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BUSINESS
IN BRIEF 3/9
Banks
earmark big credit lines for fishermen
The Bank for
Investment and Development of Vietnam (BIDV) said it will offer a credit line
of VND15 trillion with preferential interest rates for fishermen in the
2014-2017 period, in line with a Government decree to support aquaculture
development.
It has set aside
VND3 trillion for projects to build boats providing logistics services for
fishermen. Part of this sum will be lent to fishermen to build high-capacity
fishing vessels in the 2014-2017 period in
It also signed
contracts with an enterprise and nine fishermen in the province to help them
build new steel ships.
The bank has
received 98 loan applications from fishermen aimed to build new vessels or
upgrade old ones.
It also lent
fishermen living from Nghe An to Binh Dinh Province who operate in the
fishing grounds around Hoang Sa (Paracel) and Truong Sa (Spratly)
archipelagos.
Until now, the
amount of disbursement has reached over VND106 billion.
Under the
Government’s Decree 67/2014/ND-CP on aquaculture development issued last
month, fishermen will be given financial support from local banks and
insurance companies from August 25.
In fact, other
banks have also joined the scheme.
Bank for Foreign
Trade of Vietnam (Vietcombank) said this year it will put aside VND1,000
billion to support individuals and organizations to build new vessels, and maintain
and repair used ones.
Owners of ships
could borrow a maximum of 70% of costs used to build wooden vessels at an
interest rate of 7% per year while those wanting to build steel ships could
be given a maximum of 95% at the same interest rate by Vietcombank.
In addition, the
bank can lend a maximum of 70% of costs for logistics services that fishermen
needed for each fishing trip at the interest rate of 7% a year.
Following the
Government’s Decree 67, the Ministry of Finance said that from August 25 said
it will pay insurance fees for fishermen under its insurance and credit
policies.
Beneficiaries
include owners of vessels catching fish offshore and of ships supplying
logistics services with a capacity of over 90CV.
The Government will
pay 100% of insurance fees for each crew member and subsidize 70% of
insurance fees for hull, equipment and fishing net of vessels with a capacity
of 90CV– 400CV and 90% for those with capacity of over 400CV.
The
According to Oryza,
a website on the international rice market, the Philippine government
allocated around 10.27 billion pesos, or US$234.5 million, to the rice import
of 500,000 tons. It had set an undisclosed budget of US$456.6 per ton but
bids ranged from US$460 to US$496.75 per ton.
This year, the
Oryza statistics
show that Vietnam’s 25% broken rice is currently offered at US$400-410 per
ton, US$10-20 a ton higher than the price of Pakistan but US$50-60 per ton
lower than that of Cambodia.
After NFA turned
down all the bids, rice and paddy prices in the Mekong Delta have slid amid
quiet trading.
Ngo Ngoc Yen,
director of Yen Ngoc rice firm in HCMC, told the Daily on August 28 that
IR50404 material rice prices at Ba Dac Wholesale Market in
Rice prices in An
Giang and Dong Thap provinces have declined slightly to VND7,450-7,500 per
kilo. Paddy prices in several provinces have also slid VND50-150 a kilo to
VND4,850-5,000 per kilo.
Yen explained that
demands of rice exporters have been weak since early this week while the
nation was unable to win the rice tender of the
Yen, however,
forecast that rice prices may not drop further as supply is running dry.
According to the
Vietnam Food Association (VFA),
A source from the
Can Tho City Department of Agriculture and Rural Development said VFA member
enterprises have signed contracts to export around six million tons of rice.
So, they have to ship over 2.1 million more tons to partners.
Given a stockpile
of over one million tons, VFA member firms still have to buy an additional
one million tons to fulfill the contracts with their partners, the source
said.
Ministries
yet to decide sugar import quota
The Ministry of
Industry and Trade and the Ministry of Agriculture and Rural Development
(MARD) have not decided a sugar import quota for this year as usual, and the
delay is attributable to high sugar inventories.
In previous years,
the two ministries often announced the allowable volume of sugar imported
into
A source from the
Agro-Forestry-Aquatic Processing Department, which aids MARD in sugar and
sugarcane policies, said prices of sugar sold at refineries decrease by
VND500 per kilo a month. Accordingly, refined sugar sells for
VND12,300-12,700 per kilo this month but sales volume is lower than the same
period last year.
Thirty-nine members
of the Vietnam Sugar and Sugarcane Association (VSSA) sold 93,000 tons of
sugar from July 15 to August 15, 21,500 tons lower than a year ago. This was
one of the reasons why sugar inventories at factories had soared to 269,000
tons as of mid-August, 54,000 higher than that of the same period last year.
In addition, some
mills have started producing sugar of the 2014-2015 sugarcane crop, adding a
combined volume of 4,900 tons of sugar to the inventories.
The output of domestically-produced
sugar is estimated to be 300,000 tons higher than demand, but the country has
to import 77,000 tons this year as part of its commitment to the World Trade
Organization.
The source assumed
the ministries may allow local firms to import 77,000 tons of crude sugar for
processing this year rather than importing both refined and crude sugar like
the previous years.
VSSA has proposed
the two ministries assign 41 sugar mills nationwide to process the planned
sugar imports for sale on the local market.
VRG halts
rubber latex exploitation to avoid further losses
The Vietnam Rubber
Group (VRG) said it has halted exploiting rubber latex to avoid further
losses due to a strong price fall but will keep growing new rubber trees.
Tran Ngoc Thuan,
VRG general director, told a conference on rubber consumption in the local
market held by the Ministry of Agriculture and Rural Development and the
Ministry of Industry and Trade last week in HCMC that export prices of latex
are hovering around VND40 million a ton, equivalent to production cost.
“With that price,
companies of the group cannot earn profit. The best solution is to halt
exploitation and wait for the price to improve and raise production,” Thuan
said. He did not reveal how long the halt will last.
The VRG leader also
said the supply of natural rubber in the world market is now redundant by
around 600,000 tons. Therefore, not only
The move, however,
will affect earnings of VRG this year, but Thuan said rubber is a perennial
tree and that the one-year business cycle may not exactly tell the business
efficiency of certain rubber companies. Usually it takes up to five years to
say whether such companies make gains or losses.
Apart from
In the middle of
last year, UK-based organization Global Witness accused VRG and Hoang Anh Gia
Lai Joint Stock Company of harming the environment and putting households
around their rubber farms in a difficult position as they did not have land
for cultivation.
However, in a
statement issued on August 21, Global Witness highly evaluated VRG’s effort
in fulfilling requirements of the organization and local residents, which
requested the rubber manufacturer to respect international law and the
interests of people around its rubber farms in
Speaking with the
Daily, Thuan said the VRG has recently cooperated with Global Witness to deal
with all problems and will continue that cooperation in the coming time to
solve all issues related to local residents living near the group’s rubber
farms.
The group has
targeted to finish growing 50,000 hectares of rubber in
Saigon
Square welcomes vendors from Saigon Tax Trade Center
The operator of
Saigon Square Shopping Center No. 2 in HCMC said the center is able to
accommodate all vendors from the
In a meeting on
Monday held by the city’s Department of Industry and Trade to solve problems
related to the business premises of vendors who have to move out of the
Vendors moving in
from the
Other shopping
centers in the city such as Vincom or Parkson are 90% full but if vendors
from the
Previously, a
representative of Satra said it has to hand over an area of around 500 square
meters of the Saigon Tax Trade Center on the Le Loi Boulevard side to make
room for construction of a ventilation system for the Metro Line No. 1
project.
When that part is
demolished, vendors in the trade center cannot run business as fencing around
the metro construction site will be close to the façade of the shopping
center, not to mention the close gap between the construction site and the
center that will seriously affect the latter, especially in fire prevention
and fighting.
As a result, Satra
has decided to shut down its trade center and required all vendors there to
move out before September 30.
Meanwhile, shop
owners at
The Satra
representative also said the group has supported vendors of the
It has also
suggested the city government to offer tax exemptions for vendors during the
time they have to move from the center to new places.
Axe to fall
on ineffective public projects
Municipal
authorities will review 178 public investment projects already approved by
the city People’s Council for execution in the 2016-2020 period, and will
remove those deemed as not cost-effective, the Department of Planning and
Investment said.
Thai Van Re,
director of the department, told a conference on Tuesday on building the
social-economic development plan for 2016-2020 as well as the medium-term
plan for public projects in the same period that the review would take place
in the next months.
“From now until the
end of the year, authorities of districts and departments in the city will
have to reassess all projects” in accordance with the Law on Public
Investment, which will come into force next January, Re said.
The common spirit
is that public projects must be cost-effective, so heads of district
governments, departments and project management units will be held
responsible if they approve projects that lead to debts or shortage of funds
for implementation, Re said. In addition, these people must not allow for new
projects that have not been approved for the medium term.
The city now has
1,096 public investment projects underway and 178 others that have been
approved but have yet received finances, he said.
According to the
department, capital for public investment projects in the 2016-2020 period
will be disbursed in order of priority. Capital will be first disbursed for
projects due to be finished before the year’s end, then for those expected
for completion next year, and counterpart capital for ODA (official
development assistance) projects or projects using foreign preferential
loans.
The city has
planned to put aside 15% of total capital for public projects in the
five-year period to deal with unexpected situations such as changes of
prices, investment for urgent projects and other issues which may arise, in
accordance with the Law on Public Investment.
HCMC Chairman Le
Hoang Quan said the city welcomes the initiative to make five-year plans for
public invesment projects. In the past time, the plan is prepared every year
and it takes two or even three years to finish procedures for one project and
therefore, when the investment arrives, the project has become outdated, he
explained.
He took
On August 5, 2014,
the Government issued Directive 23/CT-TTg as guidelines for building
medium-term plans for public investment projects, requiring localities across
the country to evaluate their public investment results in the 2011-2015
period and set up the plan for the five-year period of 2016-2020.
According to the
directive, localities and deparments have to settle all debts arising from
public investment projects by the end of this year and from next year, they
have to strictly follow regulations of the Law on Public Investment and allow
no more debt to arise.
HCMC authorities
will order chemicals trading enterprises and households to relocate out of
the city’s residential areas and gather in a new chemicals wholesale market
that will be set up soon.
The separate market
will help ensure fire safety and allow for authorities to strictly monitor
this business, the website of the HCMC People’s Committee reported on
Tuesday.
Accordingly, the city
government will map out a scheme to establish the chemicals wholesale market
after its relevant departments carry out a survey about the number and
demands of chemicals traders in the city.
Besides, the city’s
Department of Health and the People’s Committee of District 5 will draw up a
plan to move all chemicals stores out of Kim Bien Market and surrounding
roads in the district.
Earlier, the city
authorities asked its agencies to examine kinds of chemicals being traded in
the city as well as the number of households trading in these products, and
establish a market monitoring unit well-equipped with proper facilities.
Kim Bien is a major
wholesale market with nearly 117 stores selling various kinds of chemicals
used in various fields, especially in garment and food.
Jan-Aug
farm exports put at US$20 billion
The Ministry of
Agriculture and Rural Development has announced agro-forestry-aquatic export
revenue in August is estimated at US$2.47 billion, taking to US$20.22 billion
the total in the first eight months of the year, up nearly 12% year-on-year.
Of this figure, the
export value of agricultural products has increased 5.7% to US$9.49 billion,
seafood 25.4% to US$4.95 billion and forestry products 12.5% to US$4.06
billion over the same period last year.
Such products as
coffee, pepper, cashew nut, seafood, wood and furniture have maintained
export growth in both volume and value. However, rice, rubber, tea and
cassava significantly decreased against the same period.
The first eight
months has seen
Remarkably, seafood
shipments have brought US$679 million revenue in August, raising its
eight-month total to US$4.95 billion, up 25.4% year-on-year.
Meanwhile, rubber
exports have slid 9.8% in volume and 31.9% in value; the decrease is 6.9% and
1.4% respectively for tea against the same period of 2013.
Rice exports are
down by 9% in volume and 5.3% in value in the period.
Support
industries to receive funding, infrastructure help
Two banks and an
industry association have joined hands with a concerned government agency to
boost
This was the
commitment made by Viet Nam Development Bank (VDB), Tien Phong Bank (TP
Bank), the Ha Noi Support Industry Businesses Association (HANSIBA), and the
Small- and Medium-Sized
Doan Xuan Anh, VDB
Vice President, said his bank would provide credit for a maximum of 70 per
cent of project value for qualified enterprises. The rest of the capital will
be coming from the company's equity and funds from other financial
organisations.
The term of the
loans to be offered will be 12 years, at an interest rate of 10.5 per cent.
According to Anh, the interest rate could be adjusted to the rate set by the
government.
For its part, TP
Bank is offering VND1 trillion (US$47.17 million) in credit to support
industries on the condition that the companies guarantee the loans with their
account receivables and open accounts at the bank. The bank is offering an
interest rate of eight per cent for dong loans and 3.2 per cent for US dollar
loans and is reducing transaction fees by 40 per cent.
Dang Huy Dong,
Deputy Minister of Planning and Investment, also said government
organisations such as SMESTAC would also be providing assistance that would
enable support industries to resolve their problems.
The Deputy Minister
said the ministry has been implementing support programmes for companies,
including the Support Industry Assistance Fund, to meet the financial demands
of support businesses.
He added that the
ministry would also be offering appropriate service packages related to human
resources management, as well as business administration, finance management,
technology and exporting.
The ministry would
also take advantage of its relationship with foreign partners to help
domestic enterprises gain access to modern technologies and overseas markets.
However, a number
of companies at the workshop said they would still have difficulties even if
the terms of payment for bank loans was 12 years.
A representative of
the Viet Nam International Vision (VIV) said: "The problems cannot be
solved completely if the term of the loan remains five to 10 years, as it is
now."
"The capital
for those operating in the support industries is huge, and it will take them
around five years to make profits," the representative added.
A representative of
Vinaxuki Automobile Company said support industries were mostly small- and
medium-scale, limited in financial capability and short on guarantee assets,
so it would be difficult for them to meet the standards set by commercial
banks.
Barroso:
More economic reforms sustain
President of the
European Commission (EC) Jose Manuel Barroso stressed the importance of more
economic reforms and more openness to support
Barroso raised the
point at a business luncheon organized by the European Chamber of Commerce in
Barroso took
“Through the policy
of doi moi,
Barroso said openness
has fueled
More European
companies have invested in
The EU is amongst the
leading foreign investors in
Barroso said the EU
represents the number one export destination of
“For
He said fighting
corruption and ensuring an efficient judicial system are key to improving the
business environment in any countries, including
A FTA will elevate
EU-Vietnam ties to a higher plane and it will lead
The FTA will
require both sides to eliminate tariffs and look at the broader range of
trade and investment barriers that their companies face.
Two-way trade
between the EU and
Talking about the
process of the FTA, Barroso said the negotiations have reached a decisive
stage but some difficult decisions and more ambitions will be needed for it
to be concluded. “We need to reach a solid result, one that serves the
interests of our stakeholders. And some of the most important European
stakeholders are represented here in this room.”
EuroCham chairwoman
Nicola Connolly said EuroCham has witnessed a phase of stable recovery and
growth in
Connolly said the
European business community in
“The success of the
agreement will not only have a significant impact on our members but also on
potential European investors, particularly SMEs (small- and medium-sized
enterprises),” Connolly said.
Asked when the EU
and
BR-VT says
no to new steel projects
The southern coast
The Party Standing
Committee of Ba Ria-Vung Tau Province has issued Directive 43-CT/TU on foreign
investment attraction with an aim to sustain economic development of the
province while protecting the environment and water resources, and preserving
land and energy.
Ba Ria-Vung Tau is
considered a steel manufacturing hub of
Two more plants are
expected to come online next year, raising the total steel ingot output
produced by seven mills to 4.75 million tons a year.
Steel production
has made a great contribution to the province’s economic development.
However, the industry has caused negative impacts on the environment as the
steel projects consume much electric power and water, and discard huge
volumes of waste.
In addition, the
steel industry has been growing too fast in recent years while investors have
yet to pay enough attention to environmental protection and waste management.
The local
government is now looking for capable investors to treat dust from the steel
plants. Initially, the province has plans to move dust to a treatment place.
Given the
difficulties, some industry insiders said the province should have banned
steel mill projects a long time ago.
The committee’s
directive also clarifies a licensing halt to seven other sectors such as
cassava starch production, rubber latex processing, basic chemical production
(with industrial wastewater discharged), dyeing, tanning, paper and fish
powder production. The reason is that the projects in these areas pose
pollution threats to the upstream and clean water reservoirs in the province.
The directive also
limits investments in areas such as seafood, plant protection chemical,
fertilizer, garment, leather shoe, labor-intensive projects and those
occupying much land, using outdated technologies or generating low added
value.
The province will
only give the nod to projects in those sectors on a case-by-case basis.
As of July, the
province had attracted 290 foreign direct investment (FDI) projects with
combined registered capital of US$26.7 billion and 422 domestic projects
capitalized at over VND233 trillion.
According to the
committee, the province has yet to attract many important projects in high
technology and supporting industries while some seafood and tanning projects
have heavily polluted the environment.
Hotel room
shortage on
The current
undersupply of hotel rooms on
Le Minh Hoang,
director of the Kien Giang Department of Culture, Sports and Tourism, said it
is difficult for tourists to book hotel rooms on the island on weekends or
public holidays. However, a number of hotel projects will be put into
operation early next year.
As planned, 700 new
hotel rooms of five-star Vinpearl and 200 rooms of other projects will be put
into service by the end of this year, taking the total number of hotel rooms
on the island to nearly 4,000.
“There are more
hotel rooms and service quality will be improved as most of the new hotels
are of good quality and five-star rating,” Hoang said.
New hotels have
been up and running on Phu Quoc in recent times as the island now has access
to the national grid through a subsea power cable line and more
infrastructure.
"Though the
national power grid has not stretched all over the island, it encourages
investors to speed up work on their projects,” Hoang said. “A number of
hotels using electricity from the grid are considering room tariff
reductions."
Hoang said many
investors are pressing on with their projects on
Local authorities
are now working on a zoning plan and land allocation for the complex. “As
everything is now in the process of preparation, the investors have yet to
unveil total investment capital and further details of the complex,” Hoang
said.
Phu Quoc has
attracted 400,000 visitors in the year to date, a year-on-year rise of 37%,
according to the Kien Giang Department of Culture, Sports and Tourism.
Sugar price
drops to three-year low
The wholesale price
of white sugar has tumbled to a three-year low of VND12,500 a kilo, which has
pushed several sugar factories into losses, said an expert.
Ha Huu Phai, a
sugar expert and representative of the Vietnam Sugar and Sugarcane
Association in
According to the
association’s survey, the rate of return on production costs has shrunk from
50.4% in the 2011-2012 crop to 33.4% in the 2012-2013 crop.
Statistics on the
profit ratio of the 2013-2014 crop are not available but it is easily noticed
that input costs have kept rising while the sugarcane selling price is in
decline. Therefore, growers in some areas are no longer interested in farming
sugarcane, according to Phai.
However, according
to a report of the Ministry of Agriculture and Rural Development, in the
2014-2015 crop, the area under sugarcane cultivation nationwide narrows down
by only 9,400 hectares, reaching 300,000 hectares. Sugar production, as such,
is still estimated at 1.6 million tons, equivalent to that of the previous
crop.
With the global
sugar demand forecast to be balanced with supply, the sugar price may
recover, Phai said.
According to him,
high production costs make home-produced sugar unable to compete with sugar
imported from
The price of
quality sugarcane in
Besides, transport
costs in
According Phai, in
order to survive and grow, two big problems needing to be solved are to
increase the competitiveness of local sugar products and to prevent sugar
smuggling.
As a result, sugar
factories need to upgrade technology to increase production efficiency and
sugar quality as well as find ways to lower production costs. In addition,
they need to invest in sustainable sugarcane farming areas.
Regarding
anti-smuggling measures, there needs to be a strong determination of
management agencies, Phai added.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Ba, 2 tháng 9, 2014
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