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BUSINESS
IN BRIEF 11/9
According to the
Vietnam Food Association (VFA), the average price during this period was
431.1 USD/tonne, representing a year-on-year increase of 6.47 USD per tonne.
The country
exported 4.243 million tonnes at an average price of 431.38 USD per tonne during
the first eight months of 2014, up 2.95 USD per tonne compared to the
January-August period of 2013.
Rice growers in the
country’s granary Mekong Delta had an outstanding summer-autumn crop harvest
at a time when prices for rice were high, Huynh The Nang, General Director of
the Southern Food Corporation (Vinafood II), said.
Nang also revealed
that Vinafood II won a bid to export 500,000 tonnes of rice to the
According to VFA,
Vietnamese rice producers aim to export 650,000 tonnes of rice in September.
In the last 2014 quarter, they hope to export 1.4 million tonnes of rice,
bringing the country’s annual rice export volume to 6.3 million tonnes.-
MPI urges
for more support for SMEs
The State should
further improve the business environment and implement policies that will
enable companies, especially small- and medium-sized enterprises (SMEs), to
achieve breakthroughs.
The insight came
from experts attending a seminar in
Trinh ThiHuong,
Deputy Head of the Small and Medium Enterprise Development Division of the
MPI's Enterprise Development Department (EDD), cited a report of the EDD on
the policies that have been implemented to support SMEs.
Huong said the
policies had promoted the building of information pages on the internet, as
well as the upgrade of content of the pages on the provincial and city state
offices that enterprises have often been using.
She noted that the
State offices had invested 2 million USD per year in the training of human
resource for the SMEs, and policies were applied step-by-step to ensure more
support from specific sectors for SMEs, including training in human resource
and policies on all kinds of tax.
However, Huong
added, implementation of these policies remained limited and no standards
were set for 80 percent of these policies, whose effects on the enterprises
could therefore not be measured.
Policy
implementation was limited to
"Implementation
of these policies remains slow," Huong remarked. "For instance,
information on support policies has been released to media for quite some
time, but enterprises have yet to actually enjoy the support."
Huong cited a lack
of connection among the policies that has made it difficult for the SMEs to
receive support.
The report cited
four reasons for this situation. First, six of the eight groups of support
policies were not suitable to enterprises. Second, the policies were in
conflict with the laws of various sectors.
Third, no
breakthroughs were achieved in the implementation of these policies, and
co-ordination among concerned ministries, sectors, provinces and cities was
weak.
Fourth, the ability
of State offices in the provinces and cities to provide support remained
poor, and numerous departments of planning and investment had yet to set up a
division that would take charge of supporting the enterprises.
Also, SMEs had not
tried to approach concerned government agencies regarding the policies and
updated themselves with enough information about those policies, Huong said.
The enterprises
often had a short-term strategy for production and business and had not paid
attention to reform and the raising of competitive ability among them.
Huong said the
department recommended that the State management offices improve the business
environment and build on specific policies.
Associations of
enterprises should be a bridge between enterprises and the State management
offices to improve efficiency in the implementation of these policies, she
added.
Pham Thi Thu Hang,
General Secretary of the Vietnam Chamber of Commerce and Industry (VCCI),
said the policies had been partly successful in providing needed support to
SMEs, but this was unfair to foreign-invested and State-owned businesses.
Complicated
administrative procedures were still a challenge for the SMEs, and the
support policies for SMEs had lacked synchronism, Hang added.
She urged the State
to have specific support policies for SMEs but to refrain from excessively
prioritising them.
Dairy
industry urged to boost cattle numbers
The Vietnam
Husbandry Association is urging the country's dairy industry to develop its
cattle and use modern technologies so it could diversify and raise the
quality of its products.
Nguyen Dang Vang,
President of the Vietnam Husbandry Association, said the country was aiming
to meet 60 percent of domestic demand for fresh milk for an anticipated
population of about 113 million in 2045. To achieve this, the country must
develop a herd capable of producing 5.65 million tonnes of milk per year.
The country's
domestic fresh milk production in 2013 was 456,400 tonnes, equivalent to 5.1
litres per capita per year. This satisfied only 28 percent of the country's
demand, with imported fresh milk satisfying the remaining 72 percent. Last
year, the country's average annual per capita consumption of fresh milk was
18 litres.
From August 2007 to
August 2008,
By 2045, Vietnam
will still have to import 2.25 million tonnes of milk worth 3.6 billion USD
every year, to raise annual average per capita milk consumption to 50 litres,
or just 60 percent of Japan's current consumption levels.
Vang said
Figures from the
Vietnam Dairy Association showed that as of April 1, the country had 200,400
cows, a 14-percent increase over that of last year and a 67-percent increase
over that of 2010.
In recent years,
several companies invested heavily in the development of dairy farms. The
country currently has 15 farms with 1,000 to 5,700 cows, and five more are in
the pipeline, altogether accounting for 30 percent of domestic fresh milk
production.
However,
This is higher than
that of
In addition, the
productivity of the average cow in
According to Nguyen
QuocKhanh, Executive Director of Vinamilk, which holds 50 percent of
He said that
investing in modern milk processing plants was also essential to ensure
diversification and quality enhancement of products, as well as the upgrading
of levels of competitiveness and capability to meet consumer demand.
Experts said the
country also needed a national management system for dairy cattle and measures
to protect domestic production, such as the application of import quotas.
Vu Ngoc Quynh,
General Secretary of the Vietnam Dairy Association, said the dairy industry's
development was in line with the Government plan to meet domestic demand
while expanding in the world market.
Second
turbine at Vinh Tan power plant generates power
The second 622MW
turbine of Vinh Tan 2 thermo-power plant in the central
The turbine will
officially become operational at the end of December.
The coal-fired Vinh
Tan 2 power plant, built at an investment of 23.5 trillion VND (1.2 billion
USD), has two turbines with a capacity of 622MW each.
The first turbine
joined the grid in January this year.
The plant is
projected to be completed and start working in 2015, generating some 7.2
billion kWh of electricity per year. Once fully operational, it will
contribute to ensure power supply for the southern region and ease the
national grid’s dependence on hydro power as well as boost the province’s
socio-economic development.-
Automobile
sales increase for 17 consecutive months
August marked the
17 th month in a row of automobile sales growth, with 12,562 cars sold, a 59
percent year-on-year increase, according to the Vietnam Automobile
Manufacturers’ Association (VAMA).
Compared to the
same period last year, the sales this month of domestically-assembled cars
rose slightly by 0.1 percent to surpass 9,700 units, while the figure of
imported cars dropped 2 percent with the number hitting 2,834.
Despite the
increase in August sales, there are signs the growth rate has slowed down,
with sales agents attributing this to consumers’ habit of spending more at
the beginning and the end of the year and less during the year.
Total sales for the
full year of 2014 is forecast to be 130,000, a 18 percent growth in
comparison with last year.
This year’s rubber
exports are estimated to reach 1 million tonnes, worth 1.8-2 billion USD,
marking a decline of 10 percent in volume compared to 2013, the Department of
Processing and Trade of Agricultural, Forestry, and Fishery Products and Salt
Production reported.
The main reason for
this is the combination of a drop in global demand with an increase in
supply, as countries expanded their cultivation areas in response to the 2012
period of high rubber prices.
According to Nguyen
Trong Thua, Director of the department, the price of rubber might continue to
face a downward trend in the years to come. Competition between export
countries will become fiercer, thus ultimately improving the overall quality
of rubber.
Due to its low
quality, the price for Vietnamese rubber is significantly lower than in other
countries in the region exporting rubber, such as
Export prices for
all kinds of rubber, including high-quality rubber, have decreased.
During the first 8
months of the year, 548,000 tonnes of rubber were exported, worth 989 million
USD, marking a 9.8 percent decline in volume and a 31.9 percent decline in
value compared to the same period last year.
Vietnam
expects to increase litchi, longan exports to US
Leading market
analysts are forecasting Vietnamese exports to the
The Department of
Agriculture's Animal and Plant Health Inspecition Service has issued a final
rule that, effective October 6, will allow imports of litchi and longan fruit
from
Specifically, they
must be grown at registered location and monitored by the Plant Protection
Department and each batch of product must be accompanied with a certificate
issued by the Plant Protection Department.
Most importantly,
these fruit must be in strict compliance with regulations governing levels of
pesticides.
Litchi and longans
are
Infrastructure,
power projects lead to greater ODA disbursements
The accelerated
construction of many big infrastructure and power projects has led to larger
disbursements of official development assistance to
The Ministry of
Planning and Investment (MPI) reported that disbursement of official
development assistance (ODA) and concessional loans in this year’s first half
reached 3.1 billion USD, including over 3 billion USD worth of loans and
about 84.48 million USD in grants.
Disbursement soared
41 percent up on the 2.2 billion USD released during last year’s
corresponding period.
The disbursed sum included
1.088 billion USD from Japan International Cooperation Agency (JICA), 923
million USD from the Asian Development Bank (ADB), 717 million USD from the
World Bank, 110 USD million from German government-owned development bank
KfW, 67 million USD from Korean Eximbank and 90 million USD from the French
Development Agency (AFD).
Among major
disbursements are a 250 million USD disbursement from the World Bank’s
Economic Management and Competitiveness Credit for Vietnam Programme, which
is aimed at helping the country with economic management reforms for higher
productivity and competitiveness and the AFD’s support programme to respond
to climate change in
“Notably,
faster-paced construction of major transport infrastructure and energy
projects has contributed to this six-month ODA disbursement,” said Minister
of Planning and Investment Bui Quang Vinh.
According to the
MPI, some 105 million USD funded by JICA has been disbursed for the project
to build the second terminal at
In the energy
sector, 125 million USD has been disbursed for JICA-funded projects including
the O Mon thermal power plant and power transmission grid for the Mekong
Delta, as well as the Nghi Son thermal power plant (37.4 million USD). Also
within this sector, there were disbursements for the ADB-funded Mong Duong
thermal power plant (94 million USD), and the World Bank-funded power
distribution efficiency project (72 million USD).
In mid-August,
Prime Minister Nguyen Tan Dung clinched a decision on allocating an additional
3.6 trillion VND (171 million USD) in counterpart-funding for ODA projects.
He also ordered central and local authorities to arrange enough reciprocal
funding for ODA projects next year, with the aim of boosting disbursement of
ODA nationwide.
Local
logistics service providers need to improve capacity building
Most of the
domestic logistics enterprises in
According to the
Hanoi Department of Industry and Trade, most of the logistics service
providers (LSP) are small and medium-sized, with the average capital of 18.6
billion VND. More than 60 percent of the LSPs in
Another drawback of
the LSPs in
There is a big
development gap between domestic LSPs and foreign ones, said Deputy Director
of the Hanoi Department of Industry and Trade, Tran Thi Phuong Lan, in a
recent seminar on developing logistics industry and trade inspection in
Hanoi.
The number of
foreign LSPs accounts for only 2 percent but their market share is up to 80
percent. They mainly provide international transport services and value-added
services such as consulting, cross-docking, and order tracking.
Nguyen Tuong, Head
of Representative Office of the Vietnam Logistics Association, said that the
current competitiveness of the Vietnamese state-owned LSPs and private ones
is so weak compared to other foreign companies. They are not capable of
providing high quality logistics services. Furthermore, Tuong indicated that
the current network of transport and urban infrastructure is not consistent
and does not meet the needs of shippers.
Tuong suggested
that
Besides, logistics
enterprises should improve their quality of service to compete with foreign
businesses and gain the trust of customers.
Dong Nai
sees peak in start-up businesses
As many as 1,340
new companies were established in the southern
The spike in newly
registered business capital, along with additional capital from the operating
businesses, increased the province’s total investments to over 12.69 trillion
VND (604 million USD). This represented a rise of 97 percent compared to the
same period last year and met the target set for 2014.
The new figures
brought the number of companies set up in Dong Nai to date to 19,680, with a
total registered capital of 121.14 trillion VND (over 5.7 billion USD), as
registered on the National Business Registration Portal.
In August alone,
four enterprises were dissolved and no enterprises temporarily suspended
their operations, said Bo Ngoc Thu, DPI Director.
Sixty-six companies
went out of business during the 8-month period, with an additional 46
businesses suspending their operations temporarily, up by 56.1 percent and 95
percent, respectively, Thu added.
The main cause for
business dissolution and operation suspension is inefficiency. Most of the
affected are small and medium sized private enterprises.
The locality is
implementing a number of measures to support small and medium enterprises to
expand their export markets and generate profit.
M&A in
banking sector aims to make changes in management, risk control
Mergers and
acquisitions (M&A) in the banking sector in 2014 are not as common as in
previous years when most of the M&A cases involved smaller banks merging
into larger banks. This year a number of leading banks merged to create
greater strength, the Vietnam Economic News reported.
Since the credit
institution restructuring plan for the 2011-2015 period was kicked off almost
four years ago, all M&A cases in the banking sector were implemented on a
voluntary basis.
According to the
State Bank of
Since early this
year, there have been many M&A cases in the banking sector. Small
commercial banks merged with each other or merged into larger banks.
Well-known cases included M&As at Southernbank, DongAbank, Sacombank and
Eximbank.
KPMG Vietnam and
The second wave of
M&As hasn’t only seen weak banks merge, larger banks have merged to
create joint strength. M&As between non-banking institutions, such as
finance and financial leasing companies will be promoted in the coming time.
Experts have predicted that the second wave of M&As in the banking sector
will become busier in the coming time to make changes in management and risk
control.
Keith Pogson,
Managing Partner, Asia Pacific Financial Services at Ernst & Young said
that M&As will remain an unavoidable trend because the number of
Vietnamese banks is bigger than that in other countries in the region. There
are two motives for M&As in
According to Nguyen
Thi Vinh Ha, Deputy General Director of Grant Thornton
The Hanoi
Department of Taxation has focussed on tax administrative reforms following
the Prime Minister’s direction to improve the tax system.
The department has
worked with relevant agencies to improve procedures and regulations, and
enable tax payers in the city to pay their taxes online.
According to the
department, a number of small enterprises are still hesitant to embrace the
new tax procedures, with some still filing traditional tax declarations,
since electronic tax declaration is currently not compulsory.
By the end of
August,
The department aims
to increase the proportion of businesses using the online tax declaration
service to 95 percent by the end of 2014.
Gov't to
cut number of prohibited sectors
The Government has
proposed a reduction in the number of prohibited sectors, from 51 to eleven
in a bid to provide favourable conditions to businesses.
The list, regulated
under the draft amendments to the Investment Law, includes military weapons,
drugs, firecrackers, prostitution, human and organ trafficking, certain
chemicals and wildlife products.
Business activities
relating to asexual reproduction, genetically modified animals, products that
endanger national security and social ethics, counterfeit products or
products that pose a threat to human health and life will also be banned
under the draft revision.
The list will be
subject to ongoing discussion and will be adjusted in a bid to balance the
rights of businesses, individuals and State oversight.
The draft revision
of the Investment Law also seeks to reduce the number of conditional business
sectors, from 386 to only 326.
At a Government
meeting last month, Prime Minister Nguyen Tan Dung asked the Ministry of
Planning and Investment to provide consultations and review the list so it
could be presented at upcoming meetings of the National Assembly and the NA
Standing Committee.
He said that in
line with regulations on people's rights to do business, any limitations on
these rights must be regulated and stated clearly in the law.
He also said that
the creation of the list and the crafting of relevant regulations must ensure
the improvement of the country's business and investment environment and
enhance the nation's capability to compete in the world market.
The list and
regulations must also improve the effectiveness of State management and
administration reform by ensuring transparency in implementation, to prevent
wrongdoing and corruption, he added.
Work begins
on southern oil refinery
The Vung Ro Oil Co.
Ltd. (VRP) began site leveling for construction of the Vung Ro Oil Refinery
& Petrochemical project yesterday morning.
With total
investment of US$3.2 billion, Vung Ro Refinery & Petrochemical project
will be built in
Vung Ro refinery is
located on an area of 538ha, including 134ha for construction of the
The oil refinery
and petrochemical project was also licensed to use 500-1,300 ha of sea water
surface.
A representative of
the Phu Yen People's Committee said over 134ha of
Construction is
scheduled to start this year and it is expected to open in 2018.
When completed, the
refinery will have a capacity of 8 million tonnes of oil products per year.
The refinery will
process LPG, gasoline research octane number (RON) 92, gasoline Ron 95, jet
fuel, diesel, fuel oil, and petrochemical products, including benzene,
toluene, mixed xylenes, polypropylene and sulphur.
Gasoline and diesel
processed at the refinery will meet the Euro-V specification, while the other
products will meet the existing Vietnamese specifications and international
standards.
The project is
expected to generate 1,300 jobs and contribute $111 million a year to state
coffers.
Speaking at the
ground-breaking ceremony, Kirill Korolev, general director of VRP, said the
Vung Ro Oil Refinery would create an (economic) impetus for
He said that it
would have a positive socio-economic effect on the province, helping to
improve Phu Yen residents' living standards.
PM
greenlights plan to grow wind power sector
Prime Minister
Nguyen Tan Dung has approved a list of projects that will develop wind power
in
The projects,
largely to be funded by Official Development Assistance (ODA) from
They range from
building databases, to planning wind power infrastructure at both local and
central levels, to improving the management of wind power investment.
To be implemented
between 2014 and 2018, these projects will utilise a total investment of 3.7
million euros (US$4.7 million).
PM Dung assigned
the Ministry of Industry and Trade with the responsibility of allocating the
funds to ensure the implementation of the projects.
Techcombank
eyes sale of $33.8m in bad debts
The joint-stock
Techcombank has been using all channels to improve its bad debt problem, and
has sold VND800 billion (US$33.8 million) to the Vietnam Asset Management
Company (VAMC) this year, according to a bank official.
Acting CEO Do Tuan
Anh told Viet Nam News he targeted selling up to VND1.5 trillion ($71.4
million) of the debt to VAMC this year.
"We, however,
had set up a team specialising in bad debt handling, working directly with
our customers to restructure the debts," said Anh, adding that another
VND400 billion have been handled this year.
Currently the
bank's bad-debt ratio is over 3.7 per cent, which is expected to gradually
come down to the safe level of 3 per cent regulated by the State Bank of
According to SBV,
the average ratio of Vietnamese banks was 4.17 per cent at the end of the
second quarter.
Anh said by July
his bank's total asset value had reached VND170 trillion and it had gained
VND955 billion in pre-tax profit, completing 85 per cent of the year's
target.
Lam Dong
export earnings up by 76% in first eight months
Exporters from the
Central Highland
In August alone,
exports rose 116.6 percent to hit $44.3 million, driven by farm produce.
Coffee was the biggest contributor. It accounted for 45 per cent of the total
turnover, according to the provincial People's Committee.
In the past eight
months, 68,000 tonnes of coffee were sold abroad, up 31.2 per cent. Buyers
were mainly the EU, the
Produce such as
fruit, vegetables, tea, cashew nuts, and fresh flowers registered encouraging
growths of 26.9 per cent, 12.1 per cent, 27.3 per cent, and 15.1 per cent in
volume, respectively.
The province
exported more than 258,000 tonnes of aluminium in the reviewed period for
$81.3 million, about one quarter of its exports.
Kamui opens
new $9m plant in central industrial zone
The $9-million
plant, the third in Asia after
Director of the
company Mikio Juaman said the Da Nang-based plant would produce about 2,600
products per year.
He said the plant
would supply Japanese and Vietnamese enterprises, gradually replacing
imported products.
The city has
developed a 100-hectare, US$150-million industrial park for Japanese
businesses, aiming at large investments from
Brokerages:
Investors follow ETF changes
Securities firms
predicted investors would be watching the rebalancing activity of exchange
trade funds (ETFs) this week to seek opportunities for their portfolio
restructuring after the main index continued sliding at the final session of
last week.
Last Friday, the
VN-Index moved sideways as buyers quickly absorbed supply from profit takers
before closing slightly in the red at 638.65, down 0.2% from a session
earlier. Market breadth was broad with advancers outnumbering laggards nearly
2-to-1, but large caps GAS, MSN and VIC took a hefty 3.98 points from the
index.
The HNX-Index,
however, was up 1.19% at 88.54 as PVS, VCG and PLC continued their uptrend
and contributed 0.52 points to the index of the northern bourse. Foreigners
net sold VND177 billion, the highest amount in four days.
According to Viet
Dragon Securities Company (VDSC), the number of FTSE Vietnam ETF’s
outstanding shares lost 280,000 units to 13.21 million units last Wednesday.
However, the fund’s capital withdrawals left little impact on the market.
The difference
between price and net asset value (NAV) represented a premium of 2.08%,
suggesting that further capital withdrawal by FTSE Vietnam ETF in the short
term would hardly occur.
Changes to the DB
FTSE Vietnam Index were also announced last Friday with KDC and FLC replacing
DIG and GMD as constituents, with the two latter stocks failing to meet
criteria.
DIG did not meet
the requirement for liquidity as the stock’s turnover ratio was only 15% of
FTSE Vietnam Index, lower than the 20% threshold. GMD was rejected since the
stock’s foreign room fell to 0% (versus the 2% threshold) after the company’s
foreign room limit was adjusted to account for convertible debts held by a
foreign fund.
FTSE is expected to
sell around 4.7 million shares of GMD and 6.4 million shares of DIG while
buying around 7.6 million shares of KDC and 11.3 million FLC shares, VDSC
said.
After FTSE Vietnam
ETF’ announcement, VNM ETF will also release rebalancing results late this
week. As estimated by VDSC, GMD will be excluded due to the same reason of
FTSE.
“On the other hand,
we think IJC could be included because this ticker now has sufficient
conditions to add to the ETF such as size, liquidity and free-float ratio. We
leave the door open for FLC because selection depends on balancing between
inclusion and exclusion and outstanding shares of FLC (FLC has been approved
by FTSE),” the brokerage said.
“In this review,
our analysts predict the selling side will be stronger than the buying side.
For inclusions like KDC, FLC, IJC, the rally prospect thanks to ETF trading
is not high. Meanwhile, for exclusions, investors should consider
accumulating GMD shares if this review sends its price down below VND30,000
each,” VDSC added.
HSBC:
Central bank likely cuts OMO rate further
HSBC Bank has
predicted that the central bank would mull another cut of the open market
operations (OMO) rate to beef up domestic demand and growth thanks to low
inflation this year.
In a macro economic
report released on September 4, HSBC said
After expanding
solidly since September 2013, the HSBC manufacturing PMI index eased markedly
in August to 50.3 and the bank forecast next month’s performance to be
lackluster as inventories are high and orders are weak.
Headline inflation
decelerated further to 4.3% year-on-year on low domestic demand. With the
exception of food, price pressures subdued and core inflation slowed to 4.2%
year-on-year in August from 5.1% in July.
Credit growth
slowed to 10.3% year-on-year in August from 10.6% in July. The central bank
already reduced the OMO rate by 50 basis points to 5% to support domestic
demand.
“Should inflation
stay below 4.5% in September, the central bank may deliver another rate cut
to the OMO rate to shore up domestic demand,” the bank said.
Meanwhile, the
Ministry of Finance is also doing what it can to help the business community.
The corporate tax rate was cut to support businesses and attract
manufacturing foreign direct investment (FDI) capital, especially high-tech
firms.
In January this
year, the rate was reduced to 22% from 25% and by 2016, it will be lowered to
20%.
Foreign-invested
enterprises in prioritized sectors and regions get even more advantageous
rates. Tax incentives coupled with slowing gross domestic product (GDP)
growth heightened concerns over
In 2013, the budget
deficit widened to 5.5% of GDP from 5.4% in 2012. The concern is not over the
Government’s reported deficit but the lack of clarity about what is the
“real” nature of the Government’s liability, leading to a wide range of debt
estimates.
The report also
mentioned
For example, the
inclusion of principal payment in expenditure has led to higher deficit
estimates by the Government. As a result, estimates of the debt stock also
vary, skewing on the upside.
In general, HSBC
said
By category,
corporate, customs and oil revenues are the key contributors. This year,
Nuclear
power development communications receive a boost
The Vietnam
Department of Atomic Energy and the International Atomic Energy Agency (IAEA)
on September 10 jointly held a seminar on opportunities and challenges for
communications in disseminating nuclear power development in
Addressing the event,
Hoang Anh Tuan, director of the Department Atomic Energy, stressed
During a fact-finding
trip to
He expressed hope
that experts from IAEA, the
Brenda Pagannone
from IAEA Department of Nuclear Energy underlined the need to have an open
and transparent communication strategy from nuclear power plant stakeholders
to win local residents’ trust in the safe operation of the plant in the
future.
Providing the
public with adequate information is a decisive factor in receiving their
agreement and support in building Ninh Thuan plants in
Increasing
machinery imports signal strong investment activity
A significant jump
in machinery and equipment imports in the first months of the year shows
businesses are picking up the pace of modernising production facilities.
In recent years,
Vietnam Customs
statistics show in the first 7 months of the year, machinery and equipment
imports from China reached US$4.38 billion, Japan (US$2 billion), the RoK
(US$1.73 billion), Taiwan (US$808 million), Germany (US$652 million), the US
(US$483.5 million), Italy (US$227 million), Malaysia (US$245 million),
Singapore (US$176 million) and Thailand (US$359 million).
Import values from
these countries have been on a steady but gradually uptrend. For instance,
imports from
Increasing imports
of machinery and equipment are directly attributable to a concurrent rise in
demand for technological renovation of domestic businesses and a corollary
accretion of foreign direct investment (FDI) inflow into
The Ministry of
Planning and Investment (MoPI) reports in the first eight months of the year,
the RoK ranked first among foreign investors in Vietnam with total registered
capital of US$3.22 billion, accounting for 31.5% of total foreign capital
into the country, following by Japan with US$1.27 billion (comprising 12.5%).
The movement to
install advanced technologies in all stages of production across all sectors
has also driven machinery and equipment imports up. Currently, import markets
for both new and used machinery and equipment have expanded.
On the one hand,
new technological products generally have preeminent features such as energy
saving, smaller size and improved automation, but on the other hand are more
costly than used equipment.
In emerging
countries, businesses tend to choose second-hand machinery and equipment as
the increased cost of the brand-new doesn’t outweigh the benefits.
Businesses must be
cautious when importing second-hand equipment. Imports are bound by
regulations and in particular environmental regulations. Legal guidelines on
importing second-hand equipment are being promulgated, so importers should
exercise due caution.
Nguyen Chien Thang,
Director of the Scansia Pacific Company, says
This is one of the
advantageous factors domestic businesses often choose Chinese partners as
main suppliers, Thang says.
Local businesses
have many choices. In addition to acquiring new machinery and equipment from
regional suppliers, they can optionally import equipment purchased,
oftentimes at bargain basement prices, from businesses in other countries
that are going out of business and closing their doors.
A case in point is
the situation in
One of the
complaints lodged against domestic machinery and equipment is that it has a
high price and the quality is not consistent. Thus most domestic businesses
are choosing to import machines and equipment, instead of purchasing locally.
Do Phuoc Tong, Vice
President of the Ho Chi Minh City Association of Mechanical Engineering, says
most local mechanical engineering businesses are small and medium in scale.
The lower quality
in domestic machinery and equipment results from the fact the local
engineering firms have insufficient funds to invest in newer technology, Tong
says.
Compounding the
problem for domestic engineering is that materials, components, and tools for
mechanical engineering production are subject to higher
WB,
A Vietnam
Development Report aiming to provide an insightful window into the
opportunities available for the country to develop rapidly and sustainably
through 2030 and beyond is anticipated to be completed by late 2015.
The report, a joint
project being carried out by the World Bank and the Vietnamese Government,
focuses on finding a way forward for the nation so partner efforts can be
harmonised, said Deputy Prime Minister Vu Duc Dam and WB Vice President Axel
van Trotsenburg, at a meeting in
A WB report showed
that over the past 20 years,
If average growth
remains feeble at only 5-6%, the nation will be caught in the so called
middle income trap, it warned.
The most pressing
issue facing the country in its bid to shore up its economic growth is to
overcome complacency and raise the nation’s capacity to compete on an equal
footing in the global marketplace.
Raising the nation’s
competitiveness is critically important and imperative if the economy is to
grow rapidly and develop sustainably for the socio-economic benefit of its
citizens.
Early this year,
Deputy PM Dam directed the Ministry of Planning and Investment (MoPI) and the
National Council on Sustainable Development and Competitiveness Capacity to
coordinate with the WB and international organisations to devise a list of
key tasks and incorporate them into Government Resolution 19.
He instructed the
key tasks should zero in on practical solutions to improve the business
environment and in turn improve the national competitive capacity and
facilitate the ironing out of administrative snags hindering business.
Experts at the
meeting predicted that if Resolution 19 is strictly adhered to and carried
out effectively,
Deputy PM Dam urged
the MoPI to establish a website to gather opinions from leading domestic and
foreign experts to insure a high quality report and to obtain useful ideas
and thought for making development policy in coming years.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Tư, 10 tháng 9, 2014
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