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BUSINESS
IN BRIEF 1/4
Vietnamese
seafood available in 156 markets
Vietnamese seafood
has been exported to 156 global markets, or 16 more than in 2010, with the
European Union, the
A March 30
conference in Phu Yen province heard
Despite the global
and domestic economic difficulties, the Vietnamese fisheries sector has
achieved annual growth of 4.85% over the past three years.
It has gradually
reduced overexploitation and increased the volume and value of farmed
products, significantly contributing to agriculture restructuring.
The meeting
announced a fisheries sector restructuring scheme approved by the Ministry of
Agriculture and Rural Development on November 22, 2013.
Under the scheme,
the sector will increase the added value of its products and the competitive
capacity on the market, striving to achieve annual export growth of 6%.
KPMG
Asia-Pacific leader to pay
Simon Topping, head
of KPMG’s Asia-Pacific Financial Services Centre of Excellence, will visit
His visit coincides
with indications that the State Bank of Vietnam (SBV) will request several
local banks to commence planning for Basel II implementation. Basel II is
concerned with ensuring banks have sufficient capital to cover all the risks
of the bank in the event they occur.
He will meet with
senior SBV officials and several key KPMG local banking clients to reinforce
KPMG’s commitment to working with the government, regulators and sector
participants on banking reform.
Topping is a
globally recognised leader in banking regulation, having spent 30 years with
the Bank of England and the Hong Kong Monetary Authority (HKMA).
As executive
director (Banking Policy) at the HKMA, he was the leader of the Basel II
programme for
Throughout his
career, Topping has worked with numerous regulators across Asia developing
country-tailored
Vietnamese
businesses from the tea and coffee industry are making a hit – especially
Trung Nguyen coffee – at the Malaysia International Tea and Coffee Expo 2014
(MITCE) taking place from March 27-31.
Speaking at the
event in
He emphasized that
the exposition aims to promote the exchange of information and economic
cooperation in the world’s tea and coffee industry, as well as educate
consumers about the positive effects of tea and coffee on health.
Hoang Thi Lien, a trade
office representative of the Vietnamese embassy in
Vietnam-Malaysia
trade relations have developed positively over the years with bilateral
turnover posting an annual increase of 24% in the 2011-2013 period.
Last year, two-way
trade turnover hit over US$9.1 billion, including US$850 million from
Vietnamese trade surplus.
Positive
signs for the economy in Q1
The General
Statistics Office (GSO) reports
Entrepreneurial
business startups and new venture capital in the reviewed period witnessed
exponential growth, according to the statistical agency.
GDP increased by
4.96% in the first quarter of this year, higher than the comparable period
for the past two years (4.76% in 2013 and 4.75% in 2012).
The three sectors
experiencing higher growth included services (up 5.95%), industry and
construction (up 4.69%) and agro-forestry and fisheries (up 2.37%).
The services
sector, the engine driving the country’s growth broke down into retail and
wholesale services (up 5.61%), stay, food and drink services (up 7.58%) and
financial, banking and insurance services (up 5.91%).
The Index of
Industrial Production (IIP) increased by 5.2% while manufacturing and
processing industry surged by 7.3%.
The employment rate
rose by 4.1% in the industry sector, 3.8% in non-State owned enterprises,
6.4% in the foreign direct investment (FDI) sector, and 1.7% in State-owned
enterprises.
Three-month export
earnings rose 14.1% to US$33.3 billion. Products attaining high export growth
include telephone handsets and components, means of transport, tools,
footwear and seafood.
Imports were
estimated at US$32.3 billion, a year-on-year increase of 12.4%. The high
import value, mostly for industrial production, shows the economy is continuing
its upward trend reinforced in the previous quarter.
Despite the high
import growth,
The foreign direct
investment sector produced an impressive performance in the reviewed period,
with US$3.9 billion recorded in its trade surplus.
Approximately 4,622
businesses resumed operations in the first quarter, an increase of 48.9%
against the same period last year.
Q1 also saw 18,358
newly-registered businesses with a combined capitalisation of VND97,983
billion, up 16.9% in number and 23.4% in capital.
Around 16,745
businesses ceased operations or were dissolved, up 9.6%.
Judging from
positive signals in the past three months, the GSO suggests
In addition, it
says the banking restructuring should be accelerated in a healthy, effective
and transparent manner, helping to deal with non-performing loans, increase
liquidity, and create conditions for businesses to expand investment and
production.
Binh Duong
earns high export value in Q1
The southern
The provincial
Department of Industry and Trade says its export earnings in March alone rose
15% from the previous month to US$1,069 million.
The positive result
is attributable to an increasing consumer demand in the first quarter in its
traditional markets including the
In addition, the
backlog of export orders is continuing to show positive signs as local
businesses are reporting high export orders for the second and third
quarters, a year-on year increase of 10-15%.
Key export products
which saw high growth included timber (US$388 million, up 7.8%), garments and
textile (US$448 million, up 28%), and footwear (US$289 million, up 24.9%).
Wood
exports hit US$1.4 bil in Q1
Wood product
exports are expected to hit US$490 million in March, bringing the total for
the first three months of the year to US$1.4 billion, up 20.1% against the
comparable period last year
The Ministry of
Agriculture and Rural Development (MARD) also reports that wood exports to
the US and China increased 19.85% and 57.88%, respectively for the first
quarter of 2014 compared to the first quarter of last year, accounting for 52.89%
of the country’s total export value.
The Vietnam Timber
and Forest Products Association (VIFORES) said that the wood processing
sector aims to achieve a target of US$6-6.2 billion in export turnover this
year due to its bright prospects.
Last year, export
turnover of wood processed items increased over 19%, gaining US$5.5 billion.
Vingroup
announces plans to launch into e-commerce
Real estate giant
Vingroup has announced plans to expand its leadership presence in the
emerging field of e-commerce, establishing a start-up venture headed by its
former Chief Executive Officer.
While all of the
details have not been shared, the company has announced the formation of an
affiliate – VinE-Com Co, Ltd – with chartered capital of VND1.050 billion,
for which the company is a 70% stakeholder
Chief Executive
Officer (CEO) of Vingroup Ms Le Thi Thu Thuy has been appointed as President
of the Executive Board and General Director of Vin-Ecom.
E-commerce plays an
ever-increasing important role in the world’s economy and is expected to
develop into a highly lucrative market in
According to an
annual index report on e-commerce in 2013 by the Ministry of Industry and
Trade (MoIT) Department of E-Commerce and Information Technology,
The sheer number of
online transactions and the rate of use by businesses of email shot up
significantly in 2013 from 2012 and statistics show that roughly 83% of
businesses utilized email to process orders in 2013 compared to just 70% in
2012,
Just under 43% of
businesses have set up company websites while 35% of those are sophisticated
sufficiently to process online orders, compared with just 29% in 2012.
Market research
surveys by comScore Inc. in turn confirm these trends and statistics on the
Internet situation in
According to
comScore’s research reports, 16.1 million people use the Internet each month
in
ComScore’s report
also states that
Additionally,
According to
leading analysts, long online-time use of internet users bodes well for
opportunities of online services and e-commerce fields to find a niche in the
market, especially in emerging markets like
Along with growth
in the number of internet users, in recent years, the e-commerce market has
also experienced strong developments of online transactions under groups such
as Nhommua, Muachung and Hotdeal.
These internet
users’ websites continue to prosper and are flexible enough to adjust to the
business environment. In addition, there are also numerous online showrooms
which have successfully been developed.
Speeding up
disbursement of ODA projects
Reforming the
approach to managing official development assistance (ODA) infrastructure
projects with the aim of speeding up disbursement of funds was the subject of
a conference held in
Deputy Prime
Minister Hoang Trung Hai, who is head of the National Steering Committee for
ODA and Preferential Loans, said that currently there are too many redundant
administrative procedures which slow down the process and hamper the
distribution of ODA funds.
He believes that
the steering committee and the six ODA development banks (Asian Development Bank,
World Bank, JICA, Korea Eximbank, KfW-Germany and AFD-France) need to work
directly with each other to improve coordination which will result in more
rapid distribution of the funds into the projects.
The Committee
reported that in 2013,
A high ratio of
funding from big donors was disbursed effectively in 2013 with US$ 1,686
million from the Japan International Cooperation Agency (JICA) and US$1,359
million from the World Bank (WB).
In addition, the
Asia Development Bank (ADB) level of disbursed ODA exceeded US$1,300 million,
the largest it has ever recorded.
Participants at the
conference expressed concerns that even though distribution of ODA funds is
on the rise, yet more effective disbursement of them could be achieved with
better oversight and management of the projects.
They pointed out
shortcomings in feasible study reports and consultation work, especially on
matters related to technical issues that impede implementation and
retard the disbursement of investment capital.
Improvements are
also need in expediting site clearance on transport and urban
development projects, they said, adding that too much time is wasted clearing
the sites and addressing resettlement issues which delay investment in the
projects.
The attendees also
criticized some bidders and project managers of several transport projects
for their lack of quality management and failure to keep the projects on
schedule.
Deputy Minister of
Planning and Investment Nguyen Chi Dung proposed a package of five key
measures to boost the disbursement of ODA funding as follows:
First,
administrative reforms, supplements and amendments to a number of existing
laws relating to ODA, such as the construction law, the bidding law, and the
law on public investment need to be made.
Special attention
needs to be paid to completing procedures required by donors, including those
on site clearance, resettlement, bidding, financial management, and auditing.
Second, State
management agencies need to beef up their exercise of management and
oversight of ODA-funded programmes and projects to promptly identify problems
and dealt with them effectively before they cause unnecessary delays in the
progress of the work on the project and in turn a disbursement of ODA funds.
Third, the National
Steering Committee for ODA and Preferential Loans should work hand in hand
with the six development banks and, for example, organize regularly scheduled
quarterly conferences to review and evaluate the implementation of ODA
projects.
Fourth, the
responsibilities of project managers and officers on projects needs to be
clearly delineated along with clear dispute resolution procedures so that
tighter control of the project management construction schedule can be
exercised directly by the project manager directly.
Last but not least,
it is important to improve the project selection process to ensure that on a
cost benefit analysis the selected ODA-funded programmes and projects are the
best for the nation and are effectively implemented on schedule, thus pushing
up socio-economic development and improving people’ living standards.
Hi-tech
updates from
Vietnamese
representatives joined 15,000 leading experts, scientists and mangers in the
oil and gas industry from 65 countries and territories from around the globe
at the 2014 Offshore Technology Conference Asia (OTC Asia) in
The event gave them
a good chance to exchange knowledge and ideas and share experience in
the development trends of the oil and gas industry.
OTC Asia 2014, the
largest of its kind to be held in an Asian country, focused on the challenges
facing growth in
It included an
outdoor exhibition covering 10,000 square metres for more than 200 companies
to showcase advanced technologies and modern machinery in the field.
Vietnamese
delegates took the opportunity to introduce their capacity and latest
products and services to international guests.
OTC Asia 2014 was
regarded as a great chance for
Shrimp
industry protests
Attorneys
representing the Vietnamese shrimp industry are proceeding to file a petition
with the US International Trade Commission (ITC) objecting to the imposition
of anti-dumping duties by the US Government.
Shortly after the
US Department of Commerce (DOC) issued its decision to impose a penalty tax
rate of 9.75% on shrimp exports during the eighth period of review (POR8),
Vietnamese exporters strongly objected asserting the tax rates during the
POR7 period of zero %, should continue.
Chu Van An, Minh
Phu Seafood Joint Stock Company Deputy Director, called the DOC’s decision
arbitrary and unfair asserting the anti-dumping allegations are not true and
there should be no penalty tax imposed.
Meanwhile, a
preliminary tax rate of 4.98% has been levied on his company’s shrimp
exports to the
The company is
therefore proceeding with the filing of a petition objecting to the decision
by the DOC’s on the basis that it violates the ordinary course of conduct
business standard established by the parties over the years, among other
reasons, An said.
For years there has
been no or a low penalty and nothing in the conduct of the parties
relationship has changed, he continued.
An said there may
have been some misunderstandings or miscommunications with the DOC and the
issues may be amicably resolved by getting legal representation to insure
there is clear and concise communication and all sides have ample opportunity
to thoroughly explain their positions.
If so, we will
again have an opportunity to enjoy low tax rates, even zero % six months from
now in the next period, he concluded.
A representative
from Soc Trang Seafood Joint Stock Company said that his company is following
a similar path as Minh Phu Seafood JSC and hopes the issue can be resolved
with a fair hearing and the filing of a formal petition.
Singapore-Vietnam
trade continues to thrive
Two-way trade
between
According to the
International Enterprise
Meanwhile,
The country’s key
exports are petrol and oil products and assorted phones.
Singapore Customs’
statistics show that the two countries’ trade turnover hit US$14 billion in
2013, up 36% from the previous year. Of the total figure,
Despite climbing 18
notches in the provincial competitiveness index (PCI) list last year,
The PCI was
initiated by the Vietnam Chamber of Commerce and Industry (VCCI) as part of
efforts to quantify subjective measures of business competiveness.
Matters pertaining
to business environment, quality of economic management and administration
reform are difficult to assess, but are highly important factors in measuring
business performance.
VCCI President Vu Tien
Loc noted
Climbing up 18
notches demonstrates that the capital city is fully committed to implementing
programmes to raise the index, and their highest accomplishments have been in
human resource training and services support.
Other indices which
have witnessed dramatic increases are transparency and information accession,
up 26 notches compared to 2012, ranking the capital 13th out of 63 provinces
and cites.
Businesses report
that they highly value information from the Hanoi Portal, leaping up 12
places to come in 4th out of all 63 provinces and cities.
PCI research group
reports the overall market access cost index in 2013 was stable. The length
of time required to obtain a land use rights certificate was cut from 30 days
to 20 days, climbing up 43 notches to 4th position.
In addition,
Hanoi’s other indicators are lower than the country’s average level, such as
access to land, stability in land use, time spent on enforcing State
regulations, informal costs, proactive municipal leadership and legal
institutions.
Dau Anh Tuan, Head
of the VCCI’s Legal Department, said if Hanoi further improves the quality of
management and administration procedures, it will attract more investors,
particularly those from the EU.
A locality has a
high PCI when it has low market access costs, easy access to land, stable
land use, transparent business environment, easy access to business
information, low informal costs and high quality of support services, Tuan
said.
Pham Van Khanh,
Vice Director of the Municipal Department of Natural Resources and
Environment, said the department granted 1,200 land use rights certificates
last year, meeting 120% of the set target. It plans to hand out 2,000 such
certificates this year and cut the licensing time to less than 20 days.
Currently, the city
has detailed development zoning plans, making it easier for investors to
follow and make a decision, and helping them feel secured about their
investment.
Khanh revealed that
the department regularly holds meetings and talks with businesses to timely
address their concerns..
Vu Xuan Bach,
Deputy Head of the Hanoi Taxation Department, said the department is
streamlining tax declaration procedures, striving to shorten the period from
the current 10 days to 6 or even 2 days.
It has eliminated
32 improper administration procedures and offered online services to support
businesses.
Pepper
exports up in value, volume in Q1
Vietnam’s pepper
exports jumped 29.4% in volume to 49,000 tonnes and 32.3% in value to US$331
million in the first three months of 2014, compared to the same period last
year.
The Ministry and
Agriculture and Rural Development (MARD) reported that 25,000 tonnes of
pepper worth US$170 million was shipped abroad in March at an average price
of VND6,828/tonne, or 3% higher than the same period last year.
MARD announced that
the US, Singapore and India emerged as Vietnam’s largest pepper consumers,
accounting for 43.63% of total market share.
According to the
Ministry of Industry and Trade (MoIT), the country is currently the world
leader in terms of pepper output and export volume, and plays a key role in
stabilizing the global pepper market.
The Vietnam Pepper
Association (VPA) predicts the country’s pepper output may reach
120,000-125,000 tonnes by the end of 2014, posting export revenue of
US$900 million.
Last year, Vietnam
raked in US$899 million from exporting 134,000 tonnes, or a year-on-year
increase of 15% in volume, and over 13% in value.
Vietnam
learns to develop energy market
Navigating the
risks and obstacles in developing Vietnam’s energy market was the topic of an
international seminar held in Hanoi on March 28.
An elite group of
leading scientists, economists, government officials and energy executives
from around the globe participated in the seminar to explore the challenges
inherent in developing the market.
It was reported
that in the 2010-2013 period, the annual output of Vietnam’s energy increased
by 14%, fulfilling 98% of local people’s demand, and gradually ensuring
national energy security.
However, delegates
agreed the domestic energy market reveals a number of shortcomings, including
the imbalance between supply and demand, an inefficient use of energy, and
unsteady energy development.
They spoke of
scientific basis for a genuine energy market, stressing the need to develop a
market-based price mechanism to regulate the law of supply and demand.
They said such a
mechanism must be developed in a transparent manner and take into account
input costs and competitive factors.
To boost energy
development, they said it is essential to delineate detailed plans for
different energy sectors, including electricity, coal, oil and gas, new
energy, and renewable energy, while intensifying management oversight.
Delegates also
dilated on speeding up the restructuring of State-owned enterprises in the
energy industry, building a healthier competition environment, as well as
encouraging the engagement of the private economic sector in the industry.
They also
underlined the need to promote scientific research and new technology
application, especially in such areas as exploration and exploitation of
coal, and oil and gas.
The seminar was the
result of a joint effort by the Party Central Committee's Economic
Commission, the Ministry of Industry and Trade, and the Vietnam Energy
Association.
EuroCham
Vietnam selects new leader
The European
Chamber of Commerce in Vietnam (EuroCham) has elected Nicola Connolly,
General Director of Adecco Vietnam, its chairwoman.
The announcement
that she was selected to replace outgoing Preben Hjortlund, who has served as
president for the past two years, came at EuroCharm’s recent annual meeting
simultaneously held in Hanoi and HCM City.
Connolly said she
embraces the appointment as “a new beginning for Eurocham” and is
wholeheartedly committed to improving the chamber’s activities to elevate the
image of Vietnam throughout the world’s business community as an attractive
investment destination.
Connolly said it is
her honour to lead the organization and have the opportunity to work with the
Vietnamese Government, Eurocham members, and Vietnamese and European partners
in a concerted effort for a more prosperous Vietnam.
Member businesses
also elected Remco Gaanserse, who is Chief Representative of ING N.V Bank its
Standing Vice President in Hanoi.
Five Vice
Presidents were also announced, namely Tomaso Andreatta - Chief
Representative of Intesa Sanpaolo Bank; Michael Behrens - General Director of
Mercedes Benz Vietnam; David John Champion – Executive Director of Bayer
Vietnam; Kristof Claes – Partner Marketing at Brand Partner; and Thien-Nga
Ngo-Rocaboy – General Director of eXo Platform.
The Chamber’s
16-member executive board includes representatives from nine different
European nationalities and a number of high-profile businesses in Vietnam.
Urban
consumers reduce cash payment
Consumers in some
big cities tend to reduce bringing cash when going shopping, and instead use
card for payment, according to a study just released by the global payment
technology company Visa.
The Payments and
Cards market in Vietnam study was conducted between 2012 and 2013 in Hanoi,
Danang, HCMC and Haiphong by TNS Vietnam on behalf of Visa Vietnam.
When asked what
payment method made them feel they were being smart with their money, credit
cards came out on top at 53%, while debit cards and cash scored 38% and 30%,
respectively. Similarly, credit and debit cards scored the equally highest in
terms of consumers feeling like they were doing the “right thing” with their
finances.
“These results
reflect a very positive outlook for the growth of electronic payments in this
rapidly developing market. In an economy that is heavily reliant on cash,
these figures are certainly encouraging,” said Lorijon Bacchi, Visa country
manager for Vietnam, Cambodia, and Laos.
The study also
uncovered some interesting attitudes towards cash, which is currently the
predominant payment method in Vietnam. Some 42% of the respondents felt safe
carrying credit cards, but only 20% felt safe having cash along. 19%
indicated they felt vulnerable while carrying cash, and only 4% felt
vulnerable carrying credit cards.
Project
kicks off to dredge waterway to Hau River
The project to
dredge and upgrade 46.5 kilometers of the Hau River and nearby canals in the
Mekong Delta region was resumed last Saturday after years of suspension
caused by capital shortage.
It is expected that
big vessels can enter the delta region late next year to transport goods,
according to the Vietnam Maritime Administration as the project owner.
The project’s
investment amount has been revised up to VND9.781 trillion compared to around
VND5 trillion estimated previously. Major components like building a breakwater
of 2.4 kilometers and dredging the river for ships of 10,000-20,000 tons will
be finished late next year.
The second phase,
to be executed after 2015, will include embankments along the Hau River and
Chanh Bo Canal, a station for barges of 500 tons, roads along the waterways
and connecting roads, and the signal system.
The project to
dredge the waterway passage to the Hau River was first started in late 2009
and was scheduled for completion in 2012. However, the project was put off
due to financial problems.
Due to the
importance of the passage, the Ministry of Transport had petitioned the
Government to resume work on the project.
According to the
Vietnam Maritime Administration, the volume of cargo transported via
waterways in the Mekong Delta in 2012 was only 6.6 million tons compared to
the demand of 30 million tons. Up to 80% of import-export cargoes had to
transit in HCMC before being shipped to the buyer, since the Hau River
waterway only allows for vessels of 5,000 tons, causing the transport cost to
surge by US$170-180 a container.
Once the passage is
completed, commodities from the Mekong Delta can be shipped directly
overseas.
In related news,
Soai Rap waterway leading to Hiep Phuoc port complex in southern Saigon is
expected to open on April 19, slashing the time for vessels to enter the port
complex, said the port operator.
Nguyen Ngoc Quynh,
deputy general director of Saigon Premiere Container Terminal (SPCT), told
the Daily that Soai Rap waterway will be completed ahead of schedule earlier
set for June 2014. The waterway will cut by half the time needed to transport
cargo into the port compared to the current passage via the Long Tau River,
as well as to assist HCMC’s group of ports in taking larger vessels.
Long Tau waterway
is 8.5 meters deep compared to 9.5 meters of Soai Rap. The Soai Rap dredging
project aims to make Hiep Phuoc the main southern gateway, she added.
The project
incorporates three phases. The first one aimed to dredge the passage to a
depth of 9.5 meters, allowing vessels of 30,000 to 50,000 tons to navigate.
The second phase targets a depth of 11 meters, handling ships of 50,000 to
70,000 tons. The last is 12 meters in depth, accommodating vessels of over
70,000 tons.
Vessels from the
East Sea and the Mekong Delta to HCMC via Soai Rap can shorten the distance,
thus facilitating the city’s maritime economy and stimulating development of
other ports nearby.
“SPCT is the first
foreign-invested terminal in Vietnam able to handle 1.5 million twenty-foot
equivalent units (TEU). It is also connected to other ports such as Phuoc
Long ICD, Dong Nai, and Phu Huu to support enterprises with barge services,”
said Quynh.
At the moment,
there are 11 international carriers using the services at the port. SPCT in
2003 saw a throughput of 250,000 TEUs, or nearly 25% of the capacity of the
port.
“As Soai Rap is
widened, the port’s operating costs will drop significantly and transit will
be easier,” added Quynh.
Improved
PPP legal framework pledged
Viet Nam will
improve the legal framework for creating favourable conditions for benefiting
investors and state and public service users in public-private partnership
(PPP) projects, a Ministry of Planning and Investment senior official has
said.
Le Van Tang, head
of the ministry's Bidding Management Department, addressed a consultation
workshop held yesterday to discuss the draft decree on PPP.
He further added
that currently, Viet Nam has set regulations over the co-operation between
the State and private sector, including the 2009 Decree No. 108/2009/ND-CP on
the investment in forms of build-operate-transfer, build-transfer-operate,
and build-transfer contracts and the 2010 Decision No. 71/2010/QD-TTg on
promulgation of regulation on pilot investment in PPP form.
However, Tang
clarified that the shortcomings were revealed during the implementation of
the regulations, which impelled Viet Nam to improve the legal framework in
this field, especially when it has a huge demand for infrastructure
development but has tightened its public spending and wanted to mobilise its
resources from the private sector.
Last September, the
Prime Minister approved the development of a PPP decree that consolidates the
Decree No. 108 and Decision No. 71. So far, three drafts of the PPP decree
have been introduced and the fourth draft is expected to be submitted for the
Justice Ministry's appraisal next month. It will thereafter be submitted for
receiving the Government's approval in May.
Minister of
Planning and Investment Bui Quang Vinh, who is also the leader of the
drafting committee of PPP decision, said that compilers must consider
themselves as investors to gauge expectations.
Under the third
draft decree introduced yesterday, the PPP investment was defined as the
implementation of projects based on a contract on the rights,
responsibilities, and risk allocation between an authorised state agency and
the investors for investment, construction, restoration, modernization,
expansion, management and operation of infrastructure facilities, and
provision of public services in sectors including transportation, water
supply and drainage, power plans, and healthcare.
The draft also has
a separate chapter on investor selection and signing of the investment
agreement and project contract as well as a chapter on the responsibilities
of parties with respect to project preparation and implementation.
Tang remarked that
the procedures for the PPP projects would be more simplified and favourable
for the investors.
"Any public
investment projects that can be executed under the form of PPP investment
will be given priority," Tang added.
Under the draft,
investors and the project enterprise shall be entitled to incentives,
support, and guarantees in investment, corporate income tax, and import tax,
if they import goods to implement a PPP project.
Moreover, they
shall be exempted from land use fees for the areas of land allocated by the
state or be exempted from paying land rent for the entire term of the project
implementation.
The PPP decree will
not impose the proportion of the state's contribution in PPP projects and the
contribution will be identified based on certain financial foundation of the
projects. In contrary, under the Decision No. 71, the State's contribution
can be at the most 30 per cent of the project's investment, which may detract
investors from huge projects.
As per Decision No.
71, investors are not encouraged to submit the PPP project proposal and only
the Prime Minister can approve PPP projects. The PPP decision is expected to
fix the shortcomings to be at par with international practices.
EVN ensures
power supply during dry season
Vietnam Electricity
(EVN) plans to produce and buy 140.5 billion kWh this year, a 9.9 percent
increase on 2013, to meet the increased demand during the coming dry season
in the north and to provide sufficient power for the south, the Vietnam
Economic News reported on March 18.
EVN said that the
power industry would produce 391 million kWh per day this March and would
make the most of hydropower plants, coal-fueled thermopower plants and gas
turbines to ensure sufficient power during the dry season.
EVN General
Director Pham Le Thanh told the paper that the EVN produced 9.455 billion kWh
this February and a record 384.4 million per day during the month to meet
demand for power for socio-economic development and domestic use. Power
production amounted to 19.79 billion kWh in the first two months of the year,
a 5.5 percent increase from the same period last year.
EVN said that major
power resource projects kept up with the schedule. In the first two months of
the year EVN inaugurated Turbine 1 of the 622MW Vinh Tan 2 Thermopower Plant
and Turbine 2 of the 300MW Hai Phong 2 Thermopower Plant.
It also began work
on the 600MW Thai Binh Thermopower Plant and the Vinh Tan 4 Thermopower Plant
on March 9. Vinh Tan 4 is expected to contribute to providing sufficient
power in the south in an economical manner, reducing power transmission from
the north to the south, reducing power loss and increasing safety, stability
and economy of the power system. These major projects could provide stable
power in the next two to three years.
The national power
system has a total design capacity of 26,700MW, of which 20,400MW could be
produced compared with the need of 18,600MW. The industry would produce an
additional 4,466MW this year.
EVN Southern Power
Company (SPC) Deputy General Director Pham Ngoc Le said that EVN SPC set a
goal to produce 44,120 million kWh of commercial power and save 882 million
kWh this year. It would also try to ensure sufficient power for the south
during the dry season.
According to the
EVN General Director, EVN had put into operation several hydropower plants so
as to not reduce power supply in the south during the dry season.
This February EVN
also began operation of Turbines 1 and 2 of the Song Giang 2 Hydropower
Plant, Turbine 2 of the Dakdrinh Hydropower Plant and Turbines 1 and 2 of the
Dong Nai 2 Hydropower Plant, which have a combined capacity of almost 170MW.
It accelerated the
pace of construction of the 500kV Cau Bong Transformation Station, 220kV Cau
Bong-Cu Chi Transmission Line and 220kV Cu Chi Transformation Station in
preparation for launching the 500kV Pleiku-My Phuoc-Cau Bong Transmission
Line at the end of this coming April and before the demand increases to peak
levels in June-July in the south.
The new 500kV
transmission line is expected to increase flexibility of the power supply
system, reduce power loss by 1-2 percent, or 1.3-2 billion kWh per year, and
reduce the pressure for the southern power system during the dry season.
Pham Le Thanh
believed that putting new turbines into action and building new power
projects this year could increase power supply and reduce black-out in the
south during the dry season.-
Esquel
opens new facility in the north
Esquel Group Esquel
Enterprises (Singapore) Pte, a subsidiary of Hong Kong based clothing giant
Esquel Group, opened its $25 million garment project in the northern province
of Hoa Binh today.
The project is
divided into two phases with designed capacity of 11.52 meters of garment per
year. The firm was licensed in 2012, covering 70,000 hectares in Hoa Binh’s
Luong Son Industrial Park.
This will be Esquel
Group's third plant in Vietnam, and joins its existing 13-year-old facility
in the southern Binh Duong province which now employs 3,900 employees as well
as another factory in the neighbouring Dong Nai province with 1,400
employees.
According to the
Esquel Enterprises (Singapore), all products made at the plant will be
exported to the group's international brand clients including Hugo Boss,
Lacoste, Marks & Spencer, Nike, Ralph Lauren and Tommy Hilfiger.
Esquel Group is one
of the world leading producers of premium cotton shirts. With production
facilities in China, Malaysia, Vietnam, Mauritius and Sri Lanka, and a
network of branch offices serving key markets worldwide with the total number
of employees of 54,000.
PVC begins
divestment drive
PetroVietnam
Construction last week announced that it would divest from 13 listed
companies by the end of 2015 but its proposal could face difficulties as it
targets a par value payment on its shares.
The order-matching
price for each share will meet the market price at the moment of sale but it
must not be lower than the share value when Petro Vietnam Construction or PVC
(coded PVX) invested in the company. The divestment will begin from March 10
and run until December 31, 2015.
The corporation has
contributed trillions of dong to the 13 companies, but many of them have
reported losses for many consecutive years.
Noticeably, two
companies managed consecutive losses running over three years - PVC-Saigon
(coded PSG) racked up three year total losses of VND547 billion ($26 million)
for 2011-2013, exceeding the charter capital of VND350 billion ($16.6
million) and PVC-Nghe An (PVA) booked a loss of VN175 billion ($8.3 million).
Several other
companies ignominiously achieved losses over 2012 and 2013 such as
PVC-PetroLand (PTL) which recorded total losses of nearly VND140 billion
($6.7 million); Vinaconex-PVC (PVV) with a two year losses of VND105 billion
($5 million) and PVC-Dong Do (PFL) with a loss of VND100 billion ($4.8
million).
Most shares on the
divested list are now worth less than par value of VND10,000 ($0.47) per
share. Therefore, it will prove difficult for PVC to withdraw capital from
these companies at prices not lower than when they bought them.
The PVC board also
approved a plan to divest from unlisted Ha Long Cement JSC and PetroVietnam -
SSG Real Estate JSC at market price, but not lower than the par value of
VND10,000 per share.
PVC’s member
companies have suffered losses over the past three years which has negatively
affected the business results of the mother company due to the difficult
economic situation and struggling real estate market.
In 2013, PVC
achieved a net revenue of VND5,096 billion ($242.6 million), up 14 per cent
year-on-year, but it still saw a net loss of VND2.6 trillion ($123.8
million), double that of 2012.
As of 2013, the
corporation’s short-term loans rose to VND12,113 billion ($577 million) which
exceeded its short term assets of VND10,875 billion ($518 million).
Cumulative losses reached VND3,342 billion ($159 million), while its equity
remained at just VND808 billion ($38.47 million), much lower than the initial
investment capital of VND4 trillion ($190 million).
Listing
proposal to up transparency
The Ministry of
Planning and Investment’s Development Strategy Institute has issued a
proposal to ensure the performance of state-owned enterprises becomes more
transparent.
At discussions at
the Ministry of Planning and Investment (MPI) last week on the draft of
Vietnam’s hallmark economic institutional reform project for the next 15
years, the institute suggested that the government should embrace regulations
on forcing state-owned enterprises (SOEs) to list on the country’s stock
markets.
“It would need time
for SOEs to do this. It would also probably need about a year to enact the
regulation and for it to take effect. All SOEs would be forced to make clear
their performance via their listing on the stock market,” said Bui Tat Thang,
head of the institute assigned by the prime minister to draft Vietnam’s
socio-economic plans and strategies.
“The stock market
is one of the best ways of raising capital and it insists on transparency.
The presence of SOEs on the market would allow private investors to improve
the efficiency of SOE operations,” Thang said.
The proposal
received a thumbs-up from MPI Minister Bui Quang Vinh.
“It is a good idea
helping boost the sluggish pace of equitisation. I also think that the best
solution is to define which SOEs would need to be liquidated and retained.
The problem now is to maximise SOE equitisation, so that private investors
can engage in the sectors currently dominated by SOEs,” he stressed.
The prime minister
in early March issued Announcement 85/TB-VPCP on the restructuring of SOEs
during the 2014-2015 period. He ordered ministers, chairpeople of people’s
committees of provinces and cities, and chairpeople of the economic groups to
take responsibility for SOE restructuring and equitisation under their
charge. Those who blocked reform or were too slow in enacting change could be
removed or assigned to other posts.
The National
Steering Committee for Enterprise Renovation and Development reported on the
pace of equitisation (see table), valuing the shares issued at nearly VND19
trillion ($905 million).
“The current
equitisation process is too slow,” Vinh said.
Regarding SOE divestment,
only some VND4.1 trillion ($195.2 million) of nearly VND21.8 trillion (over
$1 billion) worth of non-core investments has been withdrawn by SOEs,
according to the committee.
Some 432 SOEs will
be equitised during the 2014-2015 period.
After the conclusion
of the current round of equitisation, Vietnam will still possess 485 wholly
state-owned SOEs by 2015. The government has committed itself to issuing
criteria on classifying the remaining 100 per cent state-owned firms with an
eye to their future equitisation.
Sugar
stockpile proves bitter harvest
Vietnam-based sugar
producers are facing bankruptcy because of poor anti-smuggling efforsts which
have contributed to a domestic market surplus.
According to
Vietnam Sugar and Sugarcane Association (VSSA), Vietnam produced an estimated
300,000 tonnes of sugar in March, while Vietnam’s sugar inventory is likely
to hit 500,000 tonnes by the end of the month.
The association’s
general secretary Nguyen Hai said the sugar inventory in the first months of
this year had already topped last year’s 300,000 tonnes. Hai told VIR that
local sugar firms were struggling and Long My Phat and the Hau Giang Sugar
Company had already shut two plants.
“Other plants in
Ben Tre, Tra Vinh, Soc Trang and Hiep Hoa have been operating at only
moderate levels,” he added.
He said high
inventories were the by-product of slow demand and illegally imported sugar
from Thailand via Cambodia, which currently accounts for 70-80 per cent
market share in the Mekong Delta. He also worried that high inventories would
force sugarcane prices down, leaving farmers to suffer.
According to
domestic sugar firms, they now suffer losses of over VND1,000 for every kilo
they sell. Despite incurring losses, firms cannot lower the price of the
sugarcane they buy from local farmers.
The black market in
sugar had also damaged tax coffers and unfairly penalised Vietnamese sugar
firms, said Nguyen Ba Chu, general director of Bourbon Tay Ninh Corporation,
Vietnam’s biggest listed sugar company.
“While smuggled sugar
has no tax, sugar producers in Vietnam have to pay 15 per cent tax including
5 per cent value added tax and 10 per cent corporate income tax. Vietnamese
sugarcane costs from $45-$50 per tonne, while in Thailand, India and Cambodia
it is only $35-$38 per tonne,” Chu explained
The price of sugar
has continuously dropped, sinking to around VND13,000 per kilo wholesale and
VND 18,000-VND21,000 a kilo retail while illegally imported sugar costs just
VND11,000-VND12,000.
“Vietnam’s sugar
prices are the highest in the world,” Chu said. “However, it is hard to cut
as the price is directly related to the life of the sugarcane growers.”
However, general
director of Khanh Hoa Sugar Joint Stock Company Do Thanh Liem, who declined
to release its inventory, said that in fact the domestic sugar price was out
of step with the rest of the region and smuggled imports were hurting the
domestic industry.
Last year the Hanoi
Stock Exchange-listed Khanh Hoa Sugar Joint Stock Company’s after-tax profits
plummeted 67 per cent to VND 39 billion ($1.85 million).
Other listed sugar
firms that shared a gloomy year on the markets included Kon Tum Sugar Joint
Stock Company and Gia Lai Sugar-Thermal Power Company.
VSAA also estimated
that every year, Vietnam was missing out on VND500 billion ($23.8 million) in
tax from smuggled sugar.
The Ministry of
Industry and Trade earlier this year set a 77,200 tonne annual limit on
imported sugar.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Ba, 1 tháng 4, 2014
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