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BUSINESS IN BRIEF 10/9
VN
textile, garment industry to join TPP
Participation
in the Trans-Pacific Partnership Agreement (TPP) would create favourable
conditions to boost
Deputy
general secretary of the Viet Nam Textile and Apparel Association (VITAS)
Nguyen Van Tuan said at a workshop on the TPP and impacts on
He
warned that it's also a challenge for Vietnamese textile and garment
businesses when the industry still faces a big deficiency in materials
including cotton and cloth as well as technology.
"The
industry uses 820,000 tonnes materials every year, which include 420,000
tonnes of cotton and 400,000 tonnes of fiber. However, we had to import
415,000 tonnes of cotton, 99 per cent of the total demand of the industry's
production last year," Tuan said.
"A
figure last year showed the garment industry used 6.8 billion metres of
cloth, of which 88 per cent was imported.
Domestic
cloth production only supplied 0.8 billion metres," he said.
Tuan
pointed out that 70 per cent of the total exports were still made from
Cut-Make-and-Trim (CMT) contracts.
"It's
a weak point and disadvantage for Vietnamese businesses with TPP
participation. However, local enterprises should make a big change to
strengthen the competitiveness," he suggested.
Last
year, 4,000 enterprises earned a combined revenue of US$20 billion, of which
$17.2 billion came from exports, contributing 15 per cent to the country's
Gross Domestic Product (GDP).
He
also recommended that local enterprises invest in the cotton, spinning and
weaving industries, shifting production modality from CMT to free-on-board
(FOB) practice, as well as expanding cooperation with foreign partners.
Nguyen
Duc Tri, general director of Hoa Tho textile and garment joint stock
corporation, said a deficiency in raw material, design and technology has
been a big problem for his enterprise.
"Although
earning $100 million per year in exports, the company's production is still
dependent on imported material. A small change in the price of material would
lead to poor competition against rivals in the export market," Tri said
at the seminar sideline.
"Participating
TPP would be a big chance for us to restructure our production and make
investment in advanced technology."
Vice
chairman of VITAS Nguyen Dinh Truong emphasized that TPP would help sustain
the country's industry as one of the top-five exporters in the world.
"The
industry has developed with an annual growth of 20 per cent over past two
decades. From 200 textile companies with an export value of $1 billion in
1990, the industry has expanded to over 4,000 enterprises with 5.1 million
spindles," he said, adding that it employs 2.5 million workers.
He
stressed that VITAS conducted a big survey to evaluate the capacity of
businesses before mapping out a master plan for the sustainable development
of the industry.
VITAS'
deputy general secretary Nguyen Van Tuan said the government should call for
more direct investment from foreign textile manufacturers, while creating
favourable conditions for the production of raw materials and core products.
"We
have to identify key areas in fiber-weaving-dying to promote the value chain
from thread, weaving and dying to sewing. Skilled labour force training
centres will also play a key role for better competition of the
industry," Tuan said.
"Among
250 industrial parks nationwide, only Nam Dinh, Hung Yen and Binh Thuan
provinces reserve areas for developing the fiber-weaving-dying
industry," he said.
"Our
garments and textiles could not have big power if we do not produce materials
ourselves," he concluded.
Banks
ignore deposit interest cap in desperate liquidity bid
Banks
are flouting the deposit rate cap to improve liquidity though, paradoxically,
many are barely lending, according to analysts.
The
State Bank of
But
many banks, mostly small, are offering rates well above that.
Le
Hung Anh of HCM City's Tan Binh District said two months ago he deposited
VND1 billion (US47,393) in a bank for one month and was offered 8 per cent
interest.
In
September the bank raised the rate to 8.5 per cent, he said.
Duong
Thi Ngoc of Phu Nhuan District said three months ago she was offered 10 per
cent on her VND800 million deposit for a month. The rate was cut to 9 per
cent and then 8 per cent but was recently raised again to 8.5 per cent, she
said.
An
executive at a bank in District 3 admitted the bank is ready to pay over 8
per cent for dong deposits and 2 per cent for dollar deposits.
Deposits
of more than six months are paid even higher rates. However, there are no
rate caps for them.
Thinh
Vuong Commercial Joint Stock Bank, for instance, offers 8.3 per cent for
six-month deposits, while the Sai Gon Commercial Joint Stock Bank offers
8.8-8.92 per cent.
Analysts
are puzzled by what they say is a paradox, pointing out that according to SBV
data deposits were up 9.5 per cent by late August though loans outstanding
had only risen 5.4 per cent.
Vo Van
Chau, former general director of the Phuong Dong Commercial Joint Stock Bank,
told Nguoi Lao Dong newspaper that some banks lacked assets to use as
collateral to borrow on the inter-bank market or through open-market
operations (OMO).
As a
result, they are forced to get deposits by paying more, he said.
Others
said some banks had accepted gold deposits until last year and lent out the
gold. They have been unable to get repayment and so need money to buy gold to
repay their depositors, they said.
Heads
of some banks said that many lenders are afraid of a possible liquidity
crunch at the end of the year and so are mobilising deposits now.
Analysts
said the practice is not new but difficult to control because banks produce
proper documents when asked by inspectors.
A
deputy director of the SBV's branch in
Siam
Cement Group (SCG) from
SCG
President and CEO Kan Trakulhoon said that
"We
will continue our investment in this potential market, focusing on cement,
building materials, paper and chemicals," he stressed.
SCG
currently has 19 affiliates in
In the
first half of this year, the figure saw a year-on-year rise of 43 per cent to
hit VND4.9 trillion ($230 million).
Last
December, the Thai group paid $5.12 trillion ($240 million) for 85 per cent
of Prime Group, a leading building material producer in
Kan
Trakulhoon noted significant changes in
"
SCG is
also seeking other opportunities here. Last year, the group and Thai Plastics
and Chemicals Public Company Limited (TPC) entered into a joint venture with
QPI Viet Nam (a subsidiary of Qatar Petroleum International), the Viet Nam
National Oil and Gas Group (PetroVietnam) and Viet Nam National Chemicals
Group (VinaChem) to invest in a petroleum project in the country.
SCG
and TPC own 28 and 18 per cent of the project respectively. The remaining
belongs to Vietnamese businesses. It is scheduled to become operational in
the next few years.
Besides
Vinh
Long prepares to host
The
2013 Mekong Delta Economic Co-operation Forum (MDEC Vinh Long 2013) is
scheduled to be held in southern
The
announcement came at a press conference in Ha Noi late last week by the
Steering Board for the Southwest Region (SBSR), the Steering Committee for
the MDEC Vinh Long 2013 and the Vinh Long provincial People's Committee.
Under
the theme ‘Mekong Delta towards the Green Economy', MDEC Vinh Long 2013
comprises a series of events, including the 2013 Conference on Investment
Promotion and Social Welfare for the Mekong Delta region and the 2013 Mekong
Delta Business Forum.
Addressing
the press conference, Deputy Prime Minister Vu Van Ninh, who is also SBSR
Chairman, stressed the strategic position and role of the Mekong Delta, as
well as the need to strengthen links in the region and apply scientific and
technical advances to production.
"Investment,
trade and tourism must be promoted based on each locality's strengths and the
common interests of the whole region," he said.
He
also urged relevant ministries and agencies to suggest suitable mechanisms
and policies to help the Mekong Delta region take full advantage of its
potential and strengths.
The
Mekong Delta Economic Co-operation Forum is an annual event where participants
propose initiatives and policy suggestions to enhance co-operation among
provinces in the region, as well as the connections between the region and
other localities nationwide, central ministries and agencies, and
international organizations; and to boost the region's socio-economic
development.
The
suggestions will be submitted to the Prime Minister for consideration.
EVN
tackles gas pipeline halt
Electricity
of Viet Nam (EVN) is lifting efforts to minimise a potential power shortage
this month due to a 9-day halt in gas supply at the Nam Con Son Gas Pipeline
Company.
The
director of the Ministry of Industry and Trade's Electricity Regulatory
Authority of Viet Nam (ERAV), Dang Huy Cuong, said that if necessary, EVN
would mobilise more expensive sources including oil and diesel fuel to meet
energy demand.
According
to the PetroVietnam Gas Corporation, Nam Con Son Pipeline Company suspended
gas supply to thermal electricity plants Phu My 2 and Phu My 3 between
September 7-16, for maintenance purposes.
It is estimated
that around 358.6 million kWh could be generated with oil and diesel fuel, if
needed.
EVN
also plans to make use of hydro-power plants in the southern and central
regions during the halt; additionally requesting hydro-power plants to store
water reserves for the rest of this year.
By the
end of September, water volume in reservoirs may be able to generate up to
9.707 trillion kWh, over 2.2 trillion kWh more than planned levels approved
by the Ministry of Industry and Trade.
According
to ERAV last month, average water volume at hydro-power plants' reservoirs
across the country was relatively higher than that of previous years; with
the exception of those in the central regions and Central Highland provinces.
In the
last eight months, 25 power generation projects were built and a further 16
power transmission projects began construction, with investment for the
projects being said to have exceeded VND56.8 trillion ($2.7 billion).
Last
month, the first turbine - Hai Phong 2 Thermal Electricity Plant - was also
connected to the national grid.
By
this month, EVN will have achieved its plan for the year with six turbines
commencing operations, including Nghi Son 1 Thermal Electricity Plan, Ban
Chat Hydro power Plan, Quang Ninh 2 Thermal Electricity Plan and Hai Phong 2
Thermal Electricity Plan.
VN
firms eye speedy
In the
short and medium terms,
The
impacts of the negotiations on local business and enterprises are far
reaching as it exposes them to the world economy and they will gain
competitive edge needed to compete on the world economic stage, Thuy said.
She
added that TPP has already stimulated overseas investment into
However,
Thuy said, joining TPP would also create pressures to further open the market
and increase competitiveness for local enterprises which need to react to the
new trade initiative.
Meanwhile,
she said local firms still have limitations with production, so TPP may bring
disadvantages for them if they do not reform production methods and business
models.
Thuy
recommended businesses speed up their restructuring process to improve
quality and value of goods and services and to raise efficiency for their own
economic growth.
Negotiators
from 12 member countries of the Trans-Pacific Partnership gathered in
The
nine-day round of talks focused on 10 issues, including intellectual property
rights, state-owned business and tariffs with the goal that all TPP members
try to complete the talks so that an agreement can be reached this year.
Besides
the official meetings, ministers and ministerial-level officials also held
bilateral sessions with partner countries to present their requests and
offers related to trade tariffs.
The
TPP member countries together create a market of 790 million people and
account for about one-third of the global trade.
The
member states currently include
Gold
price gap widens as SBV ends auctions
The
disparity between domestic and global gold prices increased once more, after
the State Bank of Viet Nam abruptly ended its weekly gold auctions, seeing
the popular commodity settling at VND3.3 million (US$157) higher per tael
than world gold prices.
This
week, the State Bank of
"The
key factor expanding the gap between local and global prices is the
suspension of the gold auction," said a representative of the Viet Nam
Gold Trading Association who asked to remain unnamed.
"The
demand is so-so, but the gap would increase if no gold auction was
held," he added.
The
Sai Gon Jewelry Company (SJC) yesterday reported a drop of 0.26 per cent
(VND100,000) against previous transactions, with the buy price per tael (1.2
ounces) settling at VND38,2 million, and the sell price at VND38,3 million.
Matching
the trend, the global spot price for gold dropped a full 1 per cent yesterday
to rest at US$1,365.05 an ounce. The overall gap between the two markets
surged due to the price drops.
The
bank's sales generated a profit of more than VND6 trillion ($272.72 million)
largely due to the significant differential between the over-heated domestic
gold price and the lower global price.
Fund-management
profits ‘unsustainable'
Most
fund management firms made profits not from their core business, but
financial activities in the first half of the year.
However,
some industry insiders are concerned about the trend. They say sustainable
growth of fund management firms whose profits mainly come from financial
activities are often extremely volatile as parent companies or related
partners can withdraw their capital unexpectedly.
Among
the 11 fund management firms that posted profits, only VFM and BIDV-Vietnam
Partners reported a slight rise in profits from its core business of fund
management and managing investment portfolios. The rest made profits mostly
from deposits and financial-investment transactions.
Up to
98 per cent of Vietinbank Management Company's VND54 billion (US$2.56million)
profit in H1 was from financial activities. Fees for fund management and
investment portfolio management brought the company only VND760 million.
Besides
Vietinbank, ACB, IPA and Ban Viet fund management firms also profited most
from financial activities. Profits from deposits made up 90 per cent of ACB
Fund Management Company's total profits. The figures for Ban Viet and IPA
were also high at 88 and 82 per cent, respectively.
Industry
insiders said that most of the firm's profits came from financial
transactions related to its parent companies. ACB Fund Management Company's
profit, for example, mainly came from its deposit in its parent company, ACB.
In the
first half of the year, many fund management firms faced difficulties. Big
firms also reported losses due to a sharp decline in turnover and profits
from core business performance.
VinaWealth,
which is managing the country's first open-ended fund, VFF, plans to set up
two others, posted a loss of VND9.2 billion in H1.
Manulife
Although
still posting profits in H1, pre-tax profits of Ban Viet Fund Management
Company and SSI Fund Management Company declined half against the same period
last year.
Corn
imports a threat to domestic producers
A
major increase of high-value corn imports to
Mai
Van Chung, a purchasing director of the Japfa Cornfeed Viet Nam Ltd Company,
said the firm has signed a contract to import 80,000 tonnes of corn for the
production of animal feed by March 2014.
Japfa
needs at least 16,000 tonnes every month and while it has always imported
corn, it is doing so on an unprecedented scale at the present time to take
advantage of the cheap price of corn on the South American market.
The
cost of imports from nations such as
It is
customary for local animal feed producers to purchase all the maize on the
Vietnamese market before importing it from abroad when the local supply is
exhausted, he said.
This
year, though, the import price was cheaper than the local one so they
imported the product before the local crop had ended, he added.
As
well as being more affordable, foreign corn tends to be of superior quality
and has a much lower humidity rate, preserving it for longer.
The
increase of corn imports has forced the local corn price to fall, said Ha
Quyet Nghi, deputy director of the Agriculture and Rural Development
Department of northern Son La Province.
In
early August, the local maize price was VND7.4 million per tonne. It has now
dropped to VND6.2 million, Nghi revealed.
To
reduce corn imports, the agricultural sector must apply biotechnology
allowing maize production to increase output and better meet the local
demand, argued Nguyen Tri Ngoc, former head of the Plantation Department
under the Ministry of Agriculture and Rural Development.
The
State should support the sector in building corn preservation and
distributing systems to ensure a stable supply for the local market, he
added.
Le Ba
Lich, chairman of the Viet Nam Animal Feed Association, said the country has
an annual maize output of 4.5 million tonnes and only 1.8 million tonnes goes
to animal feed processors.
The
processors currently must import 1-1.8 million tonnes of maize from
In the
first eight months this year, the nation imported 1.34 million tonnes of
maize, 18.9 per cent higher than the same period of last year.
Survey
reveals keys to retaining employees
Competitive
salary and benefits are the essential factors to retain management level, but
not the unique factor, a survey by a leading HR service provider has found.
According
to Talentnet Corporation's survey on retention factors, which questioned 400
people at the management level, career development, compensation and
organisation – related values, such as company vision, mission, direction,
working environment, are the three factors influencing long-term employment.
Managers
seek a clear career development road map as an objective for their ambition.
In
addition, a good working environment with transparent communications where
they can be involved in business strategy and direction is also important.
And
last but not least, for managers, remuneration can be seen as a measurement
for their achievement recognition.
Oganisations
should consider all of these factors, including tangible and intangible
elements, when employing managers.
For
companies in hi-tech industry, for instance, training and development and
flexible working hours are benefits highly valued by senior management.
Companies
in the Fast Moving Consumer Goods industry consider opportunities to work in
overseas offices, sponsorship for studying advancement, and recognition the
most important.
According
to the Mercer and Talentnet Remuneration Survey last year, compensation and
benefit schemes for management are distinguished from other levels to create
motivation and inspire managers to contribute to the business.
However,
these practices differ in Vietnamese and foreign companies.
While
there is a big remuneration gap between senior management and staff level at
foreign companies, the gap is narrower in Vietnamese companies.
This
shows that multinationals focus on motivating the management level, while
Vietnamese companies need more time to do so.
According
to the HR service provider, talent attraction, particularly senior
management, is a challenging process for both foreign and Vietnamese
companies, especially in such a limited talent pool.
Most
companies have to nurture talent in-house or have internal promotions for key
positions.
There
is no standard model for businesses in attracting and retaining management
level as it relies a lot on business status and the working model and
operation of each company.
For
instance, for long-term demand, some foreign companies have management
trainee program to attract talented graduates. They provide them training as
well as opportunities to work overseas to prepare them for future positions.
Challenging
projects are also created to allow staff to act as project leaders so they
can widen their knowledge, gain more experience, and upgrade both hard and
soft skills.
Some
companies create their own employer branding program to provide scholarships
for the best students even when they are still in university.
If
companies need to fill positions quickly, they work with consulting companies
and freelancers who have specific knowledge.
Talentnet
said that companies, however, should first understand their businesses
clearly, reposition themselves to create specific requirements for such
positions.
Many
Vietnamese companies instead offer attractive remuneration schemes for top
senior management but do not pay attention to their internal structure and
policies.
As a
result, if senior managers quit, other staff cannot adapt and there are
losses in time, finance, trust and reputation.
The
best way to attract and retain talent is to understand and clarify your
company's business objectives and expectations, and then define the people
strategy to satisfy those objectives. This will result in proper talent
attraction and retention policies.
Ha
Noi gets tough on landlord tax collections
The
Department of Tax in Ha Noi will tighten its collection of landlord tax payments
until the end of the year in an effort to crack down on tax evasion.
According
to the municipal tax department, Ha Noi's rental market was experiencing
rapid growth; particularly in the expat rental sector.
However,
tax collection on rentals remained difficult, with reports of tax evasions
occurring across the city.
Director
of Tay Ho District's Tax Department Nguyen Huu Hung said that before 2009, a
tax rate of 22.56 per cent was applied to rent.
From
2009, he further said, landlords were required to pay a value added tax (VAT)
and personal income tax at progressive rates; prompting landlords to find
ways to pay less tax on rental properties.
In an
effort to reduce the number of tax evasions, the Ha Noi Tax Department will
work with municipal police to inspect rental properties in each district with
the temporary residence registry.
The
tax department has said the lack of rental contracts between landlords and
tenants will make the fight against tax evasion even more challenging.
Actual
rental rates remain hard to verify due to payments made in cash without
bills, the department said, adding that currently, there was no regulation on
compulsory payments via the banking system.
Local
exporters urged to make most of eager overseas markets
The
Ministry of Industry and Trade has urged Vietnamese exporters to reap the
gains of Free Trade Agreements (FTA) by tapping into foreign markets.
Speaking
at a conference on FTAs in Ha Noi on Wednesday, Ministry of Industry and
Trade representative, Hoang Van Phuong, emphasised the importance of
Phuong
said only 33 per cent of Vietnamese goods exported to FTA countries enjoyed
preferential tariffs from the agreement.
He
said Viet Nam's average growth rate of exports to members of the ASEAN
community; China, South Korea, Japan, Australia, New Zealand and India, was
more than 20 per cent while that of exports to the world market was 15 per
cent.
He
added that businesses would be more able to meet export potential by meeting
requirements for Certificates of Origin (CO).
Statistics
from the ministry showed that export turnover using COs last year reached
US$18 billion, accounting for 33.6 per cent of exports under
Deputy
head of the ministry's Import-Export Department Tran Thanh Hai said a sharp
decrease in tariffs would provide opportunities for Vietnamese businesses to
boost exports.
In the
same year, exports to
Meanwhile,
the country has been an active participant in negotiations for the
Trans-Pacific Partnership (TPP), while conducting FTAs negotiation with the
EU and
In
spite of these developments, Vietnamese businesses continue to struggle to
take advantage of such agreements.
Hai
said several enterprises have not paid attention to changing tariffs and were
not investing or restructuring to meet C/O standards.
The
ministry said they would continue to support multilateral trade under the WTO
to access to trade markets.
Four
key industries in
According
to the Department of Industry and Trade, the mechanical engineering industry
leaped by 13.4 percent in two successive years of 2011 and 2012 and showed an
upward trend from 15.3 percent in 2005 to 17.1 percent in 2012.
The
mechanical engineering industry accounts for 20-25 percent of industrial
growth and is continuing to attract big projects deploying advanced
technologies.
Similarly,
the chemical industry increased by 8.8 percent in 2011 and 2012 and accounts
for 39-45 percent of growth in the country.
New
equipment and technologies have been deployed in production of
washing-powder, cleaning chemicals, skin lotion and softeners, waterproof
paint, dry batteries, heat-resistant paint, bicycles and car tires, which are
manufactured not only for domestic markets but also for exports.
Nguyen
Van Lai, Director of Department of Industry and Trade, said there have been
improvements in electronics-IT industry and food processing. The IT industry
accounts for 27 percent of growth in the country with an average growth of
4.6 percent a year in 2011 and 2012.
With
good infrastructure,
Before,
the food processing industry was outsourcing but it has been revamping
steadily since 2006. Accordingly, Vietnamese brands like Vinamilk, Kinh Do,
Pham Nguyen, Hanco, Saigon Beer, Vocarimex, Tuong An, Vissan, Ba Huan and
Huynh GIa Huynh De have gradually taken control of the local market and
exports.
Farmers
abandoning rice cultivation due to Non-Profits
In an
alarming situation, farmers in the
Thousands
of farmers in Quang Binh and Ha Tinh Provinces have abandoned their paddy
fields. Truong Loc Commune with 331.3 hectares under paddy accounts for
70.40 percent of rice cultivation, one of the biggest rice areas in Ha Tinh
Province.
Hoang
Manh Hung, the
As
days go by, more farmers want to give their rice farmland back to the
government. At this rate, paddy fields will be totally abandoned in the next
few years.
Hung
added that farmers are not interested in doing farm work as they earn little
to no profit. They prefer expat labor overseas or seek jobs in
In
Pham
Huu Thao, Deputy Head of the People’s Committee of Le Thuy District, said
farmers cultivated the summer-autumn rice crop on 4,500 hectares in previous
years but this is now reduced to 1,400 hectares, because farming is no longer
profitable.
Thao
said that at present farmers prefer growing recycled rice as they spend less
and can harvest after 40 days. Each hectare harvests 26 quintal, earning more
profits.
Phan
Van Gon, Chairman of the People’s Committee of Bo Trach District in
The
Department of Agriculture and Rural Development in Ha Tinh Province sent a
report to the Ministry that a total of 1,309 hectares of paddy fields are
lying uncultivated.
The
central provincial's authorities have sent their proposal to Government with
wishing to get input-output price stabilization policy. If that they would be
able to keep their mind on their work.
Ministry
tightens control on multi-level marketing firms
The
Ministry of Industry and Trade has cracked down on multi-level marketing
firms and issued new regulations that will tighten control, though not
altogether ban such operations.
The
Ministry will now issue licenses to multi-level marketing firms for a maximum
period of five years. All multi-level marketing firms must also have a
minimum chartered capital of VND10 billion (US$470,000) and a deposit of VND5
billion ($235,000) at an authorized state agency.
To
protect consumers, multi-level marketing firms must notify the local
departments of trade and industry about the time and venue of their
workshops, conferences, and sales training sessions, as most such firms take
advantage of open events to expand their network.
The
Ministry also requires multi-level marketing firms not to charge participants
for basic training sessions, or charge only a reasonable amount to cover
material costs and not compel them to purchase a certain amount of
commodities.
Farmers
begin harvesting autumn-winter rice
According
to the Cultivation Department under the Ministry of Agriculture and Rural
Development, farmers in the Mekong Delta provinces of Dong Thap, Kien Giang,
Hau Giang, and Can Tho have begun harvesting of more than 20,000 hectares of
early autumn-winter rice crop.
The
price of fresh paddy bought at the field is now at VND4,000-4,100 per kilo;
and long-grain paddy at VND4,500-4,600 per kilo.
According
to Huynh Thanh Kieu, a farmer in Vinh Thanh District in Can Tho City, at the
current price level farmers can only profit by VND10-15 million per hectare.
This has raised concerns as rice price tends to decline and inventory is
forecast to climb in the near future when farmers harvest more rice.
Up to
now, farmers in the Mekong Delta provinces have grown rice over 560,000
hectares out of 790,000 hectares, and will finish growing the rest by
mid-September.
A
recently released report on global competitiveness for 2013-2014 by the World
Economic Forum shows Vietnam ranked 70th from among 148 countries surveyed,
gaining five ranks compared to last year.
This
result is mainly due to a slightly better macro-economic environment with
inflation decreasing to one-digit in 2012. The country’s transport and energy
infrastructure has also improved, and there is much more progress in the
goods market, thanks to lower trade barriers and taxes.
Nonetheless,
despite these improvements, the country’s economy remains fragile. For
instance, the efficiency in the labor market went down five ranks; financial
market development was at 93rd ranking; and technological slid to 102nd
ranking.
Moreover,
Illicit
tobacco trading causes state budget VND4-trillion loss
The
illegal trading of tobacco has become more rampant, causing
This
information was given by the Ministry of Industry and Trade’s Market
Surveillance Agency.
It's
the lure of big profits that makes this illegal activity very popular, the
department said, adding that tobacco producers only earn a profit of
some 3% of their total production costs, but the rate can climb as high as
300% for those who import the tobacco illegally.
Do
Thanh Lam, Deputy Head of the Market Surveillance Agency, said the illegal
trading of tobacco has increased from the north to the Southwestern region
with the most popular brands being Esse, 555 and Hero.
The
agency said, on average 500 million packs of cigarettes are illicitly
transported to
Vu Van
Cuong, Chairman of Member Council of the Vietnam National Tobacco
Corporation, said control of tobacco consumption remains lax, fueling the
illicit import of this product. Most retail tobacco shops sell Jet and Hero
publicly.
According
to the agency, in the first six months of this year, it revoked 553,000
tobacco packs, up 55% compared to the same period of last year. Recently,
authorities seized 10,000 illegally-imported packs in Can Tho City.
The
Vietnam Tobacco Association has proposed that the Ministry of Industry and
Trade approve and implement soon a project to stop illicit tobacco business
activities to protect local producers.
Vietnamese
beverage, confectionery firms face fierce competition
Many
local beverage and confectionery companies are losing ground to foreign
competitors in domestic markets for 3 reasons: lack of capital, technology
and expertise.
In
recent years, as the economy has developed and the population has grown,
demand for beverages and confectionery has risen in
Many
long-standing multi-national groups have continued to invest in the market
and widened their market share, at the expense of Vietnamese companies.
In
order to increase their market shares in
They
have only to update the technology and apply their business strategies to
ensure long-term development.
Carlsberg’s
acquisition of a stake in Huda Beer is regarded as a first step for such a
foreign giant to eventually control the entire beer market in central
In
1994, Hue Beer Company co-operated with Carlsberg to set up a joint venture
with equal ownership.
After
over two decades of co-operation, Carlsberg wholly owned Huda Beer by late
2011, after buying the other half of the joint venture’s stake from Thua
Thien Hue provincial government.
Carlsberg
has also conducted several other deals in order to increase its stake in
Vietnamese beverage companies.
It has
increased its stake in a joint venture with Viet Ha Beer Company from initial
35% in 1993 to current 60%.
In
2007, Carlsberg bought a 30% stake in Ha Long Beer Company and the two sides
set up a joint venture in Ba Ria –
Many
other foreign beverage companies have also entered the Vietnamese market
using this same partnership model.
Uni-President
has acquired Tribico via joint venturing and stake buying.
British
Diageo spent USD90 million on buying a 45% stake in
Aneuser-Busch
Inbev (AB Inbev) – the world’s biggest beer producer plans to enter the
Vietnamese market next year which may well mean fierce competition in the
market.
Even
though the Vietnamese confectionery market is a potential investment
environment, local firms find it hard to compete due to their lack of
diversified products, enabling foreign firms to increase their market shares.
Lotte
started business in
Lotte
has taken advantage of Bibica’s infrastructure to further develop its own
service chains, including Lotteria fast food and, Lottemart, hotel and
stores.
After
four years of co-operation with Lotte, Bibica has reported a decrease in its
profits during the past two years. Bibica leaders have accused Lotte of price
transferring of export products forcing Bibica to incur a loss of 18% in
selling prices and make a loss on co-operation projects.
Glico,
a leading Japanese confectionery firm has widened its market share and its
investment in
Nabti,
an Indonesian confectionery producer, also plans to build a plant in
Economists
said this situation is an unstoppable development trend due to increasing
demand in the local market.
The
Vietnamese Ministry of Agriculture and Rural Development (MARD) has decided
to apply normal monitoring measures on seafood products imported from
The
decision, which would take effect from September 1, was made based on
positive radioactive monitoring results on Japanese food imports by the
Department of Animal Health and Department of Plant Protection over the past
two years.
MARD
requested that Departments of Animal Health, Plant Protection, and National
Agro-Forestry Fisheries Quality Assurance direct their subordinate agencies
to remove strict monitoring measures on Japanese food imports.
The
decision came after a recent proposal by the Vietnam Association of Seafood
Exporters and Producers (VASEP) to remove radioactive monitoring measures on
frozen seafood products imported from
Monitoring
results over the past time showed that after the radioactive leakage incident
in
Previously,
MARD requested that food imported from
State
bank official: VND85 trillion in bad debts settled
Banks
in
Bad
debt is not only an issue for banks but also affects enterprises as well as
the whole economy.
SBV
Deputy Governor Dang Thanh Binh said, local banks have been actively dealing
with their bad debts. The settlement of debts, mounting up to VND85 trillion,
is good news for the banking sector. The rate of bad debt in June of this
year is down 4.68%, much lower than what was forecast.
Binh
noted that bad debt is not only an issue for banks but also affects
enterprises as well as the whole economy.
SBV
has instructed to restructuring eight commercial joint stock banks with
ineffective operations. Three among the four big state-owned banks namely
Vietcombank, VietinBank and BIDV have also been urged to privatise.
The
deputy governor added that from now to 2015, SBV will try to rearrange
bad-performing banks through different measures such as mergers and
acquisitions. Also, foreign financial institutions may be allowed to
invest in these banks.
Deputy
Governor Dang Thanh Binh is also the Chairman of the Board of Members of
newly-established Vietnam Asset Management Company (VAMC) which is expected
to settle between VND40 trillion (USD1.42 billion) and VND70 trillion
(USD3.33 billion) in bad debts this year.
Source:
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Hai, 9 tháng 9, 2013
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