BUSINESS IN BRIEF 11/9 Vietnam's seaport system to be adjusted The Vietnam Maritime Administration has submitted to the Ministry of Transport a report on the adjustment of the country’s seaport system planning by 2020 and orientations towards 2030. Accordingly, Van Phong port will be an international one. Besides, those of Ho Chi Minh City will be adjusted as follows: Hiep Phuoc port on the Soai Rap River will be the main to serve the Mekong Delta, and Cat Lai port area on the Dong Nai River will be the main for containerized cargo. Meanwhile, wharfs on the Saigon and Nha Be rivers and docks on the Saigon river will gradually be reallocated. New stations will be built on the Nha Be river to receive international cruisers, while Vung Tau port will be an international gateway. Tra fish exports to EU down by 12.8 percent Vietnam’s tra fish exports are estimated at US$237 million in the first eight months of the year, down 12.8% against the same period last year, according to the Vietnam Association of Seafood Exporters and Producers (VASEP). VASEP said that by mid- August, seafood exports to the EU fetched US$667.3 million, of which tra fish dropped by 12.8 percent to US$237 million but shrimps and tuna  rose 5.3% to US$195 million and 33.8% to US$89 million respectively. Total seafood exports to the EU in the past eight months hovered around US$720 million (down 4.6 %) despite an increase in shrimp and tuna shipments in the second quarter. Tra fish which make up 35-40% of total seafood export earnings from the EU continued dropping in both volume and value. As Vietnam’s largest seafood importer in the previous years, the EU comes second after the US this year. VASEP explained that the falling price of tra fish was due to an abundant supply of gadidae fish. For example, tra fish exports in the second quarter dropped by 12.8% to US$95.6 million compared to the same period last year. The price of tra fish was somewhere between US$2.40-2.60 per kilo, down 10-20% on the previous years. However, VASEP said, the consumption of tra fish in other markets like Portugal, the UK, and East European countries tends to increase while Holland still has a great demand for tra fish, especially from retailers. Vietnam, RoK SMEs boost cooperation The Korea Federation of Small and Medium Business (KBIZ) is strongly committed to promoting cooperation between small and medium-sized enterprises (SMEs) of the two countries for mutual benefit. This was declared by KBIZ Chairman Kim Ki-m Un at a meeting with the Vietnam Chamber of Commerce and Industry (VCCI) in Hanoi on September 9 within the framework of RoK President Park Geun-hye’s visit from September 7-11. In reply, VCCI Chairman Vu Tien Loc stressed the importance of SMEs in economic development and the need to strengthen bilateral cooperation with a focus on high-tech and value-added products and support industries. He expressed his hope that the VCCI and KBIZ will act as a bridge between the two business communities. On this occasion, the two organisations signed a cooperation agreement providing a legal framework for closer cooperation in trade, investment and support industries. Opportunities and challenges for farm exports Vietnam’s World Trade Organisation (WTO) membership has adversely affected the country’s agricultural sector. This assessment was shared by experts at a recent seminar hosted by the Ministry of Agriculture and Rural Development (MARD). MARD Deputy Minister Nguyen Thi Thu said Vietnam is especially vulnerable to global market fluctuations because it is unable to capitalize on the advantages offered by the WTO. Dr Pham Lan Huong from the Central Institute for Economic Management (CIEM) assessed the impact of climate change and external factors on Vietnam’s agricultural industry. In the 2007­–2012 period, the forestry-agriculture-aquaculture sector grew at an annual rate of 3.4 percent, lower than the average annual growth of 4.1 percent in the five years before Vietnam’s joined the WTO. Shifting the national economic focus to industry and services was also considered a factor behind the decline. International integration means rescinding protectionist policies and replacing them with measures prioritising production and value chain development and improving competitiveness. Huong argued that recent dramatic increase in petroleum prices has greatly benefited Vietnam’s macroeconomy in terms of crude oil exports but the agricultural sector has suffered losses from using large volume of petroleum in production and processing. In the past five years, fertilizer prices rose 2.5 times, but rice prices increased by 1.2 times. As a result, agricultural production costs went up by 35–40 percent with no matching gain in revenue. Expert Pham Thi Ngoc Linh from the Institute of Policy and Strategy for Agriculture and Rural Development (IPSARD) presented a report on the agricultural repercussions of free trade agreement (FTA) tax barriers. Linh noted the tariffs imposed on imported agricultural products had fallen to between zero and 10 percent on staples like beef, dairy products, and rice. Most of the country's agricultural exports to FTA partners faced tax rates of between 5–15 per cent, with sugar, dairy products, vegetables, and meat subjected to rates as a high as 30 percent, she said. Linh forecast Vietnam's trade deficit with its ASEAN, Chinese, South Korean, and Japanese FTA partners would reach US$4 billion by 2017. She said its total export earnings from forestry-agriculture-aquaculture products would increase by US$15–17 billion. Its exports to ASEAN would increase by 18–20 percent, while shipment to China would rise 25–30 per cent, vegetables 15 percent, and dairy products nearly 50 percent. Linh considered Japan and the RoK as the most potential markets for Vietnam’s rice, dairy, and other agricultural products under the terms of FTAs. IPSARD Chief Dang Kim Son reiterated that Vietnam’s WTO membership has revealed the weaknesses of domestic agricultural products caused by excess sugar and salt, deficient animal husbandry, disease epidemics, poor food hygiene and safety standards, and environmental and natural resource pressures. The agricultural sector is also hampered by its small production scales, obsolete technology, and limited connectivity with other economic sectors, he added. But, in his view, FTA tax reductions have presented foreign companies with plenty of third-country export opportunity. Vietnam, Customs Union hold FTA negotiations Vietnam and the Customs Union of Russia, Belarus and Kazakhstan conducted the third round of Free Trade Agreement (FTA) negotiations on September 9 in Minsk, the capital of Belarus. During the five-day talks, delegations will focus discussions on trading commodity and service, and investment, commercial law, trade dispute settlement, customs management as well as advantages and disadvantages in building the FTA. Began in March with the first two rounds of talks held in Hanoi and Moscow, the parties have reached consensus on a plenary structure of the agreement as well as a roadmap for building the FTA. The FTA is believed to create a breakthrough in bilateral relations, helping lift customs barriers, and offer great opportunities for the union to penetrate potential ASEAN countries’ markets and open the doors for Vietnamese goods to its member countries. New technology plaza to enhance Vietnam-RoK cooperation The Vietnam- Republic of Korea Win-Win Innotech Plaza opened in Hanoi on September 8. The Innotech Plaza, run by the Korea Trade and Investment Promotion Agency (KOTRA), focuses on providing training courses, consultancy and supporting business foundations for Korean and Vietnamese young people. The plaza also aims to formulate useful models to strongly boost CSR (Corporate Social Responsibility) and CSV (Created Shared Value) for Korean enterprises invested in Vietnam by combining the Korea International Cooperation Agency’s cooperation mindset with Vietnamese policies. The RoK Government has valued Vietnam as a strategic partner and potential market, KOTRA Hanoi Director General Lee Kyuseon said, adding that the new plaza will play an active role in boosting further development between the two countries. To mark the event, a job fair was organised to provide information on vacancies and work requirements at RoK businesses in Vietnam. Green growth a part of Vietnam-EU trade talks Negotiations between Vietnam and the European Union over the free trade agreement (FTA) will include the highest incentives for companies making investments in green technologies, green growth and green commodities, EU sources said on Wednesday. Jacques Bouflet, minister counsellor and head of the trade and economic affairs section at the Delegation of the EU to Vietnam, said that there would be a chapter on green growth in the FTA under negotiations between the two sides. He was speaking at a press conference in Hanoi on Wednesday to introduce Green-Biz 2013, which comprises a conference and exhibition on the green solutions scheduled to take place on September 19-20 at the Hanoi-based Melia Hotel. Green growth will be an important chapter in the FTA. The chapter will mention solutions for entities to obtain priorities through credit supporting programs or credit subsidies to balance the benefits for the related sides, he said. Both EU and Vietnam have agreed to offer the highest priorities to companies applying technologies for sustainable development and production of environmentally-friendly items, Bouflet emphasized. European consumers now are favoring green products and obviously Vietnamese customers will also adopt this trend in the future. One important thing is that green technologies are costly with huge investments needed but investing in future sustainable development is the most cost-saving way but creating highest economic efficiency, he noted. At present, capital is seen as the biggest challenge for Vietnamese enterprises in green solution applications. Preben Hjortlund, chairman of EuroCham Vietnam, meanwhile informed that most countries joining the Green-Biz 2013 all have financial solutions to support Vietnamese companies. Specifically, a representative of a Swedish firm said that a network of up to 1,000 Swedish enterprises active in Vietnam all expect to make tie-ups for business and supports with Vietnamese entities. “We not only commit to providing non-refundable aids or low-interest loans for Vietnamese firms but also want to set up business cooperation with them on a fair basis,” the representative said. More than 70 European businesses have put their names down for the Green-Biz 2013, which is predicted to rise to about 100, said Hjortlund of EuroCham Vietnam, adding the event lures many non-governmental organizations as well. Specially, the organizers will set aside part of the exhibition area for Vietnamese enterprises wishing to join the event. Green-Biz 2013 is organized by EuroCham in coordination with the Ministry of Industry and Trade and the Vietnam Chamber of Commerce and Industry. Having the same scale as that in previous years, the third Green-Biz will focus on actual challenges and solutions via an international exhibition and a conference. It therefore is expected to connect companies, and between companies and the Government. PPP investment should start from small projects It is necessary to carry out small projects under the format of public-private partnership (PPP) first to set up a general legal framework for all PPP schemes to make the model effective in Vietnam, experts said at a seminar in HCMC on Wednesday. Claire Phillips, PPP director of the Ministry of Treasury of the United Kingdom, told the seminar on PPP investment that her country had applied the PPP format to all sectors but did not achieve success with all. The application of PPP investment to certain industries in Britain might be called a disaster, she said. For instance, the PPP investment application to the information technology is seen unsuitable as the sector is changing very fast requiring multiple amendments leading to the disagreements between public and private sectors. As PPP investment is a long-term model, it is considered to be the most suitable with infrastructure, environment and others with long-term stability, she stated. Regarding the Daily’s question if the application of the PPP model in Vietnam will be successful, Luong Van Ly, former director of the city’s planning and investment department, said the Government has only joined the PPP model in terms of project preparations, not in business operation. The limited participation of the State is appropriate now since it makes investors feel secured from the beginning, he clarified. If Vietnam follows Britain’s model in the future, the Government will take part in the processes of providing services and operating the schemes, which will cause unnecessary worries for involved investors, he insisted. Meanwhile, Vu Ngoc Nam, deputy director of the legal document department of the municipal Department of Justice, argued that it is difficult to conclude if the model is appropriate with Vietnam because no PPP projects have been put into operation in the country so far. Nam suggested that local authorities should execute the model step by step to see whether it is suitable with schemes at home or not. But the most important thing is a reliable legal framework, he noted. Claire Phillips advised Vietnam to pilot the model on small projects first to prepare a legal framework before applying it to bigger schemes. Stagnant capital flow hits city enterprises dearly Many enterprises in HCMC are facing huge difficulties due to the stagnant capital flow caused by the gloomy business situation while banks are fretting about offering credits to corporate customers. Speaking at a meeting between industry associations and HCMC authorities on Wednesday, Nguyen Van Dung, chairman of the HCMC Association of Fine Arts, Gold, Jewelry and Gemstones, said that 70% of nearly 3,000 gold and jewelry trading firms in the city are suffering capital shortage. Domination of China-made jewelry products on the market has also hurt the local industry. Since the end of June, gold trading and production firms have had to settle all gold loans at banks. However, the enterprises then cannot access credits as banks have been prohibited from granting loans for gold purchase for jewelry and fine arts production. After local enterprises stopped jewelry production, many traders from China, Malaysia and Hong Kong have brought their products to the local market. The products have the same quality and design as locally-made jewelry but have lower prices. “China-made products rule the jewelry market. As a representative of the industry, I feel great anguish at the situation while local gold enterprises are suffering great challenges,” Dung said. The central bank is organizing gold bar auctions but only banks and large enterprises are capable of joining the biddings. Therefore, small firms have to buy gold bars from bidding winners. Other industries in the city also find the cash flow problem as the biggest headache. Tran Viet Anh, vice chairman of the HCMC Rubber and Plastics Association, said that interest rates have never been so favorable over the past 15 years. However, enterprises in the industry dared not take out bank loans due to the poor business situation. Many enterprises are hesitant at asking for bank loans because of psychological factors, not high interest rates, Anh said. Le Thanh Nguyen, a representative of the HCMC Association of Mechanical Industry, said that commercial banks only pick corporate borrowers with financial capability. Besides, the current interest rate of 10.5% per annum fails to support enterprises much as they are generating profit margins of just 6-8%. Nguyen Phuoc Hung, acting secretary general of the HCMC Business Association, suggested banks simplify lending procedures to support enterprises. Besides, enterprises are now expecting stable interest rates, so banks should not revise up lending rates after signing credit contracts with them. Nguyen Hoang Minh, deputy director of the central bank’s HCMC branch, said commercial banks still see capital surplus at present. The agency from now until early November will organize more capital connection sessions between banks and enterprises across the city. A credit contract signing ceremony between banks and enterprises in Binh Tan and Binh Chanh districts will take place tomorrow, in Hoc Mon District on September 12, districts 10 and 5 on September 17 and districts 1, 2, 3, 5 and 7 early next month. Vietnam soon to build national competitiveness index The Ministry of Planning and Investment is mapping out criteria for building the national competitiveness index in an effort to pinpoint weaknesses and strengths of the economy as a basis for solutions to cope with the slowing economy. The initiative is suggested by Deputy Prime Minister Nguyen Thien Nhan, who also serves as chairman of the National Council for Sustainable Development and Competitiveness Building. According to the draft prepared by Nguyen Dinh Cung, deputy head of the Central Institute for Economic Management under the ministry, the index is prepared based on the approach of the World Economic Forum (WEF), which ranks the competitive capacity of countries annually. WEF on Wednesday released the Global Competitiveness Index 2012-2013 in which Vietnam climbs five notches to the 70th position out of 148 economies. In addition to basic requirements for sub-indexes like the right to asset ownership, corruption and Government effectiveness, there will be reports regarding six areas comprising higher education and training, commodity market efficiency, labor market efficiency, financial market development, technological readiness and market size. Cung explained that such in-depth reports on competitiveness were a combination of analysis of actual situations and recommendations for actions which had orderly priorities to be carried out. According to Cung, to improve Vietnam’s competitiveness, it is imperative to identify weaknesses and how to overcome such weaknesses. However, he seemed to be hesitant over the plan, saying that he had not noticed any country having its own competitiveness index and that building such an index was not an easy task. Leading Vietnamese economic experts also expressed doubts over the issue at the meeting with the index’s drafting committee on Wednesday. Nguyen Quang Thai, former deputy director of the Institute for Development Strategy, said that surveys on specific sectors should be conducted first to have statistics which would be used to measure their competitiveness. Meanwhile, economic expert Le Dang Doanh was concerned over the value of such a report. He questioned, “Vietnam has already had many reports (on competitiveness), so what will one more report help?” Doanh recalled recommendations by U.S. professor Michael Porter, who was requested by the Government to build a national competitiveness report in 2010, and said that several recommendations of the foreign expert had been ignored. “He offered many straightforward recommendations which were highlighted by local media at that time. But it was such a pity that policies adopted after that went inversely to his suggestions, making Vietnam’s competitiveness drop,” he said. Professor Porter warned against the risk of an economic collapse when construction and property projects went up massively in 2010 but credit and property still flew in bulk into the market, Doanh said. Sharing the same opinion, economic expert Pham Chi Lan said, “If only we accepted some opinions at that time, the economy would not be as difficult as it is now.” She, however, also expected the index to be finished soon to help policymakers improve Vietnam’s competitiveness which has been eroded in recent times. Steel imports menace local industry A sharp rise in iron and steel imports has badly affected the local steel industry in the context that production capacity of many kinds of steel products has doubled demand. Iron and steel volume imported into the country totaled around 6.2 million tons worth nearly US$4.5 billion in this year’s January-August, rising by 24.7% and 10% year-on-year respectively, according to the General Statistics Office. In the meantime, January-August iron and steel exports by local enterprises only posted a combined 1.5 million tons worth around US$1.2 billion, resulting in a trade deficit of up to US$3.3 billion for the industry in the period. Total construction steel capacity reaches 11.3 million tons now, the Vietnam Steel Association (VSA) reports. Apart from many enterprises that are still building factories and scaling down or halting operation, others with total capacity of 7.5 million tons annually have to compete fiercely due to local oversupply, not to mention the massive imports of low-priced steel products. The association therefore predicts this year’s building steel sale volume at only roughly five million tons, up 3-5% versus last year. Nguyen Tien Nghi, vice chairman of VSA, informed that his association at a meeting with leaders of the Ministry of Industry and Trade on Tuesday again proposed the ministry have policies to help the industry find outlets to cut inventories. VSA also suggested adopting solutions to tighten control over the rising imports of Chinese steel containing boron alloy that enjoys low import tariffs, which has cut into market share of local enterprises. The industry ministry’s leaders at the meeting responded that it and the Ministry of Science and Technology would issue a joint circular on management of imported steel products within this month, Nghi said. In a petition sent to Deputy Prime Minister Hoang Trung Hai at the end of July, VSA noticed lots of Chinese companies had mixed boron with steel items to enjoy tax incentives. Chinese companies only mixed the chemical element with cold-rolled steel at first but they have now done the same thing with hot-rolled steel and hot-rolled steel sheets, competing directly with local products, according to VSA. The massive boron-contained steel imports from China with the current oversupply at home have left negative impacts on industry players. Localization rate in Vietnam manufacturing under 30% Japan as the single biggest foreign investor in Vietnam says the local contents at Japanese-invested manufacturers here is smaller than 30%, which is the lowest in the region, the Japan External Trade Organization (JETRO) said. Local input materials and components for Japanese enterprises in Vietnam is only 27.8%, far lower than that in Indonesia (43%), Thailand (53%) and China (61%), according to JETRO. At the opening ceremony of the exhibition of supporting industries opened on Wednesday in Hanoi, JETRO Executive Vice President Daisuke Hiratsuka said that the labor cost in Vietnam was rather low and could compete with neighboring countries like China and Thailand. However, Japanese enterprises when making investments in Vietnam have to encounter huge costs of importing components, which pushes up production costs, he added. Hiratsuka said that Japanese enterprises now cared more about the Vietnamese market and there was an increasing number of enterprises coming to sound out opportunities as well as making investments here. According to statistics of JETRO, the number of Japanese projects recorded before April totals 1,900 with investment capital amounting to US$31.8 billion. Up to 55.7% of the projects with capital accounting for 83.4% of the total are in the manufacturing sector. Last year, Japan’s fresh capital in Vietnam was US$4.3 billion, accounting for 50% of total fresh investment capital of foreign countries. It can be said that via such investments, Japanese enterprises are spurring Vietnam’s economic development by creating jobs and transferring technology, said Hiratsuka. However, to become more attractive to Japanese investors and more competitive as well as to prepare for the ASEAN Economic Community in 2015 and Vietnam’s industrialization in 2020, the development of supporting industries is crucial. The four-in-one exhibition consists of the fifth Vietnam-Japan Supporting Industries Exhibition, the Japanese Monozukuri Technology Exhibition, the Vietnam Manufacturing Expo 2013 and the Industrial Components and Subcontracting Vietnam 2013 lasting until tomorrow at Hanoi International Center for Exhibition (I.C.E Hanoi). The exhibition is considered as a special show as Japan offers over 100 free booths for 107 Japanese and Vietnamese enterprises. At the exhibition, 57 manufacturing and assembling enterprises from Japan and neighboring countries are displaying spare parts and components they want to buy in Vietnam while 54 Vietnamese component producers are displaying products they produce and want to sell to Japanese partners. Enterprises downbeat on 2014 economic outlook A recent survey among more than 300 senior executives at big enterprises in Vietnam show that local businesses have a pessimistic view of the economy in the coming time. Vietnam Report Joint Stock Company on Wednesday said that the survey has reached over 300 senior executives of large enterprises to collect their business results in the first six months of this year and development prospect in 2014. The survey suggested that enterprises have yet to see positive signs in business situation next year. Up to 57.7% of enterprises said that the business context would be as gloomy as now. Some 20.4% said that 2014 would be more challenging for enterprises, even worse compared to 2013, while only 21.9% expected that next year’s situation would be brighter. It seems that the belief in the early recovery of the business situation has waned gradually partly due to prolonged economic difficulties. Meanwhile, the Government’s supports have failed to recover the economy that is full of uncertainties, prompting enterprises to seek measures to save themselves, the report said. Notably, Vietnamese enterprises have turned less concerned about high inflation and hard access to credits. Many leaders of large enterprises are more concerned about fair competition, improvement of research & development (R&D) activities and renovation to create distinctions, improve competitiveness to survive and develop in long term. CEOs of the enterprises, according to the survey, also said that this year’s inflation would not reach double-digit level. Concerning factors that have impacted business operations this year, only 25% of enterprises said that inflation has affected their production and business activities. Other factors, including difficult access to credit sources (18.2%), are no longer the big deal because given the gloomy economy and insolvency risks, enterprises have self-balanced and used their own capital instead of taking out loans. Nearly 66% of enterprises said that unhealthy competition and the lack of transparent information have caused strong impacts on their business. Some 52.3% are concerned about fast changes of government policies and 29.5% are struggling with skilled labor shortage. In the second half of 2013, most enterprises said that significant changes in revenue, profit and staff are unlikely. Of which, many were concerned that revenue and profit shortfall will be inevitable. Enterprises in the coming time have plans to make strong investment in customer care services (81.8%), manpower development (63.6%), R&D and renovation (54.5%). They have also chosen to change business model (50%), system and process (43.2%) among three main factors that need to be renovated in the current stage, the report said. Pepper exporters resort to imports As local pepper supply is nearly running out of stock, many exporters have had to temporarily import pepper from Indonesia and Brazil for re-exports to fulfill contracts they had signed earlier. Pepper exports totaled 103,000 tons in the first eight months of the year, meaning the nation has almost no pepper left for exports prompting a host of exporting companies to resort to imports, said Tran Duc Tung, office manager of the Vietnam Pepper Association (VPA). Tung said the temporary imports for re-exports are often opted for by big enterprises in the pepper industry but he declined to name those entities. At present, the price of pepper imported from Indonesia and Brazil is almost equal to that of Vietnamese pepper. The country’s pepper export prices averaged out at some US$6,566 a ton in the January-July period, with importers earning no profits now, according to VPA. Pepper products were priced VND120,000-131,000 a kilo in the local market on Wednesday, rising VND1,000 a kilo versus one day earlier. VPA has at least twice given estimates on pepper yield over the past time. The association produced pepper yield prediction for the first time after making surveys in pepper-growing provinces like Ba Ria-Vung Tau, Dong Nai and the Central Highlands, expecting the yield to slump to some 90,000 tons due to unfavorable climate conditions. The association then changed its prediction, saying the yield would stay at 105,000 tons like in previous years. Big air discounts for int’l visitors to ITE Visitors to the International Travel Expo (ITE) 2013 in HCMC have a chance of buying discount air tickets of Vietnam Airlines at the prices starting from only VND199,000 for many international flights. Vietnam Airlines will offer airfares at preferential rates for more than 31 international flights departing from Hanoi, HCMC, Danang and Nha Trang to 28 foreign destinations at the prices ranging between VND199,000 and some VND8.4 million. For domestic flights, the lowest prices for one-way routes are only from VND350,000. The discount prices are exclusive of taxes, fees and other surcharges. The promotion program is only applicable to Vietnamese individual customers purchasing tickets from September 12 to 14 when the exhibition takes place. The target international flights are scheduled for departure from September 22 to March 31 while domestic ones are set for departure from September 22 to December 20. The event is organized by exhibition organization companies Vinexad and Infoma and the city’s culture department under the instruction of the Ministry of Culture, Sports and Tourism. It comprises of an exhibition, seminars and meetings between tourism ministers of five countries in the Greater Mekong Sub-region. First housing project in Can Tho gets subsidized loan Hong Loan Real Estate Trading and Construction Joint Stock Company has become the first housing developer in Can Tho City to get access to the VND30-trillion home loan package launched three months ago by the Government. Ngo Van Lam, general director of the company, said after completing required procedures, the firm has been approved to borrow VND50 billion, equivalent to over 70% of its low-cost housing project’s investment (VND68 billion). Lam said that the project would consist of three buildings with 288 apartments. “With our own capital source, 40% of the project’s workload has been finished, and the rest is expected to be completed in 2015,” he said. The firm has received over 200 home buying applications, nearly 30 of which are qualified enough. Apartments are sold at a price ranging between VND200 million and VND360 million each, depending on their sizes of between 30 and 48 square meters, he said. According to Can Tho City’s Department of Construction, there are five projects in the city seeking approval to be converted from commercial to budget ones to as to be eligible for subsidized loans. Most of them are located in South Can Tho urban area in Cai Rang District. Those approved to take out loans from the housing loan package will enjoy an annual interest rate of 6% or even less. Can Tho City government will have a working session with relevant departments and agencies late this week to discuss issues concerning housing for workers and low-income earners as well as the city’s property market. Deal struck for bridge to connect Can Tho, Dong Thap South Korea’s GS Engineering & Construction and Hanshin Engineering & Construction on Thursday clinched a deal with Cuu Long Corporation for Investment, Development and Project Management of Infrastructure (Cuu Long CIPM) to construct a bridge linking Can Tho City and Dong Thap Province. According to the Ministry of Transport, work is scheduled to start on the Vam Cong Bridge which crosses the Hau River and connects Dong Thap’s Lap Vo District with Can Tho’s Thot Not District next Tuesday. The bridge’s length is 2.97 kilometers and if the access roads at two sides are included, the total length of the project will be 5.75 kilometers. The six-lane bridge will allow for a maximum speed of 80 kilometers per hour. The project needs a total of US$271.58 million sourced from South Korea’s official development assistance loans and Vietnam’s reciprocal capital. Cuu Long CIPM has been assigned to manage and implement the project. According to Deputy Minister of Transport Nguyen Van The, Vam Cong is one of the important projects of the second route supporting the overloaded National Highway 1A. After completion, the bridge will facilitate transportation between southwestern provinces and the southern key economic zone. The Mekong Delta is divided into parts by the Tien and Hau rivers. Although there is My Thuan Bridge over the Tien River and Can Tho Bridge over the Hau River, transportation between central areas of Mekong Delta provinces still need Vam Cong and Cao Lanh ferries. Corporate tax incentives foster green growth The Government plays an important role in boosting green growth, with tax incentives one of the most effective policies of stimulating enterprises into following sustainable development, an EU senior official said. Vietnam is currently facing a number of challenges in the context that local demand for energy consumption is surging while energy resources are being increasingly depleted at home, John Nielsen, Danish ambassador to Vietnam, said in HCMC on Thursday. He was speaking at a briefing on Green-Biz 2013, which comprises of a conference and exhibition on green solutions to take place from September 19-20 at the Hanoi-based Melia Hotel. Nielsen noted that the application of green solutions should not depend on either ODA loans or sponsors and that the Government should play a key role in assisting enterprises to follow green growth as a global development trend. Among the supporting solutions, the Danish ambassador insisted that tax exemptions and reductions for a few years was the method his Government used to encourage local businesses to make stronger investments in and apply green solutions to business and production. The benefits of green growth are undeniable but the high investment in initial phases is one of the biggest challenges for enterprises. Sharing the same view, Preben Hjortlund, chairman of EuroCham Vietnam, said that supporting policies like tax incentives will help local firms cover expenses for green growth. This year’s Green-Biz focuses on three major topics, namely green lifestyle awareness improvement, cleaner production and resource management. It comprises of discussions on solutions for the business community, the Government and researchers to deal with problems on sustainable development in Vietnam. The third event, organized by EuroCham Vietnam in coordination with the Ministry of Industry and Trade and the Vietnam Chamber of Commerce and Industry, features green technologies of 70 companies from Denmark, Poland, Germany, France, the Czech Republic and Sweden. Belgium interested in city’s waterway transport Belgian ambassador to Vietnam Bruno Angelet on Tuesday asked for information on the potential of Hiep Phuoc port complex and HCMC government’s moves now that the first phase of the Soai Rap River dredging project is complete. There are preparations being made for the official visit of the transport minister of Flanders to the city in November. Speaking at the meeting with HCMC vice chairman Nguyen Huu Tin, Anglelet said that seaport specialists from Belgium will join him on the trip. Therefore, the city should present its needs now or in the near future so that relevant agencies in Belgium can select suitable experts for the visit. Tin said that the second phase of the Soai Rap River dredging project is going smoothly and the city needs support for capital, techniques and manpower training. In the first phase, the river was dredged to a depth of 9.5 meters, allowing vessels of 50,000 DWT to traverse it and reducing the section from the East Sea to HCMC by 31 kilometers. Once completed in 2014, the project will also help speed up construction of Hiep Phuoc port complex. Therefore, Belgian Official Development Assistance (ODA) loans are highly appraised, Tin said. According to the HCMC Department of Transport, the final phase of the project will dredge this same section of the river to a depth of 11.5 meters, allowing it to receive vessels with a loading capacity of 70,000 tons. Of the total investment of nearly VND2.8 trillion, around VND2.2 trillion comes from Belgian ODA loans and the rest from the city budget. After the project is complete, the two sides will continue discussing the potential of Hiep Phuoc port complex on a total area of 400 hectares. The project is expected to play an important role in the city’s seaport development strategy. According to the Government’s seaport planning, both Cat Lai and Hiep Phuoc ports are in the port complex No. 5. The city is building a road system to connect the port complex with the central area and main roads. The works are expected to be completed next year, Tin said. Ports in HCMC are projected to handle 200 million tons of goods to meet demands by 2020 but the current capacity is only around 80 million tons. Home Credit offers credit consulting PPF Vietnam Financing Company, known through Home Credit brand name, on Thursday launched a financing consulting program for customers who want to take out consumer loans. Friedrich Weiss, general director of the firm, said it would take clients just 10 minutes to take out a loan from Home Credit and each individual client could borrow up to VND85 million. To help citizens understand consumer loan contracts, the company is joining hands with the Vietnam Association of Standards and Consumers Protection to deliver 10,000 free copies of the handbook “Think it through, sign it wisely” in HCMC and Hanoi City. The enterprise will also launch information sessions for customers in September and October. It will send staff to 10 Co.opMart supermarkets in HCMC and five Fivimart stores in Hanoi to provide information on consumer loans. Weiss said that besides the contract, Home Credit will give customers a summary note of basic information such as loan value, interest rates, fines on late payments and early payments. Weiss said the local consumer credit market has much potential as customers are not too conservative to borrow. As of August, Home Credit had nearly 440,000 active contracts, up 98% against the previous year and 10 times higher than in 2009.  The firm now receives around 3,000 credit applications a day. HSBC Vietnam reports VND1.1 trillion of bad debts Bad debts of HSBC Vietnam in the year’s first half amounted to over VND1.104 trillion, up 34% from late last year, according to the bank’s financial report audited by KPMG. Besides, its overdue debts recorded in late June almost reached VND2.969 trillion, rising by 25% from late last year. The ratio of overdue debts to total outstanding loans of HSBC Vietnam was 9.2% in the period and its bad debts stayed at 3.4% of total outstanding loans. In addition, mobilization and borrowing of HSBC Vietnam did not change much in the period. Total outstanding loans were recorded at VND32.35 trillion, rising by less than 1% from last year while capital mobilization inched up by 3.4% to VND46.143 trillion. The bank’s total assets in the six-month period dropped by 4.2% to VND63.124 trillion. Meanwhile, its pre-tax profit reached VND1.114 trillion, up 3%, and the capital adequacy ratio was 13%. HSBC Vietnam says on its website that it network consists of one transaction center, one branch and five transaction offices in HCMC; one branch, three transaction offices and one savings unit in Hanoi; four branches in Binh Duong, Can Tho, Danang and Dong Nai; and two representative offices in Haiphong and Ba Ria-Vung Tau. According to a report of the central bank’s HCMC branch released in late July, total bad debts of credit institutions in the city amounted to over VND52.3 trillion, accounting for 5.85% of total outstanding loans and increasing by 11% from last year. Among these, debts in Group 5, deemed as potentially irrecoverable, were VND35.075 trillion and accounted for 67.1% of total bad debts. The report also indicated that foreign banks had the lowest ratio of bad debts over outstanding loans, which was 2.88%. According to financial reports that have yet to be audited of ten commercial banks released recently, bad debts of those banks ranged between 1.5% and 3%. The three banks having high bad debts were Nam Viet, Saigon-Hanoi and Techcombank with 6.1%, 9% and 5.3% respectively. Bao Viet’s sale growth twice the market average The January-June financial report of Bao Viet Holdings indicates the firm’s insurance sales posted a rise of 10.3% year-on-year, almost doubling that of the whole market in this year’s first half. According to the six-month consolidated financial report, Bao Viet obtained VND8 trillion in total sales, up VND280 billion over the same period in 2012 and equivalent to a growth rate of nearly 4%. The firm’s consolidated pre-tax profits reached VND735 billion in the six-month period. Bao Viet’s insurance sales marked a surge of 10.3% with its sales from fresh life insurance policies registering a growth rate of 31% over the year-ago period. Total premiums of life and non-life segments were around VND5.5 trillion, soaring VND507 billion or 10%. Among the consolidated pre-tax profits of VND735 billion, Bao Viet’s insurance business contributed up to 74% of the total, with non-life insurance generating VND221 billion or 27% and life insurance VND379 billion or 47%. The remaining part of the group’s profits came from other business activities. Bao Viet’s equities posted about VND12.6 trillion as of June 30, growing 9% against December 31, 2012, while its total assets reached around VND48.9 trillion, a rise of 4%. Bao Viet in the January-June period achieved positive results in the cross-selling of products, said Hoang Viet Ha, operational director of the group. The revenue of product cross-selling via Bao Viet Commercial Joint Stock Bank marked up 52% year-on-year while that via Bao Viet Life Insurance increased 31% year-on-year. The country’s biggest insurer is seeking approval to establish Bao Viet Fund Management Company, and has submitted an application to the State Securities Commission for a license to set up this open-ended fund, Ha informed. Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR