BUSINESS IN BRIEF 4/8 Vietnam, Hong Kong develop Gulf of Tonkin economic belt A Vietnamese delegation led by Ho Xuan Son, Deputy Minister of Foreign Affairs, held a working session with the Hong Kong-Vietnam Chamber of Commerce, on July 31. Dr Jonathan Choi, Chamber president said that the meeting offered a good chance for members to learn about investment opportunities in the Southeast Asian nation. Dr Jonathan Choi expressed his belief that the improved Hong Kong-Vietnam relationship will contribute to the development of the Gulf of Tonkin economic belt, especially the Hong Kong-Guangxi-Vietnam triangle. For his part, Son reviewed the outstanding achievements in relations between Vietnam and China as well as Hong Kong. Son emphasized that State President Truong Tan Sang’s State-level visit to China in June this year have laid a solid foundation for consolidating trust among senior  leaders and boosting bilateral political relations. Accordingly, both sides have decided to further promote economic and trade cooperation, striving to bring bilateral trade turnover to US$65 billion by 2015.  They have also made great efforts to balance bilateral trade. During the session, Hong Kong businesses highlighted Vietnam’s investment environment in recent times, saying that they will continue to pursue a long-term business strategy in Vietnam. On the occasion, representatives from relevant ministries and agencies answered queries from Hong Kong businesses, about the supply of human resources and stabilization of exchange rates. Capital slow to pull down illegal houses The deadline to remove deformed and super-slim houses in Hanoi by September is unlikely to be met due to inadequate compensation. A super-slim building in Hanoi's Tu Liem District. The city still has ill-shaped houses which will not have been removed by the September deadline. The deadline to remove deformed and super-slim houses in Hanoi by September is unlikely to be met due to inadequate compensation. The statement was made by Deputy Director of Construction Department Tran Duc Hoc, in a meeting of the Ha Noi People's Council held this week. He disclosed that only 203 out of 394 ill-shaped houses have been removed. The remaining 191 houses are based in nine districts including Ba Dinh, Dong Da, Hai Ba Trung, Tay Ho, and Hoai Duc. Houses in Thanh Xuan, Cau Giay, Hoang Mai and Ha Dong have also been tasked for removal. Deputy director of the Department of Planning and Architecture Duong Duc Tuan said people were prohibited from building on blocks less than 15sq.m or under three metres wide. According to Nguyen Hoai Nam, who heads the council's Legal Department, the actual figure of houses needing to be removed is much higher than records show, as many houses confirmed for demolition are yet to be removed. These houses bring down the quality of the city's architecture and interfere with city planning, he said. These houses also pose a significant safety risk to people living inside and in the surrounding neighbourhood, he said. He has urged relevant authorities to explain the cause of this delay. Hoc said the financial resources needed to compensate for the removal of dangerous houses was significant and that it was difficult to source the funds from other projects already undertaken by the department. It is estimated that each district will need at least VND5 billion (US$238,000) for removals with the exception of Ba Dinh District which will require a whopping VND450 billion ($21.4 million) for the removal of 35 houses, he said. Meanwhile, owners of marked houses have also been reluctant to accept the compensation offered by the authorities. Hoc believes many have been living in their houses permanently while the remainder are landlords collecting rent as their primary income. If their houses are removed, so will their income source, he said. Nguyen Huu Khang, who owns a house on Dao Tan Street, said his three-storey house was built more than 10 years ago and has a legal construction certificate. This house has been for lease at a monthly price of VND25 million ($1,190), he said. Like many other home owners, Khang is adamant that his compensation should be equal or higher than the market value of his current house so that he can afford an equivalent block of land. Adding to the dilemma, the People's Committee has decided it will not allow the land to be used for parking lots or pavements. Hoc says that the districts face a significant problem in deciding how small land lots will be used after houses are removed. Nam has called on two departments, the Department of Construction and the Department of Planning and Architecture, to provide better support for local authorities to deal with complex cases. In the meantime, the city's People's Committee has requested local communities to report their financial needs for scheduled removals. Japan helps develop Vietnam’s industrial strategy Vietnam and Japan are working closely together to develop detailed action plans to carry out Vietnam’s industrialization strategy, as part of their co-operation agreement towards 2020 with a vision to 2030. Under the strategy approved by the Prime Minister earlier this month, Vietnam has defined six industries that will be prioritized for development in the near future as they are key to the national economy. The six industries are electronics, agricultural machinery, agricultural and seafood processing, ship building, the environment and energy saving and the manufacture of cars and spare parts. These industries can stimulate domestic and foreign investment, especially from Japanese enterprises and spread ‘technological seeds’ to other industries and the economic in general. At the first policy meeting between the Ministry of Planning and Investment and the Japanese Business Federation, Keidanren, held in Hanoi on July 23, it was stated that liaising closely with Japan will help to speed up the industrialization process in Vietnam, especially as the country has targeted becoming industrialized in 2020. With roughly 2,000 investment projects worth nearly US$33 billion operating in Vietnam, Japan tops the list of 101 nations and territories investing in the country. Over 83% of their investment focuses on processing and manufacturing industries, where Vietnam is keen to attract more foreign direct investment. The head of the Central Institute for Economic Management, Le Xuan Ba, said that the six priority industries could create a breakthrough in attracting even more FDI, especially from Japanese investors. They will also help to change the structure and the different industrial models in Vietnam, which would help the country’s economic restructuring, he said. The joint chairman of the Japan – Vietnam Economic Committee, Takahashi Kyohei, said that ESEAN member countries were committed to developing an ESEAN Economic Community as a single market and production base by 2015 and Vietnam will be at the heart of the market’s supply chain. Japan is already committed to assisting Vietnam to boost its support industries, which are the foundations of industrial development, but this did not prove to be as effective as expected. He said that the firms involved in support industries are mainly small and medium sized, and will not invest any capital unless they saw a prosperous outlook. “The approval of the industrialization strategy with its six prioritized industries encourages investors and gives us a clearer vision on how to work together and what to invest in,” he said. Minister of Planning and Investment Bui Quang Vinh, said that governments and companies in both countries were making a lot of effort to improve the investment climate in Vietnam, including proposing support policies or solutions for existing problems. In the past, Vietnam failed to put together an effective automobile and spare parts manufacturing strategy, said Vinh, blaming a lack of development in the country’s support industries and the incompatibility of goals and policies, which include complex regulations, high taxes and fees. For example, motorbikes can be seen as luxury goods, but cause still traffic congestion. In the near future, the country will focus on solutions for these two issues, while ensuring the investment climate is much more transparent. Dung Quat refinery performs well in seven months The Dung Quat Oil Refinery Plant, which is operated by Binh Son Refining and Petrochemical Company (BSR), sold 3.3 million tons of oil and gas products in the first seven months of this year, reaching 58% of its target. Dinh Van Ngoc, General Director of BSR, said the plant earned over VND70 trillion in revenue and contributed almost VND12 trillion to the state budget in the period. To ensure the constant operation of the plant, BSR will continue to import crude oil to regularly replace the oil supply from the Bach Ho (White Tiger) field in the coming time. The company will exploit new oil sources to serve the expansion and upgrade of the plant in accordance with the direction of the Vietnam Oil and Gas Group (PetroVietnam). It will optimise the production process to improve its operational efficiency to fulfil its production plan. In the four years of the refinery’s operations, BSR has sold over 21 million tonnes of products, raking in VND417 trillion. This year, the company is expected to produce 5.65 million tonnes of oil and gas products, making revenue of VND111 trillion. Coffee replanting slow over lack of detailed plan Vietnam Bank for Agriculture and Rural Development has agreed to lend to farmers and enterprises to replant coffee, replanted areas have remained small due primarily to the absence of a detailed plan. The Ministry of Agriculture and Rural Development on Thursday organized a seminar on coffee replanting in the Central Highlands province of Daklak to explore solutions to coffee plants that are over 20 years old in Vietnam. The ministry is expected to assign some units to draw up a detailed coffee replanting plan. Nguyen Viet Vinh, general secretary of the Vietnam Coffee-Cocoa Association (Vicofa), told the Daily that Vietnam currently had some 140,000 hectares of coffee which needed to be replanted. The ministry targets to replant 25,000 hectares each year, he added. Coffee replanting has been much discussed in the past decade but has made little or no progress as scientists have failed to reach technical solutions which can help farmers replant their coffee. The reason, according to the Western Highlands Agriculture and Forestry Science Institute, is that about 88% of replanted areas have died after one or two years due to nematode infections. Therefore, a firm producing plant protection drugs and the institute have studied a drug which can kill nematodes. However, the cost needed to replant a hectare of coffee ranges from VND100 million to VND120 million. As a result, only coffee enterprises and farmers with strong financial resources can do the replanting. According to the agriculture ministry, Vietnam has an additional 40,000 hectares of coffee turning old. With a plan to replant 25,000 hectares a year, the acreage of old coffee would increase by 15,000 hectares annually. Gold custody service available at 12 banks Gold owners can now use custody service at 12 banks to keep their precious metal safe, said Nguyen Hoang Minh, deputy director of the central bank’s HCMC branch. Gold custody service is now available at Vietcombank, Vietinbank, BIDV, Agribank, MHB, ABBank, Viet Capital Bank, BaoViet Bank, TienPhong Bank, LienViet Post Bank, ACB and Military Bank. Most of those banks do not need to apply for a license to provide this service since their business licenses have already listed “cash management, banking and financial consulting, asset management and preservation, safe deposit box leasing” as their operations, pursuant to the Law on Credit Institutions. Only ACB has just got a license. Many other banks, including Sacombank, Eximbank and VietABank, are currently awaiting approval from the central bank, said Minh. Gold custody service was previously available at many banks, but the central bank wants to prevent commercial lenders from using the gold of their clients for their own purposes and is drafting specific regulations on this issue. While pending the release of these rules, banks do not need to return the gold they are keeping but only need to apply for adjustments to their business licenses to continue providing this service, said a senior source from the central bank. Regarding the concern that gold owners would not be able to get back the exact gold bars they leave at custodian banks, he said, banks do not have enough boxes to keep gold separately, so they have to store all the gold together and return it with quality and quantity guarantees. Minh said the inspection of gold-related operations at banks would continue and finish in early August. This inspection is conducted to check the gold holding of each bank and the gold volume kept in the form of custody instead of deposit since June 30, when banks were officially banned from gold mobilization. Another gold auction took place on Thursday, with 25,900 taels sold. After 46 auctions, gold sales total nearly 1.25 million taels, or 46.7 tons. Local gold on Thursday shot up VND600,000 over the preceding day to VND38.85 million per tael. This price is VND4.6 million a tael higher than the world’s level. Provinces told to help deploy home loan package The Ministry of Construction has asked provinces and cities to lend a helping hand in deploying the VND30-trillion housing credit package by simplifying procedures for homebuyers, said a source from the ministry. Deputy Minister of Construction Nguyen Tran Nam last week asked the governments of provinces and cities to instruct grassroots authorities to simplify procedures relating to household registration and housing situation that are conditions for homebuyers to access the housing credit package. Under current regulations, homebuyers must have registered residence in a locality and must have not owned a house if they want to take out soft loans, and such conditions must be certified by grassroots authorities. But this is a hard nut to crack as many local authorities refuse to certify such procedures. The Government earlier this year issued Resolution 02/NQ-CP on a host of solutions to remove production and business difficulties, prop up the market and deal with bad debts. The resolution also seeks ways to boost credit assistance allowing low-income earners, State employees and military officers to buy and hire low-cost and commercial homes of less than 70 square meters a unit at no more than VND15 million per square meter. Under the resolution, the target households and individuals will be subject to low-cost housing supports, including a soft interest rate of only 6% a year or less for loans taken from the VND30-trillion package. Meanwhile, corporate customers applying for the housing credit package must be low-cost housing developers or those seeking to convert commercial housing schemes into low-cost ones. Long Phu 2 power plant to use imported coal India-based Tata Power Company plans to use coal imported from Indonesia and Australia to operate Long Phu 2 thermal power plant in the Mekong Delta province of Soc Trang’s Long Phu District. Speaking to the Daily last Thursday, Nguyen Nhat, director of the Vietnam Maritime Administration, said that the plant will run on imported coal which will be transported by large vessels of over 100,000 DWT. Nhat, referring to a report from the investor sent to the administration, said that coal may be transported to a port in Ba Ria-Vung Tau Province or other ports before being carried by small ships or barges along the Hau River to the plant. The Government earlier allowed Tata Power to invest in Long Phu 2 thermal power plant under the build-operate-transfer (BOT) model. The plant has a total capacity of 1,200 MW. Long Phu 2 thermal power plant is expected to be operational in 2018. Therefore, the company has proposed the Government to soon build transshipment ports to transport coal to the plant, Nhat said. The Vietnam Maritime Administration will survey locations for transshipment ports in the Mekong Delta in the coming time. Last year, the Japan International Cooperation Agency (JICA) proposed eight coal transshipment ports for the Mekong Delta, which are Vinh Tan, Cai Mep, Soc Trang, Con Dao, Nam Du, Duyen Hai, Soai Rap and Hon Khoai. Long Phu 2 is one among the three plants of Long Phu Thermal Power Center in Soc Trang Province. Long Phu 1 plant built by Vietnam Oil and Gas Group (PetroVietnam) will be put into operation in 2015. VN trade with Taiwan grows Bilateral trade turnover between Viet Nam and Taiwan reached US$5.4 billion in the first half of the year, a year-on-year increase of 4.7 per cent. Bui Hoang Yen, deputy director of the Viet Nam Trade Promotion Agency's representative office in HCM City, said that Taiwan continued to be one of the country's major trade partners. Speaking at a trade promotion event organised on Monday in HCM City, Yen said that Viet Nam earned $1.03 billion from exports to Taiwan, up by more than 11 per cent compared to the same period last year. Meanwhile, the country's import value stood at about $4.4 billion, a year-on-year rise of 13 per cent. According to Yen, Viet Nam imports mostly steel, iron and cloth from Taiwan, while exports are mainly garments and textiles, rubber and seafood. At the event, more than 40 companies from new Taipei City showcased their products, including those in the fields of green technology, information technology and software. Support industry products were also displayed. "This is a good opportunity for companies from Viet Nam and New Taipei City to find out about each other and to embark on new projects," Yen said. Taipei officials at the event said they welcomed Vietnamese businesses and encouraged them to take part in trade promotions in Taiwan. The annual event is organised by the Taiwan External Trade Development Council (TAITRA), a non-profit trade and investment promotion organisation. Consumers warned over loan terms Experts have urged consumers to carefully study the terms for loans to make sure they stay solvent. Friedrich Weiss, general director of PPF Viet Nam, warned that most customers did not read loan contracts carefully. He added that to protect themselves, borrowers should update their knowledge on lending terms. According to financial expert Dinh The Hien, borrowers should clearly understand the duration of a loan, interest rate, monthly payment and relevant fees. Interest rates on loans for buying vehicles or television, for example, could be up to 30 per cent a month, Hien said, adding that borrowers should choose financial institutions with suitable terms. Hien said that in Japan, financial companies had different interest rates for different groups of customers, depending on their assets, income and credit records. This meant that customers with higher solvency enjoyed lower interest rates. He said Viet Nam could learn from this to develop different packages to meet a variety of customer demands. Lawyer Phan Thi Viet Thu said that instalment loans were relatively high, so consumers should carefully consider what they are signing. She said the rights of borrowers were protected when taking out loans as they were when purchasing other products. Central bank reports H1 credit growth up 4.91 pct Total outstanding loans in the country’s banking sector grew 4.91 percent from last December, according to the State Bank of Vietnam (SBV). The central bank said the figure was much higher than the rate 1.2 percent recorded during the same period last year, through it was far from the Government’s full-year growth target of 12 percent. The lending growth figure stood at 4.5 percent by the end of last month and 1.98 percent by the end of May. Meanwhile, total dong deposits surged by 9.48 percent from the end of last year. The country’s broadest measure of total money supply, or M2, rose 8.25 percent during the first half of the year, representing a year-on-year rise of 9.2 percent. Local credit institutions were earlier requested to take measures to expand lending in order to achieve credit growth of 12 percent set at the beginning of the year, a move that aims or spur economic growth. Accordingly, the SBV required banks to consider adjusting credit growth limits for credit institutions and allocate funds to priorities areas while ensuring credit quality. Earlier, SBV Governor Nguyen Van Binh said that Vietnam’s banking sector should strive to boost credit growth by 12-15 percent by the end of the year to help the economy growth by 5-5.5 percent. Standard Chartered Vietnam wins “Best Consumer Internet Bank” award Standard Chartered Bank Vietnam has been awarded the “Best Consumer Internet Bank" for the second consecutive year by Global Finance Magazine, the world’s leading economic and financial publication. Vietnam is among the 11 markets globally and one of six Asian countries where Standard Chartered Bank is honoured to receive the preeminent industry rankings for online and mobile services. The award recognises Standard Chartered Bank (Vietnam) for offering online and mobile services that enhance the banking experience of its clients and customers. It also further reaffirms the internet consumer banking leadership position of Standard Chartered in Vietnam. “We are delighted to win the distinguished award of such a prestigious publication as Global Finance Magazine in two consecutive years (2012 – 2013). This recognition certainly encourages Standard Chartered (Vietnam) to continue our deployment of new online products and services with more convenience for customers, as committed through our brand promise – “Here for good,” Amit Arora, head of Consumer Banking, Standard Chartered Bank (Vietnam) Ltd. said. Standard Chartered was selected to be the winner based on its strength of strategy for attracting and servicing online customers, success in getting clients to use web offerings, growth of online customers, breadth of product offerings, evidence of tangible benefits gained from internet initiatives, and web site design and functionality. Following success of The Best Asset Service Provider Award 2013, this “Best Consumer Internet Bank” award once again recognises Standard Chartered for its dedication to bring the world’s best banking services and products to Vietnam. Specifically, Standard Chartered have promoted its consumer banking this year by partnership with Cathay Pacific Airlines & Up to 5 per cent Cash Back Programme with Standard Chartered card, Online Term Deposit and Online Personal Loan programmes in a non-stop effort to offer the most convenience for its clients and customers. Viet Thai enters agreement for Microsoft’s licenced software Today, Microsoft and Viet Thai International Joint Stock Company officially mark a key milestone in strengthening their business partnership by signing an enterprise agreement. Under this agreement, all Microsoft products including comprehensive IT solutions to improve work productivity and information safety being used at Viet Thai will be legalised. The partnership agreement signifies an important milestone for Microsoft and Viet Thai as both companies agree to standardise 300 licenscs for Microsoft Office 2013, 300 licences for Microsoft Windows 8, 300 licences for Core CAL, four licences for Windows Server, one licence for Lyn Server and one licence for Exchange Server as well as updates of any new relevant Microsoft products within the next three years. This agreement demonstrates Viet Thai’s leadership and shows its serious commitment to support intellectual property and desire to partner with Microsoft to continue strengthening its IT infrastructure. “As a service oriented company, our priority is to meet all customers’ requirements and ensure their satisfaction with our products and services. We realise that the deployment of advanced technology and a solid IT platform are important in enabling Viet Thai to improve staff productivity,” Dr. Thiet Nguyen, chief administration officer of Viet Thai said. “By legalising Microsoft’s genuine software under the agreement today, we strongly believe that Viet Thai International will leverage its full potential and increase competitive capability to provide the best products and services to our customers.” For its part, Microsoft will support the implementation and deployment this solution in IT infrastructure of Viet Thai International. “IT trend has been continuously developing and we could not ignore benefits that IT can bring to any enterprise. Consumerisation of IT and flexible lifestyle are the growing tendency for new information technology towards to flexibility, diversity and mobility for business. With a famous brand that it has, Viet Thai’s decision on building a solid IT infrastructure through solutions such as Microsoft Office 2013, Windows 8, Core CAL, Lyn Server, Windows Server and Exchange Server will help them to better improve competitive capability and differentiate themselves at seriously competitive environment like today,” said Vu Minh Tri, general manager of Microsoft Vietnam. Power prices spark tiff Disagreements over whether to charge higher electricity prices for major power consumers such as steel and cement plants remain, but advocates of the price rise claim it would encourage firms to modernise the sectors. Chairman of the Vietnam Steel Association’s (VSA) Pham Chi Cuong last week renewed his call for fair treatment to different sectors including the steel sector when it comes to electricity price. Cuong also confirmed that many local steel makers were using high technology to follow the industry’s plan toward 2020 with vision to 2030 approved by Deputy Prime Minister Hoang Trung Hai. Meanwhile, Nguyen Van Thien, chairman of the Vietnam Cement Association, noted that the total capacity of Vietnam’s cement sector reached 68 million tonnes, mostly using ASEAN comparable high technologies. “Only 2.35 per cent of cement firms run blast furnaces,” he said. Under the third retail pricing draft compiled by the Ministry of Industry and Trade (MoIT), steel and cement producers using power voltages of 110kV or higher during peak hours would pay 10 per cent more for power compared to the average retail price. The highest price hike for voltages of less than 6kV during peak hours would be 20 per cent as per the draft. This means power prices for the steel and cement producers would increase 2-16 per cent in comparison with other sectors at all voltage levels. “It is not fair to apply separate higher electricity prices for the cement and steel sectors. Most of cement firms are facing hard times due to large inventories and a woeful real estate market. If the power prices rise, it could push them to the wall,” said Thien. Deputy general director of Vinausteel Joint-Venture Company, Lai Quang Trung said that increasing power prices were aimed to encourage savings and new investment, however the electricity industry should ask them-selves how much the people and other industries would suffer as a result of the price increases. “It seems clear that the decline of the cement and steel industries would have a wider negative impact,” he said. “Power prices are going to rise in this context where the government has given solutions to help domestic firms deal with high inventories and interest rates,” said Trung, adding that many more companies were in trouble and might soon face bankruptcy if the power price hikes went through. According to Trung, seven steel making factories in Haphong, one of the country’s steel making hubs, have shut down. Bui Quang Chuyen deputy head of the MoIT’s Heavy Industry Department said that the steel and cement sectors in total consumed 12 per cent of commercial electricity in 2010, 11.6 per cent in 2011 and 11.4 per cent in 2012. Pham Chi Lan, economist and former deputy chairwoman of the Vietnam Chamber of Commerce and Industry (VCCI), said it was not necessary to apply a separate price framework for the two sectors. “Instead, state-run Electricity of Vietnam (EVN) can propose to the government a specific amount of power that should be provided to the sectors and regulate which factories qualify for the power,” she suggested. Lotte Mart expansion plan ousts Mipec Tower tenants Lotte Mart will develop Hanoi’s Mipec Tower shopping centre into a mega-supermarket. This information was revealed to VIR last week by Vo Thi Thu Hang, marketing supervisor from Lotte Viet Nam Shopping Co., Ltd, which recently acquired 20,000 square metres of the shopping mall from Mipec. “After being inaugurated late this year, the mega-supermarket, which used to be shopping centre, will operate on a similar basis to Big C or Coopmart,” said Hang. According to Hang, Lotte will use 40 to 60 per cent of the total retail space for its business, with the remaining area put up for rent. “Lotte wants to build a new retail model with an abundance of goods at affordable prices where consumers can enjoy a shopping experience with a range of entertainment and relaxing services such as cinema, arcade, coffee shops, fast food outlets and restaurants,” added Hang. Hang said the economic downturn had kept customers from renting space in not only Mipec Tower, but many other shopping centres in Hanoi. However, Lotte’s selection of Mipec Tower for its mega-supermarket was in line with its long-term business strategy. “Lotte decided to lease four of Mipec Tower’s five floors due to many factors, including its ideal location,” Hang said. Current lease-holders at Mipec Tower are scheduled to leave as the new Lotte Mart lease takes effect. Pham Thi Hong, a saleswoman at the Alome shop said that shop owners had been told to leave the tower by late June, but were then provided with a one-month rental payment exemption, in order for them to clear their stock. “Mipec agreed to lease four of its floors to Lotte, even though these floors had already been leased to other shops. Mipec’s decision has obviously affected our business,” added Hong. A saleswoman from Thailand’s Sunny jewellery shop said that she still wanted to continue at Mipec Tower and would wait until Lotte’s new mall opened for business. “I think that the new owner [of the mall] will need shop owners like me since 90 per cent of previous shop owners would have moved to Vincom Mega Mall Royal City by the end of this month,” she added. Nguyen Van Linh, a salesman at Malaysia’s Noir shoe store said the shop had already decided to move to Vincom Mega Mall Royal City. Some shop owners at the tower said Mipec had failed to promote the shopping centre’s image and had made it difficult for them to increase sales. They also speculated that Mipec’s lack of effort was due to the fact that Mipec had already wanted to lease the mall to Lotte. Mipec failed to reply to VIR requests for a comment. Meanwhile, Hang from Lotte said that Lotte only co-operated with Mipec and refused to further comment on the problem. Gamuda Gardens Show Village gets official opening Gamuda Land Vietnam on July 20 opened show houses for their Hanoi-based integrated Gamuda Gardens township, with two semi-detached houses and one villa available for public view. In addition to the green, landscaped Show Village, the display includes landscaped grounds that feature a kid’s playground, main gateway and entrance road. The lush green setting is located right at the heart of Gamuda Gardens. Covering an area of 288m2, the villa features full state-of-the-art facilities. The semi-detached houses are just the stone’s throw away and cover 189m2. Their design features create a sense of lightness and openness and ensure air circulation in the house. According to Gamuda Land Vietnam general director Cheong Ho Kuan, one of the unique aspects of the Gamuda Gardens development is the fact that 50 per cent of the whole project has been devoted to landscaped greenery. The spacious gardens and parks surrounding the housing provide residents with space and time to enjoy the great outdoors just a few steps from their front door. The children’s playground has been completed and equipped with made-in-Germany facilities near to the Show Village. “We are offering residents not only a home but also a balanced and easy life with community values, and a healthy and safe environment”, Cheong added. The 364 units including semi-detached and terraced houses are almost complete and stand within walking distance from the Show Village. Gamuda Gardens is one of two self-contained lifestyle townships in the integrated Gamuda City project. Only 12 minute drive from Hanoi’s business district, Gamuda Gardens combines a landscaped environment and state-of-the-art facilities for family life, business and pleasure. Nestled in close proximity to the world-class recreational Yen So Park developed by Gamuda Land Vietnam, Gamuda Gardens is destined to be the most balanced and modern lifestyle township in Hanoi’s Hoang Mai district providing a combination of 2,000 villas, semi-detached houses, terraced houses and apartments. Promising prospect of Vietnamese fruit exports to the US market The US will remove some snags in administrative formalities to allow for Vietnamese fruits to enter its market. The statement was made at a meeting between US Agriculture Secretary Tom Vilsack and State President Truong Tan Sang during his recent visit to the US, said Vietnam’s Minister of Agriculture and Rural Development Cao Duc Phat. Both sides exchanged views on issues of mutual concern and agreed to co-ordinate to deal with the outstanding issues related to cooperation in farm production. Accordingly, the US will import some tropical fruits such as litchis and longans and consider other kinds of goods as well. They also agreed to strengthen cooperation in promoting the application of science and technology and coping with climate change. They pledged to increase cooperation in farm production under the terms of the Trans-Pacific Partnership Agreement (TPP). The US Agriculture Secretary said he will work with relevant agencies on the import of tra fish, shrimp and honey from Vietnam. The TPP is of great importance to Vietnam, especially in the agricultural field when almost all agricultural goods need more outlets to increase production capacity. Both sides are expected to sign the agreement late this year. Realty black market in HCMC needs study: Fulbright Lecturer According to CB Richard Ellis Vietnam (CBRE), a real estate company, housing prices are often as much as 25 times the yearly average income of a person in Vietnam. Nevertheless, most Vietnamese people in general and residents of Ho Chi Minh City have their own houses. So, what is the way they can afford to own a house? Saigon Giai Phong Newspaper had a talk on this issue with Huynh The Du, a Fulbright Scholar and Lecturer at the University of Economics in HCMC, who is currently doing a PHD on urban design at Harvard University. Du said that in the past ten years of the 20th century and ten first years of the 21st century, because of the huge economic breakthrough, population in HCMC doubled. As a result, the City infrastructure became overloaded and to make adjustments, many housing projects sprang up. In other countries, immigrants to any big city immediately purchase a house or buy land to build their own house. If the process takes place without government intervention, the population becomes divided as rich and poor in about equal measure. However, this situation did not happen in HCMC thanks to government support on creating an essential infrastructure and issuing legal documents to immigrants. In addition to a natural population increase, the City has around 300,000 immigrants coming from all corners of the country every year; whereas housing developers can meet only one-third of the demand, resulting in people seeking to make a shelter of their own. Average income per head as per a survey in 2010 is VND1-6.5 million a month. On an average, a house contains five people with monthly income from VND5-32 million. Assuming that people spend a maximum of 30 percent of their income on purchasing a house, they will pay from VND186-1.1 billion during the next 30 years for a house. According to Fulbright lecturer Le Nguyen Tran, expenditure on a house in the legal market in HCMC’s precincts in 2011 was VND9.7 million per square meter and in the black market at VND4 million per square meter. With such income, people can purchase a 19-25 square meter house or a smaller house in the legal market against 47-134 a square meter house in the black market. With meager incomes, most residents in HCMC seek a house via the black market. Therefore, the role of the black realty market in the present context needs to be studied. However, this does not mean that the government will allow construction of illegal houses, but urban planning should have participation of people and control of the government in developing the City’s skyline. In future, when more and more people flood the City for work and study, planning projects must be well publicized to the public. Central bank to continue monitoring weak lenders The State Bank of Viet Nam (SBV) has pledged to continue regular inspections of commercial banks to ensure the safety of Viet Nam's financial system. The pledge came after the SBV's Bank Supervisory Agency completed the first six months of inspections, designed to make the nation's banking sector healthier. It is intended that close monitoring will identify banks that need restructuring and reduce the risk of a financial crisis. The SBV confirmed that in the first six months, it had provided strict guidelines for voluntary mergers, consolidations, and acquisitions taking place to remedy unfit lenders. So far eight restructuring plans have been submitted to the Prime Minister for nine commercial banks. Under the submission, three banks have merged and another three banks have received approval for self-restructuring plans. The central bank is yet to impose any involuntary restructuring, with only one bank under consideration for compulsory intervention. For the past two years, mergers have involved Saigon Commercial Bank (SCB), Viet Nam Tin Nghia Bank (TinNghiaBank) and First Commercial Bank (Ficombank). The SBV last year also gave approval for a takeover of the Ha Noi Housing Commercial Joint Stock Bank (HBB) by the Saigon-Ha Noi Commercial Joint Stock Bank, merging over VND8.866 trillion (US$422.19 million) of capital. PetroVietnam Finance Joint Stock Corp (PVFC) and Western Commercial Joint Stock Bank (WTB) are also seeking SBV approval for a completed merger to help boost earnings by the third quarter. The SBV backed the measures, saying they were helping to create a more solvent banking sector. Economist Bui Kien Thanh believes the measures are on par with international standards. In a further measure, SBV last week officially launched the Viet Nam Asset Management Company (VAMC) to resolve bad debts. Chairman of the Member Board of VAMC and SBV Deputy Governor Dang Thanh Binh said the number of debts handled by VAMC would depend on a range of factors, adding that he expected VAMC would help to build a public debt trading market. Apartment sales on the rise Positive signs have appeared in the property market as some apartment projects have seen the number of customers rising significantly over the past six months. A number of projects have achieved impressive growth in apartment sales. Some even sold out apartments on offer in one morning. For example, Dat Xanh Real Estate Service & Construction Corporation last Saturday welcomed some 500 homebuyers to the 4S2 Riverside Linh Dong project in HCMC’s Thu Duc District. Around 260 apartments of the 336 units offered in the first sales round were registered before the official launch this Sunday. These apartments are priced at VND12.1 million a square meter, meaning a two-bedroom apartment covering 55 square meters sells for around VND720 million. Earlier, the project distributor sold out 336 units of another block from January to March, along with some other projects in the same segment in the inner-city districts. Owner of 4S2 Riverside Linh Dong is Truong Thanh Loc Construction Co. Ltd. The project consists of four 20-storey blocks with about 1,100 apartments. Most of the projects with products currently on sale attached priority to the progress of construction, beside other factors like prices, payment methods and quality. Hung Loc Phat Construction & Manufacturing Co. Ltd. pledges to compensate customers if failing to timely complete the Phat Hung project in Saigon South and deliver homes in the second quarter of 2014. If the apartment handover is six months late, homebuyers can get back all the money they have paid and obtain compensation based on their total payments at an annual interest rate of 25%. This apartment project on Le Van Luong and Dao Su Tich streets comprises 358 units with prices around VND14.7 million per square meter. Buyers can move into their homes after making a down payment of 60% of a flat’s value. The rest will be settled within 24 months. Nam Viet Real Estate JSC, distributor of this project, said about 80 of the 100 units going on sale in early July had found buyers. In the high-end segment, The Estella developed by Singapore’s Keppel Land in District 2 has recorded a significant increase in the number of customers in the last three months, which is partly attributed to its flexible payment policy. Like several other projects, The Estella attracts customers by allowing them to take over apartments after making a down payment of 50%. The remainder will be settled within two years with no interest charged. The Estella apartments have prices starting from VND31 million per square meter. More than 100 units have been registered since the introduction of the flexible payment scheme in April. Doan Anh Hung, general manager of Keppel Land Vietnam, said this scheme enabled homebuyers to be more proactive in cash flow management. Given the positive response from customers, Keppel Land has decided to continue preferential programs for those buying homes at The Estella and Riviera Cove projects in HCMC’s District 9. Not only The Estella, but other high-end projects like Imperia An Phu and The Vista are also attractive to buyers, partly because they have been completed and have home ownership certificates available for their customers. Savills Vietnam informed the number of transactions in the second quarter had risen 59% over the same period last year. The best selling products in the past three months were apartments priced at VND10-15 million a square meter. Savills forecast around 2,500 apartments would go on sale in HCMC from now until the year-end. Vietnam Airlines earns pretax profit of VND173 billion in first half of 2013 National flag carrier Vietnam Airlines made a pretax profit of VND173 billion (USD8.32 million) between January and June this year despite numerous difficulties. During this period, the company earned revenues of VND27 trillion (USD1.28 billion), up 5.3% from the same period last year. An official from Vietnam Airlines said in the January-June period, the number of foreign visitors to Vietnam was lower than expected. The carrier focused on domestic flights, meanwhile, many local airports faced limited infrastructure conditions, particularly infrastructure repair and upgrade activities at Phu Bai and Tan Son Nhat international airports.This lowered Vietnam Airlines’ flight frequency. Between January and June this year, Vietnam Airlines carried 7.28 million passengers, up 6.4% on-year, with domestic flights accounting for 4.47 million, up 5.2% on-year. It conducted nearly 58,000 safe flights, and plans to raise that figure to more than 112,000 flights by the end of this year, carrying 14.4 million passengers. Since late 2012, Vietnam Airlines has opened some air routes to South Korea, Cambodia and Russia which are considered as potential regional markets. Vietnam Airlines plans to raise the number of airplanes it has in service from the current 79 to 101 by 2015. Vung Ang Port serves as transit point for Laos cargoes The Ministry of Transport will seek to make Vung Ang Port a transit facility for cargoes transported from the neighboring countries of Laos and Thailand, said an official of the ministry. Vietnam’s transport ministry and Laos’ waterway administration on Tuesday had a meeting on managing and exploiting Vung Ang Port to seek better solutions to cater to cargoes in transit from Laos and Thailand, said Deputy Minister of Transport Nguyen Van Cong. After the meeting, the transport ministry urged its International Cooperation Department to ask approval from local relevant authorities to put national highways 8 and 12 into the Greater Mekong Sub-region Cross-Border Transport Facilitation Agreement. Also, Cong informed his ministry would petition provincial governments having the national highways running through to give assistance to Laotian enterprises, vehicles and commodities during the transit. The ministry will also ask related authorities to fix a consistent time frame as well as lengthening opening hours of border gates between the two countries along the two national highways for the transit, he added. Commodity volumes of Laotian vessels handled at Vung Ang Port have increased sharply regardless of the current unfavorable conditions, said Duong The Cuong, director of Viet-Lao Vung Ang Port Joint Stock Company. Total cargo throughput handled at Vung Ang Port reached nearly 1.4 million tons in January-June, with some 60% known as Laotian products like bronze and iron ore, kali salt, fossil coal and equipment, while total Laotian cargoes transited at the port was only 100,400 tons in all of 2012. Cuong said his company had made great efforts to work with Laotian customers on goods transit at Vung Ang Port. “Besides handling commodities at the port, our firm also provides supports to customers during cargo transportation in Vietnam,” he said. Vung Ang Port and national highways 8 and 12 are expected to give a boost to trade exchange activities among Vietnam, Laos and Thailand for the development of the East-West Economic Corridor. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR