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BUSINESS
IN BRIEF 18/10
Spanish
interested in PPP deals
Spanish businesses
are seeking to cultivate investment projects in
Last week saw
high-level representatives of Acciona, the world’s biggest waste water
treatment specialist, and energy and infrastructure development group come to
Vietnam to work with the Ministry of Planning and Investment (MPI) and Ho Chi
Minh City authorities on the possible construction of two waste water
treatment projects.
Acciona’s
international director Ortega-Loizaga Jose Maria said over the past months,
the group had worked with the city’s authorities about the possibility of
working on the World Bank-funded $450 million Nhieu Loc-Thi Nghe and $230
million Western Saigon waste water treatment plants in Ho Chi Minh City,
under a public-private partnership (PPP) agreement.
Maria said
Acciona had sought a South Korean investor for jointly implementing the
“We also want to
engage in many other such PPP projects in
“If these projects
are implemented successfully by Acciona, they will be
Vinh said Acciona
was just among many Spanish investors wanting to do business in
“Within just three
months, sixteen major Spanish firms have come to
Tran Van Hung, vice
president and general director of BPA Group that specialises in producing
trains in Europe, told VIR that BPA was assisting Acciona and other Spanish
groups like Sacys, OHL, Navantia, Tango, and Mondragon in placing investments
in Vietnam in infrastructure development, agricultural plant cultivation,
waste water treatment and building-oriented security solutions.
BPA has
successfully invested in
“
Hung added that
Acciona and Tango’s leaders were set to visit
Visit
boosts
Scores of Japanese
firms are eyeing
Governor Masaru
Hashimoto of
“We recognise that
“There will be a
new investment wave of Japanese enterprises into
Taku Kaitsuka,
director of baked sweet potato vendor Potato Kaisuka’s sales division in
Kazunari Sutou,
senior assistant director for engineering affairs of
“
The minister hoped
that the two sides would focus on technological co-operation, applying new
technology to agricultural production, biotechnology, processing, and
post-harvest preserving, while collaborating to increase the value of
products along the processing chain.
On the occasion of
President Truong Tan Sang’s visit to
In May, Governor
Hashimoto said Vietnam’s Ministry of Labour, Invalids and Social Affairs and
the Ibaraki Agriculture Association signed an agreement on receiving
Vietnamese apprentices to learn agricultural techniques used in Ibaraki.
For the past five
consecutive years,
Safety,
quality key to export growth
Ensuring food
safety and security as well as higher-quality products would enhance the
sustainable development of
Thierry Rocaboy, an
expert in the agribusiness and agrifood industry, told seminar participants
that the country's food production for consumption had expanded greatly, with
However, he noted
that export prices had remained low due to the quality of products, and that
food safety, especially herbs and seafood products, were still of concern.
The value added to
products was also low as materials were not locally processed, he said,
adding that less than 10 per cent of coffee and 20 per cent of rubber were
processed in
Marieke Van Der
Pijl, vice chairwoman of the Food, Agri and Aqua Business Sector Committee of
Eurocham, said food safety was a key issue as demand for higher standards had
increased from both export and local markets.
Further steps are
needed to achieve efficient and effective food safety control, and
co-operation with neighbouring countries should be enhanced to address
cross-border food-safety issues.
Improved
food-safety management and enforcement would also help export growth, she
said.
Also speaking at
the seminar, Alain Cany, country chairman of Jardine Matheson Viet
Another pressing
concern mentioned at the seminar was climate change. Arie Veldhuizen,
agricultural counsellor at the Dutch Embassy in Ha Noi, said the world
population was forecast to reach nine billion by 2050, with climate change
expected to undermine agriculture and food systems in many regions, making it
difficult to achieve food security.
Under such a
scenario, it is necessary to create a sustainable increase in agricultural
productivity and resilient food systems.
"The key for
The country should
focus more on restructuring the agricultural sector to improve productivity,
quality and efficiency, ensuring sustainable food security while protecting
the environment, he said, adding that efficient co-operation among different
stakeholders was also needed.
Delegates at the
seminar said that costs and post-harvest losses were too high, mainly due to
weak logistics services.
Currently, 20 per
cent of seafood, 25 per cent of fruit and 30 per cent of vegetables produced
in
Nguyen Tien Dinh at
the Rural Development Centre under the
To further develop
the animal feed industry, improvement must be made to small-scale and
fragmented manufacturing, ineffective supply chains with too many
intermediaries, quality of animal feed, and food safety.
Other seminar
speakers mentioned the challenges in agricultural mechanisation.
Farmers have not
been using advanced mechanical methods for several reasons: financial
problems, a lack of understanding and application of advanced technology, a
lack of special expertise, and the use of small and split fields, especially
in northern and central regions.
Despite robust
growth of the agricultural sector and Government incentives, foreign
investment in the sector remains low compared to other industries, accounting
for about 0.5 per cent of total foreign direct investment in the country.
Since the sector is
heavily dependent on natural conditions, it poses higher risks for investors.
Inefficient, small-scale dispersed production, and a shortage of
infrastructure had contributed to investment problems as well.
Seminar attendees
urged the Government to develop clear incentives and transparent policies,
reduce licensing and land procedures and costs, apply policies and
regulations in a uniform way across regions, and focus on protection of
investors' rights.
In addition,
authorities should consider ways of promoting more public-private
partnerships in the agricultural sector, they said.
Luong Van Tu,
chairman of the Viet Nam Coffee and Cocoa Association, suggested that EU
investors increase investment in processed coffee and provide loans for
replanting old coffee farms.
The seminar was
organised by EuroCham, its Food Agri Aqua Sector Committee and the EU Viet
Nam Business Network.
Attendees included
Government officials, public- and private-sector practitioners, agribusiness
leaders and researchers.
Canadian
market offers opportunities
Vietnamese
companies have yet to exploit the full potential of the Canadian market,
which was described as lucrative because of its significant import volume.
At a conference
held in the capital city yesterday, Hoang Van Dung, vice chairman of the Viet
Nam Chamber of Commerce and Industry, said that ever since the two countries
signed a bilateral trade agreement in 1995, trade relations between
Last year,
However, Canada has
yet to be included in the list of Viet Nam's 20 largest export markets and
accounted for less than one per cent of exports, said Zaki Munshi, Project
Manager Asia at TFO Canada, a non-profit non-government organisation that
facilitates access to the Canadian marketplace.
To increase trade
with
The companies
should also make greater efforts to explore the full potential of the seafood
and electronics products segments, Munshi added. He also stressed the
importance of registering companies' business profiles and export offers on
TFO Canada's website, where less than 30 Vietnamese companies were currently
registered.
At the event,
participating Vietnamese companies also learned more about
According to the
Ministry of Industry and Trade's American Market Department, exchanges of
government and business delegations and trade information should be
accelerated.
Vinamilk
suffers 16% fall in net profit
Vinamilk (VNM)
achieved a net profit of nearly VND4.3 trillion (US$202.8 million) in the
first nine months of this year, representing a 16-per cent year-on-year
decline.
A report from HCM
City Securities Company also revealed that Vinamilk's revenues increased by
12 per cent year-on-year, hitting VND25.6 trillion ($1.2 billion), while
sales from domestic operations climbed by 8.6 per cent even as export
turnover fell by 27 per cent.
However, the
company's 70-per cent stake in US-based subsidiary Driftwood Dairy is
expected to yield VND1.8 trillion ($84.9 million).
In the third
quarter alone, the company's revenue was estimated at VND8.3 trillion ($391.5
million), a 7.8-per cent year-on-year increase but also a 6.3-per cent
quarter-on-quarter decrease.
Gross profit
margins in the third quarter increased slightly because of lower input costs
and in spite of higher selling, general and administrative expenses.
HCM City Securities
lowered its revenue forecast but maintained its profit forecast for this
year. The brokerage company expects more prospects for Vinamilk next year as
domestic demand could improve and gross domestic profit could rise if input
prices continued to decline.
HCM City Securities
also predicted Vinamilk's revenues to reach VND38.8 trillion ($1.8 billion)
and profits to reach VND7.9 trillion ($372.6 million) next year.
Vinamilk is set to
reach a deal this month which allows the group to buy material for next year's
operation at $3,000 per tonne, or 24 per cent less than this year's cost.
Earnings per share
in the fiscal year of 2015 is estimated at VND8,360 ($0.3), a 35.8-per cent
increase. VNM share prices dropped by 1.9 per cent yesterday to VND106,000
($5) per share.
VN to pilot
individual e-tax payment next year
The General
Department of Taxation will pilot e-tax payment at the beginning of 2015 with
a view to making it easier for individual tax payers.
Tax payers will
carry out their tax duties at the Portal of the taxation, from tax
registration, enumeration, payment to seeking tax-related answers and
searching relevant information.
In the short term,
the General Department would pilot in two localities before expanding it to
others in coming years.
So far, 63 cities
and provinces and over 300 taxation branches have applied e-tax registration
services.
The e-tax
registration system provided services for over 397,130 tax payers and handled
over 17.6 million dossiers.
E-tax payment
services have been implemented in 18 provinces and cities nationwide with
nearly 4,000 enterprises and VND 2 trillion of tax collection.
Corporate
borrowers still shun bank loans
Local enterprises
have still shied away from bank loans although lending rates have dropped to
new lows over the past years.
At a meeting
between National Assembly deputies in HCMC and bank and business
representatives on Monday, most enterprises said they have no demand for new
capital given current economic difficulties.
A representative of
the HCMC Enterprise Association said he used to deliver thousands of credit
application forms to enterprises at seminars but only a few firms had
returned the papers to him. This indicated that they were not interested in
taking out bank loans.
Do Duy Hung,
general director of Viet Capital Bank, said banks now need corporate
borrowers more than enterprises do. The lender has still set aside some
VND2.45 trillion worth of loans for businesses but few companies have reached
the credit package.
Nguyen Quang Triet,
deputy general director of Eximbank, said the bank is in the same situation.
Meanwhile,
enterprises said lending rates are still high.
According to the
association representative, banks only offer low lending rates in the first
months. Some banks have launched credit packages with lending rates of 5-6%
per annum but the lending rates for enterprises are 10-12% per annum.
Representatives of
11 banks at the meeting said the gap between mobilization and lending rates
vary from 2.5 to over four percentage points at banks. Many banks have
offered lending rates from 5-6% per annum but applied in the first several
months only.
Do Minh Toan,
general director of Asia Commercial Bank (ACB), said its mobilization rates
average at 5.74% per annum and lending rates at 9.79% per annum. ACB has also
launched a credit program for enterprises with an interest rate of 7% per
annum in the first three months and 8% in the following three months.
Hung of Viet
Capital Bank said the lender has offered lending rates of nearly 8% per annum
in the first six months but then it has to revise rates following market
levels. The bank has also introduced a credit package with an interest rate
of 5% per annum but applicable in three months only.
Borrowers should
use bank capital fast to enjoy low lending rates but most firms fail to meet
conditions, Hung said.
Le Tung, chairman
of Saigon Trading Group (Satra), said Satra’s affiliates are not able to
reach unsecured loans and they have no demand for capital. Enterprises find
it hard to gain profits due to low buying power if they take out bank loans.
Companies are also
facing a host of difficulties in tax and business registration policies.
Moreover, banks
only want to extend loans to good enterprises for fear of bad debt. Banks are
currently using different ways to handle bad debts, including selling their
debts to Vietnam Asset Management Company (VAMC), but the process has yet to
bear fruit.
Nguyen Hoang Minh,
deputy director of the central bank in HCMC, said mobilization at banks in
the city in the first nine months of this year was estimated at VND1,226
trillion, up 11.6% against the same period last year and 4.7% over early this
year.
Total lending in
the period was more than VND1,010 trillion, rising by 10.6% year-on-year and
6.02% over late last year. The credit growth was backed by manufacturing and
trading sectors, which accounted for up to 80% of the outstanding loans.
Demand for
senior staff in manufacturing sector jumps
The manufacturing
sector had the highest recruitment demand for senior and middle-ranking
employees in the third quarter of this year, accounting for 17% of the total
demand as indicated in a report released on Monday by Navigos Search.
The result of
Navigos Search, a leading executive recruitment firm in
The information
technology sector posted the strongest growth in demand for senior and
middle-ranking personnel during the period, making up 15% of the total.
According to
economists, the strong growth in the demand for middle- and high-ranking
personnel of the information technology industry mainly results from business
modernization, policies of the Government to encourage this sector, and the
outsourcing development in
Senior and
middle-ranking employee demand of the apparel and leather-shoe sectors
accounted for 10% of the total, bringing the sectors to the third position in
the demand ranking from the fifth position in the previous quarter.
The retail and
consumer goods sector made up 9% of the total demand for such employees,
falling from the previous share of 14% in the second quarter while demand of
the finance-banking-stock-insurance sectors fell to 7% in the third quarter
from the previous 10%.
Initial survey of
Navigos conducted in the early days of October showed that the apparel and
leather-shoe sectors had the highest demand for senior and middle-ranking
personnel, accounting for 17% of the total, followed by the information
technology and consumer goods and retail sectors with 12% each.
Vinacco
raises VND14.7 billion from IPO
Agricultural
Construction and Rural Development Corporation, or Vinacco, raised over
VND14.7 billion from its initial public offering (IPO) at the Hanoi Stock
Exchange (HNX) on October 14.
The firm put up
over 2.6 million shares, or 34.75% of its chartered capital, for auction with
the starting price of over VND10,000 each.
Four individual
investors bought over 1.47 million shares, or 55.7% of the total volume. The
biggest bidding volume was 1.1 million shares and the average winning price
was equivalent to the starting level.
Foreign
retailers grow the fastest
Foreign-invested
retailers posted the highest growth rate in the January-September period, though
they are holding market share of only 3.4%, said the Association of Vietnam
Retailers at a forum in
Dinh Thi My Loan,
president of the association, said foreign retailers obtained a growth rate
of over 21% in the nine-month period compared to 8.4% at State-owned
enterprises and 11% at private entities.
However, of the
total retail value of commodities and services at VND2,100 trillion in
January-September, foreign retailers occupied only 3.4% compared to 10.1%
held by the State sector and over 85% by the domestic private sector.
Overall,
Loan, by giving the
market share comparison at this seminar about the vision and path to retail
success, brushed aside concerns that foreign retailers are gaining an upper
hand in the retail sector.
“It looks as if
foreign enterprises were taking a larger share of the retail market because
they launch effective publicity campaigns when coming into
However, foreign
investors paid little attention to other channels like traditional wet
markets, small shops and the like, which account for a combined 75% of the
sector.
Besides large
foreign firms, many domestic enterprises have won the confidence of
consumers, such as Coopmart, Fivimart, Intimex, or some electronic firms such
as Nguyen Kim, Tran Anh, Pico and so on. Local retailers have advantages in
distributing high-quality Vietnamese goods and maintaining close
relationships with domestic suppliers.
Alan David
Treadgold, member of the Advisory Council of Oxford Retail Management
Institute, considered local retailers cannot compete with FDI businesses in terms
of technology when customers are changing their shopping habits gradually.
More buyers will be in favor of online shopping rather than traditional ways,
so Vietnamese retailers need to change to adapt to new trends, he said.
According to him,
foreign retail firms only enter
ADB huge
source of aid
The Asian Development
Bank (ADB) has provided nearly US$13.1 billion in loans, technical assistance
and non-refundable grants for
The State Bank of
Vietnam (SBV) announced the figure in a statement released on October 13 on
the occasion of ADB Executive Director Maliamibin Hamad’s visit to Vietnam on
October 10-13 as part of the annual activities of the financial institution’s
board of directors to exchange socio-economic updates of developing member
countries in the region as well as look into the effectiveness of development
projects and programs funded by ADB.
Of the nearly
US$13.1 billion provided for Vietnam as of last month, ADB lent US$12.7
billion to 157 programs and projects, offered US$253.5 million in technical
assistance and US$170 million in non-refundable aid.
ADB has pledged
around US$1.3 billion a year for projects in the fields of transport, energy,
agriculture, natural resources, water supply, infrastructure, urban services,
education and finance in
At the meeting with
deputy governor of SBV Nguyen Thi Hong last week, the executives of ADB
highly evaluated
The executives of
ADB also met the Ministry of Planning and Investment, the Ministry of
Finance, and the government of HCMC, and visited a number of ADB-funded
projects in the central
ADB reaffirmed its
commitment to helping
This year, ADB has
pledged more than US$1.36 billion for 11 programs and projects. Negotiations
for seven of these programs and projects with around US$878 million have been
completed so far.
Construction
project owner must seek planning paper
Owners of
construction projects themselves in the near future will have to obtain
planning certificates for their works in areas where detailed zoning plans
have not been available, a task so far mainly assumed by local State
agencies.
Under a draft
decree on planning for construction works, which is expected to be issued and
take effect next January, provincial governments will consider and issue
planning certificates for projects covering over 50 hectares, while
smaller-scale projects will be considered by district-level authorities.
This rule applies
to projects to develop groups of construction works as well as to those
schemes to build separated construction works. However, it does not apply
where separated houses are built by individuals.
Owners of projects
in those areas where detailed zoning plans are available must also obtain
planning certificates if such areas are subject to changes to land boundaries
or land-use norms, according to the draft decree due to take effect on
January 15.
To receive the
certificate, investors have to submit full dossiers to competent agencies,
including an application form for the planning certificate, a sketch or diagram
showing the location of the project, the expected construction site, the
land-use scheme, project scale and cost, reports on the legal status of the
project owner and its financial capability.
The competent
agencies will have 45 days to collect comments, review, evaluate projects,
and grant the certificates.
Contents of the
planning certificate will specifically regulate requirements for each
project, such as the land-use scheme, public infrastructure, greenery, and
design among others.
The Ministry of
Finance will provide detailed guidance on fee collection for awarding the
certificate, which will be calculated based on the total investment capital
of projects.
Unfair competition,
absence of standardized products hurt
Vietnam’s fruit
exports to the U.S., South Korea, and Japan remain modest due to a lack of
standardized products, plus unhealthy competition among local firms, even
though many Vietnamese-grown tropical fruits have been allowed to enter these
strict markets, statistics have shown.
Since 2008, the
However, Vietnamese
fruit exporters say they lack adequate supplies for the fruits and face
fierce competition from
In the meantime,
Vietnamese fruit
export businesses say the volumes shipped are much smaller than demand for
the fruit in these markets.
The Southeast Asian
country still has to sell 80 percent of its dragon fruit crops to
Exports of
Vietnamese rambutan to the said countries have posted even lower volumes and
expanded by almost zero percent thanks to harsh competition, according to
industry insiders.
The real volume of
Vietnamese dragon fruit exported to the
Khoat said the
problem facing fruit exporters is that they cannot source enough standardized
products to increase export quantities.
“We have provided
tech support for many dragon fruit plantations, but only 10 percent of their
yields are qualified for export to the
Nguyen Hong Hung, a
former deputy director of Yasaka, a food irradiation company based in the
southern
There are more
exporters who sell dragon fruit to the East Asian country, and some of them
have competed by reducing their prices, Hung said.
Yasaka was the
first Vietnamese company to export dragon fruit to
“At that time our
export price was US$5 a kg, but now some local businesses ask for only $2.5
per kg,” Hung said.
Many Vietnamese
catfish and rice exporters have been hurt by this unhealthy competition
method, in which export prices are constantly lowered, he added.
While
Local firms
adopt sustainable practices
The difficulties
they faced in production and business during the economic downturn have
encouraged domestic enterprises to follow sustainable development practices
now and in the future, according to experts.
The Viet Nam
Chamber of Commerce and Industry (VCCI) reports that
The economic
difficulties in recent years have had strong impact on the production and business
of these enterprises, VCCI says. In the first nine months of this year, the
nation had 53,192 newly established enterprises and 11,872 enterprises that
resumed work after suspending their operations temporarily.
Meanwhile, 48,330
enterprises which faced difficulties in production and business stopped
operations or were dissolved in the first nine months of this year.
The VCCI says the
fall in the number of newly registered enterprises and the large number of
enterprises that stopped operations or were dissolved show that the local
business environment is still facing difficulties, reports the Tin tuc (News)
newspaper.
However, the
chamber says that the difficulties in production and business have forced the
existing enterprises to improve their quality.
Efficiency in
production and business has increased and many enterprises have expanded
business during the economic downturn.
The percentage of
enterprises making pre-tax profit has increased from 29.7 per cent in the
first quarter to 32.9 per cent in the second quarter, according to the VCCI's
report on enterprises in the first half of this year.
The confidence of
the local business environment has improved and is expected to be even better
in the second half of this year and later, as against the first half of this
year and last year, the report says.
"There was a
period when the number of local enterprises exceeded 700,000 units. Now that
number has fallen, but the quality of the enterprises has improved
sharply," says Cao Sy Kiem, Chairman of the Small and Medium-sized
Enterprises Association.
"The
enterprises have adjusted business strategies and paid attention to
management, especially risk management, to strengthen the foundation of a
more sustainable development," he adds.
The state has
completed the legal system for enterprises to create transparency and
synchronisation in the business environment, Kiem says, adding that it is the
key target of the government to resolve the difficulties for the local
enterprises.
"Enterprises
expect amendment of the laws on
The Law on
Additionally, the
state should have specific policies to support enterprises in establishment
and development, including giving them preference in credit, provide training
for a high-quality workforce and ensure a fairer business environment among
economic enterprises, he says.
Nguyen Huu Toan,
director of the Toan Thien An Furniture Co Ltd, says that most small and
medium-sized enterprises have neither had much knowledge about support
policies, nor taken advantage of them or of the state incentive capital.
In the near future,
Therefore, the
local enterprises should have specific solutions for long-term and more
reasonable and efficient business strategies, says Toan, adding that they
should do core business and avoid investment in non-core business to reduce
risks.
Banking
sector lacks skilled execs
The online news
portal infonet quoted figures from the
The resources
include risk management experts and senior managers, as well as investment
and financial experts. Experts have urged banks to map out long-term
strategies for the early training of outstanding candidates for ranking
management positions who are capable of leading the banking system in
accordance with regional standards.
Besides, the
institute said, the ageing workforce possesses invaluable experiences in
overcoming financial crisis that banks should capitalise on.
The figures also
showed that roughly 60 per cent of the banking industry's workforce was
currently aged less than 30 years and would be considered the next leading
generation who would decide the banking industry's future competitive
capability.
The entire banking
industry workforce is also forecast to continuously increase by roughly eight
to 10 per cent per year in the coming years, reaching 240,000 by 2015 and
300,000 by 2020.
Fuel price
cuts have no impact
The prices of
consumer goods and services remained the same in spite of the sharp cut in
petrol and oil prices this year.
This week, and for
the seventh time this year, the prices of petroleum and oil products were
reduced, with petrol falling to VND22,890 per litre, a 10.7-per cent decrease
compared with that in July.
When petrol prices
were raised this year, numerous transport companies joined producers and
suppliers of consumer goods in increasing their prices to offset the petrol
price increase.
Vu Vinh Phu,
chairman of the Ha Noi Supermarkets Association, said the petrol and oil
price reduction would immediately impact on transport fees, which would, in
turn, impact on the prices of consumer goods.
Phu noted that
consumers were at a disadvantage now as transport fees and the prices of
consumer goods remained the same.
However, transport
companies gave various reasons for maintaining prices. Nguyen Van Thanh,
chairman of the Viet Nam Automobile Transportation Association, said fuel
costs accounted for roughly 40 to 50 per cent of transport fees, so the fees
would be adjusted in accordance with fuel price fluctuations.
Thanh added that
though petroleum and oil prices were reduced seven times this year, the cut
each time was only for a small percentage, so transport companies were
finding it difficult to immediately cut prices.
He remarked that
after an increase or decrease in petrol and oil prices, transport companies
needed more time to make the calculations that would serve as the basis for
transport fee adjustments.
Taxi and passenger
transport companies will also find it difficult to make any adjustments as
they have to reprint tickets, adjust taxi metres and seek tax agencies'
approval, Thanh added.
The companies can
adjust prices if the petrol and oil price decrease or increase lasts for a
long time, he noted.
Thai Van Chung,
general secretary of the HCM City Transportation Association, said transport
companies often increased their fees when petrol and oil prices rise by five
per cent, so the reduction was often the same.
However, the
reduction in petrol and oil prices this year was only roughly one to two per
cent each time, so the decision to cut transport fees would depend on the
transport companies, Chung added.
Since transport
companies were maintaining their prices, producers and suppliers of consumer
goods said they would likewise maintain theirs.
Meanwhile, the
Ministry of Industry and Trade said it could not intervene, as the market
mechanism was managing the prices of consumer goods and services except for
electricity, water and petrol.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Sáu, 17 tháng 10, 2014
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