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BUSINESS
IN BRIEF 18/4
Automobile
imports pick up speed
More than 5,200
cars were imported into the domestic market in the first quarter of 2014,
representing 1,400 units more than the comparable period last year, according
to Vietnam Customs statistics.
Auto imports in
this period saw a year-on-year increase of 37% in volume. However, their
value went up nearly 80% (around US$26.3 million) due to a large number of
imported luxury cars.
Vietnam Customs
reported that
The country also
spent US$385 million on purchasing auto spare parts from overseas markets in
the first quarter, up 30.9% from a year earlier.
Competitiveness
of
The Vietnam Chamber
of Commerce and Industry (VCCI) on April 16 organised a workshop in the
Mekong Delta
Head of VCCI’s Legal
Department Dau Anh Tuan said VCCI conducted a survey of over 8,000 businesses
nationwide in 2013, 1,600 of which were foreign invested ones.
The competitiveness
of 11 out of 13 Mekong Delta provinces was assessed as fairly good, good or
very good. Notably, Kien Giang climbed to the third position in
However, the
regional localities have not performed well in some important criteria, for
example their support for private businesses, trade promotion services,
workforce training and transparency, Tuan noted.
He also urged them
to quickly improve workforce quality to meet the stricter demands of
investors so as to attract more investment.
However, Vice
Chairman of the People’s Committee of Can Tho city Truong Quang Hoai
He cited the
business support criterion as an example. It contains up to 18 sub-criteria,
making it very hard for the provinces to satisfy all standards.
In 2013, the
central city of
Trade
surplus hits over US$1.08 billion in Q1
According to
Vietnam Customs statistics,
The trade value in
the second half of March reached US$13.15 billion, or 12.8% higher than the
first half.
Foreign direct
investment (FDI) businesses earned US$39.59 in trade revenue, representing a
year-on-year increase of 17.6% and accounting for nearly 60% of the country’s
total trade turnover.
In the reviewed
period,
As a result, the
country’s trade surplus reached more than US$1.08 billion, with the FDI
sector contributing US$1.88 billion.
Deputy Minister of
Industry and Trade Do Thang Hai announced that the 24th Vietnam International
Trade Fair (Vietnam Expo 2014) which opened in
He added that the
participation of businesses in the event has helped them develop their
trademark to consumers and visitors in a fast and convenient way.
Hai emphasized that
Vietnam Expo is considered a practical trade promotion activity to develop
the domestic commodity market and support Vietnamese businesses to boost
exports and help both local and foreign businesses share experiences,
cooperate in investment and technological transfer.
He said his
ministry submitted a proposal to build a large-scale national exhibition fair
centre to meet the growing demand for trade cooperation between local and
international businesses.
The highlight of
the event is the establishment of a separate pavilion to introduce
localities’ potential and Vietnamese industrial parks to both domestic and
foreign investors.
In addition, a
design pavilion helped Vietnamese and the
Vietnam Expo 2014
attracted 600 local and foreign businesses from over 23 nations and
territories worldwide.
Ha
General Director of
Suido Kiko Kaisha Co, Ltd under Toray Group, Shinri Sato, held a working
session with the northern Ha
Sato said that his
group has 30 domestic subsidiary companies and 60 foreign branches. He
expressed his wish to invest in
Mai Tien Dung,
Chairman of Ha
A hotline has been
set up to make it easier for the provincial People’s Chairman to connect with
investors, Dung said, while hoping that Suido Kiko Kaisha and Toray Group
will invest and bring hi-tech industries to the locality.
Toray is willing to
help Ha
The same day, the
Japanese general director also toured several Japanese businesses operating
in the locality to learn more about investment policies.
Local
company imports a batch of
Hai Thanh Trading
and Service Co, Ltd in
According to the
company, the lowest price of a Koi fish in the batch is US$2,000. The company
imported a Koi Fish Kohaku (87 cm in length) valued at US$20,000 and several
fish worth US$10,000. There was also a Sanke fish which measures over one
metre in length included in the shipment.
Le Huu Hung,
general director of the company said that the import of these “jumbo” fish
aims to develop the production of Koi fish in the country.
Koi fish is
considered the “national fish” of
Vinh Long
plans to expand
The Mekong Delta
According to Tran
Son, deputy head of the provincial Centre for Agriculture Encouragement,
farmers are advised to increase their Nam Roi My Hoa Binh Minh grapefruit of
the standards by 20-30 hectares per year.
Currently, Vinh
Long has 7,780 hectares of grapefruit area, accounting for 16% of the total
area under perennial trees, mainly focusing on the banks of
Son said the
current price of the fruit applying the Global GAP process is higher than
normal ones, varying from VND10,000 – VND30,000 per kilogram, up 20% over the
same period last year.
Earlier in
February, 26 hectares of grapefruits of the Nam Roi My Hoa Binh Minh
cooperative were re-recognized with a Global GAP certificate.
The National Office
of Intellectual Property also recognized the protection of geographical
indications for the fruit in August last year, allowing more than 600 tonnes
of Nam Roi grapefruit to be present in the supermarket system nationwide as
well as foreign markets each year, he added.
Experts
suggest ministries rethink IT approach
Many experts have
stressed that ministries and local government offices need to hire IT service
providers to manage their computer systems, rather than attempting to build
and maintain their own – a practice that is currently widespread.
They made the call
at a meeting chaired by Deputy Prime Minister Vu Duc Dam, who is also Vice
Chairman of the recently-established National Committee on IT Application, in
Chairman of the FPT
Group Truong Gia Binh said employing external IT experts is a growing trend
among top businesses around the world. He claimed that if encouraged in
Participants hailed
the establishment of the committee led by the Prime Minister, which they said
will create breakthroughs to turn
Others said that it
is advisable to address constraints in putting IT projects in place. They
recommended subtracting part of earnings from public services to pay for IT
services.
Turkish
investment in
By the end of March
2014,
The Foreign
Investment Agency (FIA) reported that the manufacturing and processing
industry made up the majority of Turkish investment in
It was followed by
education and training with 3 projects at US$3.45 million and the remaining
incidental investment in agriculture, forestry, fisheries, accommodation and
restaurant services.
At present,
Japan leads
foreign investment in Vietnam
According to the
Foreign Investment Agency (FIA) under the Ministry of Planning and
Investment, the average investment of a Japanese project is US$15.8 million,
substantially higher than the overall average of all nations combined of US$14.58
million.
Currently,
Real estate with 30
projects and construction with 54 projects follow in second and third place
at US$1.4 billion and US$1.05 billion, respectively.
Japanese firms have
highly diversified their investment in 48 out of the 63 provinces and cities
across
Good
practices earn firms low-cost loans
Companies with
transparent finances, profitability and potential projects may avail of dong
loans at 6 – 7 per cent interest, the State Bank of
The lending
interest rate for privileged industries is 8 per cent. The five priority
sectors include agriculture, export, support industries, small- and
medium-sized enterprises and high-tech firms.
Other sectors may
have to pay 9-10.5 per cent interest per year for short-term loans and
11-12.5 per cent interest for mid- and long-term loans.
The business trend
survey of Q2, 2014 for credit organisations by the SBV's Monetary Statistics
and Forecast Department reported that the majority of the industries expected
lower lending interest rates.
An industry expert
stated that enterprises should view the reduction in interest as an
opportunity to expand business and production.
Apart from attempts
to boost loans for companies in the two economic hubs of HCM City and Ha Noi,
the central city's People's Committee of Da Nang late last month decided to
offer preferential loans at 7.5 per cent interest to businesses for a
one-year period.
Profitable or
audited businesses and enterprises without bad debts in any bank in the city
can avail of a loan of VND120 billion ($5.7 million) from the city's budget
and the Investment and Development Fund. In other words, each eligible
business can avail of a maximum loan of VND5 billion ($238,000) once, with
strict regulations from this year onwards. The loan will be provided to
businesses involved in the stable price programme in the city. Enterprises
running at a loss but employing a large workforce can avail of the loan if
they propose an effective production plan or provide confirmation of their
tax returns and debt payments in the previous years.
Programme
launched to help business start-ups
The HCM City Young
Businesspeople Association (YBA) and the Business Start-up Support Centre
(BSSC) have launched a community project to provide business expertise to
minimise risks to some 10,000 young entrepreneurs starting businesses in the
next five years.
"Every
Businessman-A Teacher" will also provide 1,000 students with intensive
training in starting a business, while 100 successful entrepreneurs will
support a start-up each.
Speaking at the
launch, Truong Ly Hoang Phi, BSSC director and YBA general secretary, said
the project is aimed at stimulating entrepreneurship among young people in
the city and create close links between them and successful business people.
"The project
conveys a message that each young business person can become a teacher of a
young business start-up generation.
"[Besides],
each young start-up business person needs a teacher to understand, share, and
support in the initial period."
The two also
launched a business start-up competition titled Startup Wheel 2014 as part of
the programme to create a platform for young people to present innovative
ideas, promote start-ups and develop a strong start-up community.
Mongolia
seeks textile partnership with HCM City
Regzenda said his
country, whose economy is based mostly on agriculture, is trying to integrate
into the global economy.
It exports hundreds
of items to the EU with low tariffs and is negotiating a free trade agreement
with
His country wants
to co-operate with
Nguyen Binh An,
deputy head of the Viet Nam National Textile and Garment Group's southern
office, said Viet Nam's garment and textile industry, which employs 2.5
million workers, is growing at 15-20 percent annually.
Last year trade
between the city and
Tran Xuan Dien,
deputy director of the city Department of Industry and Trade, said there is
huge potential for economic co-operation between the city and
"
At a recent meeting
with the chairman of the
The two leaders
spoke about the need to organise more business forums to create opportunities
for businesses in the two cities to establish links.
Banking,
insurance firms draw complaints
Banking and
insurance are the two sectors that elicit the most consumer complaints in
Dao Thi Cuc, a
senior Vinastas official, told a conference titled Enterprises and Consumers'
Faith on Tuesday that last year her office in
But the conference
heard that in most cases consumers' information was based on what they were
told at banks and insurance companies and not on carefully reading the
contracts. This often caused conflicts after the contracts were signed,
delegates said.
Phan Vu Tuan, a
lawyer, said many consumers did not know much about the law or to protect
themselves. Insurance is a specialised sector and only people working in it
can clearly understand it, he added.
Cuc said to reduce
these problems a model contract is needed in the two sectors to protect
consumers.
The contracts
should be studied carefully by lawyers since now contracts are drafted to
protect service providers rather than customers and it is difficult for
consumer to identify their rights, she said.
Other products and
services that consumers complained about were cosmetics, electronics,
advertisements, and health care.
Vinastas said last
year nearly 80 per cent of claims were settled out of court, most of them
relating to food hygiene and safety.
But claims against
online traders could not be settled, it said.
It was difficult to
protect consumers against monopoly companies in sectors like petroleum, post
and telecom, airlines, power, and water, it admitted.
Participants said
the lack of knowledge of the laws prevented consumers from protecting
themselves, adding that the latter should consult lawyers before signing
contracts.
Tobacco
lobby pushes for tax increase delay
Increasing the
special consumption tax on tobacco is essential but should not be done next
year since smuggling is rampant, cigarette companies and the Viet Nam Tobacco
Association told a seminar late last week to discuss amendments to the Law on
Special Consumption Tax.
They said the smuggling
would increase further and that the tax should only be increased when
contraband can be kept out.
Pham Kien Nghiep,
general secretary of the Viet Nam Tobacco Association, said between 2005 and
2009, when the tax was hiked by 20 percentage points (from 45 per cent to 65
per cent), cigarette smuggling jumped by 80 per cent.
An expert said that
the hike must be effected only in 2016 and the tax rate must not be above 80
per cent.
But the ministries
of Finance and Health rejected their arguments, saying the time has come to
increase the tax.
Smoking damages
human health, they said.
The finance
ministry plans to increase the tax on tobacco products by 10 percentage
points to 75 per cent by July 2015, and by another 10 per cent in 2018.
It considered and
rejected a second plan involving a combined excise duty of VND500 per pack
and increasing the current ad valorem tax rate by 5 percentage points once
each in July 2015 and 2018.
But it said it
would continue to talk to companies and business groups.
It will submit a
draft to the Government next month and the National Assembly in October.
If approved, the
amendments will take effect in July 2015.
SOEs stakes
may be sold at discount rates
A draft regulation
about allowing State-owned enterprises (SOEs) to sell stakes in non-core
businesses at below the face value would be presented to the Prime Minister
for approval.
This is part of the
efforts to accelerate the SOEs' restructuring process. According to Deputy
Director of the Department of Entrepreneurial Finance Dang Quyet Tien, the
decision about speeding up capital withdrawal from non-core business in the
2013-15 period was now being evaluated by the Ministry of Justice and would
be submitted to the Prime Minister this month.
Tien said that the
regulations would tackle the problems which the SOEs were encountering during
the capital withdrawal process, while preventing losses to the State assets.
Nguyen Duc Tang, an
expert in equitisation, was quoted by Dau Tu Chung Khoan (Securities
Investment) newspaper as saying that the sale of stakes below the book value,
in fact, did not conflict with the market principle as the investments were
inefficient.
What's important
was to ensure transparency during the capital withdrawal process in order to
prevent losses to the State assets.
The transparency must
be there right from planning, auctions and prices to the buyers, he said.
According to the
Department of Entrepreneurial Finance, the plan and progress of the State's
capital withdrawal from non-core fields must be approved by the relevant
authorities.
Then, the share
transfers would be conducted under trading on stock exchanges, public
auctions or direct deals.
The restructuring
of SOEs is currently underway in
Speaking at the
conference – held to review the city's achievements during the 30 years of
economic reform – head of Party Central Committee's Commission for
Popularisation and Education Dinh The Huynh said HCM City has a great deal of
experience in economic reform to share with other localities.
Le Thanh Hai, the
city Party Committee Secretary, said a range of economic sectors play vital
roles in the city's socio-economic development.
The city has
recorded double-digit economic growth for nearly 20 years now, and its annual
income per capita has reached US$5,000, he said.
The public sector
plays a central role, he said, but added that it should only "facilitate
the market instead of playing the role of the market."
Than Thi Thu, head
of the HCM City Party Committee's Commission for Popularisation and
Education, said the city has achieved many breakthroughs while overcoming
challenges in the last 30 years.
It has created a
legal framework for many business models, she said.
In 1989 the city
issued a decision regulating many models of private businesses, limited
companies, and joint-stock companies to create favourable conditions for the
private sector's development, she said.
After the
establishment of limited companies and joint-stock companies, the country's
first export processing zones and industrial parks as well as the stock
exchange were established in
The city also
developed programmes such as those to exchange land for infrastructure,
socialise infrastructure, and improve the administration to serve the public
better, which many other localities learnt from and followed suit, she said.
It not only taught
the entire country lessons in socio-economic development but also ushered in
the concept of urban management under the market mechanism, she said.
The country and
city are now facing many other hardships in the process of globalisation.
Other challenges
include the ineffectiveness of public spending that has plagued the city for
a long time, the worsening budget deficit, and transfer price abuse for tax
evasion by foreign firms, which has become harder to check.
Half of foreign
businesses in
Other speakers
referred to a major problem: the failure of the country, especially the city,
to take full advantage of available resources.
The country is
divided into three key economic zones in three distinct, but they lack
linkages or co-operation, and fail to tap their potential.
Hai said the city
needs to take more drastic measures to improve the socialist-oriented market
economy.
Huynh said
democracy is another issue that many delegates discussed at the meeting.
Many suggested that
the democratic mechanism should be discussed more seriously at other forums.
Huynh called on the
attendees to mull over the issues and send their opinions to the Central
Theoretical Council.
Bamboo,
rattan sector calls for capital, technology to develop
Though
According to the
Agro-Forestry-Aquatic Product Trading, Processing and Salt Industry Department
and Vietnam Association of Craft Villages (Vicrafts), poor strategic planning
in domestic handicraft sector, backward technology and poorly designed
products made the sector difficult to develop. The remarks were made at a
seminar on
Luu Duy Dan,
Chairman of Vicrafts, said that the whole country has 713 bamboo and rattan
craft villages, which account for 24 percent of the total craft villages and
attract approximately 350,000 employees. Since 2009, famous bamboo and rattan
villages such as Phu Nghia, Chuong conical hat village, the Vac village,
Chang Son and Phu Tuc of
Craftsman Ta Thu
Huong from the Chuong conical hat village in the Thanh Oai district of Hanoi,
said that previously high-qualified conical hats were sold at least 120,000
VND each, but now the price has dropped to 50,000 VND. She noted that the
price of raw materials is rising, causing more difficulties for production
establishments.
So far,
According to the
Vicrafts, 80 percent of the production establishments do not have sufficent
capital to expand their production scale and invest in technological
innovations.
According to Nguyen
Manh Dung from the Agro-Forestry-Aquatic Product Trading, Processing and Salt
Industry Department, to stabilise and expand the market of these products,
the craft villages need to quickly change traditional processing techniques.
According to
forecasts, demands of the raw material of craft villages will require at
least one billion bamboo trees per year by 2020. To meet this demand, the
country needs to plant about 60,000 hectares of bamboo and invest in wild
bamboo conservation.
In the future, the
State must have plan to develop bamboo and rattan areas to supply for the
industry.
Additionally, the
Government should provide financial support for enterprises and households as
well as promote new market strategies for rattan and bamboo products. In
particular, enterprises and villages should conduct market researches and
register intellectual property rights in order to protect their brand names.-
Every year,
Head of the
Ministry of Industry and Trade's Science and Technology Department Nguyen
Dinh Hiep said Vietnam has successfully carried out research and mixed some
kinds of biofuels like E5 (petrol containing five percent of ethanol), E10,
E15 and E20 and launched pilot sales at 160 stores nationwide. The biggest
advantages of using bio-fuel are to reduce from 27-44 percent of the gases
causing the greenhouse effect and also to save fuels compared with using
other ordinary petrols.
According to the
experts from Hanoi University of Science and Technology and the Centre for
Technology Application and Transfer under the Vietnam Petroleum Institute,
the E5, even E10 and E20 in conventional engines which are popular in Vietnam
will not fundamentally affect the vehicle 's features. Using the biofuels
even helps motorcycles and automobiles start and speed up better.
In particular, with
materials mainly from industrial production, the development of biofuels can
stimulate agricultural production and expand markets for agricultural
products in the country. Pham Anh Tuan, CEO of Phuong Dong Biofuel Company
said if cassava production remains stable, about 300 thousand households or
1.2 million people, most of them living in remote areas and so poor will
stabilise their lives.
Recognising the
importance of biofuel to the energy security issue, the Vietnam Oil and Gas
Group (PVN) has worked out a roadmap to develop biofuel with a target by 2015
with a vision until 2025 to develop biofuels which can ensure energy
security, improve the environment and increase incomes for farmers.
To accomplish this
goal, PVN and Petro Vietnam Oil Corporation have put into operation three
projects on producing ethanol biofuels with capacity of 300,000 cu.m per
year, including Phu Tho Ethanol Plant (Tam Nong district, Phu Tho province),
Quang Ngai Ethanol Plant (Dung Quat Economic Zone, Quang Ngai province) and
Binh Phuoc Ethanol Plant (Bu Dang district, Binh Phuoc province).
According to PVN,
the government has granted permission to build six ethanol plants using
cassava chips as raw materials which helped cassava farmers in neighboring
provinces stabilize production and lives.
However, finding
markets and consumers at present remain limited, resulting in difficulties
for the government to draw a roadmap for using biofuels across the country.
According to experts,
The nation now has
six ethanol plants with a total capacity of 535 million liters a year. Of
these, domestic consumption accounts for 20 percent and the remainder is
exported to
Unbaked
brick makers face slow sales
Makers of bricks
made of cement and industrial waste are finding it difficult to gain market
access in
Four years ago, the
Government launched a programme to use more unbaked bricks. Prime Minister
Nguyen Tan Dung and the Ministry of Construction adopted guidelines about
their use.
Made from
industrial waste, such as ash and cinders from thermal power stations and red
mud from bauxite factories, unbaked bricks help save natural resources,
especially clay and coal. They also reduce the cost of treating industrial
waste.
The use of unbaked
bricks in construction works accounts for about 27 per cent of total building
materials.
Vice president of
the Viet Nam Association for Construction Materials, Nguyen Quang Cung, said
that the rate of unbaked brick use would be higher, but for the slowdown in
the real-estate market.
There are few
guidelines to promote the use of unbaked bricks, including creating public
awareness and adopting technical standards that all builders are aware of.
Head of the
Construction Materials Management Department under the Construction Ministry,
Le Van Toi, said that State-funded buildings were actually required to use
only unbaked bricks.
However, few
buildings met the requirement because of loose regulations. He urged closer
supervision of agencies to ensure more unbaked bricks were used in State
constructions.
General director of
HCM City-based An Thai Buiding Materials Joint Stocks Company, Nguyen Thi Sy,
said that the company had capacity to produce 200 million clay bricks but
sold only 20 million.
This was because
people were not used to using the new style bricks and because of the
downturn in the construction sector in
Sluggish production
and consumption created problems for producers in paying interest on bank
loans and retaining competent staff, he said.
Director of Minh
Khang Bricks Joint Stocks Company, Le Hoai An, said that unbaked brick
producers needed to combine to meet consumers' requirements.
An said that
producers must first register the trade mark and quality of their products
and then provide qualified products to gain consumers' trust.
Vietinbank
aims for Vinalines ports stake
Vietinbank, the
second-largest bank by assets, would like Viet Nam National Shipping Lines
(Vinalines) to name it as a strategic investor at member ports after the
initial public offerings (IPO).
This is expected to
act as a means of debt payment. The plan, which was disclosed by baodautu.vn
newspaper, is expected to lift up grand debts, improve investment efficiency
and administration after equitisation. The plan still needs the approval of
the Ministry of Transport. Vinalines incurs a total debt of VND4.98 trillion
(US$236 million), excluding interests paid to Vietinbank. Of this, the mother
company takes VND2.05 trillion ($97 million) and subsidiaries VND2.93
trillion ($139 million).
The corporation
targets to equitise eight companies this year, including
Next month,
Vietinbank may take its stake in
Unable to pay
debts, Vinalines has finalised proposals to reschedule VND100 trillion ($4.7
billion) of local debt and $196.25 billion of foreign debt.
Vinalines has
successfully equitised two units,
Swiss back
VN business reforms
The four-year
(2014-18) MPI -UNIDO project for "Expansion of National Business
Registration System (NBRS)" to new commercial entities is expected to
cost $5.45 million.
In 2008-13 the
project was funded by the MPI,
NBRS is being used
for single-point, fully-computerised services for business, tax, customs,
statistics, and public-security registration of firms in 63 provinces.
As a result, online
enterprise registration and enterprise information services, covering the
records of over 864,596 enterprises and subordinate units registered under
the Enterprise Law and 164,000 annual financial statements of shareholding
companies, are available through the National Business Registration Portal at
www.businessregistration.gov.vn.
The average
registration time has decreased from 15 days in 2008 to only 3.5 days as of
last year.
According to the
International Finance Corporation's estimates, companies registering for the
first time have been saving around $4 million a year and these savings nearly
double when enterprise record amendment services are also considered.
Deputy Minister of
Planning and Investment Dang Huy Dong said: "Business registration
reform to date has not only reduced the cost and time for registration
nation-wide, but also demonstrated that client-friendly and efficient public
sector services benefit the development of the private sector.
Miroslav Delaporte,
country representative of
He added that the
expansion would further help the private sector by improving transparency and
reducing the risks of doing business in
Nilgun Tas, chief
of the Competitiveness, Business Environment and Upgrading Unit and deputy to
the director of the Business, Investment and Technology Services Branch at
UNIDO, said: "The private sector will not only gain access to efficient
services of NBRS, but also benefit from more appropriate enterprise
supporting policies, designed and implemented based on the full picture of
all commercial entities operating in Viet Nam.
"There is also
great potential to link the NBRS with additional public services, for
example, with social insurance, secured transactions, trademark, and
patenting services, among many others and as such to expand this e-Government
initiative wider."
SOEs' IPO
failures reflect poor preparation
The poor
first-quarter response to IPOs (Initial Public Offerings) launched by
State-owned enterprises (SOEs) shows that they have not prepared well for
their equitisation process, a VnExpress report said.
It said more than
70 per cent of the shares offered went unsold from January to March, during
which 25 SOEs put up 355 million shares on the two stock exchanges in the
country, three times higher than the same period last year. The report
estimated the value of unsold stock at nearly VND2.53 trillion (US$120
million). It said many companies saw more than 90 per cent of their shares
unsold.
Of the 15
businesses that could not sell out theirs, the Transportation and Unloading
Company of Inland Waterway (Tranciwa) fared the worst with almost all its
shares going unsold. The company, which has a charter capital of VND58.5
billion ($2.8 million), put up 5.85 million shares for sale but sold just
24.200 for VND242 million ($11.500).
Others companies
like the Ha Noi Construction Corporation (Hancorp), Viet Nam Motors Industry
Corporation (Vinamotor), Viwaseen Infrastructure Construction Investment JSC
(Viwaseen), Civil Engineering Construction Corporation No 6 (Cienco 6) and
Waterway Transportation Co (Vivaso) also had high unsold rates of 96-97 per
cent.
Several company
executives admitted they had not prepared well for their IPOs. Pham Ngoc
Dich, Chairman of Vivaso, said the company did not have the time it needed to
plan the IPO and complete its official website as required. He said the
company would organise a shareholders' meeting by the end of this month and
discuss continuing the share sale in 2015.
Though the Vietnam
Waterway Construction Corp (Vinawaco), was able to sell all the shares
offered in its IPO, chairman Nguyen Duy Hien admitted that the company did
not have enough time to look for strategic investors and had picked some
before a proper evaluation of the latter's capacity. Market observers have
said that the IPO failures also have to do with the health of the
enterprises. For example, the profits of Tranciwa and Hancorp declined in the
three years before they launched their IPOs, and this could have discouraged
investors.
Phan Dung Khanh,
head of the Investment Division of MayBank Kim Eng Securities Co, said many
businesses failed to show a clear development strategy and target suitable
buyers.
Foreign
investors eye manufacturing
Foreign investment
in manufacturing has increased significantly in
In the first
quarter they have invested US$2.3 billion in 141 projects in the three
places, accounting for 70 per cent of the total FDI they attracted. Binh
Duong topped with nearly $800 million, and
In the last few
months in Dong Nam Industrial Zone in HCM City's Cu Chi District, Worldon
Viet Nam Limited built a 45ha garment factory that will go on stream in June
next year.
The British Virgin
Islands-based firm will invest $140 million in the plant that will produce 80
million products a year.
Samoa's Sheico Viet
"The
investment opportunities in textile and garment in
According to the
HCM City Export Processing and Industrial Zone Authority (HEPZA), many firms
are wrapping up procedures to increase investment to expand production.
German-owned
Pepperl - Fuchs Viet Nam Limited company wants to increase its investment by
$10 million and has sought an additional 9,000sq.m to expand production of
high-tech sensors.
Initially the
company had planned to expand its production in
Many Japanese and
Singaporean firms have invested in production of electronics components.
"We have
invested $2 million and will consider investing more in the long term,"
Masaharu Tsukada, general director of Japan's Maruko Keihoki Viet Nam Limited
company, which will produce car's horn in district 7's Tan Thuan processing
zone, was quoted as saying in Tuoi Tre (Youth) newspaper.
"It is a good
opportunity for investors in
TranViet Ha, head
of HEPZA's Investment Department, said: "This year FDI has flowed
strongly into production, with many firms expanding their factories. The
capability of local human resources to learn new technologies quickly is an
advantage."
Luong Van Ly, an
investment analyst, said: "Foreign investors have realised that Viet
Nam's outdated technologies cannot benefit from the TPP agreement, and are
pouring money into production in Viet Nam."
Investors from
non-TPP countries were set to come to
Tobacco
lobby pushes for tax increase delay
Increasing the
special consumption tax on tobacco is essential but should not be done next
year since smuggling is rampant, cigarette companies and the Viet Nam Tobacco
Association told a seminar late last week to discuss amendments to the Law on
Special Consumption Tax.
They said the
smuggling would increase further and that the tax should only be increased
when contraband can be kept out.
Pham Kien Nghiep,
general secretary of the Viet Nam Tobacco Association, said between 2005 and
2009, when the tax was hiked by 20 percentage points (from 45 per cent to 65
per cent), cigarette smuggling jumped by 80 per cent.
An expert said that
the hike must be effected only in 2016 and the tax rate must not be above 80
per cent.
But the ministries
of Finance and Health rejected their arguments, saying the time has come to
increase the tax.
Smoking damages
human health, they said.
The finance
ministry plans to increase the tax on tobacco products by 10 percentage
points to 75 per cent by July 2015, and by another 10 per cent in 2018.
It considered and
rejected a second plan involving a combined excise duty of VND500 per pack
and increasing the current ad valorem tax rate by 5 percentage points once
each in July 2015 and 2018.
But it said it
would continue to talk to companies and business groups.
It will submit a
draft to the Government next month and the National Assembly in October.
If approved, the
amendments will take effect in July 2015.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Năm, 17 tháng 4, 2014
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