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BUSINESS IN BRIEF 4/7
Indonesian
enterprises keen to do business in Vietnam
Eight Indonesian
state enterprises plan to establish cooperation with local companies or
through investment, ANTARA News has reported.
They include coal
mining company PT Bukit Asam, fertilizer company PT Pupuk Indonesia,
telecommunication company PT Telekomunikasi Indonesia, aircraft manufacturer
PT Dirgantara Indonesia, cement company PT Semen Indonesia, pharmaceutical
company PT Kimia Farma, logistics agency Perum Bulog and oil and gas company
PT Pertamina.
PT Bukit Asam will
supply coal to
PT Telkom will join
a
Bulog cooperation
with
Tien Giang
farmers’ cow breeding
A cow breeding
project to improve the livelihood of poor farmers has been launched in the
southern
It is partly funded
by Canadian Heifer International and the Norwegian Mission Alliance
The project has an
investment of VND18.2 billion, including VND14.2 billion from the Canadian
and Norwegian organisations. It will be carried out from now until June 2017.
As many as 2,400
poor households in Phu Thanh and Phu Dong communes in Tan Phu Dong district
will benefit from the project.
In the first phase,
300 households will each receive a cow worth VND12 million while 300 others
will be given a preferential loan of VND8 million per household to breed
pigs, goats, poultry or aquatic animals.
The remaining 1,800
households will be supported in the second phase.
The programme aims
to raise incomes, ensure food safety and nutrition for the beneficiaries as
well as improve their awareness.
It also creates
opportunities for them to access other sources of capital.
Eleven
export commodities earn US$1 billion in revenue
These export
commodities hit more than US$1 billion in the first half of 2013.
Among the highest
earners were mobile phones (US$9.907 billion), followed by garments and
computers (US$7.98 billion and US$4.712 billion, respectively).
Other commodities
fetching more than US$1 billion each were footwear, crude oil, seafood,
machinery, transport vehicles, timber products, coffee and rice.
According to the
General Statistics Office, 15 countries in the world imported Vietnamese
goods worth US$1 billion or more in past six months.
The
Other major export
markets for Vietnamese goods were the
In the past six
months,
Export
turnover likely to surpass US$126 billion this year
The country’s
export turnover is expected to reach US$127 billion this year, one billion
higher than the set target, according to the Ministry of Industry and Trade
(MoIT).
The MoIT said that
in the context of positive changes in the world, major economies like the
Against this
backdrop,
The ministry, for
its part, has devised a string of measures to boost trade promotions with a
focus on commodities which are much sought after at home and abroad.
It warned producers
and exporters of import barriers and urged them to improve the quality of
commodities to avoid risks for enterprises when signing export contracts with
foreign partners.
The MoiT said that
the FDI sector has overtaken the domestic sector in terms of export revenue,
with a trade surplus estimated at US$5.41 billion to compare with the
domestic sector’s trade deficit of US$6.82 billion in the first half of this
year.
Exports of
processing industry show a six-month increase of 27.2 percent, accounting for
68.9 percent of the total turnover, with the volume of mobile phones worth
US$9.91 billion (up 97 percent). Meanwhile, most of export items (except
pepper and cashew nuts) from the agricultural and seafood sector have dropped
to a level lower than last year.
In the first six
months of 2013, the country’s export turnover is estimated at US$62.05
billion, up 16.1 percent against the same period last year. Of the total
figure, the domestic sector earned US$20.9 billion (up 2.2 percent) but the
FDI sector fetched US$41.14 billion (up 24.7 percent).
Over 3.5
million foreigners visit
In the past six
months, more than 3.54 million foreigners came to
Among 18 countries
and territories having the largest numbers of visitors to
The number of
foreigners arriving in
However, the growth
rate was still 16.9 percent lower than last year’s level.
Salt output
to top 1 million tonnes
Salt output is
likely to increase by 18 per cent this year to reach one million tonnes, the
Ministry of Agriculture and Rural Development has said.
This would be
enough to meet domestic demand, the ministry claimed. Production up to June
15 stood at almost 800,000 tonnes, including 193,000 tonnes produced
industrially.
The ministry
attributed the increase in output to favourable weather conditions in the central
region.
It has instructed
industrial producers to improve infrastructure at salt field level. Salt
prices remained reasonably high, enabling farmers to make decent profits, the
ministry said.
Growth in
The nation's
commercial hub has recorded a GDP of VND340.654 trillion (US$16.2 billion) in
the first half of 2013, a year-on-year increase of 7.9 per cent.
A report by Le
Hoang Quan, Chairman of the HCM City People's Committee at a meeting held on
Friday to review the city's socio-economic development in the first six
months of 2013, said that the city's service sector rose by 9.1 per cent over
last year, the agricultural sector by seven per cent, and the industrial and
construction sector by 6.2 per cent.
The city achieved
an export turnover of over $13.7 billion, a year-on-year increase of 6.2 per
cent, while its import turnover rose by 15.5 per cent to $12.7 billion. The
sharp increase in imports is due to increases in the import of materials for
textile and garments, footwear, pharmaceuticals, plastics and fuel sectors,
according to the report.
Total retail sales
went up by 11 per cent year-on-year to VND288.9 trillion, up by 11 per cent
compared with the same period last year, the report said.
It noted, however,
that the city's economy still faced difficulties due to the global economic
turmoil, large inventories and stagnant property market.
The report said the
city welcomed over 1.9 million foreign visitors in the first half of the
year, an increase of five per cent compared with the first half of 2012, and
the tourism sector's turnover of over VND41 trillion ($1.95 billion) in the
same period marked a significant 30 per cent year-on-year increase in value
over last year. No explanation was given for the apparently disproportionate
surge.
Quan said at the
meeting that to reach targets set for the second half of 2013, all agencies
and departments would carry out several measures mapped out by the city
administration.
He said the city
would continue to help businesses solve their problems through policies and
incentives including exemption of some taxes and payment extensions for other
taxes so as to release more capital for development.
Quan said priority
would be given to farming and rural development, and to supporting
industries, medium and small enterprises and enterprises using high and
advanced technologies.
The city would also
promote investment and exports, he said.
Quan asked State
management agencies in the city to enhance dialogues with businesses,
especially medium and small enterprises, in their localities. He said this
would result in greater understanding of difficulties the firms were facing
and help create more favourable conditions to promote production.
Military
Bank arm plans restructuring
Military Bank
Securities plans to list after merging with another firm over the next 2-3
years, the company announced during its annual general meeting last week.
With support from
its parent bank - the Military Bank (MB) - the brokerage will restructure itself
and choose another securities firm to merge with.
After merging the
company will retain the name, Military Securities Company and stick to its
existing operational strategies.
The bank will still
hold a dominant stake, while at the same time provide support to its offshoot
in terms of network development, cross-selling and creating new products.
"The merger
will strengthen our position in the market by making the most of our brand
name, new technologies and customer base," said the company.
After merger with a
much stronger asset base, operational efficiency will be enhanced which in
turn will meet the requirements demanded by the State Securities Commission.
"Shareholders
from both companies in the merger will benefit as soon as the new entity
makes a profit," said a company spokesperson. "In addition, listing
will greatly improve the liquidity of our shares."
The brokerage has
not yet revealed the name of the company they are targeting for the merger.
Military Bank
Securities expects to make VND353 billion (US$16.8 million) in turnover this
year, equivalent to only 89 per cent of last year's revenue. However, gross
profit is estimated to jump by 73 per cent to VND20.5 billion ($0.9 million).
Last year, the
company exceeded its targets for revenue and profit by 27.5 per cent and 12
per cent respectively.
New
policies fail to lift shares
Several new
Government policies, including tax relief for low earners and a new ceiling
on deposit interest rates, began from yesterday but shares still took a dive
on the country's both stock exchanges.
The threshold for
paying income tax has risen from VND4 million (US$190) to VND9 million
($428.5) per month.
The cap on the
deposit interest rate will be reduced to 7 per cent.
Despite such
supportive policies, the recent downturn on the stock market has made
investors extra cautious.
The decline slowed
on the
The strong recovery
of a few heavyweight shares, including Masan Group (MSN) and PV Gas (GAS),
cushioned the index fall. Both rose nearly 3 per cent yesterday.
The market
condition was still negative, however, as losers outnumbered gainers by
133-72 while 101 codes were unmoved.
The VN30, which
tracks the top 30 shares on the bourse, was down by 0.69 per cent to 534.85
points. Trading was the two-month low at 35 million shares, worth nearly
VND500 billion ($23.8 million), by the end of the session.
Property giant
Hoang Anh Gia Lai Group (HAG) remained the most active with 2.35 million
changing hands for VND20,400 ($0.97) each, down 1.45 per cent from the
previous closing price.
What happened on
the gold market loomed large on the stock exchange, stock analysts at FPT
Securities Co said.
"A sharp drop
in bullion prices is forecast to draw a considerable amount of cash from
other channels, including equity markets," they said.
Besides, the fresh
gasoline price hike last Friday and low manufacturing data hit the stock
market, analysts said.
On the Ha Noi Stock
Exchange, the HNX-Index also slipped 0.43 per cent to close at 62.49 points
with nearly 16.7 million shares worth just VND130.4 billion ($6.2 million)
being traded.
Investment FLC
Group was the most heavily traded stock nationwide with over 3.8 million shares
changing hands for VND6,400 a share.
Overseas investors
were still net sellers on the
Global hike
fuels gas price rise
Gas prices
increased by VND13,000 (US$0.62) per 12-kg canister yesterday, according to
wholesalers.
This means current
retail gas prices range from VND375,000-380,000 ($17.9-18.1) per 12-kg
canister. The domestic gas price hike occurred because of higher world gas
prices and high transportation fees.
This is the third
consecutive gas price hike since May. Earlier in the year, there were four
consecutive price cuts.
The current price
remains VND54,000 ($2.57) per canister lower than at the end of 2012.
Industrial
production to grow
The industrial
production was expected to grow more in the second half of the year than in
the first, the Ministry of Industry and Trade said.
At its monthly
press conference in the capital yesterday, the ministry forecast the
industrial production index for the full year would be around 5.7 per cent,
0.5 per cent higher than the figure reported in the first half.
The country's total
export turnover was expected to reach US$127 billion, about $1 billion higher
than the Government's goal, while the trade deficit would be roughly $9
billion, 8 per cent lower than the target.
The Export-Import
Department reported that the total export turnover in the first six months of
this year was $62 billion, reaching 49 per cent of the goal for the full
year. The current trade deficit was $1.4 billion, which was "under
control," it said.
The ministry said
purchasing power would improve due to many holidays falling in the second
half of the year, together with the acceleration of the trade promotion
programme.
It was estimated
the total sale of goods and services would be 12.48 per cent higher than last
year.
Meanwhile, the
Domestic Market Department reported the increase in domestic petrol prices in
June had followed an upward trend in world petrol prices. The domestic petrol
prices increased twice, on June 14 and 28, by VND426 (US$0.02) and VND370
($0.017) per litre respectively.
The department said
the world's 30-day average price of petrol showed an increasing trend in
June, rising from $111.08 per barrel at the end of May to $112.975 on June 13
and $114.442 on June 27.
The department also
said a nationwide check on the location of petrol stations was under way and
those that did not meet planning regulations would have their licences
revoked.
Regarding power
prices, the Electricity Regulatory Department said any adjustments to prices
must be based on a calculation of input costs to ease the impact on the
consumer price index and economic growth.
Credit
institutions close gold deposit accounts
Commercial banks
all closed their gold accounts by the June 30 deadline, except for one or two
with insignificant outstanding gold deposits, according to the State Bank of
Viet Nam (SBV).
Previously, some
banks asked the SBV to delay the deadline to the end of this year. Though the
SBV declined the proposal, it said banks could seek support to resolve any
issues.
The SBV originally
set the deadline as December 30 last year, but increasing pressure from banks
and a growing gold shortage caused the central bank to push it back to June
30 and organise auctions to increase supply.
From March to June,
it organised 37 auctions for nearly 37 tonnes of gold.
At an auction
today, another 40,000 taels of gold bars will go on sale.
Industry insiders
said that the move was quite surprising, as banks had already closed their
gold accounts.
However, SBV deputy
governor Le Minh Hung said the central bank would still maintain its
regulatory role and planned to hold more auctions in case market demand rose.
Drug
dealers make use of lax policing
Drug dealers have
taken advantage of international air routes to smuggle drugs in and out of
The department
yesterday gathered to discuss ways of tackling these dealers, who have become
more ingenious and adaptable in their methods to avoid detection.
Since 2006, police
investigating drug-related crime have worked with other law enforcement
officials to detect 57 cases of illegal drug trading, involving 119 people.
In that period, they have seized 67.45 kg of heroin and 75.54 kg of synthetic
drugs.
Meanwhile, they
have also faced personnel and logistical shortages which hinder their ability
to detect sophisticated drugs crime.
Another shortcoming
has been the concentration of drug prevention measures at major airports at
the expense of smaller ones, which have been left exposed to crime.
Participants in the
meeting said that in the future, capacity-building programmes would be
required, not only for police but also for customs officials, aviation
security and immigration authorities in order to track down potential drug
dealers at airports.
Lieutenant General
Do Kim Tuyen, deputy head of the Drugs Police Department under the Ministry
of Public Security, said concrete guidelines should be publicised outlining
the measures in preventing and controlling illegal drug trade via air routes.
Leading
pharma firms keep essential drug prices stable
The price
stabilisation programme in
A total of 13
pharmaceutical firms are participating in the programme this year, covering
392 locally produced medicines in 21 categories, Pham Khanh Phong Lan, deputy
director of the city's Department of Health, was quoted as saying by Sai Gon
Giai Phong (LIBERATED SAI GON) yesterday.
Last year, nine
pharmaceutical firms had joined the programme, compared with just four in
2011, Lan said.
The number of
medicines sold at stabilised prices, which are 5-10 per cent lower than
market prices, also increased to 80 in 17 categories last year from
corresponding figures of 45 and 10 in the previous year.
As of May this
year, an additional 312 drugstores have signed up for selling drugs under the
programme, raising the total number to more than 2,300.
All 106 drugstores in
city hospitals are selling the drugs, mostly used to treat fever, cough,
diarrhoea, heart diseases, allergies and some chronic diseases.
Lan said the
department works constantly with hospitals to ask doctors to give priority to
prescribing locally made medicines, including those sold under the price
stabilisation programme.
Indian
firms find investment chances in Vietnam
A number of large
Indian firms have found many opportunities for investment in
The event was
organized by Invest
Anil Kumar, president
director of PT Pricol Surya, the Indonesian subsidiary of
The firm is looking
to increase its market share in
D. Jesudas Bell,
managing director of Futurelinks International Pvt. Ltd., said he had seen
chances for investment in infrastructure in
However, the
Government is reviewing investment incentives, promising chances for Indian
power companies to find partners and jointly invest in the electricity sector
in
Indian Consul
General in HCMC Abhay Thakur noted that in the fields of mining and power,
Indian investors could acquire stakes in Vietnamese companies during their
restructuring process.
At the roundtable,
Indian officials suggested businesses of the two countries cooperate in
certain areas, such as rubber and coffee processing, and called on Vietnamese
enterprises to invest in food processing and automotive sectors in
Currently, there
are around 30 mega food parks with sufficient infrastructure in
21 cases of
banking sector violations found in five months of this year
At least 21
violation cases were detected in the Vietnamese banking sector in the first
five months of this year, according to the Government Inspectorate.
The cases have
caused a total loss of VND682 billion (USD32.5 million), 561.2 taels of gold
and USD50,000. However, the State Bank of
The Government
Inspectorate said, during the first half of this year, inspection agencies
uncovered 6 corruption cases that cost a combined loss of VND1.7 billion
(USD80,952) for the state budget. Meanwhile, the party’s inspection agencies
and internal inspection agencies also detected 12 corruption cases that
involved 16 individuals, resulting in an additional loss of VND8 billion.
The Ministry of
Defense discovered one official who embezzled VND8.1 billion from the state
budget. The case has been sent to the criminal inspection agency and he
awaits prosecution.
According to the Government
Inspectorate, a number of agencies, including those in
The Government
Inspectorate also added that accuracy of asset auditing remains limited due
to the lack because there is a lack of ability in agencies to handle such
work. Transparency in areas with high risk of corruption such as bidding,
auctioning of state-owned enterprise assets for privatisation and land
compensation is still weak.
Banks race
to cut lending interest rates
Though the State
Bank of Vietnam (SBV) has lowered interest rates, banks have still found it
hard to loan because so few enterprises qualify.
Many banks have
tried to further lower interest rates which has caused worry among banking
experts.
From June 28, the
cap on deposits with terms of between one and six months was cut to 7% per
year, while the ceiling lending interest rates for some prioritised
industries was also cut to 9% per year. However only a minority of
enterprises qualify for these loans.
Nguyen Duc Vinh,
General Director of VPBank, cited the bank’s survey, saying that only one or
two out of ten enterprises that apply for bank loans meet all requirements.
“The banking sector
is faced with pressure to boost lending, but around 70%-80% of businesses
fail to meet their requirements. This situation has led banks to continually
lower interest rates," Vinh said.
The effect has been
a race by many banks to lower their interest rates in order to attract more
customers. This trend has brought about warnings from a number of experts.
Phan Thi Chinh,
Deputy General Director of the Bank for Investment and Development of Vietnam
(BIDV), said "This trend poses certain risks to the whole banking
system."
According to her,
due to the better access to capital, several enterprises have increased their
profits by certain investments, some even exceeding their targets. This
profit, she said, returns into the banking system in the form of deposits
that earn interest.
On the other hand,
she also noted that several foreign banks have jumped into the lending race
by lowering interest rates. She added that, "If this trend continues, it
could pose a problem when there are those who would take advantage of the
disparity between the VND and foreign currencies, threatening the exchange
rate."
Leaders of a number
of commercial banks have suggested that the SBV lower the cap on lending
interest rates and remove the cap on interest for deposits with terms of over
six months. They say this would attract more deposits to small banks.
Nguyen Duc Vinh
said some banks that have reported low credit growth have applied
irresponsible policies, such as buying their own debt and increasing lending
based on demand. He emphasised that these practices could lead to real
trouble in the coming years.
Pham Thi Chinh
agreed, saying that banks in this country are taking on more risk.
Her suggestion was
that the SBV should more closely monitor the flow of capital in the banking
system so as to ensure that an acceptable proportion of the funds are used
for industries which promote economic development instead of non-production
industries. This, she said, could help curb inflation.
Viglacera
to export tiles to Indonesia
State-owned
construction materials producer, Viglacera Group, has recently signed a
Memorandum of Understanding for cooperation with the Indonesian PT Arwana
Citramulia Tbk (Arwana) Group.
Accordingly,
Viglacera will export tiles to the Indonesian market, worth US$8 million a
year.
The company targets
export growth of 25 percent per annum, reaching $75 million by 2015.
The company’s
traditional markets include
Southern
Hydropower Company exceeds revenue target
Southern Hydropower
Joint Stock Company (SHP) recently announced its business result of 2012 with
revenue reaching VND192.7 billion, exceeding by nearly 40 percent the last
year target of VND137.9 billion.
The company saw
pre-tax profit of VND95.2 billion, up 124 percent compared to the target for
VND42.4 billion.
This year, the
Hydropower Company has set a target of VND195.4 billion, with pre-tax profit
of VND53.4 billion. In September this year, Da Mbri Hydropower Plant will
start test runs and provide an estimated 55 million kWh of electricity.
Ministry
deliberates hike in electricity
Ministry of
Industry and Trade is currently examining the financial audit report of 2012
of Vietnam Electricity--the country’s largest power company--and possibility
of a hike in price, said Dinh The Phuc, deputy head of the Electricity
Regulatory Authority of Vietnam.
He was speaking at
a regular press conference hosted by the Ministry on July 1 in response to
press queries related to a recent proposal from the National Financial
Supervisory Commission to hike electricity price by 10-15 percent.
According to Mr.
Phuc, power price will be adjusted when there are changes in cost price,
material price or in the exchange rate.
Mr. Phuc said that
if it is necessary to raise the price, the Ministry will carefully calculate
a suitable rate in order not to affect the Government target to curb
inflation and stabilize socio-economy.
The Ministry is
also looking into another proposal to charge higher electricity prices from
businesses in the steel and cement industries, which consumed upto 11.5
percent of commercial electricity last year.
Higher electricity
price will prompt businesses in these two industries to move to better
technology to save energy, he said.
Another matter of
public importance was the petrol price hike, as domestic retail price hiked
on two occasions in the last two weeks despite drop in world price.
Nguyen Xuan Chien,
deputy head of Domestic Market Department, an organ under the Industry and
Trade Ministry, said that data from his Ministry and the Ministry of Finance
shows that world petrol price was on the rising trend in June.
Specifically, the
price of Ron 92 gasoline was $111.08 a barrel on May 31 and increased to
$112.9 a barrel on June 13 and $114.442 a barrel on June 27.
Mr. Chien said that
the domestic retail price increase was in accordance with Government
regulations. The Ministries of Finance, and Industry and Trade also permitted
businesses to dip into the price subsidization fund to minimize impact of the
hike.
Statistics
depict relatively good economic picture: GSO
With gross domestic
product (GDP) growing 4.9% and inflation picking up 2.4% against end-2012,
the socioeconomic situation in the year’s first half was relatively good,
said Do Thuc, director general of the General Statistics Office (GSO).
The global economy
further contracts in the 2011-2013 cycle, with a growth rate of only 2.1%,
according to the United Nations Economic and Social Council.
In this context,
Although there are
different opinions, statistics show that the Government managed to accomplish
the goals of curbing inflation, stabilizing the macro-economy and achieving
reasonable growth, he said.
To obtain the
target for 5.5% GDP growth for the whole year, the growth rate in the second
half must be 6%. “This is extremely difficult,” he said.
However, he noted
that in
“Still, every
solution has its risks. If we rushed to make investment, inflation might
shoot up,” he warned.
GSO forecasts GDP
growth will be 5.1-5.2% in the second half. With such a growth rate, plus
healthy and stable balances, the goals for this year will be basically
attained, he said.
GDP growth this
year may be lower than last year, but in the current difficult context, it is
not poor, he stated.
“The global GDP
growth is only 2.1%. The growth rate in
Total investment in
the year to date has dropped to 29.6% to GDP, versus 40% in previous years.
If investment continued to dwindle, there would hardly be high growth, he
stressed.
The countries with
rapid growth have a high ratio of investment to GDP, he remarked. For
example,
“The Government has
noticed this and is seeking ways to boost investment, but public investment
cannot be increased. That’s the problem,” he said.
“In the current
tough times, everyone longs for rapid growth. But if we hastened, policies
would get from one polar to the other, and we would never be able to overcome
the crisis, or the fluctuations in the already weak local economy,” he told
the Daily.
Special
Incentives At
Up and running
early this year, the 11-story QTSC Building 9 has reported 60% occupancy as
it has become a trustworthy destination for domestic and international ICT
firms.
Located in
QTSC Building 9’s
prime site allows it to have two main gates, one of which links with the
inner part of QTSC, while the other connects the park with To Ky Street. This
creates convenience for operation, transportation and commercial activities.
In a bid to attract
more ICT enterprises, the park’s operator is applying special incentives for
those who rent spaces at the office building. Lessees will enjoy a rental
exemption of up to five months, free-of-charge Internet leased line up to two
months and complimentary installation of telephones and fax machines, among
others. All are aimed at providing the best support for enterprises.
“We attract
businesses thanks to competitive prices, good infrastructure, stable power
supply sources and especially the enthusiasm of staff in offering corporate
services,” says Lam Nguyen Hai Long, deputy CEO of QTSC. “Low office rentals
and low Internet, power and water supply charges, as well as other
conveniences like dining and parking are our advantages that will help
businesses save nearly 40% of operation costs compared with those leasing
offices in the city downtown.”
QTSC is one of the
key economic projects of HCMC which facilitate ICT development in the city
and the country. About 140 domestic and foreign ICT enterprises and investors
are doing business in the park, including giants like HP, KDDI and IBM.
Exports buoy up paper industry
January-June paper
exports rose 15% year-on-year, giving a lifeline to the local paper industry
that has seen a sharp drop in paper consumption at home, says a report by the
Vietnam Pulp and Paper Association (VPPA).
Newsprint demand
slid 29% and tissue paper demand plummeted 18% year-on-year in the first half
due to current economic difficulties, VPPA reports.
Only some paper
products posted growth, with writing paper demand increasing 6.3% and packing
paper demand 1.1%. Local sale volume for all paper products reached nearly
1.4 million tons in the year’s first half, a slump of 3% year-on-year.
Meanwhile, paper
exports totaled 67,800 tons from January to June, up 15% over the year-ago
period thanks to stable shipments.
Besides,
This year is a very
tough year for the local pulp and paper industry as local factories have
failed to run at full capacity while production costs are rising, seeing
industry players struggling with price hikes and shrinking profit margins,
according to VPPA.
On the contrary,
other market players have fared well and continued to expand production.
Kraft Vina Paper Co. Ltd. has raised its capacity by 12%, Chanh Duong Paper
Company has installed new equipment with annual capacity of 350,000 tons and
Phu Giang Paper and Packaging Co. Ltd has also put into operation a new
machine with a designed capacity of 20,000 tons annually.
VFA defends
floor price for export rice
The Vietnam Food
Association (VFA), responding to criticism over new floor prices set for
export rice, has dismissed an accusation that setting the lowest rice export
prices is an anti-competitive practice.
Nguyen Phuong
Citing Circular 89
on floor rice export prices issued in 2011 by the Ministry of Finance, Phong
said VFA has the right to decide the lowest price of rice for export at the
beginning of a crop. A floor price, he explained, is used by the association
as a measure to negotiate export contracts.
Circular 89 is
based on Government Decree 109/2010/ND-CP on rice trading and the Pricing
Ordinance.
On June 3, right
before the Government approved a major program for purchasing one million
tons of summer-autumn rice for temporary storage to shore up prices, the VFA
adjusted the floor prices of two low-grade rice types. The floor price for
35% broken rice was lowered from US$365 to US$360 per ton, while the price
for 25% broken rice was also slashed to US$360.
Truong Dinh Hoe,
general secretary of the Vietnam Association of Seafood Exporters and
Producers (VASEP), said floor export prices were mentioned in a draft decree
on tra fish production and trading.
Unlike floor prices
in the rice export sector, setting floor prices for tra fish is aimed at
preventing exporters from undercutting prices to thwart competition, he said.
However, he said imposing floor prices was not a good solution.
“Industry
associations cannot determine floor prices and force enterprises to comply.
Only the Government has authority to set floor prices and ensure their
enforcement. However, this is an administrative order, which is no longer
appropriate and goes against market rules. It is easily described as a
Government intervention in export,” he said.
Ho Tram
Strip uses helicopter to pick up customers
In addition to bus
as a popular means of transport, The Grand-Ho Tram Strip in Ba Ria-Vung Tau Province
which will open to public on July 26 will transport customers by helicopter.
The Grand-Ho Tram
Strip has piloted the helicopter service to pick up customers from HCMC.
However, the service is being piloted, and thus its specific fee has not been
revealed.
The first part of
this tourism complex’s first phase comprises of around 500 hotel rooms
meeting five-star standards, gaming facilities, convention space,
restaurants, bars, swimming pools and areas for children.
“Over 90% of
services of the first part have been completed. The golf course and other
services will be put into operation early next year,” said John Webb, vice
president for hospitality and integrated resort.
The Grand-Ho Tram
Strip is running two promotion programs on the occasion of its opening, which
are a promotional room rate of VND1,888,000 plus per night (50% reduction
compared to normal rate) applicable from July 27 to August 29, and a normal
rate of VND3,666,000 plus per night inclusive of VND600,000 for food and a
third night free.
Located in an area
of over 164 hectares with a beach stretching over two kilometers in Ba
Ria-Vung Tau Province, The Grand-Ho Tram Strip worth up to US$4.2 billion is
invested by Ho Tram Project Company under Asian Coast Development Ltd.
The complex’s first
phase will include 541five-star rooms, international restaurants, convention
space, golf course as well as other beach recreation activities. Late last
year, the investor started work on the second phase consisting of the second
hotel with 559 rooms and other components.
HCMC wants to
cooperate with
The city is facing
many challenges such as traffic congestion, flooding and pollution. The city
needs to join hands with Siemens to apply new traffic technology, said HCMC
chairman Le Hoang Quan at a meeting Wednesday with Roland Busch, CEO of the
Infrastructure and Cities Sector of Siemens Asia-Pacific.
There are several
areas where the two sides can form partnership, Quan proposed, such as energy
efficiency in buildings, power supply for metro lines, and development and
transfer of intelligent transport technology. He suggested Siemens join the
development of the German House in the city using energy-efficient models.
Busch said Siemens
was willing to cooperate with HCMC in the areas where it had strengths like
traffic technology, energy efficiency in buildings and power supply for metro
systems.
He expressed
interest in Metro Line No. 2 (Ben Thanh-Tham Luong) and would like to
participate in this project.
Regarding the
progress of Metro Line No. 2, Nguyen Van Quoc, deputy head of HCMC Management
Authority for Urban Railways, said bidding documents for this project were
under consideration and bidding would be launched soon.
Budget
condo buyers get 50% VAT cut
Those buying and
renting low-cost homes from today enjoys a value-added tax (VAT) rate of 5%,
down by a half from the old level.
A 50% VAT cut is also
given to homebuyers at the commercial projects with flats covering less than
70 square meters each and quoted at below VND15 million per square meter,
says a dispatch released by the Ministry of Finance last Friday. VAT
reduction is effective from today to June 30, 2014.
In addition, from
today, businesses are charged a corporate income tax rate of only 10% on
their earnings from budget condo sale and lease. The preferential tax rate is
also applied to the low-cost housing projects developed by the State and
private organizations and individuals.
Source:
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
BUSINESS
IN BRIEF 4/7
Indonesian
enterprises keen to do business in Vietnam
Eight Indonesian
state enterprises plan to establish cooperation with local companies or
through investment, ANTARA News has reported.
They include coal
mining company PT Bukit Asam, fertilizer company PT Pupuk Indonesia,
telecommunication company PT Telekomunikasi Indonesia, aircraft manufacturer
PT Dirgantara Indonesia, cement company PT Semen Indonesia, pharmaceutical
company PT Kimia Farma, logistics agency Perum Bulog and oil and gas company
PT Pertamina.
PT Bukit Asam will
supply coal to
PT Telkom will join
a
Bulog cooperation
with
Tien Giang
farmers’ cow breeding
A cow breeding
project to improve the livelihood of poor farmers has been launched in the
southern
It is partly funded
by Canadian Heifer International and the Norwegian Mission Alliance
The project has an
investment of VND18.2 billion, including VND14.2 billion from the Canadian
and Norwegian organisations. It will be carried out from now until June 2017.
As many as 2,400
poor households in Phu Thanh and Phu Dong communes in Tan Phu Dong district
will benefit from the project.
In the first phase,
300 households will each receive a cow worth VND12 million while 300 others
will be given a preferential loan of VND8 million per household to breed
pigs, goats, poultry or aquatic animals.
The remaining 1,800
households will be supported in the second phase.
The programme aims
to raise incomes, ensure food safety and nutrition for the beneficiaries as
well as improve their awareness.
It also creates
opportunities for them to access other sources of capital.
Eleven
export commodities earn US$1 billion in revenue
These export
commodities hit more than US$1 billion in the first half of 2013.
Among the highest
earners were mobile phones (US$9.907 billion), followed by garments and
computers (US$7.98 billion and US$4.712 billion, respectively).
Other commodities
fetching more than US$1 billion each were footwear, crude oil, seafood, machinery,
transport vehicles, timber products, coffee and rice.
According to the
General Statistics Office, 15 countries in the world imported Vietnamese
goods worth US$1 billion or more in past six months.
The
Other major export
markets for Vietnamese goods were the
In the past six
months,
Export
turnover likely to surpass US$126 billion this year
The country’s
export turnover is expected to reach US$127 billion this year, one billion
higher than the set target, according to the Ministry of Industry and Trade
(MoIT).
The MoIT said that
in the context of positive changes in the world, major economies like the
Against this
backdrop,
The ministry, for
its part, has devised a string of measures to boost trade promotions with a
focus on commodities which are much sought after at home and abroad.
It warned producers
and exporters of import barriers and urged them to improve the quality of
commodities to avoid risks for enterprises when signing export contracts with
foreign partners.
The MoiT said that
the FDI sector has overtaken the domestic sector in terms of export revenue,
with a trade surplus estimated at US$5.41 billion to compare with the
domestic sector’s trade deficit of US$6.82 billion in the first half of this
year.
Exports of
processing industry show a six-month increase of 27.2 percent, accounting for
68.9 percent of the total turnover, with the volume of mobile phones worth
US$9.91 billion (up 97 percent). Meanwhile, most of export items (except
pepper and cashew nuts) from the agricultural and seafood sector have dropped
to a level lower than last year.
In the first six
months of 2013, the country’s export turnover is estimated at US$62.05
billion, up 16.1 percent against the same period last year. Of the total
figure, the domestic sector earned US$20.9 billion (up 2.2 percent) but the
FDI sector fetched US$41.14 billion (up 24.7 percent).
Over 3.5
million foreigners visit
In the past six
months, more than 3.54 million foreigners came to
Among 18 countries
and territories having the largest numbers of visitors to
The number of
foreigners arriving in
However, the growth
rate was still 16.9 percent lower than last year’s level.
Salt output
to top 1 million tonnes
Salt output is
likely to increase by 18 per cent this year to reach one million tonnes, the
Ministry of Agriculture and Rural Development has said.
This would be
enough to meet domestic demand, the ministry claimed. Production up to June
15 stood at almost 800,000 tonnes, including 193,000 tonnes produced
industrially.
The ministry
attributed the increase in output to favourable weather conditions in the
central region.
It has instructed
industrial producers to improve infrastructure at salt field level. Salt
prices remained reasonably high, enabling farmers to make decent profits, the
ministry said.
Growth in
The nation's
commercial hub has recorded a GDP of VND340.654 trillion (US$16.2 billion) in
the first half of 2013, a year-on-year increase of 7.9 per cent.
A report by Le
Hoang Quan, Chairman of the HCM City People's Committee at a meeting held on
Friday to review the city's socio-economic development in the first six
months of 2013, said that the city's service sector rose by 9.1 per cent over
last year, the agricultural sector by seven per cent, and the industrial and
construction sector by 6.2 per cent.
The city achieved
an export turnover of over $13.7 billion, a year-on-year increase of 6.2 per
cent, while its import turnover rose by 15.5 per cent to $12.7 billion. The
sharp increase in imports is due to increases in the import of materials for
textile and garments, footwear, pharmaceuticals, plastics and fuel sectors,
according to the report.
Total retail sales
went up by 11 per cent year-on-year to VND288.9 trillion, up by 11 per cent
compared with the same period last year, the report said.
It noted, however,
that the city's economy still faced difficulties due to the global economic
turmoil, large inventories and stagnant property market.
The report said the
city welcomed over 1.9 million foreign visitors in the first half of the
year, an increase of five per cent compared with the first half of 2012, and
the tourism sector's turnover of over VND41 trillion ($1.95 billion) in the
same period marked a significant 30 per cent year-on-year increase in value
over last year. No explanation was given for the apparently disproportionate
surge.
Quan said at the
meeting that to reach targets set for the second half of 2013, all agencies
and departments would carry out several measures mapped out by the city
administration.
He said the city
would continue to help businesses solve their problems through policies and
incentives including exemption of some taxes and payment extensions for other
taxes so as to release more capital for development.
Quan said priority
would be given to farming and rural development, and to supporting
industries, medium and small enterprises and enterprises using high and
advanced technologies.
The city would also
promote investment and exports, he said.
Quan asked State
management agencies in the city to enhance dialogues with businesses,
especially medium and small enterprises, in their localities. He said this
would result in greater understanding of difficulties the firms were facing
and help create more favourable conditions to promote production.
Military
Bank arm plans restructuring
Military Bank
Securities plans to list after merging with another firm over the next 2-3
years, the company announced during its annual general meeting last week.
With support from
its parent bank - the Military Bank (MB) - the brokerage will restructure
itself and choose another securities firm to merge with.
After merging the
company will retain the name, Military Securities Company and stick to its
existing operational strategies.
The bank will still
hold a dominant stake, while at the same time provide support to its offshoot
in terms of network development, cross-selling and creating new products.
"The merger
will strengthen our position in the market by making the most of our brand
name, new technologies and customer base," said the company.
After merger with a
much stronger asset base, operational efficiency will be enhanced which in
turn will meet the requirements demanded by the State Securities Commission.
"Shareholders
from both companies in the merger will benefit as soon as the new entity
makes a profit," said a company spokesperson. "In addition, listing
will greatly improve the liquidity of our shares."
The brokerage has
not yet revealed the name of the company they are targeting for the merger.
Military Bank
Securities expects to make VND353 billion (US$16.8 million) in turnover this
year, equivalent to only 89 per cent of last year's revenue. However, gross
profit is estimated to jump by 73 per cent to VND20.5 billion ($0.9 million).
Last year, the
company exceeded its targets for revenue and profit by 27.5 per cent and 12
per cent respectively.
New
policies fail to lift shares
Several new
Government policies, including tax relief for low earners and a new ceiling
on deposit interest rates, began from yesterday but shares still took a dive
on the country's both stock exchanges.
The threshold for
paying income tax has risen from VND4 million (US$190) to VND9 million
($428.5) per month.
The cap on the
deposit interest rate will be reduced to 7 per cent.
Despite such
supportive policies, the recent downturn on the stock market has made
investors extra cautious.
The decline slowed
on the
The strong recovery
of a few heavyweight shares, including Masan Group (MSN) and PV Gas (GAS),
cushioned the index fall. Both rose nearly 3 per cent yesterday.
The market
condition was still negative, however, as losers outnumbered gainers by
133-72 while 101 codes were unmoved.
The VN30, which
tracks the top 30 shares on the bourse, was down by 0.69 per cent to 534.85
points. Trading was the two-month low at 35 million shares, worth nearly
VND500 billion ($23.8 million), by the end of the session.
Property giant
Hoang Anh Gia Lai Group (HAG) remained the most active with 2.35 million
changing hands for VND20,400 ($0.97) each, down 1.45 per cent from the
previous closing price.
What happened on
the gold market loomed large on the stock exchange, stock analysts at FPT
Securities Co said.
"A sharp drop
in bullion prices is forecast to draw a considerable amount of cash from
other channels, including equity markets," they said.
Besides, the fresh
gasoline price hike last Friday and low manufacturing data hit the stock
market, analysts said.
On the Ha Noi Stock
Exchange, the HNX-Index also slipped 0.43 per cent to close at 62.49 points
with nearly 16.7 million shares worth just VND130.4 billion ($6.2 million)
being traded.
Investment FLC
Group was the most heavily traded stock nationwide with over 3.8 million
shares changing hands for VND6,400 a share.
Overseas investors
were still net sellers on the
Global hike
fuels gas price rise
Gas prices
increased by VND13,000 (US$0.62) per 12-kg canister yesterday, according to
wholesalers.
This means current
retail gas prices range from VND375,000-380,000 ($17.9-18.1) per 12-kg
canister. The domestic gas price hike occurred because of higher world gas
prices and high transportation fees.
This is the third
consecutive gas price hike since May. Earlier in the year, there were four
consecutive price cuts.
The current price
remains VND54,000 ($2.57) per canister lower than at the end of 2012.
Industrial
production to grow
The industrial
production was expected to grow more in the second half of the year than in
the first, the Ministry of Industry and Trade said.
At its monthly
press conference in the capital yesterday, the ministry forecast the
industrial production index for the full year would be around 5.7 per cent,
0.5 per cent higher than the figure reported in the first half.
The country's total
export turnover was expected to reach US$127 billion, about $1 billion higher
than the Government's goal, while the trade deficit would be roughly $9
billion, 8 per cent lower than the target.
The Export-Import
Department reported that the total export turnover in the first six months of
this year was $62 billion, reaching 49 per cent of the goal for the full
year. The current trade deficit was $1.4 billion, which was "under
control," it said.
The ministry said
purchasing power would improve due to many holidays falling in the second
half of the year, together with the acceleration of the trade promotion
programme.
It was estimated
the total sale of goods and services would be 12.48 per cent higher than last
year.
Meanwhile, the
Domestic Market Department reported the increase in domestic petrol prices in
June had followed an upward trend in world petrol prices. The domestic petrol
prices increased twice, on June 14 and 28, by VND426 (US$0.02) and VND370
($0.017) per litre respectively.
The department said
the world's 30-day average price of petrol showed an increasing trend in
June, rising from $111.08 per barrel at the end of May to $112.975 on June 13
and $114.442 on June 27.
The department also
said a nationwide check on the location of petrol stations was under way and
those that did not meet planning regulations would have their licences
revoked.
Regarding power
prices, the Electricity Regulatory Department said any adjustments to prices
must be based on a calculation of input costs to ease the impact on the
consumer price index and economic growth.
Credit
institutions close gold deposit accounts
Commercial banks
all closed their gold accounts by the June 30 deadline, except for one or two
with insignificant outstanding gold deposits, according to the State Bank of
Viet Nam (SBV).
Previously, some
banks asked the SBV to delay the deadline to the end of this year. Though the
SBV declined the proposal, it said banks could seek support to resolve any
issues.
The SBV originally
set the deadline as December 30 last year, but increasing pressure from banks
and a growing gold shortage caused the central bank to push it back to June
30 and organise auctions to increase supply.
From March to June,
it organised 37 auctions for nearly 37 tonnes of gold.
At an auction
today, another 40,000 taels of gold bars will go on sale.
Industry insiders
said that the move was quite surprising, as banks had already closed their
gold accounts.
However, SBV deputy
governor Le Minh Hung said the central bank would still maintain its
regulatory role and planned to hold more auctions in case market demand rose.
Drug
dealers make use of lax policing
Drug dealers have
taken advantage of international air routes to smuggle drugs in and out of
The department
yesterday gathered to discuss ways of tackling these dealers, who have become
more ingenious and adaptable in their methods to avoid detection.
Since 2006, police
investigating drug-related crime have worked with other law enforcement
officials to detect 57 cases of illegal drug trading, involving 119 people.
In that period, they have seized 67.45 kg of heroin and 75.54 kg of synthetic
drugs.
Meanwhile, they
have also faced personnel and logistical shortages which hinder their ability
to detect sophisticated drugs crime.
Another shortcoming
has been the concentration of drug prevention measures at major airports at
the expense of smaller ones, which have been left exposed to crime.
Participants in the
meeting said that in the future, capacity-building programmes would be
required, not only for police but also for customs officials, aviation
security and immigration authorities in order to track down potential drug
dealers at airports.
Lieutenant General
Do Kim Tuyen, deputy head of the Drugs Police Department under the Ministry
of Public Security, said concrete guidelines should be publicised outlining
the measures in preventing and controlling illegal drug trade via air routes.
Leading
pharma firms keep essential drug prices stable
The price
stabilisation programme in
A total of 13
pharmaceutical firms are participating in the programme this year, covering
392 locally produced medicines in 21 categories, Pham Khanh Phong Lan, deputy
director of the city's Department of Health, was quoted as saying by Sai Gon
Giai Phong (LIBERATED SAI GON) yesterday.
Last year, nine
pharmaceutical firms had joined the programme, compared with just four in
2011, Lan said.
The number of
medicines sold at stabilised prices, which are 5-10 per cent lower than
market prices, also increased to 80 in 17 categories last year from
corresponding figures of 45 and 10 in the previous year.
As of May this
year, an additional 312 drugstores have signed up for selling drugs under the
programme, raising the total number to more than 2,300.
All 106 drugstores
in city hospitals are selling the drugs, mostly used to treat fever, cough,
diarrhoea, heart diseases, allergies and some chronic diseases.
Lan said the
department works constantly with hospitals to ask doctors to give priority to
prescribing locally made medicines, including those sold under the price
stabilisation programme.
Indian
firms find investment chances in Vietnam
A number of large
Indian firms have found many opportunities for investment in
The event was
organized by Invest
Anil Kumar,
president director of PT Pricol Surya, the Indonesian subsidiary of
The firm is looking
to increase its market share in
D. Jesudas Bell,
managing director of Futurelinks International Pvt. Ltd., said he had seen
chances for investment in infrastructure in
However, the
Government is reviewing investment incentives, promising chances for Indian
power companies to find partners and jointly invest in the electricity sector
in
Indian Consul
General in HCMC Abhay Thakur noted that in the fields of mining and power,
Indian investors could acquire stakes in Vietnamese companies during their
restructuring process.
At the roundtable,
Indian officials suggested businesses of the two countries cooperate in
certain areas, such as rubber and coffee processing, and called on Vietnamese
enterprises to invest in food processing and automotive sectors in
Currently, there
are around 30 mega food parks with sufficient infrastructure in
21 cases of
banking sector violations found in five months of this year
At least 21
violation cases were detected in the Vietnamese banking sector in the first
five months of this year, according to the Government Inspectorate.
The cases have
caused a total loss of VND682 billion (USD32.5 million), 561.2 taels of gold
and USD50,000. However, the State Bank of
The Government
Inspectorate said, during the first half of this year, inspection agencies
uncovered 6 corruption cases that cost a combined loss of VND1.7 billion
(USD80,952) for the state budget. Meanwhile, the party’s inspection agencies
and internal inspection agencies also detected 12 corruption cases that
involved 16 individuals, resulting in an additional loss of VND8 billion.
The Ministry of
Defense discovered one official who embezzled VND8.1 billion from the state
budget. The case has been sent to the criminal inspection agency and he
awaits prosecution.
According to the
Government Inspectorate, a number of agencies, including those in
The Government
Inspectorate also added that accuracy of asset auditing remains limited due
to the lack because there is a lack of ability in agencies to handle such
work. Transparency in areas with high risk of corruption such as bidding,
auctioning of state-owned enterprise assets for privatisation and land
compensation is still weak.
Banks race
to cut lending interest rates
Though the State
Bank of Vietnam (SBV) has lowered interest rates, banks have still found it
hard to loan because so few enterprises qualify.
Many banks have
tried to further lower interest rates which has caused worry among banking
experts.
From June 28, the
cap on deposits with terms of between one and six months was cut to 7% per
year, while the ceiling lending interest rates for some prioritised
industries was also cut to 9% per year. However only a minority of
enterprises qualify for these loans.
Nguyen Duc Vinh,
General Director of VPBank, cited the bank’s survey, saying that only one or
two out of ten enterprises that apply for bank loans meet all requirements.
“The banking sector
is faced with pressure to boost lending, but around 70%-80% of businesses
fail to meet their requirements. This situation has led banks to continually
lower interest rates," Vinh said.
The effect has been
a race by many banks to lower their interest rates in order to attract more
customers. This trend has brought about warnings from a number of experts.
Phan Thi Chinh,
Deputy General Director of the Bank for Investment and Development of Vietnam
(BIDV), said "This trend poses certain risks to the whole banking
system."
According to her,
due to the better access to capital, several enterprises have increased their
profits by certain investments, some even exceeding their targets. This
profit, she said, returns into the banking system in the form of deposits
that earn interest.
On the other hand,
she also noted that several foreign banks have jumped into the lending race
by lowering interest rates. She added that, "If this trend continues, it
could pose a problem when there are those who would take advantage of the
disparity between the VND and foreign currencies, threatening the exchange
rate."
Leaders of a number
of commercial banks have suggested that the SBV lower the cap on lending
interest rates and remove the cap on interest for deposits with terms of over
six months. They say this would attract more deposits to small banks.
Nguyen Duc Vinh
said some banks that have reported low credit growth have applied
irresponsible policies, such as buying their own debt and increasing lending
based on demand. He emphasised that these practices could lead to real
trouble in the coming years.
Pham Thi Chinh
agreed, saying that banks in this country are taking on more risk.
Her suggestion was
that the SBV should more closely monitor the flow of capital in the banking
system so as to ensure that an acceptable proportion of the funds are used
for industries which promote economic development instead of non-production
industries. This, she said, could help curb inflation.
Viglacera
to export tiles to Indonesia
State-owned
construction materials producer, Viglacera Group, has recently signed a
Memorandum of Understanding for cooperation with the Indonesian PT Arwana Citramulia
Tbk (Arwana) Group.
Accordingly,
Viglacera will export tiles to the Indonesian market, worth US$8 million a
year.
The company targets
export growth of 25 percent per annum, reaching $75 million by 2015.
The company’s
traditional markets include
Southern
Hydropower Company exceeds revenue target
Southern Hydropower
Joint Stock Company (SHP) recently announced its business result of 2012 with
revenue reaching VND192.7 billion, exceeding by nearly 40 percent the last
year target of VND137.9 billion.
The company saw
pre-tax profit of VND95.2 billion, up 124 percent compared to the target for
VND42.4 billion.
This year, the Hydropower
Company has set a target of VND195.4 billion, with pre-tax profit of VND53.4
billion. In September this year, Da Mbri Hydropower Plant will start test
runs and provide an estimated 55 million kWh of electricity.
Ministry
deliberates hike in electricity
Ministry of
Industry and Trade is currently examining the financial audit report of 2012
of Vietnam Electricity--the country’s largest power company--and possibility
of a hike in price, said Dinh The Phuc, deputy head of the Electricity
Regulatory Authority of Vietnam.
He was speaking at
a regular press conference hosted by the Ministry on July 1 in response to
press queries related to a recent proposal from the National Financial
Supervisory Commission to hike electricity price by 10-15 percent.
According to Mr.
Phuc, power price will be adjusted when there are changes in cost price,
material price or in the exchange rate.
Mr. Phuc said that
if it is necessary to raise the price, the Ministry will carefully calculate
a suitable rate in order not to affect the Government target to curb
inflation and stabilize socio-economy.
The Ministry is
also looking into another proposal to charge higher electricity prices from
businesses in the steel and cement industries, which consumed upto 11.5
percent of commercial electricity last year.
Higher electricity
price will prompt businesses in these two industries to move to better
technology to save energy, he said.
Another matter of
public importance was the petrol price hike, as domestic retail price hiked
on two occasions in the last two weeks despite drop in world price.
Nguyen Xuan Chien,
deputy head of Domestic Market Department, an organ under the Industry and
Trade Ministry, said that data from his Ministry and the Ministry of Finance
shows that world petrol price was on the rising trend in June.
Specifically, the
price of Ron 92 gasoline was $111.08 a barrel on May 31 and increased to
$112.9 a barrel on June 13 and $114.442 a barrel on June 27.
Mr. Chien said that
the domestic retail price increase was in accordance with Government
regulations. The Ministries of Finance, and Industry and Trade also permitted
businesses to dip into the price subsidization fund to minimize impact of the
hike.
Statistics
depict relatively good economic picture: GSO
With gross domestic
product (GDP) growing 4.9% and inflation picking up 2.4% against end-2012,
the socioeconomic situation in the year’s first half was relatively good,
said Do Thuc, director general of the General Statistics Office (GSO).
The global economy
further contracts in the 2011-2013 cycle, with a growth rate of only 2.1%,
according to the United Nations Economic and Social Council.
In this context,
Although there are
different opinions, statistics show that the Government managed to accomplish
the goals of curbing inflation, stabilizing the macro-economy and achieving
reasonable growth, he said.
To obtain the
target for 5.5% GDP growth for the whole year, the growth rate in the second
half must be 6%. “This is extremely difficult,” he said.
However, he noted
that in
“Still, every
solution has its risks. If we rushed to make investment, inflation might
shoot up,” he warned.
GSO forecasts GDP
growth will be 5.1-5.2% in the second half. With such a growth rate, plus
healthy and stable balances, the goals for this year will be basically
attained, he said.
GDP growth this
year may be lower than last year, but in the current difficult context, it is
not poor, he stated.
“The global GDP
growth is only 2.1%. The growth rate in
Total investment in
the year to date has dropped to 29.6% to GDP, versus 40% in previous years.
If investment continued to dwindle, there would hardly be high growth, he
stressed.
The countries with
rapid growth have a high ratio of investment to GDP, he remarked. For
example,
“The Government has
noticed this and is seeking ways to boost investment, but public investment
cannot be increased. That’s the problem,” he said.
“In the current
tough times, everyone longs for rapid growth. But if we hastened, policies
would get from one polar to the other, and we would never be able to overcome
the crisis, or the fluctuations in the already weak local economy,” he told
the Daily.
Special
Incentives At
Up and running
early this year, the 11-story QTSC Building 9 has reported 60% occupancy as
it has become a trustworthy destination for domestic and international ICT
firms.
Located in
QTSC Building 9’s
prime site allows it to have two main gates, one of which links with the
inner part of QTSC, while the other connects the park with To Ky Street. This
creates convenience for operation, transportation and commercial activities.
In a bid to attract
more ICT enterprises, the park’s operator is applying special incentives for
those who rent spaces at the office building. Lessees will enjoy a rental
exemption of up to five months, free-of-charge Internet leased line up to two
months and complimentary installation of telephones and fax machines, among
others. All are aimed at providing the best support for enterprises.
“We attract
businesses thanks to competitive prices, good infrastructure, stable power
supply sources and especially the enthusiasm of staff in offering corporate
services,” says Lam Nguyen Hai Long, deputy CEO of QTSC. “Low office rentals
and low Internet, power and water supply charges, as well as other
conveniences like dining and parking are our advantages that will help
businesses save nearly 40% of operation costs compared with those leasing
offices in the city downtown.”
QTSC is one of the
key economic projects of HCMC which facilitate ICT development in the city
and the country. About 140 domestic and foreign ICT enterprises and investors
are doing business in the park, including giants like HP, KDDI and IBM.
Exports buoy up paper industry
January-June paper
exports rose 15% year-on-year, giving a lifeline to the local paper industry
that has seen a sharp drop in paper consumption at home, says a report by the
Vietnam Pulp and Paper Association (VPPA).
Newsprint demand
slid 29% and tissue paper demand plummeted 18% year-on-year in the first half
due to current economic difficulties, VPPA reports.
Only some paper
products posted growth, with writing paper demand increasing 6.3% and packing
paper demand 1.1%. Local sale volume for all paper products reached nearly
1.4 million tons in the year’s first half, a slump of 3% year-on-year.
Meanwhile, paper
exports totaled 67,800 tons from January to June, up 15% over the year-ago period
thanks to stable shipments.
Besides,
This year is a very
tough year for the local pulp and paper industry as local factories have
failed to run at full capacity while production costs are rising, seeing
industry players struggling with price hikes and shrinking profit margins,
according to VPPA.
On the contrary,
other market players have fared well and continued to expand production.
Kraft Vina Paper Co. Ltd. has raised its capacity by 12%, Chanh Duong Paper
Company has installed new equipment with annual capacity of 350,000 tons and
Phu Giang Paper and Packaging Co. Ltd has also put into operation a new
machine with a designed capacity of 20,000 tons annually.
VFA defends
floor price for export rice
The Vietnam Food
Association (VFA), responding to criticism over new floor prices set for
export rice, has dismissed an accusation that setting the lowest rice export
prices is an anti-competitive practice.
Nguyen Phuong
Citing Circular 89
on floor rice export prices issued in 2011 by the Ministry of Finance, Phong
said VFA has the right to decide the lowest price of rice for export at the
beginning of a crop. A floor price, he explained, is used by the association
as a measure to negotiate export contracts.
Circular 89 is
based on Government Decree 109/2010/ND-CP on rice trading and the Pricing
Ordinance.
On June 3, right
before the Government approved a major program for purchasing one million
tons of summer-autumn rice for temporary storage to shore up prices, the VFA
adjusted the floor prices of two low-grade rice types. The floor price for
35% broken rice was lowered from US$365 to US$360 per ton, while the price
for 25% broken rice was also slashed to US$360.
Truong Dinh Hoe,
general secretary of the Vietnam Association of Seafood Exporters and
Producers (VASEP), said floor export prices were mentioned in a draft decree
on tra fish production and trading.
Unlike floor prices
in the rice export sector, setting floor prices for tra fish is aimed at
preventing exporters from undercutting prices to thwart competition, he said.
However, he said imposing floor prices was not a good solution.
“Industry
associations cannot determine floor prices and force enterprises to comply.
Only the Government has authority to set floor prices and ensure their enforcement.
However, this is an administrative order, which is no longer appropriate and
goes against market rules. It is easily described as a Government
intervention in export,” he said.
Ho Tram
Strip uses helicopter to pick up customers
In addition to bus
as a popular means of transport, The Grand-Ho Tram Strip in Ba Ria-Vung Tau
Province which will open to public on July 26 will transport customers by
helicopter.
The Grand-Ho Tram
Strip has piloted the helicopter service to pick up customers from HCMC. However,
the service is being piloted, and thus its specific fee has not been
revealed.
The first part of
this tourism complex’s first phase comprises of around 500 hotel rooms
meeting five-star standards, gaming facilities, convention space,
restaurants, bars, swimming pools and areas for children.
“Over 90% of
services of the first part have been completed. The golf course and other
services will be put into operation early next year,” said John Webb, vice
president for hospitality and integrated resort.
The Grand-Ho Tram
Strip is running two promotion programs on the occasion of its opening, which
are a promotional room rate of VND1,888,000 plus per night (50% reduction
compared to normal rate) applicable from July 27 to August 29, and a normal
rate of VND3,666,000 plus per night inclusive of VND600,000 for food and a
third night free.
Located in an area
of over 164 hectares with a beach stretching over two kilometers in Ba
Ria-Vung Tau Province, The Grand-Ho Tram Strip worth up to US$4.2 billion is
invested by Ho Tram Project Company under Asian Coast Development Ltd.
The complex’s first
phase will include 541five-star rooms, international restaurants, convention
space, golf course as well as other beach recreation activities. Late last
year, the investor started work on the second phase consisting of the second
hotel with 559 rooms and other components.
HCMC wants to
cooperate with
The city is facing
many challenges such as traffic congestion, flooding and pollution. The city
needs to join hands with Siemens to apply new traffic technology, said HCMC
chairman Le Hoang Quan at a meeting Wednesday with Roland Busch, CEO of the
Infrastructure and Cities Sector of Siemens Asia-Pacific.
There are several
areas where the two sides can form partnership, Quan proposed, such as energy
efficiency in buildings, power supply for metro lines, and development and
transfer of intelligent transport technology. He suggested Siemens join the
development of the German House in the city using energy-efficient models.
Busch said Siemens
was willing to cooperate with HCMC in the areas where it had strengths like
traffic technology, energy efficiency in buildings and power supply for metro
systems.
He expressed
interest in Metro Line No. 2 (Ben Thanh-Tham Luong) and would like to
participate in this project.
Regarding the
progress of Metro Line No. 2, Nguyen Van Quoc, deputy head of HCMC Management
Authority for Urban Railways, said bidding documents for this project were
under consideration and bidding would be launched soon.
Budget
condo buyers get 50% VAT cut
Those buying and
renting low-cost homes from today enjoys a value-added tax (VAT) rate of 5%,
down by a half from the old level.
A 50% VAT cut is
also given to homebuyers at the commercial projects with flats covering less
than 70 square meters each and quoted at below VND15 million per square meter,
says a dispatch released by the Ministry of Finance last Friday. VAT
reduction is effective from today to June 30, 2014.
In addition, from
today, businesses are charged a corporate income tax rate of only 10% on
their earnings from budget condo sale and lease. The preferential tax rate is
also applied to the low-cost housing projects developed by the State and
private organizations and individuals.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Tư, 3 tháng 7, 2013
Business
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