|
BUSINESS
IN BRIEF 4/9
Global
partners support
International
partners have pledged to assist
The United Nations’
Food and Agriculture Organisation (FAO) has provided technical assistance to
the ministry on the development of the scheme.
The organisation
will give support on institutional reform, climate change adaptation, science
and technology, the formulation of sustainable regulations on goods and
services, and the implementation of effective agriculture and food systems,
FAO Vietnam representative Lan Huong said.
Nguyen The Dung, a
representative of the World Bank in
The WB proposes
that in future the project focus on rice production in the Mekong Delta and
coffee in the Central Highlands, as well as enhancing the restructuring of
the agriculture sector and supporting initiatives for the sustainable
production of these crops.
Meanwhile, the
Canadian Government has funded the implementation of a technical and policy
support project to restructure agriculture in
The country is
committed to supporting Vietnam in the field, Canadian Ambassador David
Devine said, noting that incentives in agriculture, particularly in the field
of advanced technology and environmental services, would attract more
Canadian investors.-
The restaurant and
food industry in
At a recent seminar
in
Four of the six
Vietnamese participants at the seminar – Vingroup,
They touted their
advantages over other investment opportunities in the region for which they
proclaimed the restaurant and food industry is the key for Japanese investors
to penetrate the
Shopping centres
are springing up like mushrooms throughout the nation and provide investors
in this sector exponential opportunity for growth and profits, they said.
JETRO
representatives spoke glowingly of the highly qualified and skilled labour
force in
Vingroup’s retail
chains and Golden Gate’s chains of restaurants across the country like
Kichikichi, SumoBBQ, Ba Con Cuu and Vuvuzela are prime examples of the
success businesses are having in
SATRA trumpeted its
strength in food processing, services, import-export and investment
development while Takahiro Food ballyhooed its achievements in restaurants
and Japanese cuisines.
Overseas
remittances to
Overseas
remittances to
In August alone,
around US$333 million was sent to the City, a two-fold increase over a month
earlier, ,according to Nguyen Hoang Minh, Deputy Director of the HCM
City-based State Bank of Vietnam (SBV) branch.
The city expects to
receive this year’s total overseas remittances of around US$4.8-US$5 billion
higher than the 2013 figure of US$3.8 billion.
Vietnamese
remittances have still consistently increased despite low dollar interest
rates and an increase in the VND/USD interbank exchange rate by 1% in mid
June.
Binh Duong
likely to achieve 2014 export goal
The southern
According to the
provincial Department of Industry and Trade, in the first eight months of
this year, Binh Duong earned nearly 9.4 billion USD in export revenue, a
year-on-year rise of 13.3 percent. The foreign-invested sector contributed
7.9 billion USD to the figure.
In August alone,
the locality earned an estimated 1.37 billion USD from exports, up 5.4
percent against the previous month.
Head of the Binh
Duong Association for Exporters Pham Van Xo said that the province’s main
exports, such as wood products, garment and textiles and footwear, still
maintained the growing trend.
From now till the
end of this year, Binh Duong will focus on helping businesses overcome
difficulties, speeding up trade promotion activities in order to expand its
export markets, and attracting more investment in developing support industry
to reduce the import of materials.-
Free trade
pacts’ effects on employment under spotlight
At a seminar in
Participants agreed
that the agreements will have a comprehensive impact on all sectors and
economic activities.
Le Thanh Thuy from
the Vietnam Chamber of Commerce and Industry in
In addition, the
pacts will facilitate the flow of labourers among countries, which will bring
fierce competition to the local workforce, she said.
Delegates
recommended that employment centres should enhance their capacity and serve
as a bridge to provide useful information to employees and employers.
At the same time,
they emphasised the need to establish a forecast centre for human resources
and labour market, making it possible for businesses to devise their
operation strategies.-
First
double-shell petrol tank installed in
The trial
installation of a double-shell petrol tank, the first in
The technology has
been used widely in the world, especially in
The tank was made
by Petrolimex’s construction company No. 1 using technology transferred by
Chikahiro Masuda,
Assistant Resident Representative of the Japan International Cooperation
Agency (JICA) suggested
The second tank of
this kind will be installed
Nghe An
pursues international economic integration
The central
On one hand, the
province continues to reinforce ties with its traditional partners in
On the other hand,
Nghe An is seeking out new partners for trade, investment, and culture
exchange, particularly localities in Japan, Australia, Indian, EU countries,
Canada and the US, through the assistance of Vietnamese representative
agencies abroad and foreign representative agencies in Vietnam.
At the same time,
the province devotes its resources to develop local key economic zones,
including the Southeast economic zone, and the coastal areas, while making
endeavours to access loans from the World Bank (WB), the International
Monetary Fund (IMF) and the Asian Development Bank (ADB).
In August alone,
Nghe An has sent delegations to
By the end of 2013,
the province was home to 39 foreign direct investment (FDI) projects with
combined pledged capital of 1.49 billion USD.
However, several
problems are hindering the northern central province’s efforts to promote
international economic integration, particularly the low competitiveness of
local enterprises and poor skills of external affairs officials.
Gia Lai
attractive to investors
More investors are
finding the Central Highland
Since the beginning
of 2014, the province has licensed 10 projects with a total registered
capital of 1.3 trillion VND (62 million USD), which include two factories
processing cassava, a power plant fired by sugarcane bagasse, and a pepper
processing factory.
Nine investors have
also applied for a licence for their investment schemes in the locality while
two others asked to expand their existing investment. If approved, these
investors will pump a total of nearly 16.5 trillion VND (775 million USD) in
the province.
Besides general
incentives in line with national rules, Gia Lai authorities have adopted a
number of local measures to facilitate business operation. The province has
been building infrastructure such as power and water supply networks as well
as roads to designated industrial zones (IZs), tourism sites and border gate
economic zones (EZs). Investors will also benefit from support in terms of
research or attending technology and trade fairs.
Gia Lai sits in the
Central Highland intersection connecting with the central coastal area. The
province is rich in land and minerals, boasting more than 100,000 ha of land
under rubber, nearly 80,000 ha and 10,000 ha for coffee and pepper.
Reforms key
to Can Tho IZ success
In addition to its
advantages in geography, raw material resources and skilled workforce,
leaders of the Can Tho Municipal Export Processing and Industrial Zone
Management Authority have gone to great lengths to make the city as
attractive as possible to investors.
Therefore, in order
to create the most optimal conditions the authority has developed an open
investment climate and has gone to great lengths to simplify administrative
procedures within the city’s export processing zones and industrial parks
(IPs).
Back in 2007, the
Can Tho Municipal Export Processing and Industrial Zone Management Authority
(CEPIZA) chief Vo Thanh Hung founded a steering committee for the
implementation of global quality management standards ISO 9001-2000 to tackle
the diverse range of administrative procedures handled by CEPIZA.
The committee is
operating a quality management system that follows Vietnamese standards ISO
9001:2008 and tackles these administrative procedures on site at CEPIZA. A
specific section was established for receiving and delivering results under
CEPIZA management, which vastly improved efficiency at the city’s IPs. This
went a long way towards creating a modern, one-stop shop state administration
mechanism.
According to
CEPIZA’s deputy head Huynh Viet Dung, reforms in administrative procedures
have brought many practical benefits, including huge savings in both time and
costs.
Many requested
certificates and investors’ documents are now processed three to five days
earlier than the regulated time, with certain investor certificates processed
after only one day.
Last year, CEPIZA’s
section in charge of processing investors’ documents received 387 files
across 32 different administrative procedures. Of this number, 134 files were
delivered ahead of time, accounting for 34.6 per cent, while the remaining
253 files were completed on time, accounting for the remaining 65.4 per cent.
No records were delivered behind schedule.
Nguyen Van Thoi,
head of the administrative department at Dai Phong Wheat Flour Company
Limited, came to CEPIZA to source a revised investment certificate to expand
the company’s existing flour mill in the city’s Tra Noc IP.
“With active
support from CEPIZA staff, our company was given a revised investment
certificate after only three days, compared to 15 days as regulated. I was
really happy with the polite attitude of the staff there,” he said.
At present, 28
different types of administrative procedures are processed directly at
CEPIZA, belonging to eight discrete areas: environment, goods circulation,
investment, foreign employment, occupational safety, construction,
construction planning, and business start-up and development.
These procedures
are fully listed at CEPIZA’s one-stop shop or on its website. Throughout its
years of operation, the administrative mechanism at CEPIZA has been
constantly improved in conjunction with staff capabilities.
Besides helping
investors to complete procedures quickly, CEPIZA frequently hosts meetings
with businesses based in the city’s IPs to listen to any production or trade
issues they may be having, and from there finding a timely and effective
solution to the problem.
CEPIZA’s efforts to
promote administrative procedural reforms have garnered rewards not just for
the individual businesses, but for the authority and the city as well.
To date, the city’s
export processing zones and IPs are home to 213 on-going projects covering
564.9 hectares of industrial land with the total committed capital of $1.9
billion. Disbursed capital accounts for 44.4 per cent of this, at $849.2
million.
Within the city’s
IPs, there are 190 domestic investment projects worth $1.709 billion in the
total committed capital and realised capital of $677.3 million. There are
also 23 foreign invested projects worth $203.5 million in the total
registered capital and realised capital of around $172 million.
In terms of
industrial land occupancy rate, Can Tho’s IPs took the lead among locations
in the Mekong Delta region with Tra Noc 1 IP fully leased by investors and
Tra Noc 2 IP reporting an occupancy rate of nearly 90 per cent.
Government
praises businesses for cost savings
Deputy Prime
Minister Vu Van Ninh on Monday sent a dispatch praising some ministries and
state-owned economic groups and corporations for well implementing the Prime
Minister’s instruction on management cost saving and cost price reduction in
2013.
Vietnam Airlines is
one of the companies that were praised for cost savings by the Government.
The commended
Ministries include Finance, Industry and Trade, National Defense, Transport
and Construction.
The mobile network
operator Viettel Group, the Vietnam National Oil and Gas Group, the Vietnam
National Chemical Group, the national flag carrier Vietnam Airlines, the
Vietnam Cement Industry Corporation, and the State Capital Investment
Corporation were praised for their achievements in the program.
Deputy Prime
Minister Ninh instructed the groups and corporations to take the initiative
in building annual production and trading plans and cost saving measures from
now on. They will have to report their results by year-end.
Economists
support PM's speech on closing weak banks
Many banking
experts have expressed agreement with Prime Minister Nguyen Tan Dung's
assertion that weak banks should be dissolved.
At the regular
government meeting, held from August 27 to 28, Prime Minister Nguyen Tan Dung
asked agencies to deal with bad debt during this time of bank restructuring.
He said, "Weak banks must be strictly monitored and shut down if
necessary."
In June, the
National Assembly gave its consent to the new banking bankruptcy policy. From
January 2015, credit institutions will be able to file for bankruptcy. If an
insolvent facility does not file for bankruptcy on its own, the State Bank of
One banking expert
said that this is a strong message to bank shareholders, meant to urge them
to quicken the restructuring process. Many banks have tried to improve their
operations by making new development plans and offering more credit services.
However, some banks have been slow to reform, some still operate with
negative charter capital due to the heavy load of bad debt. He said,
"The state bank has been supporting the banking system, but the state
cannot subsidise a weak system forever."
The leader of a
commercial bank in
Keith Pogson, the
head of Asia-Pacific Financial Services, Ernst & Young, agreed that
Dragon
fruit prices skyrocket in crop end
Dragon fruit prices
have rocketed up after drastically falling at the end of the main crop in the
fruit farming
The prices have
increased five times over last month to reach VND16,000-17,000 a kilogram of
best dragon fruits, said Mr. Pham Huu Thu from the province’s Department of
Agriculture and Rural Development on September 1.
Normal kind fetches
VND5,000-7,000, up from only VND1,000 a month ago, he said.
The main dragon
fruit season is going to end. Farmers now prepare for an unseasonal crop
which will bear fruits two months later.
Textile,
garment achieves record export turnover
Textile and garment
exports hit a record high $2.16 billion in August, taking the total to $13.6
billion in the first eight months this year, reported the Vietnam Textile and
Garment Association.
The eight month
number was a year on year increase of 20 percent. In July, the export
turnover hit US$2.14 billion.
This year, the
textile and garment export is targeted at 12 percent growth rate and expected
to exceed US$20 billion turnover this year.
The textile and
garment exports have strongly grown thanks to opportunities from the
under-negotiation Trans-Pacific Partnership and
Increase in
luxury goods imports means bigger income gap
Even though
According to the
latest statistics from the Ministry of Industry and Trade, luxury imports
have been on the rise, reaching USD3.77 billion in the first eight months of
this year, up 8.75% compared to a month earlier and up 12% from the same
period last year.
In the first seven
months of 2014, the value of gem imports reached USD348.61 million, up 30%
on-year.
Completed auto
imports reached 6,000 in August, valued at USD120 million. This is triple
against the same period last year. The figure brought the number of car
imports to 37,000 valued at USD800 million, during the first eight months of
this year, up nearly 72% on-year in volume and up 91% on-year in value.
A survey conducted
at car showrooms in
According to those
inside this business circle, despite the slow sales of ordinary goods, sales
of luxury goods, such as Charles and Keith, Louis Vuitton, and Gucci, are
thriving.
Trade expert Pham
Tat Thang said that imports of luxury products account for only from 4% to 5%
of the country’s total imports.
“This is a paradox.
The country is trying to earn every cent of foreign currency by exporting
crude materials, but still spends billions of USD on importing luxury
products. It will be necessary to take more drastic measures to curb these
imports,” Thanh emphasised.
Increasing demand
for luxury products in the domestic market shows that purchasing power still
resides in the hands of the upper classes. Many economists have commented
that it also shows a lack of investment channels.
“The increase in
demand for luxury products amid unchanged or even lower average incomes this
society shows that the income gap is increasing,” said Dr. Luu Ho Bich,
former director of the Development Strategy Institute.
Vietnam
attends APEC Energy Ministerial Meeting
Deputy Minister of
Industry and Trade Cao Quoc Hung delivered a speech at the 11th Asia-Pacific
Economic Cooperation (APEC) Energy Ministerial Meeting held in
Hung shared
As part of the
programme,
The meeting passed
a joint statement in which ministers expressed their support for a general
future course of action for the sector.
The APEC economies
agreed to work together to diversify energy supply, strengthen cooperation to
develop liquefied natural gas (LNG), and increase the ratio of renewable
energy sources.
They also reached a
consensus on the continuation of the “APEC low carbon town” concept, and
called for more collaboration in the development of non-traditional oil and
gas sources.
The ministers
pledged to support freedom of navigation via the region’s major energy
transportation routes, and to strengthen cooperation and the exchange of
information with the International Energy Agency.
This year’s meeting
brought together 29 delegations from 21 APEC member economies and
international organisations.
PM backs
VAT exemption for animal feed
The Prime Minister
is supporting the proposal of the Ministry of Finance to include animal feed
in the list of products exempted from value added tax (VAT) payment.
The Prime Minister
told the ministry to submit for review and approval the proposal at the
Eighth Session of the 13th National Assembly due late this year.
A 5% VAT rate is
currently being imposed on animal feed. The proposed exemption aims to
stabilise the price of feed in the domestic market and benefit the farmers,
who have had to deal with diseases, declining consumption and other
difficulties in breeding farm animals in recent years.
The farmers'
situation further worsened following the increase in feed prices last year.
The Department of Livestock Production attributed the increase to the
country's dependence on imported raw materials for production and foreign
producers' domination of the industry.
Figures from the
Ministry of Agriculture and Rural Development (MARD) showed that
According to Nguyen
Dang Vang, President of the Vietnam Husbandry Association, a VAT exemption
for animal feeds is good news for farmers, who expect the price of animal
feed to fall.
To further boost
breeding and aquaculture and ensure that Government support reaches the farmers,
the Ministry of Finance has been asked to help the Ministry of Agriculture
and Rural Development and other concerned authorities in tightening
management of the pricing of imported and locally-produced animal feed, as
well as quality standards for and measures to protect local animal feed
production.
Regarding tax
policies on agricultural inputs such as fertilisers, pesticides and
veterinary medicine, the Prime Minister ordered concerned ministries to
formulate policies that conform with the Government's agricultural
development and taxation system reform strategies for 2011-2020.
SOEs slow
to withdraw from non-core businesses
For the last three
years, most State-owned enterprises (SOEs) have had stable operations with
acceptable profits, but capital withdrawal from their non-core businesses
contiues to be sluggish.
The HCM City
People's Committee reported that the city has 108 enterprises which are fully
owned by the State.
During the 2011-13
period, SOEs had an annual total turnover of VND121.5 trillion (US$6 billion)
and annual profits totalled VND2 trillion ($98 million).
"State-owned
enterprises have reformed their technologies; improved their models and
quality; increased skills and capacity for human resources; and saved
expenditures for meetings, working abroad, guests' welcome parties; and usage
of electricity, water and telephone," Le Thi Huynh Mai, deputy director
of the municipal Planning and Investment Department, was quoted as saying in
the Thoi bao Kinh te Viet Nam (Viet Nam Economic Times).
State-owned
enterprises were recognised as effectively using capital and assets,
especially for enterprises in transport, trade, tourism, services, gold and
precious stones.
In addition, these
enterprises had significantly contributed to the State budget; implemented
investment for important projects; served the city's long-term socio-economic
strategies; and contributed to the city's shift to biotechnology, high-tech
agriculture, food processing, manufacturing and engineering.
To implement the
State-owned enterprise re-structuring project, with focus on State
corporations and groups during the 2011-15 period, 17 corporations and groups
have set up re-structuring projects and 14 of them have been approved.
Another 29
State-owned enterprises will be equitised this year and in 2015, and
equitisation plans for three of them were approved.
"The slow
process of equitisation was due to resolving current problems on finances,
land, workshops and other assets," Mai added.
Furthermore, time
for restructuring has been short, and enterprises must spend their resources
for the time ahead.
At the same time,
corporations and groups have listed their investments in non-core businesses
and their plans to withdraw capital from those businesses.
However, progress
of capital withdrawal from non-core businesses has been very slow.
During the 2011-13
period, 14 corporations and groups have withdrawn VND30.2 billion ($1.5
million) from non-core businesses.
In 2014, it is
expected around VND1.5 trillion ($70 million) will be withdrawn.
The problem is the
difficulty in finding buyers, especially in a time of continuing economic
downturn.
"The
enterprises which haven't listed on the stock exchange will face more
difficulties in seeking partners to transfer their shares," Mai added.
Tea exports
plunge on quality issues
Vietnamese tea
exports fell but its average market price rose in the first eight months of
2014, based on figures from the Ministry of Agriculture and Rural Development
(MARD).
The Thoi bao Kinh
doanh newspaper quoted figures from the ministry showing that
According to the
ministry,
But the number of
export markets fell, from 77 countries and territories to 61. The European
Union, usually the market with the highest export value, fell off the list of
the top 10 importers of Vietnamese tea. This was largely attributed to
inconsistency in the quality of Vietnamese tea, with 70 per cent of
production coming from small households.
The agriculture
ministry noted that only a few large tea companies had invested in developing
regions that supply raw material for tea processing facilities.
The association is
asking provincial authorities to inspect tea processing factories in their
respective areas and revoke the licences of those that fail to meet the
MARD's standards.
The association has
also proposed the setting up of a national coordination committee that would
restructure the tea industry with the cooperation of concerned sectors and
provinces. The proposed committee includes the MARD; ministries of Planning
and Investment and Industry and Trade; and Vitas.
Trade with
Bilateral trade
between
Figures from the
Vietnamese Trade Office in
Exports showing
high growth included fibres, which increased by 112 per cent, along with
mobile phones and components by 100 per cent; garments by 45.2 per cent;
handbags, suitcases, hats and umbrellas by 43 per cent; and bamboo products
by 40 per cent. Also in the list were means of transportation, which
increased by 26 per cent, and seafood by 19.4 per cent.
The Voice of Viet
Nam (VOV) quoted representatives of the office as saying they were
co-operating with local authorities in accelerating trade promotion while
assisting Vietnamese companies to boost their exports to the market to reach
the $3 billion bilateral trade goal set for this year.
The representatives
also urged Vietnamese enterprises to immediately take full advantage of
opportunities in
According to them,
top priority should be given to increasing trade promotion and showcasing
products at international trade fairs and exhibitions, especially at the Sao
Paulo Economic Centre. This will enable the companies to penetrate further
into this lucrative market, establish partnerships and gain access to other
markets in
In 2013, bilateral
trade between
EVN purse
strings tightened
The Prime Minister
has issued Decree 82/2014/ND-CP on the financial management of Vietnam
Electricity (EVN).
The Decree, issued
on August 25, stipulates that EVN's capital for business activities includes
funding from the Government, other investments and funds.
The corporation
will have to abide by strict capital management standards and must report any
losses, unmet payments or misconduct to the Ministry of Finance (MoF).
EVN will be allowed
to raise capital from domestic or overseas sources, whilst being held
responsible for the efficient use of capital, loan repayments and interests
to creditors.
Under the new
rules, the company's liability-over-equity ratio must not be more than 300
per cent, including guaranteed loans by EVN-invested enterprises.
The corporation can
raise capital through issuing bonds, bills and debentures; or incurring
loans. It can also mobilize unused capital from subsidiaries whose charter
capital is wholly owned by EVN, and they cannot purchase shares in EVN units
following their equitisation.
The corporation
will need be required to get permission from shareholders to borrow funds,
while interest rates are not permitted to exceed the market rate.
The Decree also
says that EVN can invest its capital in the businesses defined by its
operation and organization charter.
External
investments must comply with the law and guarantee the efficient development
of capital, increase earnings and be consistent with EVN's stated targets.
EVN is forbidden
from making investments and financial contributions in a number of fields,
including real-estate projects, bank shares, insurance companies, securities
companies or securities investment funds.
The corporation is
also not allowed to take investments from subsidiaries and secondary
enterprise subsidiaries.
The International
Franchise and Business Opportunities trade show will be held for the first
time in
The IFBO, to be
held from September 4 to 6 at HCM City's Tan Binh Convention and Exhibition
Centre, also aims to provide a facilitative environment for Vietnamese
franchise players to network and forge business partnerships with their
international counterparts.
Winston Lim,
director of Singapore-based Bizlink Exhibition Services, the exhibition
organiser, said most are coming for the first time, looking for Vietnamese
franchisees.
Before deciding to
attend, they had done surveys to get information and gauge the market, he
said.
Food and beverage
chains make up the largest number.
The education and
training sector will feature entities like Adam Khoo Center and SoulKids of
Singapore, List Premier Education of Australia, ActionCOACH of the US, and
Q-dess and Brainchecker Global Group of Malaysia.
Other sectors with
a substantial presence will be fashion and technology. Lim said franchise
deals in these sectors are more likely to achieve success in the Vietnamese
market because of its large and young population which is willing to explore
new products and services.
With
Ho Khai Weng,
franchise sales manager (Asia) at Subway Systems Singapore, said his company
is impressed by the positive signs in
The exhibition will
be organised jointly with the VCCI Trade and Service One Member Company
Limited.
Price-stabilised
goods to get new logo
All goods sold
under
Le Ngoc Dao, the
department's deputy director, said the logo would help customers recognise
price stabilised goods more easily.
The department will
work with agencies and certain newspapers to raise public awareness about the
logo, she added.
Sixty-eight
companies and eight commercial banks are taking part in the price
stabilisation programme this year, which runs from April to the end of March
in 2015, she said.
Eight firms from An
Giang and Dong Thap provinces have joined the programme for the first time.
The municipal
government did not provide fund to support businesses joining the price
stabilisation programme, but eight banks taking part in the programme are
offering low interest rates on loans to participating companies, Dao said.
Banks have signed
agreement to provide total loans of VND8.3 trillion (US$392.99 million) to
businesses in the programme, a figure four times higher than last year, she
said.
The annual interest
rates are 5.5-6 per cent for short-term loans and 7-10 per cent for medium-
and long-term loans.
Under the programme,
four essential groups, including food and foodstuff, milk, medicine and
school supplies, are offered at prices 5-10 per cent lower than market
prices, Dao said.
Initiated in 2002,
the programme has 8,479 shops selling price-stabilised goods in the city,
including in outlying areas and in industrial parks.
Hanosimex
to invest $5m in Vinatex operations
The Ha Noi Textile
Garment Company (Hanosimex) said it would spend VND111 billion (US$5.2
million) to expand activities in Vinatex Hong Linh in the central
The money will be
used to buy equipment to enhance production capacity and increase fibre ouput
from 3,600 to 5,400 tonnes per year.
The move is part of
the company's investment plan for the 2014-15 period.
Banks iron
out post-merger teething issues
The new Saigon
Commercial Bank (SCB), formed by its 2012 merger with two other joint stock
banks, Viet Nam Tin Nghia and De Nhat, is turning things around after a
difficult start.
The merger between
three lenders, all of them considered weak, was the first of its kind in
But it ran into
severe liquidity and bad debt problems.
A restructuring
programme began soon after the integration with support from the central bank
and shareholders to bolster its financial capacity and resolve the bad debts.
Things have
improved, with deposits growing by 88 per cent last year. The bank has sold
VND6 trillion (US$285 million) worth of bad debts to the Vietnam Asset
Management Company (VAMC).
Last year it
increased its legal capital by VND1.711 trillion ($81.4 million) to VND12
trillion ($571million) and a further increase of VND2 trillion ($95.2
million) is expected this year.
Its bad debts are
expected to fall bellow the 3 per cent safe level regulated by the State Bank
of Viet Nam, and it hopes to double gross profit to VND121 billion ($5.76
million).
Around the same
time TP Bank was acquired by Doji Gold and Gems Group. Its legal capital was
increased to VND5.55 trillion($264 million) from VND3 trillion ($143
million), retail deposits and credit growth doubled, and bad debts fell to
2.7 per cent from 6.4 per cent.
Last year HDBank
merged with DaiABank and then acquired French group Societe Generale's SGVF
financial company. This resulted in a network of over 200 branches and
transaction offices besides 1,200 branches of HDFinance. Last year HDBank
mobilised deposits of VND76.3 trillion ($3.6 billion) for an annual growth of
26 per cent while its outstanding loans were up 34 per cent at VND44 trillion
(over $2 billion). Its return on equity was 5.66 per cent, which it hopes to
increase to 9.52 percent.
Chairman Do Quang
Hien said there are plans to increase legal capital from the current VND8.866
trillion to more than VND11 trillion before year-end to fund expansion by
issuing shares to existing shareholders.
The bank also plans
to boost retail banking activities and improve risk management and
human-resource development to ensure growth.
Bad debts however
remain a challenge to all these banks. SCB general director Vo Tan Hoang Van
said his bank has managed to collect only VND200 billion ($9.5 million) out
of VND6 trillion (US$285 million) worth debts that went bad.
Thouh much of the
loans are backed by mortgages, it is not easy to liquidate them in this
economy, he said.
By early in this
quarter the VAMC had bought bad debts worth VND50 trillion from banks, which
have registered to sell VND70 trillion this year.
The VAMC is in the
process of reselling the debts it acquired to foreign institutions. But
transparency related to the debts and the legal framework are among the
issues buyers have reportedly brought up.
According to
central bank deputy governor Dang Thanh Binh, several more M&A proposals
are under consideration and should be wrapped up this year.
Nguyen Thuy Duong,
partner in charge of financial and banking services at auditing and
consulting firm Ernst&Young had said in the Vietnam Investment Review
recently that before embarking on M&A deals banks should do due
diligence, assessing the target bank to help the valuation and studying its
development strategies to ensure synergies.
Transport
projects begin to take shape in Mekong Delta
The Ministry of
Transport broke ground for three transportation projects in the Mekong
They are a 65.3km
section of the
According to the
ministry, the Ben Nhat-Go Quao section is part of the highway between Rach
Soi and Vinh Thuan. The work includes 12 large, 14 medium, and two small
sized bridges, and will cost over VND4.26 trillion (over US$200 million).
The upgrade of the
14km section on National Highway No 61 will cost around VND471 billion ($21.2
million).
The two projects
will use funds raised by issuing Government bonds.
Construction of the
three bridges on National Highway No 80 is part of a project to upgrade 44
weak bridges across the country at a cost of VND4.11 trillion ($194 million).
Speaking at the
groundbreaking, Deputy Minister of Transport Nguyen Van The said the three
projects were important for the development of the Can Tho-Kien Giang-Ca Mau
Economic Triangle.
When completed, the
highways and bridges would help connect the
Vietnam
attends BEXASIA expo in Singapore
Representatives
from nearly ten Vietnamese companies along with 10,000 participants of 400
firms from 35 countries around the world are attending the 7thBuild Eco Xpo
(BEXASIA) taking place in
The expo is
generally considered a leading business forum in the region for construction
material producers, construction bidders and designers. This year’s event
features the latest in environmentally friendly materials and green building
technology.
The organizing
board announced more than 300 business meetings are scheduled during the
three-day event along with many seminars and conferences on eco-construction,
technical solutions and advanced technology in construction.
Louise Chua, BEX
Asia project director, said she welcomes Vietnamese businesses to the event
and expressed her hope that participating businesses can share experience in
developmental trends of eco-construction which can benefit
Meanwhile, Nguyen Viet
Chi, Trade Counsellor to
The event provides
Vietnamese businesses an opportunity to locate cooperation partners and
expand exports, in addition to learning of the latest technologies in the
industry.
In the first seven
months of the year,
Many Singaporean
companies attending the event have also expressed a keen interest in the real
estate market in
|
Thứ Tư, 3 tháng 9, 2014
Đăng ký:
Đăng Nhận xét (Atom)
Không có nhận xét nào:
Đăng nhận xét