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BUSINESS
IN BRIEF 23/6
New
exchange rate not affecting inflation control
A senior State Bank
of Vietnam (SBV) official has affirmed the bank’s June 19 decision to raise
the VND/US$ rate by 1% will help boost exports and not put pressure on
inflation control efforts.
Director of the
SBV's Monetary Policy Department Nguyen Thi Hong said in the context of a
stable monetary market with inflation in check, the rate adjustment is
expected to stimulate exports, which grew at a robust 15.4% in the first five
months of the year.
In the reviewed
period,
Hong added that as
inflation remains low, as evidenced by the May consumer price index (CPI)
rise of only 1.08% over late 2013, the new rate should have minimal, if any,
impact on the inflation control target set by the Government.
The bank’s monetary
policy has so far this year helped stabilise the macro-economy and contain
inflation at a low level. The national CPI in May inched up just 0.2%
compared to April and a modest 4.72% over the same period last year.
The ceiling
interest rate is now lower than it was in late 2013 while supply and demand
of foreign currencies are ensured.
According to Hong,
the adjustment does not come as a surprise to anyone as the SBV announced its
directions for the monetary policy and banking activities, including the
forex rate adjustment.
Businesses and
credit institutions have had ample opportunity to modify their operational
plans to accommodate the adjustment as required.
The forex exchange
rate adjustment will more likely than not spur exports in the remaining
months of this year to support economic expansion, she said.
She revealed the
central bank will keep a close watch on the forex market and introduce a
series of measures to stabilise it in line with the new ceiling level.
As of June
19, the new interbank exchange rate is VND21,246 per dollar, up from
VND21,036 per dollar
In the remaining
months of this year, the SBV will continue to actively pursue a flexible
monetary policy to control inflation within the set target’s level, stabilise
macro-economy, support economic growth and ensure safe operations of credit
organisations, Hong said.
According to
financial analysts’ at the
The Vietnam Dong is
well supported by improved exports and low import growth, they say.
In addition,
foreign direct investment (FDI) in
Middle East,
Vietnamese firms
should be proactive in boosting exports to the promising African and Middle
Eastern markets, a seminar heard in
Together, the two
regions have 70 countries with a population of more than 1.2 billion and a
huge demand for all kinds of goods, especially consumer goods, offering great
potential for Vietnamese exports, said Pham Trung Nghia, deputy director of
the Middle East,
African countries
need consumer goods, food and foodstuff, machinery, and drugs while the
Middle East needs food and foodstuff, agricultural produce, seafood, and
consumer goods, he said, adding that
"Many
Vietnamese products have won trust among African consumers and the
He noted that
Vietnamese
investment in African countries has increased recently, mainly in telecom and
oil and gas, and many companies plan to set up factories to process cashew
and timber in
Many African and
Middle-Eastern firms too have invested in Viet Nam in many sectors including
industrial processing, wholesale, retail, information technology, oil
refining, infrastructure development, dairy farming, and steel.
Despite the
potential, a lack of information about each other as well as differences in
culture, religion, and business practices have prevented trade with the two
regions from fulfilling their potential, the seminar heard.
Besides, there are
still risks Vietnamese companies face while doing business with them,
including payment issues, Nghia said.
To avoid this,
payment should be made by banks using letters of credit and exporters should
negotiate with importers at least 30 per cent advance payment, he said.
Since each country
in the two regions has its own import regulations, enterprises should study
the markets carefully, delegates said.
Besides, food,
pharmaceuticals, and cosmetics exported to the markets must have Halal
certification, they said.
Bui Thi Thanh An,
deputy head of the Viet Nam Trade Promotion Agency in HCM City, said Viet Nam
has diplomatic relations with all African and Middle Eastern countries,
creating favourable conditions to boost exports as well as investment.
It imports crude
oil, copper, liquefied gas, feedstock for plastic, cashew, and wood.
The seminar was
organised by the agency and department.
New project
targets large scale emissions reductions
The Support to the
Nationally Appropriate Mitigation Actions (NAMAs) Project in
NAMAs is an integrated,
national scale mitigation project that allows potentially large-scale
emission reductions by aligning national socio-economic development goals
into preventative activities.
The project is
being co-implemented by GIZ and the Viet Nam Institute of Meteorology,
Hydrology and Environment.
It will run from
2014 to 2018 with a budget of up to four million euros (US$5.4 million) as
part of the International Climate Initiative.
The German Federal
Ministry for the Environment, Nature Conservation, Building and Nuclear
Safety is supporting the initiative following a decision adopted by the
German Bundestag.
The overall
objective of the project is to strengthen State management in response to
climate change, and these efforts will monitored throughout. Attracting
domestic and international funding will also be a priority.
These efforts will
help realise the government's greenhouse gas emission reduction targets under
the National Green Growth Strategy.
The best practices
and lessons learnt from this project are expected to benefit local NAMAs
projects and other countries through regional and global dialogues and
peer-to-peer exchanges.
Banks eye
bonds to capitalise on low rates
After companies, it
is now the turn of banks to issue bonds to take advantage of the low
interest-rate regime to raise funds and also, in some cases, increase Tier II
capital to achieve capital adequacy.
Bond coupon rates
now stand at very low levels. Interest on government bonds have fallen by
110-120 basis points (100 basis points equal 1 percent) since early this year
to 5.6 percent for those with a two-year maturity, 6.1 percent for three-year
bonds, and 7.1 percent for five-year bonds.
Ho Chi Minh City
Development Commercial Joint Stock Bank (HDBank) plans to issue three-year
bonds to a group of individual investors, according to its preliminary
prospectus.
This is part of the
bank's plan to raise a total of 1.4 trillion VND (66.35million USD) this year
to augment its long and medium-term funds to meet companies' credit needs.
Two major
State-owned banks are also completing procedures to issue bonds.
One of them plans
to issue five-year bonds worth 2 trillion VND (94.78 million USD). The other
will issue 10-year bonds that will increase tier II capital and improve its
capital adequacy ratio (CAR).
Early this year the
Investment and Development Bank of Vietnam (BIDV) had revealed that it was
considering an issue of bonds to increase its tier II capital to achieve CAR
stipulated by international norms.
Analysts said one
of the above bond issues would carry a coupon of only 7.5 percent, just 1.4
percent higher than the rate on government bonds with the same maturity.
In the past the gap
used to be much bigger.
Just last October
HDBank issued three-year bonds at 10.5 percent interest, which was 3-3.5
percent higher than that of comparable government bonds.
Some medium-sized
banks plan to issue bonds at 2 percent higher than government bonds.
Banks' bond
issuance is starting earlier this year than last when the first issue only
took place in August.
DBJ becomes
Fecon's strategic partner
Vietnam’s one of
leading contractors Fecon Foundation Engineering and Underground Construction
JSC today signed a strategic investment and cooperation deal with the Japan
Southeast Asia Development Fund of the Development Bank of Japan (DBJ).
Under the deal, DBJ
will spend VND195 billion ($9.3 million) buying Fecon’s convertible bonds for
the year 2014 to become the latter’s strategic investor.
Fecon will use the
money to innovate the firm’s equipment and strengthen its construction
capability at major on-going projects, including Nghi Son petrochemical
plant, Thai Binh 1 thermal power plant, Danang – Quang Ngai expressway, Kyoei
Steel Ninh Binh plant and many other projects in the coming time.
Not only
participating in financial investment, DBJ is also committed to supporting
Fecon to improve management capacity, broaden market and strengthen the
relationship with Japanese investors in infrastructure and other foreign
invested projects in
Besides, the
Japanese partner also mulls introducing top reliable partners from
DBJ, entirely owned
by the Japanese government, reported $172 billion in total asset value and
$3.6 billion in total incomes last year. DBJ has been operating in
Last year, Fecon
scored VND1.2 trillion ($57 million) in the total revenue and more than
VND116 billion ($5.5 million) in net profit. 2014 is the second consecutive
year Fecon was listed among top 50 businesses in
Steel firms lobby
against policy favouring Hoa Phat
Both local and
foreign firms are claiming that a government decision to ban the export of
iron ore is benefiting only a single company – Hoa Phat Group.
In early June, a
number of steel manufacturing firms (both local and foreign joint ventures)
signed and sent a proposal to the Vietnam Steel Association (VSA), claiming
that the government decision to prohibit iron ore exports was detrimental to
their performance.
According to the
proposal, the main reason behind steel firms’ poor performance was not
economic difficulties or the flat lining property market but primarily
because of the block on exports.
The signatories
said that only one firm, leading steel maker Hoa Phat Group (HPG), benefited
from the policy, while most others were in doldrums.
“The ore price in
the domestic market has declined sharply, from VND2,200 per kilogram to only
VND1,200 per kilogram, a half of that of the world market and entirely due to
the government’s decision, Naturally, mining sites have been put in a fix
with sliding incomes and these price differences have mostly benefited HPG,
which is the leading buyer in the market,” the proposal claimed.
The steel firms
also said that “HPG proposed banning ore exports and promised to buy processed
ores at a price at least equal to that of the export price. Now it’s buying
them at half the world price, directly against its pledge.”
“With material
prices only half of what other firms spend on input materials, as they mainly
buy steel scrap, HPG has manipulated the market and driven steel firms into
hardships,” the proposal noted.
In fact among
leading steel makers, only two firms – Thai Nguyen Iron and Steel Corporation
(Tisco), also a top player, and HPG – are using blast kilns for ore
processing while the rest import scrap for processing.
While Tisco mainly
sources ores from mining sites under its management, HPG is the leading buyer
of iron ores in the domestic market, so it is clearly the biggest beneficiary
of the government decision to ban ore exports.
Last year Tisco
turned out 386,619 tonnes of steel billet, 197,629 tonnes of blast-kiln iron,
484,078 tonnes of rolled steel and had reported revenue of VND7.478 ($356
million). But the firm still suffered VND288 billion ($13.7 million) in
losses.
This year Tisco has
projected turning out 190,000 tonnes of blast-kiln iron, 410,000 tonnes of
steel billet, and 596,000 tonnes of steel with a modest profit of VND35
billion ($1.6 million).
With about 9 per
cent of rolled steel market share, Tisco currently ranks third behind Pomina
and HPG, according to the VSA ranking.
Meanwhile, HPG’s
market share jumped from 13.7 per cent in 2012 to 15.2 per cent by late 2013.
Last year the firm
scored 12 per cent and 95 per cent growth in its revenue and after-tax profits
with VND19.2 trillion ($914 million) and VND2.01 trillion ($95.7 million),
respectively.
In steel production
and related business, the group posted VND1.668 trillion ($79.4 million) in
post-tax profits, more than double that of 2012’s VND730 billion ($34.7
million).
Dentsu
Aegis Network Vietnam has new CEO
Dentsu Aegis
Network today announced changes in its leadership team in
The combined
network, which employs 162 people in the country, named Toshinori Aoki the
chief executive officer for the group’s operations in
He will step into
his new role starting from July 1.
With innovative
brand building at its core, the Dentsu Aegis Network will continue to provide
integrated solutions to clients in
“We are lucky and
blessed to have so many talented and passionate people in our network and I
believe that Aoki is the right person to steer the network in
“
Aoki, currently
chairman and managing Director at Dentsu Alpha, will lead Dentsu Aegis
Network
He’s had more than
25 years in the creative industry with experiences across the media and
account services division locally and abroad.
“As one of the
biggest emerging economies,
As part of Dentsu
Inc., Dentsu Aegis Network, active in brand, media and digital communications
services, is headquartered in
Online food
delivery marketplace wins European Tech Startup Awards
Leading online food
delivery marketplace foodpanda/hellofood was just selected as the best
ecommerce startup at 2014 European Tech Startup Awards “The Europas” on June
10, 2014 in
The company was
also honoured with vote of confidence by a group of expert judges as well as
public vote.
With services in
over 40 countries since its launch less than two years ago, the company
startup has proven to be one of the most exceptional startups worldwide.
Besides its
successful worldwide expansion, foodpanda/hellofood has reached another
milestone by partnering with over 30,000 restaurants worldwide.
Recently foodpanda
started its service in the
Its global managing
director, Ralf Wenzel said “It’s a great honour for us to be awarded for our
achievements of the last months. We are on an enormous growth track and we
look forward to bring this proven business model everywhere and become the
number 1 choice platform for our customers.”
Founded in 2009,
The Europas are the premier awards for
The awards
celebrate the most forward thinking, progressive and innovative tech companies
in
The online
marketplace helps restaurants to increase delivery sales through online and
mobile platforms and provides them with constantly evolving technology and
analytics.
Customers can
choose their favorite meals online and foodpanda processes the orders
directly to the restaurants, which deliver the meal to the customers.
Indian
animal feed suppliers to explore
A delegation of
animal feed suppliers from
They are on a
fact-finding trip to explore new opportunities in the Southeast Asian market,
which imported $4 billion worth of animal feed and raw materials last year.
Those Indian
suppliers are the members of the Solvent Extractors’ Association of India
(SEA), an apex body of the solvent extraction industry in
Their main job is
to process oil cakes, oil seeds and rice bran in modern solvent extraction
plants, and to produce the extractions or meals of rapeseed, soybean,
groundnut, copra, de-oiled rice bran, sal seed, cottonseed, sesame seed,
mango kernel, safflower seed and sunflower seed.
Those animal feed
products, which have passed strict quality control tests, can be used for
poultry and cattle as they contain high nutritional value with a protein
content ranging between 15 percent and 50 percent, said SEA.
The fact-finding
trip and the seminar are held to strengthen relations with end users of
Indian De-oiled Meals in the
They are also meant
to undertake on-the-spot studies on overall demand and to understand quality
requirements of oil meals by end users, they added.
It will offer both
Indian and local firms a chance to study the overall feed industry, the
supply and demand of feed ingredients and to enhance mutual co-operation
between suppliers and importers.
Indian exports
account for over 5 million tons of oil meals annually.
Piaggio
More than 410,000
two-wheelers have been manufactured by Piaggio
The figure, which
was announced at the visit of the Italian Prime Minister Matteo Renzi to
Piaggio Vietnam’s factory today, include 220,000 Vespa scooters, for sales on
all the group’s main markets in Southeast Asia and Asia Pacific such as
Vietnam, Indonesia, Japan, Thailand, Singapore, China, Australia and New
Zealand.
Piaggio
According to the
company’s statement, Piaggio
3 big
Vietnamese firms join in $566mn cattle project
A multifaceted
group has joined hands with a major dairy producer and a leading
cattle-slaughtering company in a multi-million-dollar project that will raise
cows and bulls for meat and milk in
Hoang Anh Gia Lai
Group, Vissan, and NutiFood inked the cooperative deal for the project that
will include as many as 236,000 cows on Monday.
The property
developer HAGL will cover half of the VND12 trillion (US$566.04 million)
investment required to raise the cattle.
NutiFood will
earmark VND5 trillion ($235.85 million) to set up a fresh milk and yoghurt
manufacturing plant, using raw materials from the project.
Meat supplier
Vissan will cover the remaining investment.
HAGL will raise
120,000 meat cattle of Australian breed to supply to Vissan, which will
slaughter the animals and distribute their meat domestically, chairman Doan
Nguyen Duc said.
It will also breed
116,000 dairy cattle imported from
The first batch of
the meat cattle will arrive at HAGL’s farm in the Central Highlands
The first dairy
cattle imported from
BUV receives formal approval as
British University
Vietnam (BUV) just received formal approval as a registered centre by the
BUV has been
recognised for its commitment and quality of teaching to
“We are so
delighted that
“This collaboration
involves both of our organisations working closely together in order to
benefit students by enriching their learning experience. We are proud to be
one of only 70 centres worldwide including
The business
programmes and international lecturers at
Minister of
Industry and Trade Vu Huy Hoang said at the bi-annual Vietnam Business Forum
held in Hanoi two weeks ago that Vietnam had asked the proposed Trans-Pacific
Partnership (TPP) members for a ‘transformation roadmap” in implementing the
yarn-forward rule, or rule of origin, to the country’s garment and textile
industry.
“This proposal has
been accepted in-principle by other countries,” said Hoang, implying that it
could be approved once the TPP takes effect in the future.
“This means that in
five years, or maybe more, if the garment and textile supporting industry is
still underdeveloped, other TPP nations would still allow
He said
The TPP is a free
trade agreement currently being negotiated by 12 countries including the US,
Australia, Malaysia, New Zealand, Singapore, Japan, Mexico, and Vietnam.
The yarn-forward
rule, under the TPP, requires that the yarns, fabrics and final garments
exported within the TPP are produced in TPP countries. If
Hoang admitted that
the yarn-forward rule was essential to preventing external players from
benefiting from the agreement. However, he noted that
“While implementing
the roadmap,
With its advantage
of cheap labour,
Since
For example,
Textile and
garment sector aims to reduce
The Vietnam Textile
and Apparel Association (Vitas) just sent a dispatch to businesses in the
sector requiring them to supply data on their textile and garment materials
and accessories, fibres, yarns, fabrics and dyes imported from
“Based on the
figures provided by firms, Vitas will have up-to-date figures on the types of
materials and accessories imported from China, and will from there devise
plans for investment and development of supply sources from the domestic
market as well as sourcing output market distribution,” said Vitas deputy
chairwoman Dang Phuong Dung.
Priority substitute
markets for Vietnamese textile and garment firms to source materials are
In the Ministry of
Trade’s most recent periodical meeting reviewing the situation in May and the
first five months, regarding measures to reduce imports from
In fact, domestic
supply of fabrics has increased in recent years, but the production cost is
still pricey and mostly higher than that of imported products.
Chairman of Garmex
Saigon Le Quang Hung said the company had yet to find another market to
supersede
Last year, total
import value of the textile and garment sector came to $13 billion. Of this,
approximately $6 billion came from the Chinese market alone.
The import value of
cotton, fibre, fabrics, and accessories in the first five months of 2014 was
estimated at $5.7 billion, with more than half coming from
Current
power supply allays foreign investor concerns
Power outages are currently
not an issue for foreign investors, reported the Ministry of Industry and
Trade.
Vu Huy Hoang,
Minister of Industry and Trade affirmed to foreign investors last week at the
bi-annual Vietnam Business Forum held in Hanoi that, “there are no outages in
Vietnam at this time”.
Hoang’s statement
was in response to Marc Townsend, chairman of the American Chamber of
Commerce, who said that a lack of adequate infrastructure facilities in terms
of power and transport had discouraged foreign investment to
Hoang asserted
that, “Power supply in
He admitted that
there were outages in some parts of the country, but that they were caused by
weak transmission systems, and not a supply shortage.
According to the
Ministry of Industry and Trade (MoIT), the nation’s electricity generation in
the first four months of this year rose 10.28 per cent on-year, reaching 41.9
billion kilowatt hours.
Hoang said this was
enough to meet the current electricity consumption demand throughout the
country. He added that current electricity reserves were around 20-30 per
cent of total generation capacity.
Though Hoang did
say there were no outages at this time, he did not address the issue of
future outages as demand rises commensurate with economic recovery.
Power shortages
have been one of the biggest concerns of foreign investors in
The Vietnamese
government has plans to build more new power plants to ensure national energy
security, but most of the projects are moving slowly.
Tran Viet Ngai,
chairman of the Vietnam Energy Association, said the government must push up
the construction of power plants to increase supply by 2015, when he believes
the country could face a severe power shortage due to rising demand.
In order to
accelerate the construction of new power plants, last year the government
ordered the MoIT to adjust the national electricity development master plan
for the 2011-2020 period. The ministry, however, has not yet given any information
on the revised content.
According to the
government, the construction of many power projects, particularly those in
the south, have been delayed, requiring additional supply from the north and
central regions to be sent to the south. This threatens the supply security
of the entire power system.
Villas and
land plot sales competing with apartments
While apartment
sales continue along a downward trend, developers of land plots and villas
are hoping to attract buyers by reducing their prices.
Traditionally,
villas and land plots in
However, due to low
sales of villas and land plots, developers have decided to lower their asking
price, making it more affordable to those who might otherwise buy apartments.
Recently, the
developer of a villa project in
In the New House
project located on the outskirts of
Land plots on the
fringes of Hanoi’s central business district such as on Dai Co Viet and Tran
Khat Chan are being sold for between VND30 to 35 million ($1,400 to $1,600)
per square metre. Those prices, although slightly higher than other land
plots, are in line with the pricing of apartment projects nearby.
According to CBRE
Vietnam, during the first quarter of this year, the land plot sector saw
signs of growth, because many developers had reduced their prices to entice
customers.
There were no new
housing project launches in the first months of the year, apart from the
re-launch of the Ao Sao, Xuan Phuong and Dai Thanh projects whose housing
prices range from VND2 billion to VND3.5 billion ($95,000 to $166,000).
CBRE also noted
that some recently-launched projects are applying attractive prices that
undercut the pricing of many condominiums or residential land in the same
district. For example, the Ao Sao project is being sold at VND20 million
($950) per square metre; Dai Thanh from VND26 million ($1,200) per square
metre; and Tan Tay Do which is only VND13 million ($620) per square metre.
“This illustrates
the emerging trend that the housing market is competing directly with low- to
mid-priced condominiums in the VND2-3 billion bracket,” said CBRE.
Land plots in Nam
Anh Khanh’s new urban area are now being sold for VND18 to 20 million ($860
to $950) per square metre.
Meanwhile, prices
in the Le Trong Tan – Hadong urban development project are only VND15 million
($714) per square metre. This price was reduced by more than 50 per cent
compared to 2010.
Price reductions
have also been recorded in projects with little activity in the outlying
districts of
In an attempt to
promote sales, developers are now offering unprecedented payment terms. For
instance, buyers in the first phase of
According to
figures from Ministry of Construction,
Figures from the
Ministry of Construction reveal that
Important
destination for real estate investors
A large number of
economists said that the real estate market of
Mr. Dang Duc Thanh,
Dean of the Viet Nam Economists Club said that real estate prices in
In the period from
Q3, 2014 to early 2015, the domestic real estate market would recover if the
Government continues to support enterprises to handle high inventory levels
and non-performing loans and raise liquidity for the real estate market so
that buyers and sellers would be able to meet each other.
According to Mr.
Neil MacGregor, Managing Director of Savills Viet
Mr. Neil MacGregor
said that
He also revealed
that customers of Savills Viet
Phan Thanh Mai,
Secretary General of the Viet Nam Real Estate Association said that eight
commercial banks are piloting a program to connect investors, bidders,
material providers and banks to remove difficulties and handle high inventory
levels in the real estate market. The move has defrosted the real estate
market.
First
quarter sees thousands of company closings
Consequences of the
recession still haunt
According to a
report from the Business Registration Office of the Ministry of Planning and Investment,
in the first five months of the year, 31,228 enterprises were established,
with over VND173 trillion (USD8.2 billion) in registered capital. However,
the number of enterprises that stopped operations is 27,867, an increase of
20.5% compared to same period last year.
In fact, over
18,000 out of 27,867 firms have effectively ceased operations, but have not
yet completed the legal procedures to reflect the fact. These companies were
included in the report so as to give a realistic view of
The report also
pointed out that, even though rescue packages from the government and
agencies have shown to be effective, domestic firms still face many
difficulties.
According to
surveys conducted by the General Statistic Office, private firms have the
highest rate of closure, followed by FDI firms and state-ownd enterprises. Of
those surveyed, 58.7% of enterprises said they had to shut down because they
could not find reliable markets for their products.
Many enterprises
said that this year the market is showing signs of more opportunities than
last year, but expectations are still not high. Of the enterprises surveyed,
55.8% said they could not make exact assessments of the the supply and demand
situation, while 50.5% planned on not taking out business loans.
The Ministry of
Industry and Trade and the Chamber of Commerce and Industry of Vietnam are
said to have played little role in supplying information to enterprises as
far as international markets, having a great impact on the success or failure
of domestic firms, particularly those specializing in export.
Banks in
deal to support real estate market
Eight banks have
entered into an important cooperation deal to provide financial support for
property developers, contractors and building material suppliers in an effort
to reduce high inventories in the building material and real estate sectors.
The cooperation
deal was signed on Wednesday by the Bank for Investment and Development of
Vietnam (BIDV), the Vietnam Bank for Agriculture and Rural Development
(Agribank), the Bank for Foreign Trade of Vietnam (Vietcombank), the Vietnam
Joint Stock Commercial Bank for Industry and Trade (VietinBank), Mekong Delta
Housing Development Bank (MHBank), the Vietnam Construction Bank (VNCB),
Saigon-Hanoi Bank (SHB) and Lienvietpostbank.
BIDV is the lead
institution in the group in implementing the deal with the property
developers, contractors and building material suppliers.
According to the
credit department of the central bank, the cooperation deal would benefit all
the parties involved, not only the banks and property developers, contractors
and building material suppliers but also home buyers and the economy as a
whole.
Previously, some
banks developed credit packages to link property developers, contractors and
building material suppliers but the result was not generated as wished since
banks competed with one another to attract clients. Therefore, the central
bank has assigned BIDV to team up with other banks in providing loans for
corporate borrowers.
The cooperation is
expected to breathe new life into the local construction sector and property
market which are still grappling with a host of challenges related to loan
access and huge inventories. Experts said housing projects in urban areas and
new township developments would benefit most from the cooperation.
In the past years,
the Government and its agencies have taken steps to fuel recovery of the
economy and the market. For example, early last year, the Government issued
Resolution 02 extending support to production, sales and bad debt settlement.
Nearly one year
ago, the central bank and the Ministry of Construction launched a
VND30-trillion low-cost home loan program for housing projects and low-income
buyers but the local property market has not shown clear signs of recovery.
Ministry
takes punitive measures against expressway contractors
The Ministry of
Transport said it will lower payments for some contractors involved in the
Cau Gie-Ninh Binh Expressway project as some stretches of the road have sunk
or cracked after a short period of inauguration.
The ministry said
in a statement issued on June 12 that Vietnam Expressway Corporation (VEC)
had been told to withdraw and deduct more than VND2.1 billion from its
payments for the contractors.
The payment
deduction will hit the contractors in packages No. 5 and No. 6 as well as a
cost reduction by half for project adjustment for Transport Engineering
Design Inc. Besides, the supervision fee of QCI of Cuba is also cut.
The ministry has
banned QCI and two units under an equipment and technology consulting and
construction auditing firm and Transport Construction Co. Ltd. No. 481 from
participating in any projects invested by VEC over a period of two years. In
addition, the ministry will not allow 10 Cuban consulting engineers to work
as supervisors at transport works in Vietnam.
The ministry has
criticized staff of advisory departments, including the Planning and
Investment Department and the Transport Construction and Quality Management
Bureau.
In March this year,
State Audit detected many problems regarding plan preparations for Cau
Gie-Ninh Binh Expressway, which cost nearly VND9 trillion.
After being put
into use for a while, the 50-kilometer-long expressway connecting Hanoi and
Ninh Binh Province has sunk or developed cracks at many sections.
The same problems
were also found on the Uong Bi-Halong section of National Highway 18 one week
after it was opened to traffic last month. As a consequence, three officials
of the project management unit were suspended from their positions.
SKEZ needs
US$311 billion for development toward 2020
The total capital
needed for development in the Southern Key Economic Zone (SKEZ) until 2020
will amount to US$311 billion, according to a new master zoning plan for the
region.
The Ministry of
Planning and Investment last week announced the plan for socioeconomic
development with a vision toward 2030 and a master socio-economic development
plan for the key Mekong Delta until 2020 with a vision toward 2030.
The master plan
envisages SKEZ development until 2020 will cost US$311 billion, 1.82 times of
the country’s gross domestic product last year, with 30-31% contributed by
the State budget.
Vice Minister of
Planning and Investment Dang Huy Dong said this was an initial calculation
and that this amount would be sourced from the State budget and other sources
including from overseas.
According to the
Development Strategy Institute under the ministry, the huge investment would
be prioritized for the projects related to transport infrastructure
development, high-tech, high-quality services and high-quality agriculture.
The projects
include HCMC-Long Thanh-Dau Giay, Ben Luc-Long Thanh and HCMC-Moc Bai expressways,
belt roads No. 3 and No. 4 in HCMC, upgrades of national highways 1, 51, 22B
and Ho Chi Minh Road, phase one of Long Thanh International Airport, and
upgrades of Tan Son Nhat and Con Son airports.
Duong Quoc Xuan,
deputy head of the Southwest Steering Committee, called for the ministry to
pay more attention to the most important projects for development and give
priority to the traffic projects as underdeveloped transport infrastructure
would hinder the region’s growth and development.
SKEZ groups HCMC,
Dong Nai, Ba Ria-Vung Tau, Binh Duong, Long An, Tay Ninh, Binh Phuoc and Tien
Giang.
Under the master
zoning plan, manufacturing will be moved from HCMC to neighboring provinces
like Tay Ninh, Long An, Binh Phuoc and Tien Giang. Large-scale industrial-service-urban
complexes in Dong Nai’s Long Thanh District, Ba Ria-Vung Tau’s Phu My new
city and Binh Duong industrial-service-urban complex are also envisioned in
the plan.
Investments will
mainly go to service, industry, science and technology in SKEZ and HCMC will
serve as the hub of the region. Ba Ria-Vung Tau Province will be the hub for
port and logistics services, petrochemical and supporting industries.
The plan also
envisages fruit farms, industrial clusters and border gate economic zones in
Tay Ninh and Binh Phuoc. Meanwhile, Long An and Tien Giang will play an
important role in ensuring food security and food for export.
In the master plan
for the Mekong Delta, Can Tho, Ca Mau, An Giang and Kien Giang will become
key food, seafood and fruit producing areas. The region will also be the
country’s energy center with three major power centers, namely O Mon, Ca Mau
and Kien Luong.
Agribank’s
top leaders appointed
Top leaders have
been approved by the central bank for Vietnam Bank for Agriculture and Rural
Development (Agribank), the largest bank in Vietnam in terms of capital,
assets and workforce.
The State Bank of
Vietnam on June 9 announced a decision appointing new members of the
management board and board of directors of the bank, a move expected to kick
off the bank’s restructuring scheme to help the lender improve operations.
Under the decision,
the bank’s CEO Trinh Ngoc Khanh is now named board chairman, while Pham Duc
An, former deputy general director of Bank for Investment and Development of
Vietnam, is appointed vice board chairman.
Tiet Van Thanh,
deputy general director of Agribank, now serves as a board member and CEO of
the bank.
The State Bank of
Vietnam also appointed five other board members for Agribank, with four of
them formerly being senior officials of the central bank.
According to
Agribank’s website, its total outstanding loans totaled VND530.7 trillion as
of May 25, including over VND380.5 trillion extended for the agriculture and
rural development.
However, the State
Audit of Vietnam in the 2013 audit report hinted unhealthy operations of the
lender.
In 2012, Agribank
repeatedly violated safety ratios. Its return on equity (ROE) was 5.39%, a
strong drop compared to 7.11% in the previous year, the report said.
Ending 2012,
Agribank reported credit growth rate of 10.22% but its bad debt ratio was
8.16%, surging by one-third year-on-year.
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Chủ Nhật, 22 tháng 6, 2014
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