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BUSINESS IN BRIEF 10/11
State
bank auctions more gold, demand stays high
The
State Bank of Viet Nam (SBV) held its 51st gold auction yesterday, auctioning
off 26,000 taels or approximately one tonne of gold.
Since
March 28, the SBV has sold about 1.37 million taels, nearly 53 tonnes,
however, the demand for gold seems to be endless.
At
yesterday's auction, only 300 taels remained unsold as 15 different credit
institutions secured the gold for between VND37.28 and 37.33 million
(US$1,775-1,777) per tael.
On the
local market, the price of gold increased by VND200,000($9.5) per tael
compared with yesterday's price. At 4pm, the Saigon Jewellery Company (SJC)
posted its gold prices at between VND37.35-37.65 ($1,778-1.793) on its
website.
However
on the kitco.com trading floor, the selling price for gold dropped to
$1,290.3 per ounce, or $1,555 a tael, leaving gold prices in
On the
forex market, commercials banks were also paying more for the US dollar after
the SBV's similar action yesterday.
Vietcombank
listed the greenback selling/buying prices at VND21,070/21,140, up VND60
compared with two days ago. Similar increases were recorded at other banks.
A
seminar on year-end business opportunities for small and medium sized
enterprises will be held next Tuesday in
The
seminar is being organized by the banking information portal Laisuat.vn in
collaboration with the HCM City Union of Business Associations with
sponsorship from VPBank.
The
It
will deal with several topics including macro-economic policies and their
impact on SMEs, and challenges and opportunities for SMEs from now until the
end of the year.
$35
million factory to make automobile parts
The
Yazaki Hai Phong-Viet Nam Co Ltd recently received an investment license to
build a factory to manufacture spare parts for automobiles in northern
The
US$35 million factory will be located on a 70,000 -sq.m plot of land in the
province's Dong Mai industrial zone.
Construction
of the plant is expected to be completed in August 2014.
Once
in operation, the factory will generate jobs for about 3,000 workers.
The
Yazaki group occupies one third of the global market in the car wiring
sub-sector.
Vinacomin
coal exports decline after tax hike
Viet
Nam National Coal and Mineral Industries Group (Vinacomin)'s coal exports
last month declined by 10 times over the previous month to 100,000 tonnes
after a rise in export tax from 10 per cent to 13 per cent in mid July.
The
rise in coal export prices caused many importers to seek other providers with
lower prices, Vinacomin said.
The
coal exploitation output and consumption in July also declined due to the wet
season.
Statistics
showed that the sold volume of coal in both domestic and foreign markets last
month hit a record low, staying at only 2 million tonnes, equivalent to 60
per cent of the average volume of the first six months of this year.
Vinacomin
said the demand of coal for electricity generation was down while the group
had not received export contracts this month.
Previously,
Vinacomin proposed the Government keep the coal export tax at 10 per cent as
it was in the first six months of the year.
Fees
and taxes imposed on coal mining are around 30 per cent, including national
resource tax (5-7 per cent), export tax (13 per cent), value added tax (10
per cent), environmental fees (3 per cent).
According
to the statistics of the Ministry of Industry and Trade, in the first seven
months of this year, the export turnover of coal declined by 15.5 per cent
year-on-year.
Coal
exploitation output in the period was estimated at 24.8 million, 14 per cent
lower than the same period last year.
Pepper
Association urges caution before signing export contracts
Pepper
enterprises needed to be aware of the risks in considering export volumes,
prices, payment methods and delivery times when signing export contracts, the
Viet Nam Pepper Association suggested.
The
world economic recession along with the social and political changes in North
Africa and the
Domestic
pepper supply this year was estimated to reach only 115,000 tonnes, 87,600
tonnes of which had already been shipped abroad by July 15, the association
said. It left a limited amount for export by year-end.
The
country exports pepper to more than 90 countries and territories but most
consumers are unaware that it originated from
Six
foreign-invested businesses currently buy and process pepper in
Association
chairman Do Ha
Macroeconomic
management to be consolidated under MPI
The
Prime Minister has approved a plan that calls for closer collaboration
between Government agencies in macroeconomic management with the Ministry of
Planning and Investment (MPI) the chief coordinator.
The
plan aims to ensure that macroeconomic policies are formulated and
implemented in a proactive and flexible manner that responds quickly to new
developments both in the domestic and world economies.
In
addition, closer collaboration between different agencies is the foundation
for more accurate forecasts of economic trends in the medium and long terms.
Under
the plan, the MPI is in charge of overseeing and accelerating the
co-ordination between relevant agencies and reporting to the Prime Minister
on a monthly basis.
The
MPI is also asked to work with the Ministry of Finance, Ministry of Industry
and Trade and the State Bank of
State
bank auctions more gold
The
State Bank of Vietnam (SBV) held its 51st gold auction on August 8,
auctioning off 26,000 taels or approximately one tonne of gold.
Since
March 28, the SBV has sold about 1.37 million taels, nearly 53 tonnes,
however, the demand for gold seems to be endless.
At the
August 8 auction, only 300 taels remained unsold as 15 different credit
institutions secured the gold for between 37.28 and 37.33 million VND
(1,775-1,777 USD) per tael.
The
same day, the price of gold on the local market increased by 200,000 VND (9.5
USD) per tael compared with August 7’s price. At 4pm, the Saigon Jewellery
Company (SJC) posted its gold prices at between 37.35-37.65 (1.778-1.793 USD)
on its website.-
Consultants
for giant oil refinery project soon to be named
Winners
of the three international consulting packages for the US$27-billion oil
refinery and petrochemical project in Binh Dinh Province will be named at a
press conference slated for next Thursday, August 15.
Man
Ngoc Ly, head of the authority for Nhon Hoi Economic Zone, where the project
will be located, told the Daily that the press conference would take place in
Binh Dinh’s
At the
press conference, PTT will name the chosen international consultants in
finance, market and technology. The oil refinery project will officially get
moving on this occasion.
PTT
will also clarify where funding and crude oil would be sourced, where the
products of this project would be sold and where technology and equipment
would be bought.
Project
planning and feasibility study will be done in nine months. After that, the
project owner will make a report to the Government and relevant ministries,
Ly informed.
On
August 19, PTT will send a delegation to the
The
government of Binh Dinh has decided to set up an advisory group consisting of
experts with profound experience of oil refinery and petrochemical,
finance-banking and environment. The group will assist PTT in replying to the
questions of the concerned agencies during project planning.
Mixed
opinions have surfaced after PTT had initiated the mammoth project worth
US$27 billion in Nhon Hoi Economic Zone. Some cast doubt over PTT’s ability
to cover the cost of this project.
In
addition, with an annual capacity of 30 million tons, this project will
likely lead to oil oversupply in Vietnam, given the existence of similar
projects in Dung Quat, Quang Ngai and Phu Yen’s Nam Vung Ro.
There
is also a concern about inputs for this oil refinery. In response, the Thai
investor has said inputs would be sourced from the Middle East, Africa and
the
Earlier,
Binh Dinh’s Vice Chairman Ho Quoc Dung said Deputy Prime Minister Hoang Trung
Hai had signed a document giving nod to the oil refinery and petrochemical
project in Nhon Hoi Economic Zone.
In
this document, the Government asks
The
oil refinery and petrochemical project initiated by PTT if approved will be
developed on 2,000 hectares in Nhon Hoi Economic Zone with an estimated
capacity of 660,000 barrels of crude oil per day, or some 30 million tons per
year. It would get off the ground in the first quarter of 2016 and start
operations in 2019.
Vietnam’s
mooncake exported to US, Cambodia
The
Kinh Do Confectionery Corporation (KDC) on August 8 announced that it
exported five containers of mooncake to the
The
company is expected to produce 2,400 tonnes of mooncake to serve the demand
of domestic and foreign markets during this year’s mid-autumn season.
Last
year, the volume was about 2,100 tonnes.-
BIDV
lends VND2.9 trillion to highway upgrade project
Bank
for Investment and Development of Vietnam (BIDV) on Tuesday signed a credit
contract with a consortium of three enterprises to provide over VND2.9
trillion for a national highway upgrade project.
The
build-operate-transfer (BOT) project will stretch nearly 34 kilometers on
National Highway 1 from Nghi Son in
The
loan has a term of 17 years with other banking services such as a four-side
credit package, retail banking and insurance products.
According
to a statement released by BIDV, upgrading the highway section will help
complete infrastructure in Thanh Hoa and Nghe An provinces, and attract local
and foreign investors to Nghi Son and Hoang Mai economic zones. The project
will also help improve traffic safety on the highway.
In
January, BIDV and the Ministry of Transport signed an agreement to arrange
capital for BOT projects upgrading National Highway 1 from Thanh Hoa to Can
Tho City. BIDV pledged to arrange a maximum of VND30 trillion for the
projects with a credit limit up to 85% of total investment of each one.
The
bank up to now has approved in principle to fund nine out of 17 projects with
the total investment of VND17.7 trillion, of which over VND14 trillion will
be provided by BIDV.
BIDV
reported credit growth of 8.5% in the first six months of this year, the
highest level among State-owned banks.
Thuan
Phuoc Bridge, known as the country’s longest cable-stayed bridge in the
central coast city of Danang, will be re-opened on Thursday after its repair
schedule has been extended for an extra ten days.
The
bridge was opened to traffic on July 19, 2009 at a total cost of up to VND1
trillion but local residents have already been familiar with repairing works
done regularly on the bridge. The bridge repair this time started from July
20, with its road surface covered with a new layer by contractor BK
Engineering and Construction Company (ECC).
The
road surface on the bridge had usually got deformed since July 2010,
especially in dry seasons which had caused a lot of traffic accidents. The
scheme’s management therefore has banned the circulation of trucks on the
bridge, minimizing its operational efficiency.
ECC
has many times assigned workers to remove the old asphalt layer to cover it
with a new one in the last three years but the more the bridge is repaired
the worse its road surface becomes.
Dang
Viet Dung, director of the city’s Department of Transport, said at a recent
meeting of the People’s Council his department had asked ECC to study many materials
and that the current one was finally approved by local authorities. “As the
new material has for the first time been used in Vietnam, we requested the
contractor to provide a warranty for ten years rather than two years as
specified from the beginning,” he told the meeting.
HCMC
is calling on capable investors to participate in two sluice gate projects,
namely Phu Xuan and Song Kinh, each costing about VND1.2 trillion.
Nguyen
Ngoc Cong, deputy director of the
As per
the city’s flood control plan, eight sluice gates will be built in the city
with a total cost of tens of trillions of dong.
So
far, only Nhieu Loc-Thi Nghe sluice gate is under construction, set to be
operational late this year. The remaining projects are still under evaluation
and awaiting investors.
As
proposed by the flood control center, Song Kinh sluice gate will lie about
110 meters upstream from
Four
sluice gates would get off the ground next year if the city managed to find
funding and investors for them. They include Ben Nghe, Tan Thuan and Phu Xuan
sluice gates and a sluice gate cum lock on the
Scheduled
for completion in 2017, these sluice gates will help reduce flooding in the
low-lying areas along the
Three
other sluice gates are set for groundbreaking in 2015 and completion in 2017,
namely Song Kinh, Rach Tra and Vam Thuat. The total cost of these three
projects is nearly VND2.3 trillion, or nearly US$1.1 billion.
The
above sluice gate projects are named in the plan for irrigation and flood
prevention in HCMC approved in 2008. Under the plan, 13 sluice gates, with a
length of 20-120 meters each, and a 173-km dike running along the Saigon
River from HCMC and Long An will be developed.
Moon
cake makers offer affordable products
Not so
many types of expensive moon cakes are on sale this year as producers are
aware of their customers’ tight budgets.
Many
confectionary makers and hotels have launched their moon cakes into the
market. The moon cake season begins several weeks ahead of the Moon Festival,
which is due on September 19 this year.
Givral
often starts selling moon cakes two and a half months before the Mid-Autumn
Festival, but this year its moon cakes go on sale a half month later. Given
the forecast about low growth, Givral will only launch some 500 tons of moon
cakes, up 10% over last year, with prices picking up 7%.
“Last
year, our output rose 20% over the previous year. We offer a slightly larger
volume this year since 25 additional outlets have been opened nationwide, not
because the market has improved. The market demand is unpredictable now,”
said a representative of Givral.
Givral
introduces many new types of moon cakes this year. The ordinary types sell
for VND400,000-500,000 per box of four pieces, while the most expensive type
is priced at VND1 million, coming together with a 20ml wine bottle and a tea
box.
Like
Givral, the Renaissance Riverside Saigon Hotel said it could not predict the
market demand now. Knowing that consumers care much about prices this year,
this five-star hotel has sought ways to lower prices and introduce new
flavors to attract buyers.
A moon
cake box made by the hotel is quoted at VND789,000, a slight drop from over
VND800,000 last year.
Do
Phan Tieu Khue, marketing and public relations manager of the hotel, said:
“As customers care more about prices when buying moon cakes, we are trying to
cut the cost of packaging to offer softer prices, luring buyers in the
current tough times.”
The Renaissance
Riverside Saigon Hotel expects to sell around 2,800 moon cake boxes this
year, an increase of 300 boxes against last year.
Meanwhile,
the five-star
This
year, the
Meanwhile,
Kinh Do said it would launch about 2,400 tons of moon cakes this year, equal
to the quantity last year.
Kinh
Do not only sells its moon cakes at home but also exports them. Last month,
the baker exported five containers to the
A
number of moon cake producers said that this year it would be very hard to
find wholesale buyers, namely companies wanting to buy moon cakes for their
customers and employees.
A
representative of a moon cake company said his firm in previous years sold
moon cakes to dozens of banks in HCMC, but now many of them had turned down
its offer. In addition, struggling property firms have lower demand for moon
cakes this year.
Footwear
export orders up 10-15%
Most
companies in the leather-footwear industry have won export orders sufficient
for production until end-September or the year-end, showing a growth rate of
between 10% and 15% year-on-year, said the Ministry of Industry and Trade.
According
to the ministry, January-July footwear export value is estimated at a
combined US$4.79 billion, a rise of 15.6% year-on-year, while the seven-month
output volume is estimated at 148.7 million pairs, up 11% year-on-year.
The
ministry attributed the good news to the fact that more foreign buyers now
are shifting their orders from
Specially,
as
The
Footwear
exports to the EU represented over 52% of the country’s total footwear
exports in 2008, which then slid to 36.7% in 2012. In the meantime, footwear
exports to the
Imported
urea flows to neighboring countries
Local
traders have imported a sizeable amount of urea fertilizer this year to
supply neighboring countries since local output is sufficient for domestic
use, said the Vietnam Fertilizer Association.
Nguyen
Hac Thuy, chairman of the association, said that the global urea fertilizer
price has dropped lately, prompting local enterprises to import fertilizer
then ship it to neighboring countries to earn profits.
According
to the fertilizer association, if the urea fertilizer price remains low in
the coming months, enterprises will boost import and then export it to make
profits. Around 100,000 tons was exported to
Statistics
of the General Department of Customs showed that from the year’s beginning
until July 15
The
Ministry of Agriculture and Rural Development late last year forecast that
Vietnam would need to import 2.5 million tons of fertilizer this year, with
SA fertilizer accounting for 850,000 tons, DAP fertilizer 570,000 tons,
kali fertilizer 950,000 tons and NPK fertilizer 100,000 tons.
SMEs
benefit most from preferential credits
Preferential
credits offered to small and medium-sized enterprises (SMEs) in HCMC made up
a high ratio of the total loan amount for five priority sectors as of July,
according to a report of the central bank’s HCMC branch.
Until
July 11, total outstanding loans for the five sectors was over VND119
trillion, up 39.8% against year-end 2012, of which credits for SMEs posted up
the strongest rise of 50%. The level was much higher than the total credit
growth rate of the city at 5.56% in the January-July period.
As
regulated by the central bank, the priority sectors are the agriculture and
rural industry, export goods production, SMEs, supporting industries and
high-tech enterprises.
However,
the total outstanding loans for the five sectors accounted for just 13.3% of
total outstanding loans of the city as of June 30. Local credit institutions
reached total outstanding loans of nearly VND895 trillion as of the end of
June and the figure was expected at VND903 trillion by July 31.
As per
the Circular No. 16/2013/TT-NHNN taking effect from June 28, short-term
lending rates in dong for the priority sectors are capped at 9% per annum,
down from 15% on May 8, 2012. Since the end of last year, high-tech firms
have been included in the priority group.
Land
plots lure buyers with flexible payment scheme
Owners
of land plot projects are offering buyers a flexible payment scheme which has
resulted in transactions in this market segment becoming more active.
Although
the value of each land plot is not high, investors allow their customers to
pay by installment to relieve their financial burden. Some project owners
even accept a monthly installment of less than VND20 million.
Kim
Oanh Real Estate Company is offering land plots at its
The
26-hectare
In
HCMC, land plots at
Covering
nearly four hectares along
Also
located in HCMC’s District 9, the residential project Tang Phu House
developed by Phong Phu Corporation and Saigon Agriculture Incorporation is
about to launch 50 land plots.
Nam
Viet Real Estate Company, the project distributor, said land plots would have
prices starting from VND13.5 million per square meter. Buyers will receive
their land plots after making a down payment equal to 40% of the value of one
unit and then settle the rest in 18 months’ time with no interest charged.
Tang
Phu House costing some VND520 billion is built on nearly four hectares,
comprising 75 land plots for townhouses, four villas, a commercial center and
295 apartments.
In
District 7, Phat Dat Property Development Corporation is seeking buyers for
75 land plots for townhouses and villas at its The EverRich 3 project.
Market
observers said Vietnamese people still preferred houses attached to land to
apartments. Thus, villas and townhouses have recorded busy transactions.
In the
second quarter, villas and townhouses in HCMC achieved a strong sales
increase of 5-18% over the preceding quarter. There are currently some 3,300
villas and townhouses in supply, according to Savills
Corporate
bond information center in the offing
The
Vietnam Bond Market Association (VBMA) has drawn up a scheme for building a
corporate bond information center for submission to the Ministry of Finance.
With
the technical assistance of International Finance Corporation, the
association has hired experts to act as consultants for the scheme. The
experts have worked with participants and State management agencies to
prepare the scheme, said General Secretary Do Ngoc Quynh.
“VBMA
has submitted the scheme to the Ministry of Finance and is waiting for an
official reply from the ministry to carry out this scheme. This is one of the
great and challenging tasks for VBMA given the underdeveloped nature of the
corporate bond market of
No one
fully comprehends
If the
corporate bond information center that VBMA plans was put into operation, it
would offer investors sufficient information about the market. Such a center
would also help improve transparency, give the corporate bond market more
opportunities for development and help the authorities manage the market in
the most effective way, Quynh said.
Founded
in 2009, VBMA is now collaborating with the Asian Development Bank (ADB) to
conduct a survey of the legal framework for construction of a standard
contract form for the bond repurchase agreement (repo) market.
VBMA
has also laid down a code of conduct in bond trading and submitted a set of
conventions on market practices to the finance ministry.
This
set of conventions is to ensure buyers and sellers find common ground, which
is very important for calculation of bond prices and yields. Any
misunderstanding or dispute over payments can be prevented if the market
participants comply with the agreed rules.
In
2010 and 2011, VBMA with the support of International Finance Corporation
compiled a handbook for forming and managing a bond trading staff in a
financial institution. The four largest market participants are piloting this
handbook.
In
2012, VBMA and eight banks established and implemented agreements between
market makers to provide the market with a standard bond price and increase
the market liquidity.
The
bond market’s potentials have not been fully unlocked because of the
asynchronous legal system. Products are not diverse and investors are few,
hindering the market development, said Quynh.
Therefore,
the unity among the market participants to apply the standards set by VBMA is
extremely important, he said.
Stronger
trade with
Two–way
trade between
However,
bilateral trade had decreased by 10 percent year-on-year to 222 million USD
for the first half of this year, mainly due to slumping import demands in
During
the period,
Export
turnover of clothing and seafood, the country’s key items, dropped by 26
percent and 20 percent respectively to reach 42 million USD and 11.4 million
USD, while the export value of wood and wooden products reached 6.7 million
USD, equivalent to the same period last year.
The
debt crisis in the eurozone has yet to show signs of recovery and the Danish
consumers tend to tighten their spending, the department said.
The
situation has a negative influence on
In the
reviewed period,
The
Danish Government aimed to double export of essential goods to
According
to statistics from the General Department of Customs, two-way trade turnover
hit 468 million USD last year, up 11 percent on the previous year.
Of
this figure,
Local
experts predicted that the Vietnam-EU Free Trade Agreement would open up a
new page for the bilateral trade ties between the two countries.
HCMC
eyes 4 satellite cities if okayed as municipality
If it
is allowed to become a municipality, HCMC would build four satellite cities
in its eastern, western, southern and northern parts, each with a different
economic function, says a draft report on piloting the model of a
municipality in HCMC.
As a
municipality, HCMC would have 13 inner districts, four satellite cities,
namely
The
head of a satellite city should be called chairman or mayor, holding an equivalent
rank of a HCMC vice chairman, says the report by the HCMC Department of Home
Affairs presented at an extraordinary meeting of the HCMC Party Committee on
Wednesday.
North
City will stretch across District 12 and Hoc Mon District, covering 162 square
kilometers with a population of 860,000. With Tan Thoi Nhi Commune as its
center, the city will assist development of services, ecotourism, high-tech
agriculture and residential areas to facilitate residential shifts from the
districts of Go Vap and Tan Binh.
The
scheme on piloting the municipality model in HCMC will be sent to the
Government and later put forward at the sixth session of the National
Assembly (NA) slated for October and November.
If the
NA gave its nod to the scheme, HCMC would soon arrange personnel, determine
the function of each satellite city and make budget estimates. All these jobs
would be finished by 2015, so that the city could start applying the
municipality model in 2016, when election of deputies to the NA and local
people’s councils for the 2016-2021 tenure takes place.
HCMC
covers a total of 2,095 square kilometers, including 24 districts with a
population of nearly 10 million. It is one of the 40 most populous cities in
the world.
The
model of a local government is becoming increasingly inadequate for urban
management and development. Therefore, in 2007, with the permission of the
Party Politburo, HCMC started building a scheme for piloting the model of a
municipality.
Confectionery
firms compete to grab market for moon cakes
Moon
cakes are already beginning to sell in shops along streets even though it is
still one month for the Mid-Autumn Festival to begin.
This
year, the slow economy has intensified competition in the market for moon
cakes which are traditionally eaten during Mid-Autumn Festival.
As
prices rise and consumer spending decreases, competition in the market for
Mid-Autumn Festival moon cakes has reached fever pitch. For confectionery
firms, Mid-Autumn Festival is the second biggest holiday in the year and that
is why enterprises spend a lot in promotions and attractive packaging.
This
year, Kinh Do Bakery plans to export five containers of moon cakes to the US
and Cambodia and produce 2,400 tons of cakes for the local markets, a
year-on-year increase of 15 percent, at retail price from VND30,000-100,000.
Kinh
Do focuses on luxury cakes for gifts. For instance, a package of ‘Trang Vang
Kim Cuong’ (Diamond gold moon) with 12 cakes costs VND2,500,000 (US$119) or
‘Trang Vang Bach Kim’ (Platinum gold moon) with six cakes and a tin of Wulong
Tea at VND1,200,000 (US$57).
Bien
Hoa Confectionery Company (Bibica) has launched 550 tons of moon cakes in the
market, an increase of 10 percent against the same period last year. Its
luxury cakes range from VND790,000 (US$37.5) to VND1.2 million (US$57).
Other
well-known brand names, namely, Dong Khanh, Nhu Lan, Duc Phat, Givral,
Vinabico, Hy Lam Mon have also launched their products in the market.
In
addition to beating each other on the price front, confectionery firms
attract customers with lure of different fillings. For instance, Kinh Do
makes moon cakes filled with strawberry jam, grapefruit marmalade or sugared
lotus seeds.
Thanh
Long confectionery manufactures moon cakes with five fruits, namely, banana,
oranges, kumquats, pomelos, and finger citrons or Indian taro coconut
fillings to satisfy the varied tastes of consumers.
Industrialization
goal seen out of reach
The
nation’s leading economists at a meeting on Tuesday voiced a grave concern
that Vietnam would hardly achieve the target of industrialization and
modernization by 2020.
Speaking
at the meeting to give updates to economic diplomacy officials held in Hanoi
on Tuesday, Tran Dinh Thien, president of the Vietnam Institute of Economics,
said: “To become an industrialized country in just a short time is a too
ambitious goal.”
He
wondered what kind of industrialized country Vietnam was striving to become.
“If it is the U.S., the target is too high. Ten years is not enough. France
is an impossible target either. Neither is it with South Korea, whose per
capita income is US$30,000, while ours is only US$1,500.”
Even
with Thailand, whose per capita income is around US$8,000, Vietnam can hardly
catch up, he stressed.
Businesses
are a driving force for development of the country, but as many as 110,000
firms shut down during the last two years and an additional 25,000 went bust
in the first six months of 2013, Thien said.
“These
25,000 businesses must have suffered two tough years, but now their endurance
has run out. This is alarming,” he stated.
He
remarked GDP growth had been gradually lower since 2007, while macroeconomic
uncertainties had been building up.
Inflation
is now under control, but it will likely pick up due to a salary increase and
the recent power and petrol price hikes, he said.
Sharing
his view, Vo Tri Thanh, vice president of the Central Institute for Economic
Management, said the efficiency of resource allocation in Vietnam was very
poor.
Incentives
for some specific interest groups in access to credit, land and other
important resources have distorted resource allocation, he said.
For
example, State-owned enterprises (SOEs) accounted for over 38% of total
investment in 2010 but only contributed 33.7% to the nation’s GDP and created
jobs for just 10% of the workforce.
On the
other hand, private firms made up 36% of total investment, but contributed
47.5% to GDP and provided jobs to around 86% of the labor force.
Thanh
noted that if there was an implicit guarantee against collapse for SOEs and
banks, they would not hesitate to borrow or give out a lot of loans.
However,
when SOEs run into troubles, public funds will come to their rescue. “This is
just like privatizing profits and equally sharing losses across the whole
society,” he said.
Thanh
said macroeconomic stabilization had always been a central task to prevent
price distortion and inspire long-term confidence among citizens and
entrepreneurs.
Thien
suggested not making a plan for one single year, but for three years in a row
for post-crisis recovery and restructuring. In addition, the thorniest
economic problems during 25 years of reform related to land, State-owned
enterprises and the State budget must be settled completely.
In a
recent talk with the Daily, Minister-Chairman Vu Duc Dam of the Government
Office also mentioned the status of Vietnam lagging behind.
“If we
did not aggressively carry out reform and restructuring, we could not
triumph. Vietnam is not facing the risk of lagging behind, but it is already
lagging behind as neighboring countries are growing rapidly and their
starting points are higher,” he said.
Deputy
PM urges for rapid development of Phu Quoc island
Deputy
PM Vu Van Ninh has told the Ministry of Planning and Investment (MPI) to
submit to the Government specific mechanisms and policies needed to turn the
country's largest island, Phu Quoc, into a special economic zone.
Ninh
complained about the slow development of plans to turn the island into a city
in southernmost Kien Giang province and gradually set up a special
administrative and economic zone.
He
said that although he had told the MPI to complete the plans in December last
year, it has so far submitted only a draft to the Prime Minister.
To
speed up the progress, Ninh required the Steering Committee for the West
Southern Region and Kien Giang province to carry out feasibility studies on
developing special procedures and policies for Phu Quoc.
He
added that they should see the proposal of Quang Ninh on building policies
for Van Don island as a reference.
Ninh
also instructed local authorities to scrutinise investors who want to invest
in the area with priorities given to large-sized, high tech and environment
protection projects.
The
local authorities recently said that they cancelled 93 projects on Phu Quoc
island, with a total area of 5,500ha. These projects were stopped because
investors could not find funding to implement the projects so that the
implementation was slow or did not take place at all. Some projects are no
longer suitable for the development plan of Phu Quoc island.
In the
whole island, the total number of valid projects is said to be more than 200.
They cover a total area of 8,900ha. Of these, 81 projects were granted
investment certificates covering 3,800ha, with a total capital of 88 trillion
VND, (4 billion USD) but only 13 are operating.
In the
Master Development Planning of Phu Quoc island approved by the Government,
the island is considered important as it is located in the centre of South
East Asia.
Vietnam-Japan
Investment Cooperation Economic Forum 2013 set to open
To
mark the 40th anniversary of diplomatic relations between Vietnam and Japan
this year and within the framework of Vietnam-Japan friendship year, the
Ministry of Construction in cooperation with the Japanese Embassy in Vietnam
and Japan International Cooperation Agency (JICA) will sponsor and support a
series of events co- organised by events organiser FDI VIVINA Company Limited
and the Vietnam Real Estate Association under the theme Vietnam- Japan
Investment Cooperation Economic Forum 2013.
The
forum agenda will cover three days from August 20 to 22, 2013 at Grand Plaza
Hanoi Hotel encompassing a series of events including showrooms and exhibitions
presenting priority investment projects of Vietnamese localities to Japanese
investors, the Vietnam-Japan friendship golf tournament and field surveys.
The
forum will be a platform for local businesses, organisations and investors,
institutions, associations, representatives of the provinces and cities of
Japan to communicate, meet, exchange and seek investment opportunities in
diverse fields, focusing on infrastructure, construction, real estate and
supporting industries.
The
three-day forum will be an opportunity for the Japanese investors to know
more about Vietnam and the Vietnamese people, giving support to strengthen
and develop the traditional friendship relations between the two countries,
in accordance with strategic partnership relations.
Toll
collection right transfer proposed for expressway
Toll
collection on the HCMC-Trung Luong expressway will likely be assumed by
another enterprise from October 1, according to a proposal by the current
operator Cuu Long Corporation for Investment, Development and Project
Management of Infrastructure (CIPM).
Le Duc
Tuan, office manager of Cuu Long CIPM, told the Daily that his firm proposes
the toll collection right transfer because it has only been doing the job on
behalf of the Government. The proposal has been forwarded to the Ministry of
Transport.
Since
February 25, 2012 when CIPM officially collected toll fees on HCMC-Trung
Luong expressway, the transport ministry has still been unable to find out
any investor intending to purchase the toll collection right.
Under
the transfer plan submitted to the transport ministry by CIPM, the transfer
of the toll collection right of the 40-kilometer expressway will be carried
out via a bidding round. The toll collection will last five years, while the
transfer value is estimated at some VND1.6 trillion which will be paid in
three installments within ten months.
Still,
it is still unknown whether the ministry will seek ways to transfer the toll
collection right again after five years or will stop the fee collection.
BIDV
Expressway Development Company (BEDC) earlier had purchased the toll
collection right of HCMC-Trung Luong Expressway for 25 years at more than
VND9.1 trillion. However, due to financial constraints, this company returned
the project and the ministry has assigned CIPM to collect the toll ever
since.
Toll
amounts totaled around VND380 billion in the first year, with VND65 billion
spent on power consumption and maintenance services for the expressway
annually, according to CIPM.
The
HCMC-Trung Luong expressway has a total length of 62 kilometers developed at
a cost of VND9.88 trillion, with the expressway section stretching 40
kilometers.
BASF
sets up crop protection business in Vietnam
German’s
chemical company BASF on Wednesday said it would sell its crop protection
drugs directly to Vietnamese farmers rather than via local distributors.
Leon
Van Mullekom, Business Area Director for Crop Protection ASEAN at BASF, said
the direct selling is aimed to ensure efficient use of such drugs as the firm
will provide technical training for farmers.
BASF
will set up an expert team to train local farmers. The company currently
focuses on providing drugs for coffee, rice and some other crops in the
Central Highlands and the Mekong Delta.
Raman
Ramachandran, BASF’s Senior Vice President for Crop Protection Asia-Pacific,
said that in the coming time BASF would consider setting up AgSolution Farm
as a model farm to introduce agricultural solutions to farmers, distributors
and BASF staff. BASF has opened such farms in Thailand, the Philippines and
Indonesia.
Talking
about BASF’s plan in the Vietnamese market, a member of the Vietnam Pesticide
Association (VIPA) told the Daily that local companies selling crop
protection drugs were facing market share decline when foreign large
companies sold their products directly to farmers rather than via
distributors.
“Currently,
50% of the market for crop protection drugs is held by seven foreign-invested
companies while the rest belongs to 300 local ones. And now with the direct
selling of BASF, local companies will lose their market share, which is just
a matter of time,” he said.
Regarding
the model farm, according to VIPA, this is the strategy which only some large
companies like BASF are capable of carrying out while others cannot due to
limited financial capabilities.
According
to the Ministry of Agriculture and Rural Development, Vietnam’s import value
of pesticides and materials amounted to US$454 million in the January-July
period, showing a year-on-year rise of 15.6%, with over half imported from
China. Besides, around 90% of the crop protection drugs available on the
market uses imported materials.
Source:
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Sáu, 9 tháng 8, 2013
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