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BUSINESS
IN BRIEF 14/7
Dong Nai:
Private companies’ registered capital rockets
The registered
capital of privately-owned enterprises in the southern
Half of that sum
came from about 1,000 newly established businesses, while the rest was from
300 existing ones, according to the provincial Department of Planning and
Investment.
By June 15, the
number of private firms across Dong Nai stood at 19,408 with a total
registered capital of over 120.105 trillion VND (5.72 billion USD).
Director of the
department Bo Ngoc Thu attributed the outcome to the province’s regular
dialogues with both domestic and foreign enterprises to remove obstacles and
facilitate credit access. It has also put into practice new favourable tax
and customs policies.
To maintain growth
pace and help out the circle, Dong Nai continues improving its investment
climate by cutting down business fees, favouring land use, while ensuring
greater transparency of administrative agencies, she added.
Irregularities
the culprit of road subsidence, say experts
The key reason
behind the sinking of roads has not been pinpointed despite a host of conferences,
but according to transport experts, such subsidence might have been caused by
conspiracies between consulting, supervision, execution and management units.
At a conference
held in HCMC last week to identify what had caused roads to sink, scientists
mentioned several possible causes.
Professor Phan Huy
Khang from the
Similarly,
Professor Nguyen Van Hung, a member of the team in charge of studying
subsidence of the
In addition,
vehicles run on only one lane, causing the road surface to deform, even
though the asphalt layer on top is replaced.
Meanwhile, vice
chairman of the
Besides, the
estimated volume of traffic to and from
To fix the road
subsidence, Professor Le Van Bach, also at the
Truong from the
However, Pham Sanh,
former head of the Phu My Bridge construction unit, objected to the
new-material scheme, saying that the use of polymer asphalt is costly and
unnecessary. Foreign countries are often quick in finding the main cause and
dealing with the problem while
“I think the main
reason lies in consulting and implementation units. If roads are built
appropriately, they cannot subside after a couple of months,” Sanh said.
One of the existing
problems when constructing roads is that contractors apply different standards
from different countries, resulting in inconsistent execution of a certain
road.
According to Sanh,
one main reason for road subsidence is irregularities among consulting,
supervision, implementation and management units as they might have reduced
the amount of materials and skipped certain implementation steps. Cau
Gie-Ninh Binh Expressway, National Highway 18 and HCMC-Long Thanh-Dau Giay
Expressway are typical examples for such irregularities, he said.
AmCham
extols TPP
When implemented,
the Trans-Pacific Partnership agreement will make
Herb Cochran,
executive director of the American Chamber of Commerce in
The TPP is a
high-standard regional free trade agreement under negotiation involving 12
countries including the
“The TPP will offer
duty-free entry into the
In fact, many
Alexander Fedman,
president of the US-ASEAN Business Council, said this was the biggest
delegation of the council to ever visit
Some American
companies have been planning to increase investments in
The US-based
multinational oil and gas company ExxonMobil is planning a mega gas
development project, worth $20 billion, on
Global chipset
manufacturer Intel Corporation recently announced plans to close its factory
in
The
But Cochran said
the actual number could be much higher as they may be reported based on a
subsidiary company’s location, such as
Cochran said US
companies in
However, if the TPP
is signed, these issues could be handled, Cochran said. For example, the TPP
chapter on transparency, anti-corruption, and regulatory coherence will
promote greater transparency, participation, and accountability in the
development of regulations and other government decisions.
In addition, the
chapter on customs, trade facilitation, and rules of origin, will help cut
red tape in trade, which will also reduce costs and increase customs
efficiencies, making it cheaper, easier, and faster for
Nearly
6,000 apartments find buyers in city
Realty firms in
HCMC sold 3,210 apartments in the second quarter, a year-on-year jump of
140%, taking the total apartment sales in the year’s first half to nearly
6,000 units, according to CB Richard Ellis Vietnam’s report (CBRE).
The property
research and management service company said the condos sold in the second
quarter belong to 11 projects of high-class, mid-end and low-cost housing
segments. In the first quarter, 2,600 apartments were successfully traded as
reported by CBRE in April.
CBRE said the fact
that homebuyers now can mortgage the houses they will own later at banks has
encouraged investors to continue their slower-than-expected projects.
Offered prices of
apartments in the city are now more affordable than in previous years.
Particularly, prices in many low-cost apartment projects have now slid to
less than VND15 million per square meter, a level which allows home buyers in
these projects to borrow from the VND30-trillion credit package.
In other
middle-range and high-class housing segments, selling prices have also edged
down by between 0.8% and 1.8% against the previous quarter. However, such
prices have risen by 1.9% and 0.7% year-on-year, respectively.
The price increase
is attributed to a change in calculating the floor area in line with Circular
3 dated April 8, 2014 by the Ministry of Construction. This circular forces
housing developers to offer buyers the usable area instead of the entire area
of an apartment including surrounding walls.
Marc Townsend,
managing director of CBRE Vietnam, predicts apartment prices will remain
stable for the rest of the year with more transactions to be forthcoming.
Duong Thuy Dung,
associate director of Research and Consulting of CBRE Vietnam, forecasts the
picture will grow positive with more stable selling prices.
Nguyen Ngoc Thanh,
vice chairman of the Vietnam National Real Estate Association (VNREA), told
the Daily that the low-cost housing segment has been faring well as such
condos meet the demand of locals. The investors now are paying close
attention to the projects intended for the low-income people rather than the
high-class apartment projects as before.
Over 6,900
apartments available in Nha Trang
In a related
development, the residential market in the coastal city of
Most of the
projects are located in wards along the coast, one or two kilometers away
from the beach.
Savills’s survey
shows that the land plot segment includes seven primary projects with the
offering prices from VND3.6 million to VND12.3 million per square meter. As
for the apartment segment, there are four active projects along
Most residential
projects are developed with a second home concept that targets homebuyers
from other provinces, especially from
VPIC1 and
Pinaco receive Q1 preferred quality award by Ford Motor
The Vietnam
Precision Industrial No.1 Company Limited (VPIC1), a leading manufacturer of
spare parts and accessories of automobile and motorbike, equipment using in
hospital in Vietnam, just caved its name among preferred suppliers and was
awarded Q1 certification by Ford Motor.
The award
acknowledges suppliers for superior quality and delivery, and ongoing
implementation of effective quality control system.
Q1 is evaluated
based on system capabilities, on-going performance and the results of Q1
manufacturing site assessment of the plant.
All of these
criteria take into account a comprehensive set of standards in diverse areas
ranging from quality and asset management, delivery rating to environment
management.
Accordingly, the
award recognises accomplishment and dedication to quality and delivery and it
represents Ford’s satisfaction and confidence in quality and delivery of its
suppliers.
VPIC1 and Pinaco
are two companies recently awarded Q1 certification by Ford Motor, followed
by Harada, the world leading antenna manufacturer, which got the award in
2007.
“Q1 has great
meaning to Ford plants all over the world. The award is also highly respected
in the automotive industry globally,” said Jesus Metelo Arias, Ford
“Receiving Ford’s
Q1 award is an honor and we are very proud of this accomplishment,” said Yu
Min Hui, chairman of VPIC1. “This achievement is a testament of our entire
team efforts and celebrates our ongoing commitment to providing quality
products and services surpassing customer expectations.”
Ministry
wants to limit pepper area at 50,000 hectares by 2020
The area under
pepper cultivation will be limited to 50,000 hectares in line with a master
plan for the pepper industry by 2020 just endorsed by the Ministry of
Agriculture and Rural Development despite the current area of 60,000
hectares.
In accordance with
Decision 1442 on the zoning and development plan by 2020 and with a vision
toward 2030, the area for growing pepper will be narrowed down to 50,000
hectares with average productivity of three tons per hectare and expected
export revenue of US$1.2 billion to US$1.3 billion.
Binh Phuoc will have
10,000 hectares to become the country’s key pepper growing province, followed
by Dong Nai, Ba Ria-Vung Tau, and Dak Nong each with 7,000 hectares, Gia Lai
with 5,500 hectares and Daklak with 5,000 hectares, according to the Vietnam
Pepper Association (VPA).
Other
The fact that
prices of pepper have remained high over the past time has encouraged farmers
to eliminate other crops such as cashew and cassava and switch to this
profitable crop while the ministry still insists on an area of 50,000
hectares only.
The export goal of
US$1.2 billion to US$1.3 billion is seen obtainable by VPA.
Statistics by the
agriculture ministry show
Multibillion-dollar property project in southern VN urged to speed
up
Authorities in the
southern
The requirement
came after an official inspection to review the progress of the $2.2 billion
Happyland project implemented by Phu An Investment - Construction and
Infrastructure Development.
Accordingly, Long
An Provincial People's Committee asked Phu An Co to map out feasible
solutions, including completing legal procedures to invite more investors to
join to resolve the deadlock on project financing.
On the other hand,
the firm should actively cooperate with the local government to quickly solve
problems in site clearance and handling the certificates of land use rights
for those who were displaced for the project.
Admitting the
difficulties in capital mobilization, An Phu Co continued to commit to carry
on and put the project into operation part by part. It is expected that a
part of the first phase of the project will be completed and put into
operation in the 2014-2015 period.
With a total
investment of $ 2.2 billion for the first phase, the Happyland entertainment
complex has seen a disbursement of about $330 million.
Ho Chi Minh
City-based Khang Thong Group, the former developer of the mega-theme park,
lost its license to develop an industrial park in the southern
Khang Thong, which
initiated the development of the US$2.2 billion entertainment complex in
neighboring Long An Province in 2011, had previously asked Tien Giang
authorities for a return of the industrial project to the province, citing
high land compensation expenses among their reasons.
In November 2011
Khang Thong broke ground on the Happyland entertainment complex, considered
the biggest tourism project in Southeast Asia, in the presence of Joe
Jackson, father of late pop king Michael Jackson, in Long An Province, south
of
Developed on a
338ha area in Ben Luc District, the multibillion-dollar project, inspired by
Disneyland, will include a theme park that costs $600 million, a 3.7 km
boardwalk, a shopping center, 3-5 star hotels, water parks, studios, indoor
and outdoor theaters, restaurants, a floating market, and other facilities.
The project site
along the Vam Co Dong River was once meant for a large-scale industrial park
but Khang Thong then switched to a tourist attraction construction plan
following environmental concerns.
The development is
projected to be
In February 2012,
Joseph Jackson, father of late pop king Michael Jackson, announced on his
website that he would pull out of the massive entertainment complex
Happyland. He had signed a deal to be involved in the construction of a major
Happyland hotel in 2011.
His withdrawal from
the development of the hotel was posted on his official website one moth
earlier, and confirmed by Phan Thi Phuong Thao, board chairman of its
developer Khang Thong Group.
The website said
that
He believed in the
growth potential of
Meanwhile, Thao
told the Saigon Times Online that Jackson signed a memorandum of understanding
with Khang Thong in February 2011 to advise and help it find investors for
the development of a five-star, 1,000-room hotel inside the complex.
The man has so far
recommended two
An American
manager, former boxer and former musician, the 82-year-old man is best known
as the father of American entertainers Michael Jackson and Janet Jackson, and
the creator and manager of The Jackson 5, a Motown group comprising several
of his children.
VND30-trillion
home credit package to benefit more people
The Government has
approved a Ministry of Construction proposal for allowing more people to gain
access to the VND30-trillion home loan package to buy low-cost apartments.
Apart from those
eligible to take out low-interest loans from the package, individuals and
households that want to buy social houses for lease and re-sale to workers,
low-income people and students, among others, can now borrow from the
preferential loan program of the Government.
During his visit to
worker dormitories in HCMC in May, Construction Minister Trinh Dinh Dung said
he would ask the Government to relax the requirements for accessing
low-interest home credit.
Industrial parks
now employ around 2.1 million workers and millions of others work outside
those parks, Dung said, and around 80% of them live in small, uncomfortable
and shabby rented homes.
The minister said
the problem has been partly solved since the Government issued Decree 188
last year on construction of housing for low-income urbanites.
However, Resolution
02 of the Government only regulates that low-interest loans from the package
will be provided for only those wanting to buy commercial homes that are less
than 70 square meters each and priced below VND15 million per square meter.
The decree makes no mention of priority policy for low-income people such as
workers and students.
A representative of
a real estate firm in HCMC said the ministry’s move would make it easy for
banks participating in the credit package to increase lending. Over the past
year only 7% of VND30 trillion has been disbursed.
After the
Government’s approval, the ministry would work with the State Bank of
Investors
can get investment certificates at home in Q3
Investors can get
investment certificates at home some time this quarter as HCMC authorities
have committed to process investment applications online, instead of forcing
investors to file their proposals in person.
The city’s
Department of Information and Communications said investors could get
feedback from authorities much faster than before thanks to the availability
of an online application system. As such, they do not have to spend much time
waiting at the Department of Planning and Investment.
The city’s
Department of Planning and Investment, and People’s Committee Office are now
working on a joint management program in which all investment documents and
evaluations are be stored in computers. The program will officially go into
operation some time this July.
The municipal
government last March informed businesses of the detailed procedure of
handling investment proposals by email in a bid to increase transparency.
The draft of the
amended law on investment stipulates investors would be required to apply for
an investment certificate for projects belonging to conditional business
fields, so for other fields of business, investors would just need to
register online and then start operations.
Dividends
main source of income for post-equitization Vinatex
Vietnam National
Textile and Garment Group (Vinatex) has said it will rely on dividends from
its affiliates and associate companies as a main source of income after it
undergoes equitization even though it will heavily invest in material
production.
BIDV Securities
Company (BSC), the consultant for Vinatex’s initial public offering (IPO),
announced a report at a road show of Vinatex in HCMC last Friday saying
Vinatex will invest VND3.4 trillion in eight fiber projects in 2013-2017 and
VND6 trillion in nine fabric projects in 2014-2017.
The country’s
leading textile and garment firm is looking to obtain revenue of nearly VND1.9
trillion this year and boost it to nearly VND8.7 trillion in 2016.
However, Vinatex
estimates low gross profit, at only VND80 billion this year, VND197 billion
in 2015 and VND313 billion in 2016. However, its after-tax profit is
projected to rise from VND300 billion in 2014 to VND562 billion in 2016,
buoyed by dividends from its affiliates and associate companies.
Le Tien Truong,
deputy general director of Vinatex, said Vinatex’s strategy is to invest in
material manufacturing plants, which will mainly supply its affiliates and
associate companies in the original design manufacturer (ODM) chain. This
will help the industry meet the Yarn Forward requirement in the Trans Pacific
Partnership agreement, which
For instance, Viet
Tien is a major shirt producer in the country but it has to import 70% of its
cloth needs. Vinatex’s forthcoming cloth production factories will supply
companies like Viet Tien, making it possible for those firms to sign ODM
contracts with customers from the TPP countries, Truong explained.
Therefore,
Vinatex’s investment in material plants will see low risk as it will not
compete with other material providers.
As per the report,
the parent firm Vinatex obtained VND116 billion in revenue last year. The
figure included those from only three units.
Financial
investments have always made up a large contribution to Vinatex’s revenues,
including dividends from member companies and deposit interest sums. Last
year it earned VND423 billion from financial investments, including VND322
billion worth of dividends.
Viet Tien
contributed the biggest dividend with VND67 billion, followed by Viet Thang
with VND29.6 billion and Phong Phu with VND48.1 billion. Vinatex had had 38
units as of end-2013.
The garment giant’s
IPO would be implemented on the Hochiminh Stock Exchange on July 22 with
nearly 122 million shares out of 500 million shares. With an initial price of
VND11,000 per share, the IPO is expected to raise VND1.22 trillion.
Ford
Ford
Led by continued
strong demand for the Fiesta, Transit, Everest and Ranger, June retail sales
of the company jumped 67% year-over-year to 972 units, capping off the best
quarterly performance since the fourth quarter of 2009 with overall retail
sales that soared 51% year-over-year.
Overall retail
sales for the first half of the year also reached a record sales high of
5,264 units, rising 54% from the same period last year, according to the
company.
“We continued to
build on our momentum since the start of the year, allowing us to make
further progress on our One Ford plan in
The segment-leading
Ford Ranger and Transit continue their popularity among Vietnamese consumers,
with both nameplates seeing best-ever quarterly performances. The all-new
Ranger delivered a second quarter sales increase of 140% over the same period
last year to 954 units. June sales for the all-new Ranger leapt 79%
year-over-year to 295 units, making it the best-selling pickup in
Quarterly sales of
the Ford Transit shot up 131% to nearly 920 units following an impressive
growth rate of 134% to 306 units in June.
The new Ford Fiesta
also saw its best sales month since December 2011, fueled by strong demand
for the Fiesta 1.0L EcoBoost – the engine technology which was awarded
International Engine of the Year for the third consecutive year in June.
Fiesta sales rose to 377 units in the second quarter, a 53% increase over the
same period last year.
The Ford Everest
family SUV recorded 149 units sold in June, a 414% increase year-over-year,
leading to a total of 403 units sold this quarter, a 58% increase over the
same period last year.
Ford continues its
successful product-led transformation in
In the first half,
Ford expanded its dealers and outlets network in Can Tho, Gia Lai and My
Dinh. It also plans to open an all-new dealer in Binh Duong in the second
half, bringing its
Luxury
hotels report strong profit rise
Luxury hotels in
The research,
released last week, reveals the EBITA (earnings before interest, taxes and
amortization) index of three- to five-star hotels last year rose 5.8% over
2012 and accounted for 34% of their total revenues compared to the figure of
around 28.2% in 2011 and 2012.
The profit increase
resulted from the reduction of 1.1%, 1.3% and 1.7% in their management cost,
general costs and fixed costs respectively.
However, revenue
per available room (RevPAR) last year slightly decreased 0.4% from US$54.44
in 2012 to US$54.22 due to the fall in average room prices, which fell 2.7%
from US$90.4 in 2012 to US$87.95 last year.
Five-star hotels
suffered the strongest reduction of 5.5% in room prices, followed by
four-star hotels with 4.7% and three-star hotels with 3.1%.
Rates of five-star
hotel rooms slid steadily in 2007-2013, says the report.
In the last fiscal
year, prices of hotel rooms dropped 7.5% in the central and Central Highlands
regions, while those in the northern region slipped 2.6%.
Hotel room prices
in the south, meanwhile, rose 3% to US$90.03 per night.
The general
reduction of RevPAR was also caused by the sharp decrease of 14.6% in RevPAR
in the three-star hotel segment.
Sugar firms
fear further price fall on oversupply
Domestic sugar
firms are worried the sugar price slide would extend in the coming time as
the bumper sugarcane crop in 2013-2014 has sent sugar output surging to
nearly 1.6 million tons, plus a large volume of smuggled sugar.
Local sugar demand
is around 1.44 million tons a year as estimated by the Vietnam Sugar and
Sugarcane Association (VSSA). On top of that, national sugar inventory in the
year to June 23 had exceeded 567,000 tons, three times higher than in the
2012-2013 crop.
VSSA, however, said
the high sugar inventory could be sufficient to meet domestic demand in the
months up to the start of the 2014-2015 sugarcane crop in October if sugar
smuggling is put under control.
More than 1.3
million tons of sugar was produced in the 2011-2012 crop. But domestic supply
has since surpassed demand as a result of increased sugar production in the
country and a huge volume of sugar smuggled in through the borders in the
southwestern region.
The oversupply has
sent sugar prices down to VND14,000 per kilogram from VND17,500. VSSA
forecast prices at refineries would fall further to VND13,000 per kilo,
almost the same as production cost.
VSSA chairman
Nguyen Thanh Long said some 400,000 tons of sugar was smuggled into
The association has
proposed the Government tighten its controls on anti-smuggling and trade
fraud on sugar products as one of the measures to support sugar firms and
farmers.
Demand for
high quality manpower keeps rising
The need for high
quality personnel, especially for senior positions, in the first six months
of 2014 increased 23% over the same period last year. Especially in June, the
number rose 38% against a year ago.
However, the supply
slightly decreased and is predicted to rise again in the second half. These
numbers were released last week by Vietnamworks.com, a leading recruitment
website.
According to
Vietnamworks, employers now are in need of experienced managers such as team
leaders, supervisors, directors and the like. Meanwhile, fresh graduates and
inexperienced candidates are less favored by employers.
The demand is
especially high in sales, marketing and information technology sectors are
the highest-ranking ones. In Vietnamworks’ accounting jobs, the competitive
rate is one to 98.
The highest
competitive employment rate is one to 67 in Dong Nai, followed by Danang with
one to 58. Meanwhile in
To celebrate its
twelfth anniversary, Vietnamworks has launched a human resource portal at
http://hrinsider.vietnamworks.com/. This website updates the movements in the
human resource market such as the most attractive sectors to laborers, the
highest competitive rate among professions, and the methods to draw attention
of recruiters.
Since the beginning
of July, this employment agency has opened a site to recruit employees for Japanese
companies at http://japan.vietnamworks.com as the demand for manpower by
Japanese companies is on the rise. In June 2014 alone, there were 300
vacancies offered by Japan-invested companies on Vietnamworks, with the
average monthly wage offered by these companies at about US$1,000.
Office
market more competitive as new supplies cut rental rates
After relatively
good quarterly figures, the office market in
Grade A average
asking rents decreased by 3.2 per cent quarter-on-quarter, while Grade B
rents recorded a slight decrease of 0.4 per cent quarter-on-quarter. Both
Grade A and Grade B buildings in Hanoi are suffering from a decrease in
occupancy this quarter, primarily due to the opening of the new EVN office
building close to the central business district (CBD).
“Grade A average
vacancy rates stood at 23.1 per cent while Grade B buildings reached 34 per
cent by the end of the second quarter,” said the CBRE report.
“More affordable
and attractive incentives from landlords motivated commercial tenants to move
from villa-type offices to professionally- managed office buildings. Delays
in construction of several office projects made the overall picture less grim
for market performance, however, supply still outweighed demand,” said CBRE
Vietnam.
“Moving forward,
projects in the west of the city are under further pressure from rent drops
as current and future supply well outstrips demand. Average asking rents are
expected to continue on a downward trend while vacancy rates will be on the
rise as new supply comes on to the market. Grade A buildings in the city
centre will achieve higher occupancy rates as tenants have limited options in
this segment. However, older buildings need to future-proof their performance
by renovating and upgrading to compete with new entrants,” said William
Badger, associate director of the Office Service Division of CBRE Vietnam.
Cushman &
Wakefield Vietnam, another consultant also commented that in terms of average
asking rents,
Specifically,
“In
In contrast, in
“Rents across all
grades in
Total Grade B
supply in Hanoi has risen to over 729,000 square metres, while stock for
Grade A rentals remained unchanged at around 330,000 square metres.
The total Grade A
stock in Ho Chi Minh City remained static at 157,000 square metres, while
total supply of Ho Chi Minh City office space has reached 820,700 square
metres, marking a nearly 2 per cent increase quarter-on-quarter and a 6 per
cent increase year-on-year. In terms of occupancy rates, Cushman & Wakefield
said that
While Grade A saw a
climb of 1.33 percentage points quarter-on-quarter to 78.2 per cent, Grade B
continued its downward trend with a 4.4 percentage point decrease over the
quarter to reach roughly 72.0 per cent. In
Chinese
vacancies push hotels to new markets
Vietnamese
hoteliers are seeking alternative strategies to cope with the falling number
of Chinese tourists due to recent tensions in the
According to Truong
Ngoc Thanh, senior PR executive of Furama Resort Danang, the resort has set
its sights on a number of different markets and new solutions.
Thanh said the
hotel was offering incentives to guests, such as its VietJet Air ticket
promotion Travel First, Pay Later and was co-operating with the central
city’s authorities to promote Danang as a MICE destination.
Moreover, Furama
Resort Danang has also co-operated with the local authorities to push up
direct routes to high potential markets such as
“We believe our
efforts will get our business through the last months of 2014 until the
market improves in 2015,” Thanh told VIR, adding that the tensions between
China and Vietnam had led to a decrease in Chinese and Hong Kong guests to
Vietnam, but that Furama’s targets of other markets helped keep its occupancy
loss to only 15 per cent, leading to a revenue drop of just $600,000 against
last year.
Bob Fabiano,
general manager of JW Marriott Hanoi Hotel, admitted that Vietnam-China
tensions had resulted in some travelers from across
“We are hopeful
that in time this will be resolved and we will once again be a hot
destination for all of our segments, from events and business travel to
leisure and exploration,” Fabiano said.
He added that
unfortunately hoteliers had suffered from several cancelled events from both
leisure and MICE groups, as these were generally Asia Pacific attended and
had a large representation of participants from
“Hopefully we will
see a resolution sometimes soon that will place us back on track to achieve
the 2014 targets,” said Fabiano.
According to CBRE
Vietnam, since the end months of 2013 to now,
In the second
quarter of 2014,
According to
Richard Leech, executive director of CBRE Vietnam, on the demand side
This number,
however, has been dropping since May due to the
He added that
despite the tensions,
Investments
shifting to agriculture
Major businesses
have been shifting their investments to agriculture in recent years though
the sector is full of risks and promises little profit.
The shift of
capital flows to agriculture has been seen in recent years at many
enterprises like Hoang Anh Gia Lai, TH Milk, Thanh Thanh Cong and Thu Duc
House which are traditionally active in the property and banking sectors.
Vietnam Seedling
Association chairman Tran Dinh Long said these enterprises have gained
success thanks to the large scale of their investment in the right things at
the right locations; and the establishment of a value chain.
Commenting on
foreign enterprises’ plans to invest in
However,
Long noted foreign
firms still see investment opportunities in
Nevertheless,
Other difficulties
which enterprises may encounter in agriculture are small production scale,
too many categories of products, a lack of skilled labor and a loose linkage
between enterprises, farmers and producers.
Meanwhile,
supporting policies of the State are no longer appropriate and there is no
specific preferential policy for those investing in agriculture.
As a result, Long
said there should be policies in terms of credit, infrastructure development,
technology and human resource training to develop high-quality and
environmentally friendly products.
Businesses
call on MoF to rein in petrol prices
The local business
community was shocked to discover this week that the price of petrol had
increased for the fifth time this year.
However, Ministry
of Finance officials have said the price jump was necessary.
"The price had
been restricted by using the price stabilisation fund to prevent adverse
impact on the entire society, especially enterprises," Nguyen Anh Tuan,
head of the Ministry of Finance's Price Management Department, said.
Speaking at a press
conference on Tuesday, Tuan said that since June 23, international petrol
prices had been rising, hitting US$126 per barrel on July 1.
Recently, however,
the international petrol price fell $2-3 per barrel.
"The price
increased by VND1,430 per litre and climbed to VND26,140 per litre or
$1.2," Nguyen Van Tiu, chairman of Tu Luc 1 Petrol and Oil Corporation's
management board, was quoted as saying in Tuoi Tre (Youth) newspaper.
Ngo Tri Long, an
economics expert, said that
"Petrol prices
will affect other prices, especially for essential goods, as well as
inflation for the rest of the year," Long said.
Long also
criticised the way the petrol price is calculated, which is based on a 30-day
period.
"Local petrol
prices go up while international price go down," he added.
The deputy minister
of Industry and Trade, Do Thang Hai, said that management of petrol prices
would be changed once a new decree is issued.
The decree will
allow local petrol prices to be equivalent to international prices.
He also suggested
that the Ministry of Finance cut petrol taxes, and to temporarily stop the
requirement that companies must pay VND300 per litre for the price
stabilisation fund. This would help reduce difficulties for enterprises.
With the new price
of petrol, the Thang Loi International Garment Joint Stock Company will pay
more VND1 billion ($47,000) every month.
"This won't
include prices for transport because many owners have informed us that they
will increase transport fees very soon," Ngo Duc Hoa, chairman of the
company's management board, said.
The cement industry
will be hit strongly because its expenditures for transport for both
materials and products are very high.
The head of one
cement company's business department said that his company has to pay
VND20-22 billion ($1 million) monthly for transport.
"Transport and
logistics businesses will suffer the most from the petrol price increase
because petrol takes 30-35 per cent of expenditures," Do Xuan Quang,
chairman of Viet Nam Logistics Association, said.
"And of
course, extra expenditures will be paid by end-users," he added.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Chủ Nhật, 13 tháng 7, 2014
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