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BUSINESS
IN BRIEF 11/7
SBV plans
flexible monetary policy for H2
The State Bank of
At a conference
held by the central bank on July 9, Binh announced this year's first half
credit growth of 3.52%, which was largely due to a 12.03% growth in foreign
credit and 2.17% growth in dong credit.
The low credit
growth, which has stirred concerns in recent weeks, was blamed on weak
capital absorption capacity of the economy, unsolved budget debts and the
process of handling collaterals along with the loan underwriting mechanism
for enterprises.
In H2, the central
bank will focus on managing bad debts, raising total demand and facilitating
market recovery.
Policy makers said
that credit demand in the second half was always twice than that of the first
half. They expressed optimistic provisionary views over the entire year's
target of 12 to 14% credit growth.
Earlier, a report
by the Monetary Policy Department showed that roughly 87 to 90% of capital
sources in banks flew into Government bonds and State Treasury bills.
The central bank on
July 9 said that the bond and bill purchases would help credit institutions
raise liquidity provision. However, they warned that the holding may probably
cause some difficulty if banks were not active in balancing tenures.
In terms of credit
structures in H1, credit increased 10% for exports, 5.8% for auxiliary
industries and 13% for hi-tech applied production firms. Meanwhile, small and
medium sized enterprises showed a 2% increase in credit.
As of May 2014,
loans allocated for agriculture and rural areas were up 2.56% against the end
of 2013.
Dong liquidity was
secured. Loan-to-deposit ratio (LTD) in the dong came down to 87.4% from
92.5% in December last. [The LTD ratio accesses a bank's liquidity. If the
ratio is too high, it means that banks might not have enough liquidity to
cover any unforeseen fund requirements and if the ratio is too low, banks may
not be earning as much as they could be.]
By the end of June,
the foreign exchange reserves were US$35 billion. The central bank said the
dollarisation in the economy was dwindling.
The ratio of dollar
deposit-to-total money supply was 11.4%, slightly down from 12.4% by the end
of last year.
New
technologies showcased at MTA Vietnam 2014
As many as 310
enterprises from 20 countries and territories are showcasing their newest
technologies at MTA Vietnam 2014, an exhibition of precision engineering,
machine tools and metalworking taking place between July 8 and 11 at the
Saigon Exhibition and Convention Center (SECC) in HCMC’s District 7.
Foreign exhibitors
account for more than 80% of the total number, displaying their best-selling
and latest technologies and products at the event co-organized by Singapore
Exhibition Services Pte Ltd and VCCI Exhibition Service Co., Ltd.
Carina Albrecht,
business development and marketing manager of TRUMPF that has joined the
annual exhibition for the past five years, said the event has facilitated the
company in approaching the fast-growing manufacturing industry in
Lee Wai Yip,
general manager of Hurco for Southeast Asia, said its operation in
Tee Boon Teong,
deputy country head of Singapore Exhibition Services Company, said
In addition to the
exhibition, there will be seminars on related manufacturing issues, trends
and development of
The capital
attracted US$560 million in foreign direct investment (FDI) in the first half
of the year, representing a 14% year-on-year increase.
The Vice Chairman
of the municipal People's Committee, Vu Hong Khanh, told a conference held in
"Production
and businesses of FDI enterprises in
He said total
investment in the city between January and June was estimated at VND871.1
trillion (US$41.4 billion), increasing 10.2% against the corresponding period
last year.
The city's budget
spent VND7.7 trillion (US$366.7 million) on development investment, meeting
44% of the whole year's target.
He added that
The city has been
rushed to complete 22 key projects by 2015.
It has done its
planning on improving the business environment as well as increasing its
provincial competitiveness index (PCI). It held meetings with around 70
businesses in the capital to quickly solve their difficulties while
continuing to apply policies on preferential lending rates.
Statistics from the
committee showed that by the end of May, the city had 6,150 businesses
registered for operations with total capital of VND33.2 trillion
(US$1.58billion), reducing 1.5% in comparison with the same period last year.
More than 5,300
firms stopped their operations, representing a 4.7% year-on-year increase, of
which 848 are implementing insolvency procedures.
He said the city
would continue to resolve its difficulties in agriculture, rural areas,
export products and support industry. It has supported small and medium sized
enterprises with low lending rates of between 7-8%, he added.
ASEAN on
verge of borderless economy
The ASEAN Economic
Community to be established next year is expected to enable free movement of
goods, capital, and skilled labour, a seminar heard in
Le Trieu Dung,
deputy general director of the Ministry of Industry and Trade's Multilateral
Trade Policy Department, said trade between
The establishment
of the AEC will bring more choices of goods and services to Vietnamese
consumers and enable Vietnamese companies to increase exports to ASEAN
countries because their goods will have zero duty, he said.
It will facilitate
mobility of skilled labour within the bloc via mutual recognition
arrangements (MRAs), enabling skilled, experienced professionals to work and
ultimately be certified in a destination country, he said.
Jae Hee Chang, a
specialist on employers' activities at the Bangkok-based International Labour
Organisation (ILO), said MRAs aim to promote mobility of skilled
professionals, attract regional talents to meet staffing shortages, boost
regional competitiveness, and improve the quality of services throughout
ASEAN.
Under ASEAN MRAs,
eight categories of professionals – in medicine, dentistry, nursing,
accounting, surveying, engineering, architecture, and tourism — will be able
to move freely within the region, she said.
She said an ILO
survey of regional employers on skills and competitiveness, which polled 240
firms in 10 countries, found that "most enterprises are optimistic that
greater labour mobility, lower trade barriers, and free investment flows will
boost their competitiveness, but few understand the AEC fully and many are
not ready to capitalise on the opportunities."
It showed that
skill gaps are a major concern across the region since companies find it hard
to recruit personnel with the skills they need, she said.
For
It is vital for
The language and
culture barriers are very important to address, she added.
There is a need for
more engagement by companies with the MRAs and in particular the ASEAN
Qualifications Reference Framework, she said, adding that they should be more
active in having dialogues with the Government and education organisations to
reform training curriculums.
Ngo Dinh Duc,
general director of HR company Le & Associates, said skilled workers will
have more choices in the future, but they must equip themselves with good
English speaking skills and improve their productivity and attitude towards
work.
To retain talent,
employers need to build a good image for their company, offer a good working
environment and salaries, bonuses, and welfare policies, and invest more in
human resources development strategies, he said.
The level of labour
integration in ASEAN remained low, Le Trieu Dung said, adding that the AEC
will have a great impact on the labour market in ASEAN, especially
23
countries, territories to attend Pharmex 2014
Nearly 600
businesses from 23 countries and territories have registered to attend the
9th international medical exhibition at the Saigon Exhibition and Convention
Centre in
This is an umbrella
exhibition encompassing five related medical industries.
Pharmex is
dedicated to pharmaceuticals and related equipment and technology; Medex to
medical equipment and devices; Analytex to laboratory products and equipment;
Beautycare to cosmetic, massage, and spa products; and Hospex to high quality
medical services.
The event aims to
update attendees with knowledge of the latest innovations, developments and
equipment in the medical sector and exchange experiences and thoughts on the
best approaches to achieve sustainability.
Last year’s event attracted
416 businesses from 21 countries and territories, displaying their products
and services in 550 stands.
Thailand
markets products in Vietnam
Nearly 200 Thai
businesses are showcasing their high-quality products at an exhibition in
On display at over
260 stands are foods, beverages, health care and beauty products, gifts &
decorations, toys for kids, furniture, stationery, plastics, and household
electrical appliances, as well as educational, tourism and restaurant
products and services.
The exhibition is
expected to help Thai manufacturers, trading companies and distributors
penetrate deeper into the Vietnamese market and cater to local consumers’
diverse tastes.
Over the past 13
years, the annual event has proved successful, seeing an increase in the
number of contracts signed between the two countries’ business circles.
At present,
Bilateral trade ties
have developed steadily in recent years.
US to levy anti-dumping duty on pipes
The Viet Nam
Competition Authority reported on July 7 that the
This follows a vote
to that effect by the US International Trade Commission (USITC).
The department said
that the USITC made its decision while affirming that the import of welded
stainless pressure pipes from the three countries has been causing
significant losses to local firms which produce the same product.
Basing on the
USITC's voting result, the US Department of Commerce (DoC) is likely to
impose anti-dumping duty on imported welded stainless pressure pipes from
July 13, 2014.
Last month, the DoC
submitted the conclusions of its investigation, under which Vietnamese
manufacturers and exporters would have to pay an anti-dumping duty of 16.25
per cent. Earlier, on December 31, 2013, DoC had made a preliminary decision
of imposing duty ranging from 17.72 per cent to 53.91 per cent on Vietnamese
enterprises.
Meanwhile, DoC has
set dumping margins, ranging from 22.07 per cent to 167.11 per cent on
Malaysian imports, and from 23.89 per cent to 24.01 per cent on Thai
products.
According to the
Viet Nam Competition Authority, the
The case involving
welded stainless steel pressure pipes is the fourth anti-dumping and
countervailing duty lawsuit the
The other three
lawsuits involved oil tubular goods, carbon-welded steel pipes and steel wire
garment hangers.
Vietnamese
wood exports to grow rapidly
The forecast of the
country's expansion of its global market share is based on the fact that the
prices of European products have remained high, while Chinese products are
being charged a high anti-dumping tax.
In September last
year, the
Speaking at a
meeting to announce the overall development plans for
According to the
Viet Nam Timber and Forest Products Association (Vietfores), the export of
wood products to the
Hanh noted that
some timber such as melaleuca, rubber timber and cultivated timber had become
He claimed that
rising timber exports had not impacted the country's forests, but he
encouraged forest cultivation, adding that forest coverage was expected to
rise from approximately 43.5 per cent this year to 45 per cent next year.
Industry and Trade
Minister Vu Huy Hoang said
International
organisations had also praised
Wood and timber
product exports are among
Mobile
retailer plans listing on
The shares of Dau
Tu The Gioi Di Dong Jsc, (Mobile World Investment Corporation or MWI Corp) will
be officially traded on the HCM City Stock Exchange from July 14.
This was announced
by the southern bourse on Monday.
MWI Corp will be
listed as MWG and its shares will be priced at VND68,000 or US$3.2 per share,
with a vibration amplitude of 20 per cent.
With 62.72 million
shares listed, the market capitalisation of MWI Corp will initially be
VND4.264 trillion ($200.18 million).
Currently, MWI Corp
has four major stakeholders, each having holdings of more than 10 per cent:
two founders with holdings of 17 per cent and 18.7 per cent; CDH Electric Bee
Limited with 18.8 per cent; and Mekong Capital with 14.3 per cent.
MWI Corp expects to
reach a turnover of more than VND13 trillion or $619 million this year, an
increase of 37.1 per cent over last year with the after-tax profit being
VND435 billion or $20.7 million, up 68.3 per cent.
Last year, MWI Corp
earned VND9.498 trillion or $452.2 million in turnover and VND258 billion or
$12.2 million in net profit.
The company was
founded in March 2004 and has been involved in trading and repairing of
mobile phones, digital devices and e-commerce.
The Gioi Di Dong
(Mobile World), which runs the store chain known as thegioididong.com , has a
25 per cent share of
Another MWI Corp
member, The Gioi Dien Tu (Electronics World), runs dienmay.com.
Cut
brokerage fees to lower prices, urge experts
Purchasing power in
the second half of the year could improve, if authorities manage to lower
consumer prices by reducing fees for brokerage services and supporting
capital for production.
According to the
General Statistics Office (GSO), the total retail sales of goods and services
in the first half of this year was estimated at US$68.5 billion, up 10.7 per
cent over the same period last year.
However, excluding
inflation, the growth was only 5.7 per cent, just equivalent of the rate in
the five-month period, and lower than the four-month period's 6 per cent,
that was showing signs of levelling off.
"A large chunk
of consumers are tightening their belts. This will make it more difficult for
producers to develop or expand the market," said market observer Nguyen
Minh Phong.
Vu Vinh Phu,
Chairman of Ha Noi Supermarkets Association, said that purchasing power would
be at a standstill, and even if there was an improvement, it would be very
modest.
"If the
situation persists, it will probably cause stagnation in production,
circulation and consumption," Phu said.
In an attempt to
bolster purchasing power, Phu suggested that authorities create more jobs,
reorganise delivery systems to lower brokerage service fees, counter goods
smuggling and fraud and penalise those found indulging in market
manipulations.
Any move to
eradicate brokerage service systems must be focused, so as to reduce prices
of consumer goods, Phong said.
"This, it is
hoped will encourage people to spend more and manufacturers to do their
jobs," he added.
Van Duc Muoi,
Chairman of HCM City Food and Foodstuff Association, said that capital
resource was another key problem that enterprises expected to get help with.
Experts have urged
the central bank to cut the dong interest rate further, in order to ease the
capital cost burden on businesses, especially small- and medium-sized
enterprises.
Annual interest
rates charged on privileged loans hover around 7 to 8 per cent. For the
manufacturing sector, the rates are 9 to 10 per cent for short term loans and
10.5 to 12 per cent for mid and long terms loans per year. For dollar loans,
popular lending rates are 3 to 7 per cent annually.
In a related move,
economists have encouraged enterprises to make the most of the Government's
support, such as designed lending packages for the agricultural sector, to
revive businesses and boost purchasing power.
In the first six
months, retail sales, which contributed three-fourth to the total value rose
by 12.2 per cent – the lowest level among four components that included
hotels and restaurants, retail sales, consumption and tourism services.
Tourism services posted the highest increasing rate of 20.5 per cent.
Rising petrol and
power prices and health-care services in
Other indicators
announced previously also showed that industrial production was also in
difficulty with high inventories (nearly 80 per cent) in the first six
months, coupled with a rising number of companies being dissolved or being
forced to halt operations (up 16.3 per cent over the same period last year).
Dong Thap
greenlights fish value chain project
The Cuu Long (
The project aims to
ensure a stable outlet for the fish as well as harmonising profits for all
stakeholders involved in the value chain.
It would help
farmers avoid a "price drop on a bumper harvest", according to
provincial authorities.
Phan Kim Sa, deputy
director of the provincial Department of Industry and Trade, said a close
linkage between farmers and enterprises would gradually eliminate
intermediaries involved in the trading of the fish.
Under the project,
farmers will breed the fish following contracts with enterprises. Enterprises
will then supply farmers with output materials and build a brand for the
fish.
Through the
project, the province wants to re-organise production of co-operatives so
that they are able to sign contracts with enterprises, he said.
This year, the
pilot model will be implemented in Binh Thanh Commune in Cao Lanh District,
with the participation of 21 farmers under the Binh Thanh Pink Tilapia
Production and Consumption Co-operative and Hoang Long Seafood Processing Co
Ltd.
This would be
vertical linkage chain producing pink tilapia brood stock, mature fish,
processing the fish and consumption.
Banks will increase
the loan limit at preferential interest rates for co-operatives participating
in the programme, while training courses will be organised to provide farmers
with advanced farming techniques.
Vo Tuan Kiet,
director of Binh Thanh Pink Tilapia Production and Consumption Co-operative,
said co-operative members were pleased that the programme would help them
find outlets to sell their fish.
Rice and tra fish
are two key products of the agricultural province.
The province for
many consecutive years has led the country in output and export revenue of
fresh water fish, with revenue from tra fish exports accounting for more than
half.
US drug
giant arrives in HCM City
Eli Lilly and
Company, one of the world's leading pharmaceutical companies, opened an
office in
Jannie Oosthuizen,
the company's vice president and director of Asian Operations, said the
company invested almost US$5.3 billion in research and development last year.
Salt
production surges on high prices
The country's salt
production has reached 870,000 tonnes in the first half of the year, an
increase of 9.3 per cent year-on-year, according to the Ministry of
Agriculture and Rural Development.
Of the quantity, more
than 237,800 tonnes were produced on large-scale fields and the rest by
individual farmers on a small scale.
For the first six
months of the year, the volume of salt harvested from large-scale fields
increased by 23 per cent over the same period last year.
As of June 20, the
country's quantity of salt in stock is about 346,800 tonnes.
For the first half
of the year,
Farmers, who have
had a good harvest this year because of favourable weather, are now entering
the peak salt season.
Farmer Pham Canh
Nhan, who owns 3,300sq.m of salt fields in Tuy Phuoc District in Binh Dinh
Province, said he had harvested more than 50 tonnes of salt and earned VND60
million (US$2,800).
Traders are paying
VND1,300 ($0.06) a kilo for "clean" salt harvested in fields lined
with canvas sheets that protect it from soil contamination.
"With this
price, salt farmers can make a profit of VND600-700 a kilo," Nhan said.
The price of salt
harvested in fields without canvas sheets is VND1,000 a kilo.
With higher prices,
many farmers in Phu My, Phu Mat and Tuy Phuoc districts have resumed
producing salt in fields that had been left vacant in previous years.
Nguyen Xuan Nam, an
official with the Binh Dinh Sub-department of Rural Development, said demand
for salt to process has increased compared to previous years.
In the first half
of the year, the two salt processors in Binh Dinh have bought a total of
3,6000 tonnes of salt to produce refined and iodised salt, he said.
"To increase
value, farmers should invest in producing clean salt by using canvas sheets
on salt fields," he said.
Binh Dinh has
produced a total of 15,321 tonnes of salt in the first half of the year, up
20 per cent against the same period last year, according to the province's
Department of Agriculture and Rural Development.
The ministry has
encouraged farmers to use advanced production techniques, including the use
of canvas sheets on salt fields to produce a cleaner salt.
Many salt-producing
provinces have taught farmers advanced techniques, and have invested in
infrastructure for salt production and transport.
Nguyen Thanh Cong,
chairman of the Ninh Thuy Salt Cooperative, which uses canvas sheets to
produce salt in Ninh Hoa Town in the central province of Khanh Hoa, said salt
yields had increased two times compared to traditional methods that do not
use any kind of lining atop the soil.
Salt harvested on
canvas sheets is whiter, he said.
Many farmers are
aware that using canvas sheets would produce higher quality of salt and yield
more profits, but they do not have enough money to invest in this method.
Each hectare of
salt produced on canvas sheets costs VND200 million ($9,500).
Dollar
credit growth safe: SBV
There is no need to
worry about credit growth in foreign currencies in the first half of this
year as the ratio of dollar loans versus mobilisation is within its safe
threshold.
Head of the central
bank's money policy department Nguyen Thi Hong said this to the local press
on Sunday.
The Ministry of
Planning and Investment's statistics showed that credit in foreign currencies
grew by 10.51 per cent, while the growth of dong loans was only 0.68 per cent
as of June 20.
Hong listed three
factors that are supposed to ensure the liquidity of foreign currencies, in a
response to an earlier report of the National Financial Supervisory Council
which said that credit in foreign currencies was bearing certain pressure.
First, the dollar
loans in May increased by 9.35 per cent against the end of 2013, but
increased by 1.34 per cent only, year over year.
Second, taking into
account all deposits and savings from domestic accounts and other capital
sources, the ratio of dollar spending is only between 50 per cent and 60 per
cent.
Third, most of the
dollar borrowers are companies which have shown proof of having dollar
resources to repay the loan. Otherwise, dollar loans are only granted to
companies in priority sectors such as exports, agriculture, hi-tech applied
agribusiness and auxiliary industry.
"While the
overall credit growth is low, the central bank flexibly allows commercial
banks to expand credit in foreign currencies," Hong said.
The State Bank of
Viet Nam (SBV) reported that the overall credit growth in the first six
months was 2.3 per cent. The banking system now has six more months to
achieve 12 per cent credit growth by the end of the year.
Hong said that
credit in foreign currencies significantly contributed to the overall credit
growth. In May 2014, Hong said if dollar loans had not increased by 9.35 per
cent, the entire credit would not have reached 1.51 per cent.
The State Bank of
Viet Nam's reports showed that the borrowing costs of dollar loans were 3 to
4 percentage points lower than that of dong loans. This has been blamed for
the steady increase of dollar loans.
The annual interest
rates charged over privileged loans hover around 7 to 8 per cent. For
manufacturing sectors, the rates are 9 to 10 per cent for short-term loans
and 10.5 to 12 per cent for mid- and long–term loans per year. For dollar
loans, the popular lending rates are between 3 to 7 per cent annually.
Although she
affirmed that the recent rise of foreign credit is in line with the State
Bank's direction, Hong said that the bolstering by dollar loans was a
short-term policy.
The central bank
would go ahead with measures for de-dollarisation of Viet Nam's economy. In
the coming weeks, SBV will closely supervise credit growth, especially dong
loans, to made proper adjustment.
Economists have
urged the central bank to cut the dong interest rate further, in order to
ease the capital cost burden on businesses. The central bank said it would
take time to consider the issue thoroughly for the sake of the dong position
in the long run.
Last week, Pham
Xuan Hoe, deputy head of the central bank's Monetary Policy Department, said
that the total capital supply increased by 6 per cent as of 25 June. Roughly
87 to 90 per cent of the capital resources in banks went to Government bonds
and State Treasury bills, though they should go towards supporting economic
recovery instead.
Shrimp,
prawn demand lifts seafood exports
The export value of
seafood in the first half of this year grew strongly due to a sharp increase
in shrimps and prawns.
The Ministry of
Agriculture and Rural Development said the value of seafood exports rose 24.2
per cent to US$3.45 billion, of which 48 to 49 per cent came from shrimps and
prawns.
The Viet Nam
Association of Seafood Exporters and Producers said shrimps and prawns were
strongly sought by the United States, the European Union, Japan, South Korea
and China.
Earlier this year,
disease in many shrimps and prawn supplies from other countries led to a boom
in the domestic market, which was unaffected.
Tran Van Pham,
general director of Soc Trang Seafood Joint Stock Company, the second largest
shrimp exporter in Viet Nam, said shrimp exporters were kept busy processing
product.
At the end of June,
in the Cuu Long (Mekong) Delta provinces, shrimp and prawn prices rose by
VND20,000 per kilo to between VND120,000-125,000kg for white-leg shrimp and
from VND255,000 to 260,000kg for prawn. In mid-June, prices rose from
VND275,000 to 280,000 per kilo for prawn.
Pham said that high
prices for shrimp and prawn had forced some importers to delay buying
Vietnamese product.
The total export
value of seafood this year is expected to reach $6.9 billion, which includes
$3.5 billion from shrimp and prawn exports, similar to that of 2013.
Trade with
Singapore rises 23% in 2014
Two-way trade
between Viet Nam and Singapore experienced a year-on-year increase of 23 per
cent to over US$6.52 billion over the past five months, according to the
Singapore Department of Statistics.
During the reviewed
period, Viet Nam exported over $1.22 billion worth of goods to Singapore, up
24 per cent over the same period last year.
Among the key
Vietnamese exports to the market were telephones and their components,
boilers, machinery and spare parts. Coffee and tea, as well as glass
products, construction glass, and oil and gas comprised the rest of the
exports.
Meanwhile, Viet
Nam's imports to this island country reached approximately $5.3 billion, a
yearly rise of 22 per cent.
VN
construction material exports to Africa rising
Viet Nam generated
over US$127.4 million from exporting construction materials to Africa last
year, up 25 per cent year-on-year, according to the General Department of
Customs statistics.
Africa was regarded
as a lucrative market for Vietnamese construction material due to its
insufficient infrastructure and the weak production capabilities of
construction material producers in the bloc, even as the demand for these
products had been increasing significantly, the Ministry of Industry and
Trade's Department of Africa, West and South Asia Market said.
The department
forecasts that Viet Nam's construction material exports would continue to
rise in the future, making it one of Viet Nam's key export items
Sugar firm to open
Singapore subsidiary
The Ninh Hoa Sugar
Joint Stock Company (NHS) will establish an affiliate firm in Singapore's
High Street Centre, with the investment capital coming from its own equity.
According to a
management board decision issued last Friday, the subsidiary will be named
the NHSS Private Limited Company and will have a charter capital of VND14.7
billion, or US$700,000.
It is expected to
sell about 6,000 tonnes of sugar and 10,000 tonnes of byproducts per year,
within an operational term of 50 years.
Ninh Hoa is based
in the central Nha Trang City and has over VND915 billion, or $43.57 million,
in equity.
Steel
consumption up in first half
Vietnam’s total
steel consumption recorded a slight increase in the first half of this year,
according to the Ministry of Industry and Trade.
Statistics from the
ministry show that in the reviewed period, the consumption of rolled steel
reached 1.72 million tonnes, a year-on-year rise of 25.4 percent, while 1.74
million tonnes of steel sheets and bars were sold, up 7.4 percent.
Raw steel
consumption saw a decrease of 2.9 percent to nearly 1.4 million tonnes.
Before June 1 when
a circular on steel quality management was still valid, businesses in Vietnam
imported a large amount of alloyed steel, with the import of this product in
May recording an impressive surge of 110 percent against April.
In the first five
months of this year, Vietnam imported 1.74 million tonnes of alloyed steel, a
year-on-year rise of 76.7 percent, and 4.32 million tonnes of steel products,
up 13.6 percent from the same period last year.
The ministry has
forecast a slight decrease in steel production and consumption due to the
same trend in construction demand.
HCM City
increases trade ties with foreign partners
Businesses in Ho
Chi Minh City have been offered a chance to study the investment and
settlement policies and opportunities in the US, especially in Vermont.
At a July 8 seminar
co-hosted by the Vietnamese Consulate General in San Francisco and Vermont ,
and the Vietnam Chamber of Commerce and Industry’s Ho Chi Minh City branch,
experts introduced investment programmes and projects that meet Vietnamese
businesses’ demands.
Vietnamese
investors also met legal consultants to learn about investment environment
and cooperation opportunities in the US .
Over the past time,
the US ’s trade and investment activities have positively contributed to HCM
City ’s economic development. By the end of the second quarter of 2014, the
country had had 285 projects worth nearly 525 million USD, ranking 12 th
among foreign investors in the city.
In the first half
of this year, many US multinational companies sought investment opportunities
in Vietnam and HCM City in particular, mainly in the fields of information
technology and education.
The same day, a
Vietnam-Thailand business forum took place in the city with the aim of
promoting bilateral cooperation in potential areas such as foodstuff,
beverages, healthcare services, tourism, restaurant and hotel services.
Six-month
credit growth reaches 3.52 percent
Vietnam’s credit
growth in the first half of this year surged only 3.52 percent compared to
last December, the State Bank of Vietnam reported on July 8.
The central bank
added that the high increase of foreign currency credit contributed
remarkably to the result.
Statistics by the
SBV in the reviewed period show that the credit system is witnessing positive
signs as it is turning towards priority sectors.
By the end of June,
credit for exports had risen 10 percent year-on-year, while those for support
industries, high technology application businesses and smalls and
medium-sized enterprises stayed at 5.8, 13 and 2 percent, respectively.
The central bank
explained that the credit increase remained slow due to the low loan demand
of local businesses in the first months of the year, the weak capital
absorption of the economy, state budget insolvency and the ineligibility of
several enterprises to access loans.
In the context of
the low credit growth, SBV’s credit policy has been applied flexibly. The
bank has allowed a number of credit institutions to give foreign currency
loans to the Government’s priority fields.
San-Earth
factory operational in central province
A factory
manufacturing earth resistance reducing material (San Earth) was commissioned
in Binh Son district of central Quang Ngai province on July 8.
This is the first
of its kind in Vietnam and one of the three in the world run by Japan’s
Sankosha Corporation to serve telecoms, electricity and navigation
industries.
The project is
designed with a capacity of producing 500 tonnes of San Earth material each
year to cater for both local and foreign demands.
Vice Secretary of
the Quang Ngai Party Committee Tran Van Minh said he hopes in the coming time
Sankosha Vietnam company will apply advanced technology and standards on
occupational hygiene and safety for high-quality products.-
IT firms
get nod to use outsourced services
Vietnamese
information technology firms get the nod from Prime Minister Nguyen Tan Dung
to use outsourced services, the English language news website VietNamNet
Bridge reported.
IT firms will
provide software products and technology systems under the mode of service
packages to customers for use.
The systems will
run on the suppliers’ platforms. Customers can order the services they want
and pay for service packages, while the service providers will take the
responsibilities for all the stages of the service deployment, from operation
to maintenance.
According to Do Cao
Bao, Chair of FPT Information System Company (FIS), there are four basic
benefits institutions and individuals can enjoy when using outsourced
services.
They can cut down
expenses, save time, improve productivity and reduce labour costs.
Regarding the
investment rate, the companies only have to pay small sums of money for what
they receive for years, instead of having to spend big money at once to build
up information systems of their own.
Customers will also
be able to save time because they do not have to follow the complicated
administrative procedures. If they use IT firms’ services, they will not have
to worry about procedures because this will be undertaken by the IT firms.
Using IT services
instead of developing information systems of one’s own is believed to be an
economical solution for everyone. They do not need to maintain a large
workforce to run IT works.
Nguyen Xuan Hoang,
CEO of Misa, said IT services are especially suitable for small and medium
enterprises and state agencies, which can easily access high-level management
systems, and do not have to spend too much money on servers and systems.
However, analysts
commented that it is too early to say the Government decision on allowing
state agencies to use outsourced IT services would help develop the market.
In fact, Vietnamese
institutions and individuals have been aware of the benefits of IT services.
However, they are hesitant to go ahead.
Bao of FIS said
that this is understandable. The “hesitancy” is the thing regularly seen in
developing countries, where the management level remains lower than in
developed economies.
However, Bao said,
this does not mean that the opportunity to develop the IT outsourced service
market has not come. Vietnam is believed to have all the necessary conditions
to do this right now.
IT has been
developing more rapidly than the average development of the other sectors of
the national economy. Some experts believe that Vietnam’s readiness index is
even higher than that of other countries with similar GDP growth rates.
Beer market
shows bubbly prospects
Japanese beer-maker
Sapporo plans to more than double its production capacity in Vietnam, said
Hirofumi Kishi, general director of Sapporo Vietnam Ltd.
The firm intends to
ramp up its production line from an output of 40 million litres to 100
million per year.
Kishi also reported
that Sapporo plans to further develop its distribution network in Ho Chi Minh
City and the rest of the southern region before expanding to Hanoi, but did
not disclose the total amount of the investment. He added that Sapporo will
target the high-end segment and projects 200 per cent sales growth in 2014.
Vietnam is among
the top 25 countries in the world in terms of beer consumption, with more
than 3 billion litres in 2013. Kishi noted that this is likely to grow by at
least 10 per cent in 2014.
Many brewers in
Vietnam are expanding production to take advantage of its fast growing
market. Sabeco, which currently holds a 44 per cent domestic market share,
recently broke ground on a new factory to expand its output to 2 billion
litres a year. Habeco also plans to expand its operations this year.
Foreign beer
producers are following suit. Anheuser-Busch InBev announced its plans to
build a brewery in the southern province of Binh Duong that will make its
Budweiser brand. A number of other foreign brewers, including China’s
Tsingtao, the Netherlands’ Heineken and Singapore’s Tiger, are increasing their
exports to Vietnam.
Vietnam's
bad debt rate exceeds 4%
The bad debt rate
of Vietnamese banks had surpassed 4% of total outstanding loans by the end of
April this year.
In January this
year, the bad debt rate of the Vietnamese banking system was 3.74%, which
increased to 3.86% in February, 3.93% in March and 4.03% by the end of April
this year.
Despite the
government’s efforts, the bad debt rate of the Vietnamese banking system has
continued rising over the past year, particularly after Vietnam Asset Management
Company (VAMC) was put into operation. By June 15, VAMC had bought around
VND47 trillion (USD2.23 billion) in bad debt from credit institutions.
According to
Moody's, bad debt in the Vietnamese banking system accounts for at least 15%
of total debt, a far cry from the State Bank of Vietnam's estimate.
However, the SBV
contests Moody’s rating, saying that the "positive signs" along
with the efforts of local banks have helped to ease the problem. According to
the SBV, by the end of 2012, the rate of bad debt rate in the Vietnamese
banking system increased to 4.73% as of October 2013, and reduced to 3.63% by
late December. The state bank said that these numbers were calculated through
standard accounting practices and continues to stand by them.
Company
contributes to Vietnam's fishing fleet
A private company
in HCM City is planning to invest some VND1.5 trillion (USD71.4 million) into
buy 95 fishing ships with equipment to be used on the East Sea.
The Duc Khai
Company also plans to buy rescue ships and two helicopters for emergency
cases. Their representatives will fly to South Korea this week to negotiate
and make the purchases of the first 12 fishing ships. Pham Ngoc Lam, chairman
of Duc Khai Company said this is purely an investment, it is not a PR tactic
nor has it political purposes, as some rumours have said.
According to Lam,
he travelled abroad to inspect the ships directly. 45 ships will be bought
from South Korean partners. They expect to receive all of the ships in
August. Duc Khai Company will also buy more ships from Japan, the US and
Australia.
Each ship costs
from VND6 billion to VND10 billion. Afterwards, Duc Khai Company will spend
VND2-4 billion more on each ship to equip it for fishing. These ships are
already 10 years old, but representatives from Duc Khai Company said they
still have 30 to 40 more years of use left. They can run at 22 nautical miles
per hour with modern navigation equipment.
Instead of taking
50% of profits from their expeditions, the company will only take 34%, with
65% going to the crew, and 1% deposited into a fund for fishermen.
PM approves
to create HCM City Region by 2030
Prime Minister
Nguyen Tan Dung signed off last week on a decision to create the Ho Chi Minh
City Region by 2030 with a vision to 2050.
The master plan
will connect the country's largest city with key economic regions in the
South Central Coast and in the context of climate change and rising sea
levels.
The planning area
includes Ho Chi Minh City and the regional provinces of Binh Duong, Binh Phuoc,
Tay Ninh, Long An, Ba Ria -Vung Tau and Tien Giang, a total area of 30, 404
sq km that had a population of just over 18 million in 2013.
The plan will also
develop rural areas that suit traditional culture and production conditions
and establish hi-tech agriculture zones, urban agriculture zones and
specialized agriculture zones.
In order to
preserve natural landscapes and ecological features, the plan suggests the
establishment of national - and international - level tourism centres.-
Vinamilk
and Masan dominate leadership positions in Katar Worldpanel latest rankings
The latest study of
the most chosen FMCG brands by Kantar Worldpanel shows that some leading
Vietnamese food and beverage companies are far ahead in Vietnamese consumers’
preferences.
This leadership of
local Vietnamese brands in the foods category is reflected in the fact that
eight out of top 10 food brands in Vietnam are from local manufacturers.
Two companies-
Vinamilk and Masan- dominate the leadership positions in the rankings.
Vinamilk holds the
top position in the urban market while Masan holds the top position in the
rural market.
Masan has three
brands in the top ten ranking for the rural market, including the number 1
position for its fish sauce brand Nam Ngu, as well as rankings for instant
noodle brand Kokomi and seasonings brand Tam Thai Tu.
In the urban
market, Vinamilk has three brands in the top ten, while Masan has the number
2 position for its fish sauce brands Chin-su and Nam Ngu.
“In Vietnam, global
brands perform strongly and lead the ranking of health, beauty and home care
sectors in both urban and rural Vietnam. Yet, when it comes to food, local
brands have more advantages,” said David Anjoubault, general manager, Kantar
Worldpanel Vietnam.
“Indeed, local
consumers feel enormous pride towards local brands and their heritage,
particularly in food, and local brands can also be more flexible and
responsive to local consumer needs. This liking for local means global
manufacturers must react to cultural differences and spend time understanding
local consumers’ needs and wants to win shoppers’ hearts,” he added.
Kantar Worldpanel
is part of the WPP group, which is the world’s leading advertising group, and
is considered a global leader in consumer knowledge and insights.
Source:
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Năm, 10 tháng 7, 2014
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