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BUSINESS
IN BRIEF 25/4
AGPPS sells
1.9 million shares to farmers
An Giang Plant
Protection Joint Stock Company (AGPPS) has sold nearly 1.9 million shares at
a preferential price to farmers nearly half a year after the company
commenced its share issuance program.
More than 1,700
farmers in the Mekong Delta region bought the shares at VND30,000 per share,
equivalent to 50% of the market price as of Tuesday. AGPPS said the program
helped it raise over VND56.3 billion.
However, the
program brought about a lower-than-expected result as the company initially
targeted issuing roughly 2.48 million shares to 6,000 farmers in the region.
Speaking at a
function held in An Giang Province on Tuesday to grant shareholder books to
farmers, chairman and general director of AGPPS Huynh Van Thon said this was
a preparatory step of the company to equitize its food processing factories
in different localities in the Mekong Delta.
As AGPPS has given
an average annual dividend of 30% to its shareholders over the years, the
farmers as holders of the firm’s shares can have similar benefits.
AGPPS was founded
in 1993 with initial capital of VND750 million and 23 employees and went
public in 2004. The company now has chartered capital of VND621 billion and
over 3,000 employees.
AGPPS has five rice
processing factories in Chau Thanh and Thoai Son districts of An Giang
Province, Vinh Hung District of Long An Province, Tan Hong District of Dong
Thap Province and Hong Dan District of Bac Lieu Province.
AGPPS plans to
commission seven new rice processing factories with each having an annual
capacity of 200,000 tons by 2018. The company’s paddy growing area is
expected to reach 316,000 hectares that year.
Total bad debt in
HCMC has amounted to over VND45.8 trillion, or 4.85% of the banking system’s
total outstanding loans, with debt in group 5 (potentially irrecoverable)
making up more than 73%.
According to a
report obtained by the Daily at a meeting on the business performance of
State-owned enterprises (SOE) here on April 17, total bad debt in the city
has increased by over VND1.1 trillion compared to late last year. However,
the ratio of debt in group 5 slightly slid compared to the 75.7% recorded
late last year.
Banks based in the
city had reported total outstanding loans of VND954 trillion as of the end of
March, up 8.3% year-on-year. In the first quarter, credit inched up a mere
0.57% against late last year.
According to the
central bank’s HCMC branch, foreign-currency loans moved up strongly while
dong borrowing declined steadily. In end-February, outstanding dong loans
reached VND790 trillion, down 1.38% against late 2013, while foreign-currency
loans grew 2.96% at over VND155 trillion.
Nguyen Hoang Minh,
deputy director of the central bank’s HCMC branch, said credit growth had
slowed due to low capital demand. Banks have also balked at extending new
loans due to bad debt concerns.
In the first
quarter, the foreign-currency loans contributed hugely to credit growth as
many importers took out foreign-currency credit.
Enterprises in five
priority fields – agriculture, export, small and medium-sized enterprises
(SMEs), supporting industries and high-tech firms – borrowed VND133 trillion,
up nearly 5.4% from late 2013. Of the figure, SMEs took out over VND81.7
trillion, followed by agricultural firms with VND24.2 trillion, exporters
VND19.2 trillion, firms in supporting industries VND7.2 trillion and
high-tech firms VND506 billion. The enterprises are subject to a lending rate
of no higher than 9% per annum.
As of the end of
March, the city’s total mobilization had amounted to nearly VND1,200
trillion, rising by 0.36% against late 2013 and 12.3% year-on-year, according
to the central bank’s HCMC branch.
Many SOEs
in
State-owned
enterprises (SOEs) in HCMC earned total profit of over VND1.5 trillion in the
first quarter this year, down a staggering 40% against the same period of
2013, according to a corporate finance agency under the HCMC Department of
Finance.
The city now has
108 SOEs, with 15 of them undertaking merger, dissolution or bankruptcy
procedures.
Speaking at a
meeting in HCMC on April 17, a representative of the agency said many
corporations and holding companies saw revenues tumble by double-digit rates
in the Jan-March period.
For instance,
Saigon Real Estate Corporation reported a 20% drop due to poor sales, Saigon
Cultural Products Corporation with a 13.6% decrease due to slow CD and DVD
sales, Saigon Trading Corp. with a 20.5% decline, Saigon Jewelry Company with
a 51.4% decrease due to no SJC gold bar processing orders from the central
bank.
Meanwhile, the pace
of profit decline outpaced that of revenue fall at many SOEs in the city,
with Saigon Real Estate Corporation reporting a 58% profit slump, Saigon
Cultural Products Corporation nearly 26% and Saigon Trading Corporation 66%.
In addition, many
public services firms saw earnings shedding 30 to 80% in the period as public
services were reduced, the agency said.
In the first
quarter of this year, SOEs in the city contributed over VND1.8 trillion to
the State budget, a year-on-year decrease of 2%.
The agency blamed
low consumer demand on falling revenues at SOEs. Meanwhile, the protracted
economic slump continued making inroads into the operations of the
enterprises. Notably, HCMC Power Corporation incurred a loss of VND212
billion.
HCMC chairman Le
Hoang Quan said if SOEs kept doing poor business, the role of SOEs would be
weakened to the point where they could not compete with private firms and
foreign-invested enterprises, he noted.
Quan said that
local banks were trying to extend loans to enterprises to help them out of
the woods. Private firms have made use of bank loans to renovate equipment
and production while SOEs have yet to make fresh equipment investments.
However, a number
of SOES still reported strong revenue growth. For example, Cho Lon Investment
& Export-Import Company saw its revenue surge nearly 46% thanks to
revenues generated from its distribution of coffee of Trung Nguyen, milk,
paper, and energy drinks of a Korean firm since June 2013. Saigon Agriculture
Incorporation also posted an 18% rise in revenue.
Airports
Corporation of
SMEs,
farmers vulnerable to FTAs
Many small and
medium enterprises (SMEs) and farmers in
Delegates at a
seminar on the role of the National Assembly in FTA negotiations and
implementation held in HCMC on April 17 delved into a host of possible
measures to help SMEs and farmers cope with new difficulties.
Tran Huu Huynh,
head of the advisory committee for international trade policies under the
Vietnam Chamber of Commerce and Industry (VCCI), said the FTAs that
For instance, there
will be tough competition on the domestic farm produce market, so SMEs will
likely get shocked if they are not well-prepared.
In addition, some
FTA member countries have set up technical barriers to protect their domestic
markets.
Vietnamese firms
would face more international lawsuits such as anti-dumping ones in FTA
markets in the future, Huynh said.
Vo Tri Thanh, vice
president of the Central Institute for Economic Management (CIEM), said the
TPP would bring about long-term benefits to
However, husbandry
farmers will suffer immediately. For instance, when Australian cow import
taxes are slashed to 0%, local beef products may fail to compete.
For trade defense,
Thanh said this was an essential solution and must be applied at a right
time. But,
Huynh of the VCCI said
that the National Assembly should weigh FTA implementation to see what
citizens and enterprises could benefit. Enterprises and citizens should raise
their voices during FTA negotiations to ensure their interests are protected.
Nguyen Dinh Luong,
former head of the Vietnam-U.S. trade agreement negotiation delegation, said
the Government can support SMEs by giving them training and consulting.
Pharmaceutical
violators under fire
Minister of Health
Nguyen Thi Kim Tien told the National Assembly Standing Committee that “all
drugs failing to meet the standards outlined in their distribution agreements
will be revoked and firms will have new registration numbers for their
products ended.”
“In the coming
time, we will continue to boost inspections of pharmaceutical firms. Any
violations will face severe punishment. Abuses that have already been
uncovered involving the distribution and sale of poor quality pharmaceuticals
have been strictly dealt with,” Tien said.
The issue of poor
quality pharmaceuticals has plagued
Several
international firms including Hong Kong’s Amoli Enterprises Ltd., and
The Ministry of
Health (MoH)’s Drug Administration recently announced that the firms had
their registration dossiers suspended and also faced a pause in the granting
of pharmaceutical distribution registration until January 24, 2016.
The administration
also stopped receiving registration dossiers for drug products made by XL
Laboratories Pvt., Ltd. The administration also announced that this company
had violated medicine regulations in
Also in December
2013, the administration required the departments of health nationwide,
These 37 firms,
including XL Laboratories, were at that time found to have marketed bad
quality products in
Last October, the
administration also halted receiving
Valeant
invests in
Quebec-headquartered
Valeant has successfully established a foothold in
Valeant CEO Mike
Pearson on a country briefing visit to
He said
The joint venture
will expand the production facilities to better serve the Vietnamese market.
The business aims to export its products to
In
Currently the joint
venture has 480 staff members. The JV’s continual investment will include
capital increases, new jobs, staff training, upgrading the IT system,
expanding the distribution network and so on.
Valeant is also
bringing many of its experts from all over the world here to help raise the
Vietnam
software outsourcing sector grows strongly, in world’s top 10
Vietnamese software
outsourcing companies have announced their first-quarter revenues rose by up
to 34 percent compared to the same period of last year while an industry body
says
Only in the first
three months, many local software companies received orders for the entire
year and their 2014 revenues are expected to soar by up to 25 percent
compared to a year earlier, the association said.
The
Tran Phuc Hong,
managing director of TMA Solutions, another HCMC-based software firm, was
quoted by newswire Saigon Times Online as saying that this year will be
stable for the software outsourcing industry as most of the orders have been
placed in the first quarter.
TMA Solutions
reported a 20 percent year-on-year growth in the January – March period, and
has so far signed contracts for the full year of 2014, Hong added.
Ngo Van Toan,
deputy CEO of Global CyberSoft, also told the economic news website that his
company enjoyed quarterly growth of 25 percent in comparison to the same
period last year, thanks to orders from
“The software
outsourcing market remains stable and has the potential to grow further, with
Software companies
headquartered in
These software
outsourcers collectively generated VND678.1 billion (US$31.99 million) in
revenue, a 34 percent year-on-year increase, the park’s chairman Chu Tien
Dung told Saigon Times Online.
Park companies are
completing orders from 20 countries and their main markets are also
Their software
exports in the first quarter were worth $16.82 million, up 37.4 percent from
a year earlier.
Last year the
industry’s revenue surpassed the $1 billion mark, 25 percent of which was
contributed by exporting and outsourcing.
FPT Software is the
country’s largest software outsourcing company with 2013 revenues topping
$100 million.
The company is
eying $150 million earnings for 2014.
Foreign-invested
garment firms show ambitious growth
Scores of foreign
invested enterprises in the textile and garment sector are looking to expand
their presence in
In late April or
early May, Venture International JSC from the
The $10 million
factory has a designed production capacity of 150,000-210,000 jackets and two
million shirts a year and would provide jobs to about 1,000 workers.
Venture dropped
anchor in
The plant’s production
line (protective clothing, fire-proof coats and specialised uniforms) are
exported to
The company’s
director John Somers attributed rising customer demands to Venture’s planned
factory in Nghe An.
Venture is not the
only company with big expansion plans. In
The first project
is from Worldon Vietnam Limited and is a $140 million garment plant with a
planned output of 80 million items a year.
The plant’s first
phase is slated for completion in June 2015.
The other project,
invested by Sheico Vietnam Limited, will soon begin. It is a $50 million
weaving and garment export project. Its first phase is expected to be
completed by November this year.
Other potential
projects have been reported by Nam Dinh, QuangBinh and Dong Nai provinces.
According to the
Vietnam Textile and Apparel Association (Vitas), now is an opportune time to
push up garment and textile export as both the domestic and global markets
are rebounding.
This was evidenced
by numerous garment and textile firms having already scored orders for the
third and fourth quarters.
Vitas, however,
admitted that foreign invested garment and textile firms, though few in
number, contribute up to 60 per cent of the sector’s total export value and
their continuous expansion shows the widening gap between their development
level and that of domestic enterprises.
Nguyen Van Thoi,
chairman of TNG Investment and Trading JS, forecasted
“The sector’s
export value could jump to $26 billion this year, up $4 billion against last
year. Many enterprises already have full orders for 2014,” Thoi added.
Crescent
Mall recognised among top five in HCMC
Crescent Mall,
owned by Phu My Hung Development Corp., has been named one of the top five
shopping centres in
City authorities
selected the top five from 12 shopping centres who registered for the 2013
competition and announced them last week.
The other four were
Vincom Centre Dong Khoi, TAX,
Judgment criteria
included size, location, design, customer service, promotion programmes,
sales staff, and contributions to the community.
Crescent Mall,
managed by Savills
At the moment
Crescent Mall is home to numerous popular brands including Mango, Tommy
Hilfiger, Gap and Bonia, as well as international supermarket chain Giant.
Aeon to
have new mall in Binh Duong
Japanese-invested
firm Aeon Vietnam has said it will open a new shopping mall in the southern
Its operational
Aeon Shopping Mall Tan Phu Celadon in Tan Phu District in HCMC needed total
capital of US$106 million while the forthcoming facility in neighboring Binh
Duong will cost less but have a larger area, Aeon general director Yasuo
Nishitohge said.
Aeon is working on
a third mall plan in the country. The Long Bien shopping mall in
Three months after
the opening of the mall in Tan Phu District, Nishitohge said it had reported
good sales. However, he admitted Aeon is facing an increasingly fierce
competition from other store operators.
More than one-third
of products at the first Aeon mall are made in
Those new products
from
Investments
in weaving and dyeing facilities still meager
Investments in
weaving and dyeing facilities in
Speaking to the
Daily on the sidelines of a conference on French weaving technology in HCMC
last week, Nguyen Van Tuan, vice chairman of the Vietnam Cotton and Spinning
Association (VCOSA), said many investors entered in the local market last
year but they were mostly involved in spinning and sewing activities.
Textile production
normally goes through three phases – spinning, weaving and dyeing (or
finishing).
For investments in
the spinning segment, there were an additional one million new spindles last
year, taking the total to 6.1 million which can turn out 720,000 tons of
short fiber, 150,000 tons of long fiber and 1.4 billion square meters of
cloth, according to the Vietnam Textile and Apparel Association (VITAS).
Tuan at VCOSA said
Last year
According to Tuan,
the industry is heavily dependent on outsourcing contracts with foreign
partners (over 70%), so there is little chance of developing design and
fashion segments.
The size of
In the long term,
The world’s cloth
output is 170 billion square meters at the moment, and with annual growth of
2%, an additional 3.4 billion square meters will be needed a year. Meanwhile,
investors are making little or no investment in weaving and dyeing processes
in
Tuan said other
Asian countries are shifting to fashion and retail, so Vietnam could be
chosen as a venue for cloth production and that numerous enterprises in the
country would import modern weaving and dyeing equipment to improve quality
to export products to major markets.
No gov’t
role in VND50-trillion realty credit plan – SBV
The State Bank of
Vietnam (SBV) has denied any Government role in a VND50-trillion credit
program for the real estate sector recently announced by Vietnam Bank for
Construction (VNCB).
The central bank
last Friday issued a statement asserting this lending program is a commercial
one, so it is not associated with any subsidies from the State budget.
The program is
VNCB’s effort to set up a four-side linkage between investors, contractors,
building material manufacturers and banks.
Lending under the
program depends on how customers can meet credit requirements such as project
feasibility, economic efficiency and debt solvency; how banks can raise
capital; and on agreements between VNCB and other lenders.
Joining this
program, banks will be able to keep track of how credit is used and to
instill confidence in the construction sector, according to the central bank
statement.
The SBV stressed VNCB’s
lending program is different from a four-side credit program which the
central bank is planning to pilot and has no connection with the
Government-initiated VND30-trillion preferential home loan program. However,
both programs are aimed at reviving the distressed real estate market,
reducing construction material stockpiles and settling bad debts in line with
the Government’s Resolution 02.
The central bank
said in the statement that it encourages commercial banks to extend loans
through this four-side format, consider new credit programs to help
enterprises ride out the current woes, support the property market and reduce
bad debts.
The central bank
said it supported VNCB’s credit program as it helps the housing and building
material markets.
However, VNCB will
have to decide which banks to cooperate with and how much participating
lenders can lend. VNCB will lend over VND10 trillion in the VND50-trillion
program to 33 projects as earlier registered with the central bank.
Ocean Dunes
golfers seek compensation
Members of Ocean
Dunes golf course in
The firm has plans
to spend VND4 trillion developing the golf course into a residential area.
Therefore, it has closed the golf course since April 1.
Around 40 Ocean
Dunes members gathered in HCMC last week to draft a formal request for
compensation and will pass it to the Government Office, the Ministry of
Natural Resources and Environment and
Among 220 members
of Ocean Dunes, around 50 have agreed on their transfers to Sealinks golf
course, also developed by Rang Dong, in Mui Ne area.
The remaining
members insisted the company either maintain Ocean Dunes golf course or make
compensation equivalent to the full value of their membership cards.
In November 2013,
Phan Thiet City-based Rang Dong Company acquired the 62-hectare Ocean Dunes
golf course for US$20 million. Last month, it won approval from the provincial
government to convert the place into a residential area.
On March 1, Rang
Dong informed the golfers that the course would be closed as it had run up
losses over the past 20 years, so its members would be transferred to
Sealinks from early this month.
Nguyen Van Dong,
chairman of Rang Dong, said in a notice that members should bring the case to
court if both sides reached no agreement.
Speaking at the
meeting last week, member Le Quang Liem, who has been playing golf at Ocean
Dunes for six years, said the course is conveniently located and meets
international standards. Liem said he would not move to Sealinks and that he
wanted compensation for his membership card worth US$25,000 with a validity
of 30 years.
According to a
member, Rang Dong would have to spend over US$4.2 million compensating 170
membership cards worth around US$25,000 each.
Nguyen Manh Hung,
deputy secretary of Binh Thuan’s provincial Party Committee, told the Daily
that the committee had yet to approve the proposal for converting Ocean Dunes
into a residential area.
The committee is
fielding suggestions from experts, former leaders and related agencies before
making a decision on the matter, Hung said.
Meanwhile, Rang
Dong’s chairman Nguyen Van Dong told the Daily that the firm would compensate
members who declined to move to Sealinks. However, it will deduct the years
they had spent playing at Ocean Dunes.
MoIT
approves 25 billion VND for promotion programme
The Ministry of
Industry and Trade (MoIT) has passed a package of 25.21 billion VND (about
1.2 million USD) for second phase of the national trade promotion programme
in 2014, the Government news portal reported.
The credit will
assist trade promotion activities to develop market, export products and
trade information in both domestic and foreign markets, heighten competence
for enterprises and bring made-in-Vietnam products to urban, mountainous and
border areas.
Trade promotion
activities will focus on organising expos to advertise promising sectors such
as food processing, aquaculture and agricultural products to both traditional
and potential markets such as the
The programme will
prioritise domestic trade promotion activities especially establishing a
distribution channel in rural, mountainous, border and disadvantageous areas.
Specifically, the
programme supports six regional fairs and 128 projects which bring Vietnamese
products to remote areas.
Earlier, the
previous national promotion programme in 2013 attracted over 6,000
enterprises with 572 signed contracts worth over 1.4 billion USD and over 1.8
million of visitors.-
Prista Oil
to co-operate on oil recycling plant
The two sides
signed a memorandum of understanding (MoU) at a symposium on exchanging
experiences in managing and treating used oil that gathered experts from both
nations and on the occasion of a visit paid by Bulgarian Prime Minister
Plamen Vasilve Oresharski to
The MoU
specifically mentions co-operation in lube oil, a management and gathering
system, and the technology to recycle the former into high quality products
that are environmentally friendly.
According to
Oresharski, environmental protection is a challenging field that governments
have no choice but to address.
“
PetroVietnam’s
general director Do Van Hau said that nearly every country had strict
regulations on the treatment and recycling of used oil.
“In the
He pointed to the
fact that
“Improving this
will not only work towards a better environment but also improving Vietnam’s
image and reputation for high-technologies that help improve environmental
production,” Hau said.
Nguyen Xuan Son,
general director of Petro Vietnam Oil Corporation, said
“The country also
lacks experience in the management, collection and recycling of used oil,” he
added.
Prista Oil is a
leading oil and gas group in
In
Garment
sector eyes localisation of inputs
The domestic
garment and textile industry aims to reach a localisation rate of 60 per cent
by 2015 to increase profits and competitiveness, and reduce the need for the
imports of raw materials, according to the vice president of the Viet Nam
National Textile and Garment Group (Vinatex).
Le Trung Hai, who
spoke with the media during the recent
Hai said this
effort was being made to increase the export value of the industry, which
depends heavily on imported raw materials and outsourcing for its major
foreign clients.
The move to
increase the localisation rate is especially important because
To enjoy low tax
from these trade agreements,
In addition to
increasing the localisation rate, domestic garment and textile companies are
also aiming to increase the Free on Board (FOB) rate from the current 38 per
cent to more than 50 per cent by 2015.
Moreover, the
Original Designed Manufacturer (ODM) rate would rise to nearly 10 per cent by
2015 from the current rate, which is now under 5 per cent.
To achieve the
targets, many projects to develop raw materials are being carried out
nationwide.
According to
Vinatex, many cotton farms with a size of up to 1,500 ha now exist in
provinces like Dac Lac and Ninh Thuan.
Vinatex worked with
the Viet Nam Oil and Gas Group to produce materials to weave fabric, and the
industry as a whole has hired and worked with foreign experts to set up
projects to develop regions to plant raw materials.
In addition,
construction of many weaving plants nationwide has taken place.
In 2013, export
turnover of the industry reached US$20.4 billion, an increase of 18 per cent
year-on-year.
Procurement
law set to lock in domestic bias for drug sales
A new regulation on
drug purchase priorities in the revised Law on Public Procurement will help
protect local drug producers.
Adopted by the
National Assembly last November and to take effect on July 1, the law
stipulates that all locally-made drugs meeting the Ministry of Health’s
requirements on treatment, prices and supply can be put out to tender and
that equivalent imported drugs will not be allowed to go to tender.
Last year
“Any bidding
dossier that includes imported drugs will be rejected. As we can now produce
many types of drugs locally, we will not allow the same products from foreign
manufacturers,” said Ministry of Planning and Investment’s Public Procurement
Department head Le Van Tang.
Under Article 50,
drug tenders will receive incentives when they engage in local or
international bidding to supply drugs of which domestic production cost is at
least 25 per cent of the products’ total cost.
Drug producers with
at least 25 per cent female or 25 per cent wounded veterans or disabled
people as a proportion of their workforce would also be given priority, as
well as small and medium-sized enterprises.
“The government
will describe these priorities in more detail,” Tang said, adding “These
regulations will have local drug producers rejoicing, but will enrage drug
importers.”
“We are happy with
this regulation, as it helps protect locally-produced pharmaceuticals, which
have faced serious competition from imported products,” said Le Van Truyen,
former Deputy Minister of Health and a representative for SAVI Pharmaceutical
Joint Stock Company.
A representative
from Lynh Pharma, which imports around 40 types of drugs into
“All active
elements for drug making in
She said
According to her,
in the coming months local authorities will apply regulations on examining
all imported drugs before they receive customs clearance.
The new regulations
are expected to be a big challenge for importers, as it will take several
months for the complete examination of a single drug.
“These examinations
are going to be a major burden on importers,” the representative said.
Under
According to
London-headquartered proprietary data, analysis and ratings provider Business
Monitor International,
High-end
sales get liquidity boost
High-end apartments
are still selling despite not being targeted by the government’s real estate
stimulus package.
According to CBRE
Vietnam, high-end apartments worth more than VND30 million ($1,400) per
square metre were showing improved liquidity.
A CBRE quarterly
report claimed the market had shown more activity than normal despite the
traditionally post-lunar new year period.
Meanwhile Ngo Thi
Huong Giang, senior manager of Research and Consultancy at Savills
“High-end projects are
trying to woo customers.
The Ministry of
Construction reported that in the first two months of this year,
In reality, the
improvement of high-end apartment sales began at the end of last year.
Good sales have
also been seen at
At Indochina Plaza
Hanoi, 11 units were sold in the first quarter of this year, despite the
price tag of VND51 million ($2,400) per square metre. This project attracted
customers because of its special buy-to-lease deal with the commitment of a
turnover of VND400 million ($18,786) per year per unit, or from 7 to 8 per
cent of return on investment annually.
Indochina Plaza
Hanoi has only 29 unsold units while Thang Long Number One and Mandarin
Garden claim only 10 per cent of their units are left for sale and these were
units over 100 square metre each.
According to CBRE
Vietnam’s executive director Richard Leech, good brands and almost finished
products were unsurprisingly popular choices.
Due to the
limitation of high-rise buildings in the centre of the city, during the last
year, only D.’ Le Pont D’or - Hoang Cau high-end apartment project began
construction.
Excluding major
projects such as
Due to the limited
supply, projects owners are maintaining high prices. The
According to Pham
Thanh Hung, deputy chaiman of Cen Group, the price of high-end apartments had
been maintained in city centre locations such as Ba Dinh, Hoan Kiem, Dong Da
and Hai Ba Trung districts thanks to many customers wanting to benefit from
good infrastructure facilities despite the limited housing stock.
This requirement
meant that despite the available properties in further flung districts such
as Ha Dong, Tu Liem and Hoang Mai, their location would act against them due
to poorer quality services and local infrastructure in their localities.
In addition,
Masterplan
backlog plagues capital
According to Nguyen
Van Thinh, head of the Administration Department of the Hanoi People’s
Committe, due to changes to the Hanoi Master Plan some of the projects had
been halted to await instructions from the committee.
Thinh also said
that other projects were idle due to the downturn in the real estate market.
“Many developers
aren’t pursuing their projects as they are waiting for a more vibrant
market,” Thinh added.
“The committee has
reviewed projects and reminded developers to stay on schedule, but this is very
difficult for them right now,” he said.
Tran Anh Dung, head
of the Inspectorate under the Minaistry of Natural Resources and Environment
said many of the delayed projects were located in areas being re-envisioned
by city planners.
“We will review all
delayed projects and those which are suspended for obvious reasons will be
allowed to extend their timetables,” he explained.
He added that any
project that has been idle for a long period would get from three to six
months from April 1 to restart. If their work fails to resume, they would
face potential shut-down.
Several well-known
delayed properties include a Financial and Trading complex invested in by TSQ
Vietnam in Ha Dong district, and Petrowaco apartment tower on
Notable
partially-finished suspended projects include
Foreign-backed
projects face the same issue. Even major projects such as Korean-backed
Booyoung Vina in Ha Dong, and the Pacific Land Vietnam’s Habiotech project in
Nam Thang Long area and a retail, office, apartment and sports centre backed
by Russia’s Togi Vietnam in Me Linh district.
According to the
latest figures from Savills
According to the
Ministry of Construction (MoC), there were more than 300 real estate projects
nationwide that had been suspended due to lack of finance.
The country now has
3,258 active real estate projects. Many of those, the MoC noted, could be
restructured as smaller apartments for lower income buyers.
The Hanoi People’s
Committee recently announced that it would not consider new commercial
housing project proposals until the end of this year. The official figures
released show that
The committee is
also allowing developers to convert their commercial housing projects into
social housing projects, to resolve current market stagnation.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Năm, 24 tháng 4, 2014
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