director Tran Long shared the view, saying that the purchase would help boost
the development of the local aviation industry and its integration into the
region and the world.
He also said VALC
will lease all these planes to Vietnam Airlines for 12 years.
At present, Vietnam
Airlines operates 47 planes, including 25 Airbus planes.
The corporation
plans to increase its fleet to 86 in 2015 and 110 in 2020.
Gardening
expo to sow seeds for trade
HCM City is set to
host its first exhibition of seeds this month.
Seeds for flowering
and ornamental trees and vegetables, plus brood stock for aquaculture and
livestock brood will be on show, which has been organised by the Department
of Agriculture and Rural Development, the Suoi Tien Cultural Tourism Joint
Stock Company, and the Sai Gon Agriculture Corporation.
Pham Thiet Hoa,
director of the city's Centre for Agricultural Consultancy and Support, said
the exhibition would also feature an ornamental-fish competition and
exhibition, with around 25 fish farms taking part.
Experts would also
advise visitors on new technologies in seed and livestock production.
On Friday this
week, a conference will be held on the status of seed production and supply
in HCM City, application of technology in sex selection of dairy cattle, and
other topics.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Tư, 26 tháng 6, 2013
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