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BUSINESS IN BRIEF 11/1
For calendar year 2014 the export of temporary labour to
Meanwhile, a representative from LOD Human Resource
Development Corporation in
The occupations of guest workers have also diversified to include
professionals, factory workers, and domestic workers, while the tradition of
Vietnamese construction workers, sailors, and nurses remains strong.
Vinaconex Trading and Manpower Joint Stock Company said
Japanese agriculture firms have been actively recruiting married couples to
work in
Nguyen Van Hiep, Vinaconex Director General, said the
construction industry in
Thanh Hoa assists projects in Nghi Son EZ
Speeding up administrative reform, organising more investment
promotion activities, and focusing resources on upgrading infrastructure are
the main measures the central
The Nghi Son EZ covers an area of more than 18,600ha, with
most factories focusing on heavy industry, basic industry and the Nghi Son
seaport.
In 2014, the zone attracted 41 domestic projects with a total
registered capital of over 3.1 trillion VND (145.7 million USD), and three
foreign investment projects worth 40.5 million USD.
In the year, enterprises in the zone generated 18 trillion VND
(846 million USD) in revenue and created jobs for around 63,000 labourers.
The zone also houses the Nghi Son Oil Refinery and
Petrochemical Complex (NSRP), the largest-ever in Southeast Asia and the
largest FDI project in
As many as 27 percent of the project’s works has been
completed, with 1.65 billion USD disbursed.
The Vietnamese economy is expected to continue recovering in
2015, though slowly, according to releases from a workshop in
Addressing event attendees, Economist Nguyen Chi Hai from the
He also emphasised the importance of science and technology
playing a vital role in economic development.
At the workshop, participants also focused their discussions
on increasing the tempo of equitisation of State-owned enterprises (SOEs).
According to official statistics, only 143 SOEs were privatised during the
first ten months of 2014, far below the 432 intended enterprises for the
2014-2015 period.
During 2013 and first ten months of 2014, SOEs only withdrew
4.4 trillion VND out of 21 trillion VND (1 billion USD) they had invested in
non-core business.
In 2015, SOEs are expected to divest an estimated 16.367
trillion VND.
Doosan Vina exports first shipment in 2015
The Water Doosan Vina Factory, a subsidiary of the
RoK–invested Doosan Heavy Industries Vietnam Co., Ltd, has exported five
units of a seawater desalination evaporator to
The remaining units of the device will be shipped from now
until end of April 2015.
When assembled and put into operation, the evaporator can
produce 220 million liters of purified water a day for 550,000 people working
at Escondida copper mine, which is located in the northern Atacama Desert of
Chile, the world’s largest copper mine.
The Doosan Vina’s shipment was made as part of the Escondida
Water Supply project signed with the Chilean side on February 19, 2014.
Singapore leads ASEAN investors in Vietnam
According to the Foreign Investment Agency (FIA) under the
Ministry of Planning and Investment (MPI),
ASEAN investment has covered all the 18 economic sectors in
ASEAN investors have been present in 55 of 63 national
provinces, mainly in
Promoting investment from ASEAN countries will be continued to
ensure increased FDI flow into
In 2014, ASEAN nations registered 53 billion USD in FDI in
According to the FIA, the foreign investment sector recorded a
trade surplus of 17.03 billion USD last year, having generated 101.59 billion
USD in export turnover, an annual increase of 15.2 percent, or equivalent to
68 percent of the country's total export revenue, while importing 84.56
billion USD worth of goods, a 13.6 percent increase.
Dollar rises after forex rate change
The State Bank of
After the State Bank's decision to increase the inter-bank
average exchange rate by 1 percent on January 7, numerous banks increased the
US dollar exchange rate.
However, given the strength of the US dollar against most
emerging market (EM) currencies in early 2015 and with the US
dollar-Vietnamese dong having been closing in on the topside of the bank for
the past few weeks, the move does not come as a complete surprise.
HSBC experts said further Vietnamese dong weakness would only
be moderate, as underlying fundamentals had not deteriorated. They expected
another 1 percent depreciation later this year, pushing the rate to 21,750
per dollar VND.
The experts said USD-VND had been trading closer to the top
side of the band through the course of December in line with the much
stronger US dollar seen over the last few months. This shift in the reference
rate should be seen as something of a catch up with other emerging market
currencies. Indeed, a 1 percent fall in Vietnamese dong versus the US dollar
actually represented a continued outperformance versus most other Asian
currencies since the start of the first quarter, they said.
There was no significant fundamental deterioration in recent
weeks which led the SBV to depreciate the Vietnamese dong. Although the trade
balance flipped to 900 million USD deficit over the month, causing an annual
2 billion USD surplus, FDI flow was robust, registering around 2.3 billion
USD in December and 15.6 billion USD over 2014 as a whole.
Furthermore, inflation continued to decrease in
In response to the State Bank's decision, selling prices
ranged from 21,420 VND -21,450 VND and purchasing prices were set at 21,510
VND - 21,520 VND per US dollar at commercial banks including Vietcombank,
Vietinbank, Eximbank and Techcombank.
This is the first time this year the State Bank has adjusted
the exchange rate, a move that aims to bring the market in line with the
international and domestic financial market climate and stabilise the foreign
exchange market. The central bank plans to implement measures and policy
instruments to stabilise the exchange rate and foreign currency market on the
new rate platform.
During a conference on banking sector responsibility in 2015,
Governor of the State Bank Nguyen Van Binh stressed that one of the sector's
targets this year was maintaining the stability of the foreign exchange
market and keeping rate fluctuation below 2 percent, though he added this
would not be easy.
Bac Lieu aims for 447 mln USD in farm export revenue
The Mekong Delta
According to Luong Ngoc Lan, Director of the provincial
Department of Agriculture and Rural Development, Bac Lieu will focus on
promoting aquaculture and offshore fishing, while implementing effective
models of shrimp, rice-shrimp, and shrimp-crab-fish farming.
Additionally, emphasis will be placed on intensifying
intensive and semi-intensive shrimp farming, as well as developing
large-scale rice field models which apply the Vietnamese Good Agriculture
Practice (VietGap) in the year.
In an effort to realise this lofty target, local authorities
have taken measures and implemented incentives related to capital,
technology, and training, as well as enhanced trade promotion activities to
further support local exporters. They have also encouraged processing
enterprises to apply the latest technologies to their production lines to
create higher quality products.
Veterinary medicine trading and breeding production within the
province will be strictly inspected and managed.
Thanks to the State’s support policies, Bac Lieu harvested
282,000 tonnes of aquatic products in 2014, 109 percent of the yearly target,
earned more than 430 million USD from seafood exports, 4 percent above the
2014 goal.
Bilateral trade between
Of the figure,
Two-way trade between the two countries experienced remarkable
features, Tien said, adding that coffee and footwear were up 71 percent and 7
percent, accounting for 18 percent and 12.5 percent of the market shares,
respectively.
Meanwhile, the import of scrap steel from
Tien said the economic development forecast for both countries
in 2015 is positive. The Vietnamese Government has set a goal for a GDP
growth rate of 6.2 percent against the last year’s figure of 5.98 percent.
According to the Vietnamese official, the Vietnamese Government’s
attention to enhancing ties with Africa, including
However, he pointed out a number of difficulties in payment
and transportation between the two countries, hindering trade.
Furthermore, Vietnamese enterprises have not paid sufficient
attention to promising markets in Africa, including
According to the Trade Office at the Vietnamese Embassy to
South Africa cum Mozambique, Zimbabwe, Namibia, Botswana, Swaziland and
Lesotho, last year two-way trade turnover between Vietnam and the African
countries reached 92.9 million USD, 34.7 million USD, 26.4 million USD, 21.1
million USD, 14.7 million USD, and 12.3 million USD, respectively.
Cooperative prospects between
According to CBRE’s recent market research report from the
last quarter of 2014, high-end property sales increased significantly in the
reviewed period, especially among newly available projects.
Marc Townsend, CBRE Chief executive officer, said many
domestic investors are taking a renewed interest in real estate projects as a
result of positive and promising market recovery signals.
He revealed his firm intends to work with 12 leading experts
in the field in Southwest Asia who have expressed interest in entering
The country’s ongoing macroeconomic stability, improving
purchasing-power and favourable changes in the Housing Law have contributed
significantly to the market’s recent recovery, Townsend noted.
The last quarter of 2014 recorded 6,760 new units, a 117.8
percent increase from the previous quarter between quarters and 105.2 percent
from the previous year. Progress in the reviewed quarter brought the total of
new properties in 2014 to 14,807 units, 3.2 times the units developed in
2013.
The new properties saw a soar in sales, causing the overall
sales rate among high-end properties in 2014 to reach 60 percent, with the
mid-range properties following at 35 percent.
About 15,000 new apartments were available in 2014, setting a
record figure over the last four years, according to Duong Thuy Dung, Head of
the CBRE Research and Consulting Department.
Currently, investors from
Northern electronics retailers in expansion race
Multiple electronics supermarket chains in northern
Electronics retailer Tran Anh has just opened three stores in
Nghe An, Hai Duong and Hai Phong after investing in new facilities in Ninh
Binh, Nam Dinh, Bac Ninh and Phu Tho provinces. Tran Anh now has 16
electronics stores in the northern region, including nine in the capital
city.
Other big names like HC, Media Mart and Pico have also reached
out to more
At present, Media Mart is leading the electronics market in
the north with 18 stores, followed by Tran Anh with 16 stores, HC with 14 and
Pico with seven.
Experts said northern electronics retailers are now focusing
on operation expansion outside
Electronics retailers expected new outlets in
Nghiem Xuan Thang, Deputy General Director of Tran Anh Digital
World Co., was quoted as saying that the company plans to open four
supermarkets in northern cities and provinces this year before expanding to
Statistics from market research firm GfK showed Vietnamese
consumers spent about 28 trillion VND on electronics and technology products
in the third quarter of last year, up nearly 21 percent year-on-year.
Project
to increase Vietnam-Laos goods transport
Deputy Prime Minister Nguyen Xuan Phuc has just approved the
basic contents of a joint project on increasing goods transport between
The project outlines solutions to facilitate the movement of
land vehicles between the two countries, helping improve the efficiency of
trans-national and transit transport of goods and make full use of the
current road networks of the two countries.
It is hoped that the project will help to raise two-way trade
to 2 billion USD in 2015 and 5 billion USD in 2020, as well as increasing
import-export turnover of the Greater Mekong Sub-region (GMS) countries and
attracting more goods from Laos transiting Vietnam for export and vice versa.
The two countries are also members of a multilateral agreement
on facilitating cross border transport of passengers and goods among the
HSBC, ANZ positive about adjusted VND/USD reference rate
HSBC and ANZ gave positive reviews on the State Bank of
Vietnam (SBV)’s decision to raise the VND/USD daily reference rate by 1
percent starting from January 7.
Under the decision, the rate is up from 21,246 VND to 21,458
VND per USD, around which VND/USD is allowed to trade within a +/- 1 percent
range.
The research department of the
HSBC experts viewed the reference rate adjustment as a
catch-up with other EM currencies. A one percent fall in Vietnamese dong
versus the US dollar actually represented a continued outperformance versus
most other Asian currencies since the start of the first quarter last year,
they said.
None notable deterioration that could lead the SBV to
devaluate the Vietnam Dong, has been recorded recently. Despite the
900-million-USD deficit in December 2014, foreign direct investment flows
maintained its momentum with total registered FDI worth 2.3 billion USD
within the same month.
Besides, inflation continued to decrease in
Based on their market research, HSBC experts expected the VND
to continue depreciating by one percent, resulting in the rate of around
21,750 VND per USD by the end of 2015.
Sharing the same opinion with HSBC,
Though no new Grade-A office buildings are forecast to come
online this year, many Grade-B buildings are expected to enter the
The office market will continue to face an oversupply over the
new year due to a significant number of office projects currently in the
fitting-out stage, especially in the western part of the city.
Therefore, rental declines are expected to continue and will
be of considerable concern for landlords. Tenants can look forward to more
flexible leasing terms in addition to falling rents.
There is expected to be around 715,000sq.m. of office space
across all grades coming onto the market in the next two years, opening up
more opportunities for tenants to choose better office space at reasonable
rental rates.
The fourth quarter of 2014 witnessed the market entry of one
Grade-B office complex project, which raised the total supply to
1,123,800sq.m, representing an increase of 0.9 per cent quarter-on-quarter.
The average asking rent for a Grade-A office building was a
very slight decrease of 0.3 per cent over the quarter, reaching US$30.4 per
sq.m per month, while Grade-B buildings saw a higher decrease of 1.3 per cent
quarter-on-quarter from $18.6 to $18.4 per sq.m per month.
Transactions are expected to be busy in the residential
market, helping to thaw out the frozen property market. For instance,
Sacomreal has launched a Dau tu an toan-co hoi vang sinh loi (Safe
investment-Golden opportunity to Earn Profit) programme for buyers.
Under the programme, Sacomreal commits to re-buy customers'
products with an increase of at least 20 per cent value when they buy land in
the Jamona City project in District 7 and land in the Arista Villa project in
Thu Duc District.
More than 100 land lots in the 106,000sq.m Jamona City project
and 90 land lots in the 9-ha Arista Villas project have been sold to
customers. Affordable apartments sized from 40–70sq.m. in the price range of
VND15–18 million ($714-857) per sq.m should continue to be the most
sought-after and this market sector is expected to be the most active going
forward.
Notably, there is no future supply located in the city centre
due to a limited supply of development sites. Permission to build residential
property is also difficult to obtain.
Therefore, future supply will be in non-CDB areas that offer
easy access to the city centre, such as District 7, District 2, District 4
and Binh Thanh District.
Projects located along the first metro line will attract more
buyers and investors.
Some suburban districts, such as Districts 8, 9, 12 and Binh
Tan, with an abundant stock of affordable apartments, sufficient land fund
for project developments and upgraded infrastructure are also attracting
developers and low-income earners.
The New Housing Law that will take effect in July, which
allows foreigners to own commercial property in Viet Nam, will help
strengthen demand, especially for mid- to high-end projects.
By 2020, over a million square metres of new retail space will
enter the market, a 200 per cent increase in retail supply compared to this
year.
Demand for retail space in the CBD is expected to remain high
in the short to medium term.
However, due to limited land, the majority of future stock
will move towards the non-CBD area at a larger scale, mostly in the southern
and eastern areas of the city where most of the city's infrastructure and
residential developments have been established.
Finance Ministry instructs Tet price stabilization
Minister of Finance Dinh Tien Dung has issued a directive
instructing authorized agencies to intensify management and supervision to
stablize the prices of goods in the coming Tet holidays.
Finance department directors are instructed to keep a close
eye on goods supply, demand and prices before, during and after the holidays,
especially to essential items such as rice, meat, egg, vegetables, cakes and
beverages.
They should work with relevant departments to counsel
provincial people’s committees with measures to stabilize the market, and
prevent goods scarcity and speculation from rigging the prices.
Inspections should be step up to ensure the serious
implementation of price, tax and fee bylaws at businesses.
The minister ordered the departments to instruct transport
firms to publicly announce their fare and freight rates.
Violators will be publicly named on the media. Authorized
agencies should speed up actions against counterfeits and smuggling.
The Price Management Department under the ministry is
instructed to send inspectorates to provinces to manage and stabilize the
prices.
Sacomreal's programme helps to thaw out the frozen property
market
Sai Gon Thuong Tin Real Estate JS Co. (Sacomreal) launched a
Dau tu an toan-co hoi vang sinh loi (Safe investment-Golden opportunity to
Earn Profit) programme for buyers as the first good sign in this year for
helping to thaw out the frozen property market.
Transactions are expected to be busy in the residential
market, the company said.
The programme is considered as a safe and attractive
investment channel when stock market has many risks; banks have offered
deposit interest rate of 5-6 per cent per year, and gold price have seen less
fluctuations.
Under the programme, Sacomreal commits to re-buy customers'
products with an increase of at least 20 per cent value when they buy land in
the Jamona City project in District 7 and land in the Arista Villa project in
Thu Duc District.
More than 100 land lots in the 106,000 sq.m Jamona City
project and 90 land lots in the 9-ha Arista Villa project have been sold to
customers.
A land lot of Jamona City is offered VND23.5 million per sq.m
and for that of Arista Villas is VND11 million per sq.m.
Opportunities for businesses in 2015
A stable macro-economy and improved economic institutions,
including the recent approval of amendments to two important laws (Investment
Law and Enterprise Law), and the completion of negotiations of several free
trade agreements, are opening up opportunities for businesses. It’s now up to
businesses to seize the opportunity.
During the most difficult period for the global economy
(2011-2014), efforts from the Government, people and businesses have helped
Vietnam to escape difficulties and gradually stabilise the macroeconomy. We
are restructuring the economy and the growth model to improve efficiency and
competitiveness. The focus is now on the restructuring of public investment,
banking and finance, and state owned enterprises. The government is taking on
strategic tasks in finalising the market economic institutions, creating an
equal and competitive business environment and administrative reforms;
developing human resources, especially high quality human resource; and
developing a harmonious and developed infrastructure system, including
transport and urban infrastructure. The Government is working on administrative
reforms, especially the effectiveness of the system, and reducing the time
and resources for tax compliance, custom procedures, insurance, and access to
electricity, starting a business and market entry, so that all these
indicators will be equal to the average of ASEAN 6 countries.
In 2014, despite the difficulties, there were positive signs
in the economy. The average economic growth rate in the 2011-2013 period was
5.6%, with exports growing 18% annually and inflation down from 18.13% in 2011
to less than 3% in 2014. A “stable macroeconomy” has been widely agreed upon
by the population. There is a wider development sphere being developed with 8
signed free trade agreements. Several other free trade agreements have
completed their negotiations, including a FTA between Vietnam and the EU,
with the Customs Alliance of Russia, Belarus, Kazakhstan, and that with the
Republic of Korea. We are also speeding up the negotiations of the TPP, and
developing the ASEAN Economic Community during this year- a common market
with about 600 million consumers, US$2,500 billion in GDP as well as the free
flow of capital, commodities, services, investments and labor. With the
prospect of having 14 FTAs in the near future, Vietnam’s business and legal
environment is expected to witness major changes, and Vietnam will become a
part of an economic chain that spans across 55 partner countries, including
15 members of the G20. This will open many opportunities for local businesses
to export their products with lower tariffs and fewer technical barriers.
However, there seems to be less activity in the businesses
community, participating in the integration process. If local businesses do
not reform themselves and act more professionally, they will not only let
opportunities pass, but may also face new threats from integration.
Businesses need to invest in human resources, governance, science and
technology, as well as ensure the quality of goods and services to stand firm
in the market. The market will be greater and there will be more
opportunities, but the pressure from the market will also increase.
A new phase of development is coming. Together with the
support from the State and society, for businesses to thrive, with stable
macro-economic conditions and a wide opening market, we should have
confidence that businesses will be stronger and act as the driving force for
the economy. They will have the ability to absorb new technology, and will be
highly competitive to dominate the domestic market and expand overseas, so as
to ensure our economic sovereignty and avoid dependence on a single market or
trade partner.
At the recent Vietnam Development Partnership Forum 2014,
Victoria Kwakwa, Country Director for the World Bank in Vietnam noted that
Vietnam’s private sector has been struggling with various challenges
recently, and many businesses have had to close down. Most of the remaining
enterprises are in the informal sector, SMEs or micro enterprises. They had
not been able to take advantage of the incoming foreign enterprises, and
their participation in global value chain was limited. She stressed that no
country can develop based solely on the foreign sector. The Government’s
policy to pay more attention to the domestic private sector was correct and
timely. Institutional reforms should focus on this direction, to help address
challenges to the private sector. Future economic integration will be more
in-depth, focusing on the ASEAN economic community, EFTA, TPP, FTA with Korea
and other partners, and will bring more opportunities for the private sector.
But the opportunities cannot be realised if there is no strong public sector
and strong institutions to help solve issues in the private sector.
HCM City to enlarge agricultural high-tech park
The area of HCMC Agricultural High-Tech Park (AHTP) will be
expanded by five times as envisioned in a development plan for the park in
the 2015-2020 period.
Tu Minh Thien, deputy head of AHTP, told the Daily on the
sidelines of a recent meeting in HCMC that the park will have an extra 400
hectares in the next five years to house sufficient facilities and sections
for cultivation, breeding and aquaculture projects.
In addition to the 88 hectares used for cultivation in Cu Chi
District, AHTP will develop a new section covering a total of 200 hectares
nearby for growing plants and breeding freshwater ornamental fish from 2020
to 2025.
A 90-hectare section will go up in Long Hoa Commune in Can Gio
District for the aquaculture sector, including producing breeders and
bio-products. AHTP plans to open this section in 2017.
The third section will cover 100 hectares in Binh Chanh
District and focus on crossbreeding cows, chicken and pigs.
Thien said AHTP is calling for local and foreign investments
in the new sections.
Dinh Minh Hiep, head of AHTP, said the park has helped apply
high technology to agriculture in the city, including orchid production in Cu
Chi District, vegetable growing in line with VietGap standards on 145
hectares in Cu Chi, Binh Chanh and Hoc Mon districts.
AHTP has also developed new models of planting organic
vegetables with yields 15-30% higher than normal vegetables.
AHTP was established in 2004 and officially came into
operation in 2010. This is the first agricultural high-tech park in Vietnam
mainly providing high quality seeds and technology for farmers, co-operatives
and agricultural companies to produce organic vegetables. So far, the park
has carried out 14 projects with total investment of VND190 billion.
All SOEs under construction ministry to go public this year
The Ministry of Construction has set a target of having all
State-owned enterprises (SOE) under its umbrella equitized within this year.
Dang Van Long, head of the Corporate Management Department at
the ministry, said the ministry currently manages nine corporations and ten
enterprises with 100% State ownership.
The corporations are Building Materials Corporation No. 1
(FiCO), Construction Corporation No. 1 (CC1), LILAMA Corporation (Lilama),
Construction Machinery Corporation (COMA), Song Da Corporation, Vietnam Cement
Industry Corporation (VICEM), Housing and Urban Development (HUD), Vietnam
Urban and Industrial Zone Development Investment Corporation (IDICO) and
Vietnam National Construction Consultant Corporation (VNCC).
The ministry has completed necessary legal procedures for
equitizing all these SOEs. The ministry has established committees
responsible for equitization, and selection of consultants for assessing
corporate assets and equitization plans.
Late last year, the ministry submitted to the Prime Minister
the equitization plans for FiCO, CC1, COMA and Lilama. These corporations
would launch their initial public offerings (IPOs) in the first quarter this
year if the plans are approved.
The ministry is now conducting corporate value assessments of
Song Da, VICEM, HUD and VNCC, and plans to submit the equitization schemes
for Song Da and VICEM to the Prime Minister in the second quarter.
Long said the ministry wanted all SOEs under it to go public
this year. “This year is the last year for implementation of the 2011-2015
socio-economic development plan and the restructuring of SOEs as approved by
the Government.”
Vinalines pulls State capital out of seaports
Vietnam National Shipping Lines (Vinalines) will continue
plans to offload shares at Nam Can Port in Ca Mau Province, Danang Port and
other seaports nationwide to speed up divestments of State capital in the
port sector this year.
Vinalines will sell 13.2 million shares at Danang Port at the
reserve price of VND12,000 each on the Hanoi Stock Exchange on January 19. It
expects to raise nearly VND160 billion if all the shares change hands.
Previously, investors bought only over 1.6 million shares at
Danang Port’s initial public offering (IPO).
Vinalines will offer 395,200 shares at VND10,000 each at Nam
Can Port’s IPO at Maritime Bank Securities in HCMC on January 28. The shares
are equivalent to 49.4% of chartered capital of the port located in the
southernmost province of Ca Mau.
The corporation earlier launched the IPOs of Haiphong, Quang
Ninh, Nha Trang, Can Tho and Nghe Tinh ports. Nghe Tinh Port’s IPO was the
most successful as all 3.89 million shares put up for sale found buyers.
Le Anh Son, general director of Vinalines, said revenues from
the IPOs of its member ports last year were lower than expected as the sold
shares of four major ports, namely Haiphong, Quang Ninh, Nha Trang and
Danang, were less than 5% of the total shares on offer. The problem is that
the State still holds a majority stake of 75% at these ports, thus
discouraging investors from buying into these ports.
Northern electronics retailers in expansion race
Multiple electronics supermarket chains in northern Vietnam
are in a race to expand operations beyond Hanoi in order to increase revenues
and cash in on rising shopping demand in neighboring provinces, especially
before the Lunar New Year holiday (Tet)
Electronics retailer Tran Anh has just opened three stores in
Nghe An, Hai Duong and Haiphong after investing in new facilities in Ninh
Binh, Nam Dinh, Bac Ninh and Phu Tho provinces. Tran Anh now has 16
electronics stores in the northern region, including nine in the capital
city.
Other big names like HC, Media Mart and Pico have also reached
out to more northern provinces to capitalize on surging shopping demand
before Tet, which falls on February 19. HC inaugurated a new store in Nghe An
Province last month while Pico is present in Phu Tho and Vinh Phuc provinces.
At present, Media Mart is leading the electronics market in
the north with 18 stores, followed by Tran Anh with 16 stores, HC with 14 and
Pico with seven.
Experts said northern electronics retailers are now focusing
on operation expansion outside Hanoi as they are sure about chance of success
in this region. Pico has had to close its store in HCMC in southern Vietnam
to concentrate resources on the northern market.
Electronics retailers expected new outlets in Hanoi’s
neighboring provinces will help them boost sales as competition in the
capital city has turned intense.
Nghiem Xuan Thang, deputy general director of Tran Anh Digital
World Co., said the company plans to open four supermarkets in northern
cities and provinces this year before expanding to HCMC and other southern
provinces in the coming years.
Statistics from market research firm GfK showed Vietnamese
consumers spent about VND28 trillion on electronics and technology products
in the third quarter of last year, up nearly 21% year-on-year.
Vietnam coffee export seen down 11%
In contrast to growth of more than 30% last year, the
country’s coffee export this year is predicted to decline 11% due to weather
anomaly and slow farming, according to the Vietnam Coffee and Cocoa
Association (Vicofa).
Vicofa forecast coffee output this year might tumble 20-25%,
leading export sales to edge down to 1.4 million tons worth US$3.2 billion.
The total export last year reached 1.6 million tons worth US$3.6 billion, up
33.4 % in volume and 32% in value against the previous year.
Vietnam is suffering severe impact of climate change. El Nino
has caused drought in the country, causing coffee farms to lack water.
The International Coffee Organization predicted that the
supply of coffee beans this year could be 11 million 60-kilogram bags lower than
global demand.
Meanwhile, most of the area of old coffee plants has not been
replanted, which will certainly affect output this year, said Nguyen Viet
Vinh, general secretary of Vicofa.
Although a coffee replanting plan in the Central Highlands in
2014-2020 has been approved, work on it has been slow given financial
distress. One of the reasons is high interest rates for bank loans discourage
farmers from borrowing.
The average export price of coffee beans last year was
US$2,090 per ton, down 2.6% over the previous year, while the local price
remained unchanged at VND40 million (some US$1,869) per ton, which brought
profit for farmers and traders.
Another tough year forecast for rubber growers
The Vietnam Rubber Group (VRG) forecast this year could be another
hard year for local rubber growers as natural latex prices are projected to
stay low like the period at the end of last year.
VRG put the price of natural latex products at VND31,000 per
kilo (some US$1.45) this year, or only VND1,000 per kilo higher than
production cost. This is a meager profit for rubber growers.
The VRG said that 2014 was one of the most difficult years for
the rubber industry when latex prices tumbled to US$1,500 per ton, the lowest
level in five years. The reason was that China, Vietnam’s largest latex
importer, reduced or suspended imports.
Oversupply worsened the situation last year, according to VRA.
The movements of latex prices this year will depend much on the supply of
major rubber producing countries, including Thailand, Malaysia, Indonesia,
India and Vietnam.
Domestic rubber enterprises have not shown signs of cutting
their output as they are following developments of the rubber industry in
regional countries.
VRA said if latex prices still stay low, rubber growers would
suspend their latex production or even chop down rubber trees to plant
high-profit crops.
According to the Ministry of Agriculture and Rural
Development, Vietnam shipped 1.07 million tons of latex worth US$1.8 billion
last year, which was the same volume to the previous year but down nearly 28%
in value year-on-year. The fall was attributable to dropping prices last year
as the export price of latex products neared US$1,700 per ton in
January-November, down 27% against the same period of the previous year.
Becamex Tokyu opens new food, shopping facilities
Becamex Tokyu, a joint venture between Vietnam-based Becamex
IDC and Japan’s Tokyu Corporation, on January 6 inaugurated food and shopping
facilities belonging to the first phase of a new commercial center in Binh
Duong New City.
The first phase comprises of a shopping area as well as Long
Monaco Restaurant owned by Phi Khoa Co. Ltd. and The Sushi Bar Restaurant,
among others.
Hikari is the first food and shopping center with large
investments in Binh Duong New City. Located in the center of the new city and
close to the Integrated Administrative Center of Binh Duong Province, Hikari
was opened to meet demand of officials and citizens.
A representative of Becamex Tokyu said the company will
continue investments in the next phases of the project to better serve
customers.
The company now is developing a major project called the Tokyu
Binh Duong Garden City worth a total of over US$1.2 billion and consisting of
apartments, houses, trade centers, office buildings and entertainment
facilities in Binh Duong New City.
The joint venture recently launched a Japan-style bus service
linking Thu Dau Mot City and Binh Duong New City.
FDI expected to surge in 2015
Foreign direct investment (FDI) in Vietnam is forecast to
increase significantly this year, as many large FDI projects are expected to
be issued licences in the next few months.
The Thoi bao Kinh te Viet Nam (Vietnam Economic Times)
newspaper quoted a source from the Economic Zone Management Authority (EZMA)
of Binh Dinh as saying that the central province is scrutinising the Nhon Hoi
oil refinery complex (also known as Victory Project). The project is expected
to be issued an investment licence before the Lunar New Year (falling on
February 19).
If the licence is issued as per EZMA's plan, the FDI capital
in Binh Dinh this year will far exceed the capital that the province
attracted last year, as the investment capital of the Nhon Hoi project alone
is estimated at US$22 billion.
Also, Nhon Hoi is not the unique large FDI project that Binh
Dinh can attract this year.
Head of Binh Dinh's EZMA Man Ngoc Ly said that the province is
also working with two other large investors, Singapore's VSIP and Thailand's
Amata, to select sites for the projects' infrastructure construction.
If their progress is advantageous, the two projects are likely
to help Binh Dinh figure among the country's most attractive FDI destinations
in 2015.
Besides Binh Dinh, the northern province of Bac Ninh is also
expected to issue licences to large FDI projects this month.
Ngo Sy Bich, head of Bac Ninh's EZMA, said that the projects
that can be issued licences early this year in the province are also large,
with each having hundreds of millions of dollars of investment capital.
He revealed that Bac Ninh is working with a Singapore-based
software investor and, if it works out, a project worth more than $100
million will be issued a licence this month.
Bac Ninh is also negotiating with a German investor. If the
deal is signed, hundreds of millions of dollars will be poured into the
province. It is expected that the project will also help the northern
province to attract other FDI supporting projects.
Experts said that licensed projects worth billions of dollars
have so far helped Viet Nam to attract many other supporting projects. This
is in accordance with the Government's sustainable growth strategy involving
investment boost to high-tech industries and creation of value-added exports
and supporting industries.
Bac Ninh, for example, has so far successfully attracted
several large high-tech companies such as Canon and Sumitomo of Japan,
Samsung of South Korea, Foxconn and Mictac of Taiwan, and Tyco Electronics
and Nokia of the United States, besides ABB of Switzerland.
The northern port city of Hai Phong has also created a hub to
attract heavy industry projects worth hundreds millions of dollars of GE,
Kyocera, Bridgestone and Fuji, as well as Xerox and Toyota.
Experts have also forecast that Vietnam will possibly attract
increased FDI capital in 2015 as a result of the advantages offered by the
free-trade agreements (FTAs) that were concluded in 2014.
Vo Tri Thanh, deputy director of the Central Institute for
Economic Management, said that the signing of three FTAs with the European
Union, the Republic of Korea and the Customs Union of Russia, Belarus and
Kazakhstan will offer great advantages to Vietnam in attracting foreign
investment in the short run.
After Vietnam concluded the three above-mentioned FTAs, and as
a result of the Chinese Investment Strategy +1, businesses in the European
Union and the Republic of Korea may shift their production facilities from
China, and Vietnam will certainly be an attractive destination, Thanh said.
He added that following their example, a number of supply businesses will
invest in Vietnam.
After the ASEAN Economic Community (AEC) is established in
2015, investors from countries which have concluded FTAs with Vietnam will
see ASEAN as a common market and a united production facility in the near
future. As an ASEAN member with accelerated trade liberalisation, Vietnam
will become an important gateway for foreign investors, including European
Union companies, to enter the ASEAN market.
Statistics from the Ministry of Planning and Investment's
Foreign Investment Agency showed that Vietnam attracted 20.23 billion USD in
FDI capital last year, an increase of 19 percent against the target. The
Republic of Korea led the 60 countries and territories investing in Vietnam
in 2014, with 7.32 billion USD in investment capital, accounting for 36.2
percent of the country's total FDI capital.
Source : VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Bảy, 10 tháng 1, 2015
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