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BUSINESS
IN BRIEF 21/7
Made-in-Vietnam
goods gain in popularity
Over 80 percent of
stockpiles in
Tellingly, 90
percent of stationery are made in
Binh recognised
that the campaign has involved all sections in society, successfully
spreading its message of using locally-made items.
Many local
enterprises have warmly responded to the campaign by embracing technological
advances to turn out affordable and better products.
Last year, they
brought 526 batches of goods to 13 communes in four outlying districts. This
year alone, the capital plans to host 34 trade fairs and bring nearly 500
batches of merchandise to 13 mountainous districts.
In the coming time,
the board will continue focusing on clearing several business bottlenecks and
bringing more Vietnamese goods to industrial zones in rural areas.
Steel
producers boost sales in home market
Local cold-rolled
steel makers have been boosting their sales in the domestic market to offset
a decline in outbound sales caused by the recent anti-dumping accusations,
the Saigon Times Daily reported.
Sales of welded
steel pipes of local producers in the domestic market rose remarkably
compared to a decline of 19 percent or 18,200 tonnes in their exports in the
first six months this year, according to the Vietnam Steel Association (VSA).
For instance, sales
in the local market of Nam Kim Steel (NKG) and Hoa Sen Group as of June 2014
had soared 127 percent (11,933 tonnes) and 117 percent (53,922 tonnes) year
on year respectively.
In addition,
consumption of steel products on the local market accounted for 84 percent of
the total quantity sold by steel makers in the same period.
On the other hand,
there were changes in market shares of local steel producers in the first six
months of this year, according to VSA.
Vietnam Steel
Corporation (VnSteel) and its joint-venture enterprises gained market share
of 47 percent in 2013, but their combined market share tumbled to 41.7
percent in this year’s first half.
Meanwhile, other
firms aside from VnSteel, which occupied the remaining 52.4 percent last
year, saw their combined market share shooting up to 58.2 percent this year.
According to the
Ministry of Industry and
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.
WB provides
soft loans for five projects in Vietnam
The World Bank will
provide
Agreements on five
programmes and projects using the loans were signed in
Of the sum, 500
million USD will be halved for the Economic Management Competitiveness Credit
2 (EMCC2) programme and the northern mountainous urban development programme.
The project to
build policies for the reform of the power sector receives 200 million USD.
Meanwhile, the
medical personnel training project and development policy lending programme
on climate change (phase 3) receive 160 million USD and 70 million USD, respectively.
This is the first
time WB President Jim Yong Kim, who is on a two-day working visit to Vietnam
from July 17, has directly inked lending documents with the SBV Governor.
At the signing
ceremony, President Kim announced the institution’s assistance worth over 3.8
billion USD for Vietnam in the three coming years, making the country the
second biggest recipient of the WB’s International Development Association
(IDA) loans.-
M&A
Forum to honour successfully equitised SOEs
The upcoming
Vietnam Merger and Acquisition (M&A) Forum 2014 will select outstanding
State-owned enterprises (SOEs) which have been equitised successfully and
performed well, heard a press conference on July 17.
Head of the
organising board Nguyen Anh Tuan, Editor in Chief of the Dau tu (Vietnam
Investment Review) newspaper, said the honouring aims to fuel the
equitisation of SOEs in the coming time.
Dang Xuan Minh,
General Director of the AVM Company – co-organiser of the event, said the
first M&A wave arose from 2008 to 2013 amid an array of economic
difficulties, forcing many businesses to restructure themselves to overcome
such a situation.
The value of
M&A deals in
This year’s forum
on August 7 in
Issues regarding
M&A strategies and technical problems will also be included in the
agenda.
The sixth annual
forum will comprise five main activities, namely conference, MAF Expo,
Some 400 domestic
and foreign entrepreneurs are expected to take part in the event.
Cashew
exports increase in volume and value
Cashew export
turnover is likely to reach 2.2 billion USD this year, the Vietnam Cashew
Association (Vinacas) was quoted by the Saigon Giai phong (Liberated Saigon)
online newspaper as saying.
Cashew exports have
included cashew nuts, nut shell oil and other processed products.
Last year, cashew
exports yielded 1.8 billion USD.
In the first half
of this year,
According to
Vinacas Chairman Nguyen Duc Thanh, the
Based on the
results of the first six months, the Ministry of Industry and Trade (MOIT)
forecast that
According to the
newspaper, the country’s import value would reach 145.5 billion USD, up 10.2
percent so that
Statistics from the
MOIT show that in the first half of 2014,
The export value of
most key products increased with that of 13 products reaching over 1 billion
USD each. These included telephones and components, textiles and garments,
footwear, computers, electronic products and components, machinery,
equipment, instruments and spare parts, crude oil, seafood, wood and wood
products, transportation means and spare parts, coffee, rice, handbags, suitcases,
headwear, umbrellas, fiber and yarn.
“These impressive
results reflected the ceaseless efforts of ministries, sectors, associations
and businesses, especially in the context of numerous export difficulties in
the recent period,” Deputy Director of the Agency of Foreign Trade under the
MOIT Phan Thi Dieu Ha was quoted as saying at a recent meeting held by the
ministry to review the results of foreign trade in the first six months of
2014.
Notably, with the
import value reaching over 69.56 billion USD,
However, it’s not
easy to achieve these results because the economy still faces numerous
difficulties. The competition between countries which export to large markets
such as the
To achieve the
export targets set for 2014, Ha said that the MOIT had issued some
instructions and proposed many measures to boost exports, especially the
export of agricultural products and seafood.
Recently, the MOIT
and the Ministry of Agriculture and Rural Development met to discuss
market-related issues to help businesses boost exports. They agreed that it
was necessary to maintain a close relationship between agricultural production,
the processing industry and value chains in order to create high-quality
agricultural products.
The MOIT encouraged
businesses to concentrate on investing in technological innovation to improve
product quality and reduce production costs, increase the localisation rate
and reduce trade deficit.
Aviation
safety – top priority: CAAV chief
The aviation sector
must define safety as the most crucial factor for its sustainable
development, said Lai Xuan Thanh, head of the Civil Aviation Authority of
Vietnam (CAAV).
In his interview
granted to the Vietnam News Agency, Thanh admitted that poor infrastructure
and human resources is the main factor affecting aviation safety, which is
the main cause of a series of recent incidents such as landing mistake,
increasing flight delays and cancellations, and expensive aviation services.
“Frankly speaking,
human resources fail to meet the sector’s development requirements, for
example we do not have any pilot training centre and have to hire foreign
pilots,” he said, adding that skilled technicians are also in shortage.
Thanh noted that
the State and involved businesses have tried to mobilise investment in
aviation infrastructure, but the low rate of return has deterred investors.
Therefore, poor infrastructure remains the main obstacle to the sector’s
development, he said.
According to the
CAAV leader, the Ministry of Transport has launched a national flight safety
programme with specific regulations on the obligations of State management
agencies and businesses in the aviation sector.
It has also set up
a series of mechanism on information control and collection and risk
assessment as well as a safety management system for aviation businesses,
airports and air service providers in line with requirements of the
International Civil Aviation Organisation (ICAO).
The ministry has
also announced a runway safety programme to prevent outside objects from
entering runways.
“Therefore, I think
we have put in place an adequate aviation safety system, and the question now
is to raise our operating capacity,” Thanh said.
In order to fix the
above-said shortcomings, the CAAV leader said the sector will implement a
project to improve the operational efficiency of aviation infrastructure.
At the same time,
he emphasised the need for the early construction of the
Reorganising air
routes, establishing a north-south flying corridor, and shifting from radar
to satellite for air traffic control are some of the solutions to facilitate
aviation growth.
The sector will try
to establish its own facilities for training pilots, air traffic controllers
and technicians, Thanh said, adding that his agency is working on a project
to improve the State management on civil aviation.
The equitisation of
aviation businesses is also a measure to attract investment in improving
fleets and equipment, he said.
Lending
interest rates in VND forecast to decrease slightly
More than 70
percent of credit organisations predict that both deposit and lending
interest rates in Vietnamese dong this year will reduce by 1.24 percent and
1.43 percent a year, respectively, in comparison with the levels at the end
of 2013.
According to a
survey conducted by the Monetary Statistics and Forecast Department under the
State Bank of
Over 90 percent of
the organisations also believe their liquidity will remain stable or improve
in the second half of the year, while 80 percent of them think their bad
debt/ outstanding loan ratio remains stable or decreases slightly in the
second and third quarters.
Meanwhile, around
two thirds expect an improvement in their business in the third quarter and
the whole year, and a recovery in customers’ demand for banking products and
services.
In the second
quarter, credit organisations focused their resources on improving their
policies and customer services, as well as increasing the quality of products
and capacity of risk management.-
Provinces
take action to drive socio-economic growth
People’s Councils
of some northern and central provinces held sessions from July 14 – 16,
stating their resolve to fulfil annual socio-economic goals through concrete
measures to be taken in the second half of this year.
For the rest of
2014, northern mountainous Son La province will focus on removing
difficulties for business operation and strengthening management of the use
of State budget for local projects.
It will also summon
all resources for flood and storm prevention and mitigation as well as the
building of new-style rural areas.
Son La reported a
gross domestic product (GDP) of 7.12 trillion VND (339 million USD) for the
year’s first half, up 8.93 percent from a year earlier.
Meanwhile, its
neighbouring Hoa Binh province plans to better local people and businesses’
access to capital, continue streamlining administrative procedures, and step
up investment promotion.
The provincial
economy grew by 7.51 percent in the past six months while budget collections
reached 942 billion VND (44.86 million USD), accounting for 55 percent of the
assigned yearly figure.
In the central
region, Ha Tinh province aims at further riding out obstacles to enterprises,
preventing corruption and wastefulness, and developing tourism and trade in
the remaining months.
The province’s GDP
in the year’s first half picked up 12.1 percent against the previous same
period. It fulfilled 60 percent of the target State budget collection with
4.3 trillion VND (204.76 million USD).
Central Thua Thien-
It will also launch
tourism stimulus packages along with a programme connecting banks with the
business circle to assist the latter’s activities.
Local GDP growth
rate stood at 7.9 percent, and over 2.2 trillion VND (104.76 million USD) was
channelled to the State budget in the reviewed period, representing 46.4
percent of the set target.
Meanwhile, the
central
Binh Thuan’s GDP
expanded by 8.6 percent from the same period last year, and it contributed
more than 3.2 trillion VND (152.38 million USD) to the State budget.
Rubber
plantation owners urged to reduce latex exploitation
The Vietnam Rubber
Association (VRA) has urged rubber plantation owners nationwide to scale down
their latex exploitation as one of the measures to deal with falling latex
prices, the Saigon Times Daily reported.
VRA said price
declines on global markets have led to lower latex prices on the local
market, forcing a number of rubber tree farm owners to reduce or even suspend
their latex extraction since mid-May to cut costs.
Many households in
the Southeastern and
Statistics from the
Department of Cultivation showed 3,000 hectares of rubber tree has been cut
and shifted to other industrial plants and crops as of June this year.
VRA has worked with
associations in other major rubber-producing countries such as
Latex prices in
A latex trading
firm said it is difficult to predict the natural latex price on the local
market as it varies depending on global demand and prices.
According to the
Ministry of Agriculture and Rural Development,
The ministry said
the average export price of natural latex in January-May stood at 1,842 USD
per tonne, down 29 percent compared to the same period last year.
New markets
for southern coconut firms
Businesses from the
southern
This is an
optimistic result of local efforts to reduce reliance on the Chinese market
which previously accounted for between 40-50 percent of the province’s
coconut export value, head of the Export Management section under the
provincial Industry and Trade Department Nguyen Van Phong said at a review
meeting on July 16.
In the first half
of this year, the province earned 27.32 million USD from sales of farm
produce, mainly coconut and coconut products, to
According to Deputy
Director of Luong Quoi coconut processing company Huynh Thi Cam Chau, canned
coconut milk and desiccated coconut are selling well in the Middle East and
the
The provincial
Department of Industry and Trade has asked businesses to enhance processing
capacity and diversifying products for both domestic and foreign consumption,
while limiting shipments of fresh coconuts to
Kien Giang
province heeds sea-based economic growth
Authorities from
the Mekong Delta
Of the total
projects, Phu Quoc island alone hosts 112, according to the local Department
of Planning and Investment.
The province now
counts 183 operational projects which focus on breeding, processing farm
produce and seafood, transport system and tourism services, among others.
In the foreseeable
future, it will pay heed to improving the management capacity and
administrative formalities to expedite the implementation of sea and island
development plans.
Special attention
will be paid to programmes coping with climate change and sea rising as well
as protecting marine ecology in a sustainable manner, said Vice Chairman of
the local People’s Committee Le Khac Ghi.
Kien Giang emerged
as an economic spotlight in the Mekong Delta in 2013, with economic growth
rate hitting 9.4 percent, ranking fourth among the 13 provinces and city in
the delta.
New customs
system troubles firms, authorities alike
Although expected
to help simplify customs clearance procedures, VNACCS/VCIS has proved
confusing for both firms and customs authorities.
Deputy director of
the customs department of Ba Ria-Vung Tau province Le Van Thung explained to
the media that the short test-run was ineffective at acclimating businesses
with the system.
Similarly, an
officer at Vung Tau port – airport customs office expressed concerns about
the new system. He said that in dealing with products relating to oil and gas
drilling and exploitation, inserting product codes into the system has proven
a major difficulty.
Responsibility now
belongs to the head of the department, instead of team leaders, as before.
With 53 possible scenarios to be essentially memorised by the people in
charge, the pressure on customs agencies has therefore intensified, added the
officer.
Businesses are also
struggling with the VNACCS/VCIS system. Jinjiro Kimura, general director of
Ukina Ltd. Vietnam, a manufacturer located in Tan Thuan export processing
zone in
In particular,
nearly 1,000 product declarations had to be re-registered, upsetting several
firms operating in Tan Thuan export processing zone. “The re-registrations
were primarily due to the input of the wrong product codes,” said Kimura.
Thang Loi
International Garment JSC chairman Ngo Duc Hoa said containers holding their
products have been sitting around at Cat Lai port for three weeks, causing
significant losses for the company. “I think the main reason is officers are
not yet used to the system. Solutions are needed immediately,” Hoa
underscored.
The officer from
Vung Tau port said companies are willing to work with the new system, but are
fearful the new process will result in errors and delays that hurt their
business results.
Despite complaints,
other businesses have given good feedback concerning the system. “I am
pinning my hopes on VNACCS/VCIS because it is three times faster than the
e-customs procedure. This is very good for businesses,” said Nguyen Duc Tinh
from U&I freight forwarding company, a customs agent serving 29 companies
in Binh Duong province.
The
Transport
minister firm on Keangnam delay
The two final
packages for the northern Noi Bai-Lao Cai expressway may soon have the
capital necessary for completion. State-owned Vietnam Expressway Corporation
(VEC) deputy general director Le Kim Thanh said that
Keangnam planned to
transfer another $6 million in the coming time to boost construction of the
packages, so the expressway could open by late August this year, Thanh added.
Keangnam’s
motivation to supply the financing came after a stern warning by the Minister
of Transport Dinh La Thang who told the company’s representatives in a
meeting late last month that if the company failed to transfer the funds to
Before issuing his
ultimatum, Thang personally examined implementation of the packages, which he
determined to be slow and not likely to hit the August deadline, as
previously committed by Keangnam. He noted that a particular part of the
under-construction road he saw had yet to lay any base or sub-base, despite
the looming deadline.
He reported that
the 41.15 kilometre A5 package in the
VEC’s general
director Mai Tuan Anh said that the South Korean side had previously pledged
to pump $10 million into the packages to ensure construction finished before
June 30, but the funds never arrived. “VEC has asked Keangnam Enterprises’
president to visit
The A4 and A5
packages were inked in early June 2010 in
Transport minister
Thang added to his warning that if the packages failed to be completed by
August 31, this would constitute grounds for dismissal of certain VEC
leaders. He also ordered that Keangnam’s work would be reduced to only five
kilometres while the remainder would be taken over by the ministry’s Cienco
1, Cienco 4 and Van Cuong Company. The 264km expressway includes eight
construction packages and two equipment installation packages, with the total
investment capital of nearly VND20 trillion ($952.4 million) for the first
stage. It started construction in the third quarter of 2008 and runs through
Apartment
market sees green shoots of recovery
Both the
At the end of May,
Vingroup announced its second phase of Times City Hanoi was up for sale at
starting price of VND1.9 billion ($90,000) per unit with numerous incentives
and financing options.
In just two days,
nearly 600 units were sold. This reveals that market demand exists for the
right products and Vingroup was timely in putting the units up for sale.
Developer FLC made
a market splash last week when it announced it would sell units in its tower
at 36 Pham Hung street for VND23 million ($1,050) per square metre, compared
to the roughly VND30 million ($1,400) per square metre for neighbouring
projects.
Many projects are
reporting solid sales, such as Thang Long Number One, Discovery Complex and
In Ho Chi Minh City
as well, a range of projects are experiencing rocketing sales such as 8X Thai
An, Hung Ngan Garden, Sunview Town and 4S Linh Dong.
According to
Savills
In the second
quarter of this year, approximately 1,900 units were sold in
From the third
quarter onward, 83 projects with more than 65,800 apartments are slated to
start construction in
Meanwhile, in
“The number of
transactions in the second quarter was approximately 2,500 units, up a
notable 60 per cent on-quarter and 115 per cent on-year. Grade C accounted
for nearly 70 per cent of transaction volume, which was the highest in the
last three years in the southern market,” reported Savills. In the second
quarter,
“Competitive
mortgage rates helped support buyers and strengthen residential demand.
Flexible payment terms in a number of Grade B and C projects also encouraged
buyer confidence,” Savills noted.
Dat Xanh
acquires new projects, restructures operations
Property developer
Dat Xanh Group has clearly started a shake-up, with a number of acquisitions
in the pipeline and an acceleration of plans for its broker network.
The Ho Chi Minh
City-based company will sell its holdings in two subsidiaries, Dat Xanh Binh
Duong (57 per cent) and Mekong Delta Real Estate (51 per cent), at prices at
least par with book value.
The move is part of
a plan to turn different Dat Xanh Group brokers across the country into four
regional brokerage firms – Dat Xanh South, North, Central Region, and South
East. The group will hold 51 per cent of each South, North and South East, and
55 per cent in Central Region.
The value of the
deals is less important than the main purpose of streamlining the
subsidiaries system, said Viet Capital Securities Co. specialist Nguyen Ngoc
Hoang Hai.
Dat Xanh has decided
to take over the 7.4-hectare Green City residential project in Ho Chi Minh
City’s District 9 from the previous developer for VND800 billion (around $38
million).
The project, a
combination of mid-class apartments and villas, will cost around VND1
trillion ($47.62 million). Of this total, 20 per cent will come from loans
and the balance from the group’s own capital. Dat Xanh will offer additional
shares to help finance the project.
Excessive
supply leaves office demand flat
Though building
mixed-use complexes was a rising trend from 2007-2010, the now-finished
buildings are largely vacant now with their office floors largely unused.
Take EVN for
example, the state-owned electricity giant build two towers, 29 floors and 33
floors, respectively, on Cua Bac street in Hanoi as a hub for the company’s
operations.
The towers were
completed in December last year and offices went up for lease in the first
quarter of 2014. Though many EVN subsidiaries have moved into the buildings,
a great deal of space is still available.
Another case was
According to CBRE,
the
The rising number
of newly constructed mixed-use complexes since the beginning of this year has
put enormous pressure on the office rental market.
In the first half
of this year, five towers entered
According to
statistics from Savills Vietnam, the average Hanoi office rental has gone
down from VND540,000/m2/month (around $26) in the second quarter of 2012 to
VND374,000/m2/month (around $18) in the second quarter of this year. In
particular, Grade A and B fell by 3 per cent and 1 per cent, respectively,
compared to the first quarter this year.
As reported by
Savills, office demand has reached 76 per cent, increasing by 2 per cent
on-year. Despite higher demand, office space is selling miserably due to the
huge amount of new space that has entered the market.
Savills’ Research
and Consultancy senior manager Ngoc Thi Huong Giang said there be an
additional 85,000 square metres available for lease from five new projects in
the second half of this year, including Lotte Center Hanoi with more than
half of that total.
In 2016,
Property
sector in H1 defined by M&A flurry
An increase in
M&A in the real estate sector has been highlighted by two significant
announcements in the first half of 2014.
Novaland, a
domestic real estate investor, recently announced it would take over three
housing projects in
In the first
quarter of this year, Vinaland, the real estate arm of VinaCapital, divested
its stake in Vina Properties, which owns the luxury Movenpick Saigon Hotel in
Many other developers
are divesting from their projects and issuing shares in order to mobilise
more capital investment.
CEO Group has
bought out the Sonasea Villas and Resort in Phu Quoc island, which looks set
to becoming one of the country’s most lucrative tourist markets.
In the case of FLC
group, in addition to recently taking over Alaska Garden City in
Apart from that,
there have been many other undeclared transactions.
In its latest
shareholders meeting, the Hoang Anh Gia Lai group announced that it had sold
a 35-hectare project to the Him Lam group, with a value of VND1,100 billion
($52 million).
Another investor
from
According to Phan
Xuan Can, chairman of SohoVietnam, M&A activity in the real estate market
has been the highest it has ever been in
“Many investors come
to us and require information about projects on offer, from apartment
buildings, to offices, to high-end resorts and complex buildings. The real
estate market now is in a recovery phase and this is a good time for sellers
to offload their projects at the best price. Meanwhile, buyers can now target
projects,” Can said.
Can added that it
was hard to get a successful real estate project for both sellers and buyers
because of the many procedures and financial details required. This is
compounded by the fact that neither sellers nor buyers want to declare these
details.
Minister for
Construction, Trinh Dinh Dung said the real estate market is facing many
difficulties at present, and that local authorities should be more careful
when it comes to licensing new projects. Several local authorities have
stopped granting new projects.
“This is a good
reason for developers to consider M&A projects. That is why I predict
that the M&A trend in the real estate sector for 2014 and 2015 will
become even more popular,” Dung said.
Kien Giang
attracts 340 projects in sea, island development
Southern coastal
These projects,
under the Viet Nam Sea Strategy till 2020, cover a total area of 20,200 ha
and worth VND166,500 billion.
Of the total, 183
projects have come into operation and 18 ones in
These projects
mainly focus on agriculture-aquatic processing, mineral exploitation,
infrastructure and tourism services, water, electricity and traffic.
Number of
super-rich Vietnamese on the rise
A number of reports
by domestic and international organisations seem to show that the number of
super-rich people has been increasing in
Swiss Bank UBS
forecast last year that the wealthy population in
Few wealthy
individuals make their assets public or hold much of their wealth in the
stock market. The reports also piqued public curiousity since they do not
mention any names, only the number of rich individuals.
On July 11, ANZ
Commericial Bank announced that the middle-class in
Moreover, the World
Bank's report, released last week, showed that Vietnam has about 110 people
with net worths of at least USD30 million.
This number is
three times higher than a decade ago.
According to World
Bank, this number is about what is to be expected when compares to other
countries which have the same per capita income. The World Bank also
expressed worries about the growing gap between the rich and the poor, as
well as the means people use to accumulate wealth.
Some of the most
well-known people are Pham Nhat Vuong, founder and chairman of Vietnamese
conglomerate Vingroup; Doan Nguyen Duc, chairman and founder of Hoang Anh Gia
Lai Group and a football club; Tran Dinh Long of steel producer Hoa Phat
Group, and Dang Thanh Tam of housing developer KBC.
Experts
optimistic about credit market
Experts have shown
optimism despite the slow credit growth over the past six months, which had
raised concerns over the banking system's ability to reach the year's target
of 12%-14% growth.
According to
statistics from the State Bank of
On the other hand,
some key sectors saw a high rate of growth, including exports, supporting
industries and the hi-tech sector. Social and agriculture programmes also saw
positive signs.
"I think this
is a highlight for our economy. For years, we have complained that our
economic development was too shaky. Firms couldn't improve operations on
their own and depended entirely on bank loans. Low credit growth means our
adjustments are on the right path," said Nguyen Duc Kien, deputy head of
the NA Economic Committee. He went on to say that forcing the economy to
sustain high rates of credit growth will result in unintended consequences
such as bad debt.
The State Bank will
continue to closely monitor credit institutions and foreign exchange rates to
issue appropriate adjustments and quickly deal with any problems. They will
also ask the government to revise its credit policies in rural areas and the
agricultural sector.
Meanwhile, experts
suggested that the government needs to improve macro-policies while they are
being carried out. NA deputy Tran Du Lich said, "The problem is how to
help enterprises. Government needs to give more support while enterprises
must reform and improve their competitiveness."
The economic growth
in the first six months was 5.18%, an improvement compared to the 4.9% over
the same period last year.
Private
firms scale down operations
Despite the rising
number of private firms in Vietnam in the 2002-2012 period, their operation
scale, workforce and capitalization were all narrowed down, seen in their
share in the national gross domestic product (GDP) shrinking from 15.5% in
2002 to only 11% in 2012, according to the Vietnam Chamber of Commerce and
Industry (VCCI)
Senior economist
Pham Chi Lan, who used to serve as a vice chairwoman of VCCI, asserted the
private sector’s dwindling operations at a meeting with local media organized
by the Business, Studies and Assistance Center (BSA) on Tuesday.
During the talks,
Lan shared the knowledge she had gained from a fieldtrip with a research
group of
A study by VCCI
shows revenues, competitiveness, and confidence of private enterprises all
declined. Particularly, less than 30% of them last year weighed expansion
schemes.
The number of
newly-registered companies was nearly 50,000 – 60,000 but as many as 40,000 –
50,000 ones shut down business within 2012 alone.
Concerning the
legal system, many companies complained about the ambiguous law and unstable
business environment, Lan said.
Although
enterprises appreciated efforts by governmental agencies in revising and
enacting new laws, they have not had faith in those legal documents that are
described as unfeasible, complicated and troublesome. The overlapping rules
and regulations also cause a lot of troubles to corporate operations.
Lan quoted remarks
by economist Nguyen Ngoc Bich, saying that lawmakers have the mindset of
politicians and do not understand business in general and private business in
particular.
Policymakers in
many instances do not see shortcomings in law enforcement but only take
advantage of their power to put pressure on enterprises.
Lan also mentioned
another obstacle concerning the State policies decried as unsynchronized and
impractical. For example, certain State bodies encouraged export at any rate
despite little profits or even losses while leaving the domestic market
dominated by foreign companies.
It is difficult for
state-owned, private and foreign direct investment companies to work together
due to the lack of a common link while in many foreign countries, all
the big, medium and small companies are all connected together, Lan added.
Vinafood 2,
AGPPS to jointly develop rice industry
Vietnam Southern
Food Corporation (Vinafood 2) has joined forces with An Giang Plant
Protection Joint Stock Company (AGPPS) for a sustainable growth
strategy for the rice industry in the Mekong Delta.
Huynh The Nang,
general director of Vinafood 2, told the Daily that his company is working
with AGPPS over developing large-scaled paddy fields, a model which has
been invested by AGPPS and other enterprises in the region in the past years.
AGPPS has
successfully applied the model to some 10% of the total area under paddy
farming in the Mekong Delta. Nang expected the cooperation with Vinafood 2
will help expand the acreage to 30%.
Vinafood 2 is the
country’s biggest rice exporter with annual shipments of 2-3 million tons of
rice while AGPPS is one of the leading producers and suppliers of
quality rice and other products for export.
“The advantages of
the two sides will certainly create significant changes for the rice industry
in the Mekong Delta,” Nang said.
Huynh Van Thon,
chairman of AGPPS, the partnership with Vinafood 2 will help address
shortcomings of the value chain in the rice industry, enhance the
quality of rice and improve incomes of local farmers.
Thon said AGPPS and
Vinafood 2 will also work towards building strong brands for Vietnamese rice.
As part of the
strategy, Vinafood 2 will ask AGPPS to become its strategic partner in the
future.
Steel
producers return to home market
Local cold-rolled
steel makers have been boosting their sales in the domestic market to offset
a decline in outbound sales caused by the recent anti-dumping accusations.
Sales of welded
steel pipes of local producers in the domestic market rose remarkably
compared to a decline of 19% or 18,200 tons in their exports in the first six
months this year, according to the Vietnam Steel Association (VSA).
For instance, sales
in the local market of Nam Kim Steel (NKG) and Hoa Sen Group as of June 2014
had soared 127% (11,933 tons) and 117% (53,922 tons) year on year
respectively. In addition, consumption of steel products on the local market
accounted for 84% of the total quantity sold by steel makers in the same
period.
On the other hand,
there were changes in market shares of local steel producers in the first six
months of this year, according to VSA.
Vietnam Steel
Corporation (VnSteel) and its joint-venture enterprises gained market share
of 47% in 2013, but their combined market share tumbled to 41.7% in this
year’s first half. Meanwhile, other firms aside from VnSteel, which occupied
the remaining 52.4% last year, saw their combined market share shooting up to
58.2% this year.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Chủ Nhật, 20 tháng 7, 2014
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