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BUSINESS IN BRIEF 5/2
Chinese electric cars, not yet licensed for use, available in
Hanoi
Despite not yet being licensed for circulation, the first
electric cars have been imported from
At a shop of motorbikes and bicycles on
“We don’t lack supply but we import such cars only when customers
pay deposits to us to purchase them,” H. said.
He also said the price of electric cars ranged from VND50
million ($2,340) to VND70 million ($3,280) per vehicle, depending on models,
number of seats, color and weight.
He added that an electric car imported from
After hearing Tuoi Tre report about the appearance of such
Chinese cars, Colonel Dao Vinh Thang, head of the Traffic Police Office under
Hanoi Police Department, said his agency will first collect information about
the consumption and sale of cars of this kind in the capital city.
The agency will then propose solutions for the management of
import, trade and maintenance of electric cars, Colonel Thang said.
He added that this kind of vehicle has a potential of causing
congestion and traffic accidents, so competent agencies must tighten their
control over such vehicles to prevent them from being imported randomly into
In related news, early this month, the Ho Chi Minh City
Department of Transport said it will launch an electric car tourist service
in the downtown area on a pilot basis in April.
The department has said that 10 eight-seat electric cars will
be deployed for this service in its initial stage.
The cars will carry visitors to the city’s major tourist
attractions in the downtown area, including Ben Thanh Market, the Municipal
Theater, People’s Court Mansion, Saigon Notre-Dame Cathedral, Saigon Central
Post Office,
The cars, to start running on a pilot basis on April 30, will
operate from 8:00 am to 5:30 pm every day, with intervals of 30 minutes.
There is not yet information about the origin of these
electric cars.
Market enters peak Tet shopping time
Businesses have fulfilled their goods preparation plans. They
said total goods value stockpiled for two months before and after the
holidays has reached VND15,849 billion (US$745 million), up VND8,268 billion
over the same period last year.
Beer & beverage consumption demand is forecast to reach
from 40 to 45 million liters in the New Year Festival, up 30-50 percent.
Producers have said that selling prices would not increase in the Tet
holidays.
Cake, jam and candy demand is expected to reach 18,000 tons.
Confectionary companies have launched several new products with good designs
and quality. Most of them have kept the prices stable.
Those attending the price subsidization program will not be
permitted to hike goods prices despite of input material cost increase in two
months before and after Tet.
The Department of Industry and Trade and the Ministry of
Finance have set up teams to intensify price inspection. The former and
businesses have arranged mobile outlets, which will move to any district
where prices are found unreasonably increase during the holidays.
HCMC has also signed an agreement to work with provinces in
the southern region to implement the price subsidization program.
The city leaders said that Lunar New Year which is the best
business time every year, accounting for 30 percent of a business’ annual
revenue. Many companies and traders usually take advantage of surging
purchasing power in this phase to sell counterfeits and low-quality goods and
create a scarcity to rig the prices.
The price subsidization program will ensure abundant goods
supply and rational prices to create best conditions for residents to
celebrate Tet festival.
Supermarkets and subsidized-goods stores will open up to
midnight on the 29th day of the 12th lunar month. They will resume operation
on the second day of the lunar New Year.
In related news Prime Minister Nguyen Tan Dung instructed
authorized agencies to tighten market management, prevent smuggling and
stabilize prices of essential items in Tet holidays at a cabinet meeting last
weekend.
The PM instructed the Ministry of Finance to studying
transport fee subsidization. Domestic gasoline prices should be kept in
accordance with that in regional nations to prevent smuggling.
HCMC steps up bio gasoline sales
Ho Chi Minh City People’s Committee has promulgated a plan to
boost selling traditional gasoline and ethanol blend E5 in the city.
According to the plan, the blend will be sold to replace
traditional gasoline at 115 stations in HCMC by June 30.
The city strives to sell gasoline E5 at all 510 stations at
the end of December this year.
The committee has instructed the Department of Industry and
Trade to work with relevant departments and businesses to implement the plan.
From December last year gasoline E5 was available at 58
filling stations in HCMC.
Import sales suffer after deadly US apple scare
Sales of imported apples have been serious damaged by a
contamination scare involving a recall order on two
Imported apples at a supermarket in
Vietnamese authorities have confirmed there were no direct
imports from Bidard Bros. Co. of the
A representative of
Ho Quoc Nguyen, head of public relations at Big C Supermarket,
said the company had reviewed all import records, and suppliers had checked
stocks in line with warnings from the Vietnam Food Administration, and they
had confirmed all apples were free of contamination. Despite assurances,
sales of imported apples fell 30 percent.
The owner of a company specialising in distribution of
imported fruits in
Vietnamese authorities in early January began a nationwide
recall of US-grown Granny Smith and Gala apples, shipments of which from
Bidard Bros. Co. were feared to be contaminated with the Listeria
monocytogenes virus. Authorities were concerned that apples sourced from the
Listeriosis can be fatal, with symptoms including fever,
severe headache, nausea and a stiffness of the neck. The US Food and Drug
Administration said the
The director general of the Plant Protection Department,
Nguyen Xuan Hong, said ambiguous information from one company may have
encouraged consumers to avoid all imported apples.
"Consumers are very concerned and sensitive about food
safety," Hong said.
Many local firms unaware of AEC
A lot of domestic companies remain unaware of the key contents
of the ASEAN Economic Community (AEC) and the challenges they will face after
the community is established later this year.
The fact is proven by a recent survey conducted by the
The majority of respondents do not know when AEC comes into
existence and its key pillars, as well as the AEC scorecard, which is a
monitoring mechanism for the integration process of each member of the bloc.
The survey also found that companies in industrial,
construction, trade and services sectors have better knowledge of AEC than
those in the agricultural sector. In general, large enterprises know AEC
better than SMEs do.
Nguyen Hong Son, head of the
Enterprises are not fully aware of opportunities and
challenges from the AEC establishment as they do not pay much attention to
this. Only 40% of respondents said they will not adjust their business plans
ahead of
The survey found local businesses attend more to the World Trade
Organization, the Trans-Pacific Partnership (TPP) and the Vietnam-European
Union free trade agreement (FTA) than the forthcoming birth of AEC.
According to the Ministry of Finance, with the establishment
of AEC later this year,
The ministry said 72% of the groups of items imported from
ASEAN were entitled to tariff exemptions last year and the percentage rises
to around 90% in 2015. This year,
However, many domestic enterprises do not know about the
commitments, according to Nguyen Thi Thu Trang, director of the
The center wrote to the Ministry of Industry and Trade asking
for the disclosure of
Vo Tri Thanh, vice president of the Central Institute for
Economic Management (CIEM), said disseminating information about
When AEC is in place,
Thanh highly appreciates the Vietnam-EU FTA and TPP, both
under negotiations. TPP requires 90% of the tariff lines to drop to 0%
immediately after it takes effect while it will take seven years to bring 90%
of tariff lines to zero in the FTA with the EU.
Opportunities await local firms to boost exports stateside
Rising demand in the
Giovanni Rojas, director of sourcing services at Target Group,
told a conference on trade and investment chances in the U.S in
The U.S. retail giant, which now has more than 1,800 stores
stateside, imported US$800 million worth of goods from Vietnam last year,
with most of them apparel, footwear, furniture, toys, photo frames and
stationery.
The Vietnamese trade counselor in the
Nhan said the
Negotiations over the Trans-Pacific Partnership (TPP)
agreement are expected to be concluded some time this year. This multilateral
trade pact will contribute to fueling
However, Nhan pointed out limited production capacities, slow
goods delivery and poor competitiveness as the weaknesses of Vietnamese
companies. On top of that, local exporters have to meet high criteria for
food safety and face technical barriers in the
Nhan called for local enterprises to sell their products to
the
However, Rojas of Target said in addition to food safety,
Vietnamese firms should meet multiple requirements for product quality,
packaging, environment, labor safety and anti-bribery before they can partner
with Target.
Rojas said suppliers from
Thomas Jandle of TJMR Asia Consultant suggested Vietnamese
firms rely on local supplies to turn out their export products, instead of
imports from the countries which are non-TPP members.
Nguyen Phu Cuong, vice chairman of
Cuong acknowledged that the province has shipped goods to the
Cuong added leaders of
Speaking at the conference, Chris Neeley, executive vice
president at Made in USA Works, said the company can support Vietnamese firms
to find funding and develop products in the
According to the General Department of Customs, two-way trade
between
Fuel price stabilization fund hits record high
The Ministry of Finance said more than VND4 trillion (US$187.5
million) had remained unused in the fuel price stabilization fund by the end
of last year, the highest level ever since the fund was established.
According to the ministry’s report on the fuel price
stabilization fund released on January 29, consumers contributed a total of
more than VND1.72 trillion to the fund when they bought fuels in the final
quarter of last year alone. The sum was the largest ever because fuel wholesalers
set aside VND500-800 for each liter of fuel sold for the fund last year when
fuel prices fell sharply.
The ministry did not have to use the fund to keep fuel prices
stable on the local market thanks to the decrease in retail fuel prices last
year.
All fuel wholesalers reported a cash surplus in their fuel
price stabilization funds, with the highest amount of VND2.16 trillion
recorded for Vietnam National Petroleum Group (Petrolimex), followed by
PetroVietnam Oil Corp. (PV Oil) with more than VND590 billion.
In 2013, the national fuel price stabilization fund has tens
of billions of dong and the amount rose from more than VND840 billion in the
first quarter to VND1.5 trillion in the second quarter and VND2.3 trillion in
the third quarter.
Experts discuss ways to raise incomes for rice farmers
Agricultural experts have underscored the urgent need to help
farmers improve their incomes as this is an important factor for the success
of a restructuring scheme for the rice sector in 2015-2030.
The urgency was raised at a seminar held on Wednesday by the
IPSARD director Nguyen Kim Son said the scheme is aimed to
enhance the effectiveness, competitiveness and sustainable development of
rice production, and ensure interests of farmers.
Nguyen Dinh Cung, head of the Central Institute for Economic
Management, said Vietnamese farmers are hard-working but their life is still
difficult though
Tran Van Lam, a member of the Vietnam Farmers’
The restructuring scheme, according to Son of IPSARD, is to
help farmers earn profits of at least 30% from paddy production. However,
many experts told the Daily on the sidelines of the seminar that the target
has been virtually realized and if this is the only purpose, the rice sector
does not need to be restructured.
“The 30% profit target has been achieved but farmers cannot
live on paddy farming. We should set a target that farmers can lead a good
life from producing paddy (unhusked rice),” a delegate said.
On the other hand, many experts are concerned that a 15-year
period starting from 2015 is too long for a restructuring scheme and it will
not bring as good results as expected if it is implemented by the Ministry of
Agriculture and Rural Development only. The reason is that the ministry is
strong in measures to improve output and productivity while exports are
managed by the Ministry of Industry and Trade. Therefore, close cooperation
between the ministries is a must.
CBU imports from
Completely built-up (CBU) autos imported into Vietnam from
China increased by more than three folds to US$538 million last year,
according to the latest figures of the General Department of Customs.
Auto imports from
Auto dealerships explained that trucks took the majority of
auto imports from
Dealerships said enterprises had to wait for 3-4 months to
have their orders for trucks fulfilled by local manufacturers and this forced
them to buy Chinese-made trucks to enjoy quick delivery and lower prices.
Trucks imported from
Last year,
Quang
The central province of Quang
In 2014 alone, the province attracted $87 million in FDI with
$72 million from 11 newly-licensed projects.
Real-estate trading was considered the most attractive sector
by foreign investors, absorbing $4 billion or accounting for 80 per cent of
the FDI registered in the province till date. It was followed by processing
and manufacturing, with $515 million or 10 per cent and the restaurant and
catering sector with $328 million or 6.5 per cent.
During the period,
Review large investment plans, MPI says
Most ministries and localities have submitted huge investment
bdgets that do not correspond to the State's limited resources, and these
need to be reviewed, Planning and Investment (MPI) Minister Bui Quang Vinh
said yesterday.
Addressing a seminar held in Ha Noi to guide agencies and
localities on implementing the national mid-term public investment plan
(2016-2020), he said obstacles that come up will have to be overcome through
better co-ordination between all stakeholders.
He said the plan's implementation should abide by the revised
Law on Public Investment, which took effect on January 1 this year.
The law is expected to provide a comprehensive legal framework
for restructuring the public investment process, he said, adding that a
Decree dealing with this will be submitted to the Government for approval by
March this year.
The ministry will also present specific data on investment
demand and report on total investment – sourced from the State Budget as well
as Official Development Assistance (ODA) - needed for the next five years, he
said.
Top priority will be given to capital disbursement for
public-private partnership (PPP) projects followed by ODA projects, he said.
Repaying capital construction debts will come next followed by funding for
unfinished projects. The ministry will also consider reviewing new projects,
Vinh said.
Some provincial representatives pointed out that the MPI was
yet to notify them about budget allocations from the centre as well as
Government bond proceeds for the 2016-2020 period. This has delayed project
implementation, they said.
Vinh responded that the preliminary perusals show that most
ministries and localities have proposed huge investment budgets that should
be reviewed and submitted to the Ministry before the end of this month for
further consideration.
Regarding total investment capital for the next five-year
plan, localities should review their budgets towards eliminating
"sudden" increases in investment capital that have been seen in the
last few years, he said.
He noted that capital disbursed from the State budget to ministries
and localities as well as supplemental capital for national programmes has
risen 10 per cent on average from a year ago.
Vinh acknowledged the need for proper regulation of public
investment by the Ministry in order to ensure that capital is channeled into
the right projects. This was needed for more efficient use of State Budget
funds, he said.
Representatives from Yen Bai and Bac Giang said that
provisions of the draft decree on public investment have been adapted to the
current situation, easing many obstacles.
However, Vinh said it appears that due preparations have not
been completed for both locally and centrally-funded projects.
He noted that for implementing the five-year plan, each
locality will be asked to submit at least one to three large-scale projects
to the ministry for consideration.
He assured that the ministry will take into consideration the
problems raised by localities as well as the recommendations they have made,
and include them in the draft decree on public investment.
Industrial production up 10 per cent
The country's industrial production sector posted a 10 per
cent growth rate in January, compared with the same period last year, the
Ministry of Industry and Trade said yesterday.
At a press meeting held in Ha Noi to review the country's
production situation, the ministry said that the beverage and paper
industries took the lead in terms of inventory last month, with a 59.5 per
cent and 100 per cent increase, respectively. Other sectors that reported
high inventory included food processing (11 per cent), medicine (15 per
cent), metal production (32 per cent) and electronics and computers (38 per
cent).
The ministry said the high inventory was a result of the
upcoming Tet holiday.
Sectors that reported a reduced inventory included tobacco
production (34 per cent), leather (8 per cent), chemicals (15 per cent) and
electricity equipment (13 per cent).
The ministry also said the prices of beer, alcohol and
beverages rose by 5 to 6 per cent due to higher purchasing power.
Beer output in January was estimated to be 261.4 million
litres, rising 4.4 per cent in comparison with the same period last year.
Deputy Minister Do Thang Hai said at the meeting that the
Electricity of Viet Nam (EVN) will not raise power price during the Tet
holiday. However, they will review reports from EVN submitted to the
Government for adjustment in March.
Previous reports from EVN showed that the group had reported a
loss of more than VND8 trillion ($373.8 million) due to foreign exchange
fluctuations in 2009-10.
Answering the question on who will benefit from the increasing
electricity prices, Hai said the Government, people and businesses will stand
to benefit.
He said electricity and petrol prices should be adjusted under
the market mechanism. Petrol prices follow the market price as per a
Government Decree, issued on September 3, on petrol and oil trading, fuel
traders.
This is the reason that cheaper input prices will benefit
businesses and the public.
He added that the World Bank has warned that electricity prices
in Viet Nam are lower than production costs, resulting in no one wanting to
invest in power production.
In addition, the Government has not benefited as foreign
invested sectors, which use considerable power, such as cement and steel,
enjoy cheap price, he added.
The Government will base its decision on reality and consider
the EVN's proposal of a 9.5 per cent increase in power price.
Deputy Prime Minister Hoang Trung Hai has also approved the
adjustment in electricity retail prices in principle.
Data showed that Vietnamese' average income is much lower than
other countries in the region, even though the country's power prices are at
such a low level.
Specifically, the electricity price in Viet Nam is equivalent
to Malaysia and Indonesia, while its income in 2013 was $1,911 per capita per
year. The average income in Malaysia was $10,538 per capita per year, while
that of Indonesia was $3,475 per capita per year.
Banks to be allocated credit growth rates
The State Bank of Viet Nam (SBV) will continue to allocate
credit growth rates for commercial banks this year, based on the banks'
health and business performance.
The move is aimed at controlling credit quality and
restricting the generation of new non-performing loans (NPLs).
SBV Deputy Governor Nguyen Thi Hong announced the policy late
last week, saying that the quota allocation for this year will be announced
soon.
The allocation is aimed at not only ensuring that credit
growth serves the economy, but also to control credit quality and restrict
new NPLs arising in the future, Hong said.
SBV will divide commercial banks into four groups, depending
upon their performance in the previous years to allocate the credit growth
quota. The division will be: Group 1 (healthy banks), Group 2 (average
banks), Group 3 (below-average banks) and Group 4 (weak banks). Group 4 might
not be allocated credit growth rates.
Hong pointed out that to boost lending safely, the central
bank's Credit Information Centre is also building a system to monitor the
credit history of borrowers so that commercial banks can base their actions
on the information, and thereby step up lending to good firms, while ramping
up scrutiny of the ailing firms.
The central bank will also streamline a model for risk
governance, inspection and supervision, especially in a number of industries
and sectors, to ensure that banking performance remains under control, Hong
stated.
SBV Governor Nguyen Van Binh said the central bank this year
is targeting a credit growth of 15 per cent to limit lending and forecast
that credit demand this year will be higher than last year. The central bank
in 2014 targeted credit growth of 12 to 14 per cent to boost lending as last
year's credit demand was too low.
Lending this year should be restrained at only 15 per cent to
ensure the safety of the banking system, Binh said, adding that commercial
banks in 2015 must pay due attention to credit quality, rather than credit
growth as in 2014.
Some banks have also announced credit targets for this year.
However, they might be adjusted by the middle of this year according to the
central bank's credit quota allocation, as well as market demand. Both
Vietcombank and BIDV targets credit growth of 16 per cent this year, while
the figures for Vietinbank, Military Bank are 13 to 15 per cent, and 15 to 17
per cent.
The central bank had decided to apply the credit quota
allocation policy in 2012 when many banks accelerated their lending by up to
50 per cent, causing a sharp rise in NPLs.
To date, some experts have recommended that the central bank
withdraw the policy, saying that it is not necessary as the monetary market
is stable. However, industry insiders have remained guarded about their view
on the withdrawal.
Head of the Business Development Institute Dr Le Xuan Nghia
told Thoi bao ngan hang (Banking Times) newspaper that the monetary market
has only recently gained normalcy after many years of volatility. The central
bank should therefore consider lifting the policy as the banking industry has
good liquidity, while the Government is applying strict measures for handling
NPLs and cross-ownership at banks.
The Deputy Director of the Central Institute for Economic
Management Vo Tri Thanh also suggested the removal, saying banks are currently
being cautious about lending themselves, as they are well aware of the
consequences, including generating a large number of NPLs that they will be
burdened due to rapid credit growth.
Besides, Thanh said, the central bank should not continuously
use administrative measures to intervene in the monetary market, but allow it
to operate under the market mechanism.
However, industry insiders recommended that the central bank
scrutinise the withdrawal.
Deputy Director of HD Bank, Le Thanh Trung, said that in theory,
the central bank should reduce its administrative intervention and allow the
monetary market to operate under a market mechanism. However, in the current
context, a withdrawal of the policy too early might not be good, and might
even lead to negative consequences.
Though the economy has become better, it will take more time
to see whether the economy is really healthy and is able to run smoothly,
Trung said, adding that therefore, the central bank's role in leading the
market and guiding the policy is very important.
Trung added that the time for policy withdrawal will depend
much on the progress of the economy, suggesting that there should be no
adjustment made at least during the first half of 2015.
Echoing Trung, deputy director of Orient Commercial Bank
Nguyen Dinh Tung, also said the improvement of the banking industry and the
entire economy as well, are not really sustainable so being cautious is
necessary.
Tung said the central bank is required to control credit
growth for the past years so that it does not withdraw the policy, unless it
feels really secure about the stability of the entire banking system.
RoK investment outlook solid for 2015
The past financial year saw strong investment in Vietnam by
RoK companies and the outlook for 2015 looks to be another sound year,
according to a recent survey by the Planning and Investment Ministry’s
Foreign Investment Agency (FIA).
According to the FIA, last year investment certificates were
issued to 505 new RoK projects, while 179 others increased their investment,
for a combined total investment for the year of US$7.32 billion.
RoK investors accounted for 36.2% of the worldwide foreign
investment in Vietnam as of the end of 2014 with investments concentrated in
the processing and manufacturing industries.
In total there were 4,063 projects with cumulative investment
of US$36.7 billion throughout the country.
A recent survey by the Korea International Trade Association
(KITA) also showed that most RoK firms operating in Vietnam in 2014 have
plans to expand operations in 2015 underscoring the confidence they have in
business prospects.
A number of big Korean-invested projects received license in
January 2015, including Taekwang MTC (US$43.2 million) in the southern
province of Dong Nai, specializing in sport shoes for export.Vietnam enhances
industry cooperation with Japan
Deputy Prime Minister Hoang Trung Hai called upon relevant
Ministries and agencies to rapidly implement the action plan for the Vietnam
Industrialisation Strategy (VIS), a part of the Vietnam-Japan cooperation
framework through 2020.
The ministries involved include that of Finance; Science and
Technology; Labour, Invalids, and Social Affairs; Foreign Affairs; Education
and Training; Natural Resources and Environment; Construction; Industry and
Trade; Agriculture and Rural Development; Planning and Investment; and Transportation,
as well as the State Bank of Vietnam.
They have been asked to carry out their assigned tasks in a
timely fashion, including submitting reports to the Deputy Minister, who is
also head of the Steering Committee for VIS, by April of this year.
Under the strategy approved by the Prime Minister on July 1,
2013, priority is given to developing the electronics, agricultural
machinery, agricultural and seafood processing, ship building, environment
and energy saving, and automobile and spare parts manufacturing industry.
The development of these industries is expected to nurture
high value-added products, boost technological innovation and productivity,
and improve global competitiveness of local firms.
The Ministry of Planning and Investment was assigned to
supervise the implementation progress of the action plan and conduct research
on potential products or areas for cooperation with Japan.
Additionally, it will collaborate with the Ministries of
Foreign Affairs and Finance to seek support from foreign partners and
enterprises for the projects stipulated within the plan.
Meanwhile, the Ministry of Industry and Trade will work with
the Japanese Embassy to finalise an action plan for the development of the
automobile and spare parts manufacturing industry in March 2015.
Electricity, oil, gas supply prepared for Tet
Stable electricity supply will be available for all
localities, especially island districts recently connected with the national
grid, during the traditional Tet holiday.
Speaking at an online meeting on February 2, Deputy General
Director of the Electricity of Vietnam (EVN) Duong Quang Thanh said the
electric sector has reviewed its entire network to detect and repair any
potential threats to avoid power-outages during the occasion.
Meanwhile, Pham Duc Thang, Deputy General Director of the
Vietnam National Petroleum Group (Petrolimex), said the sector has stored and
fully prepared for the national demand, ensuring stable prices and full
availability.
During the event, Minister of Industry and Trade Vu Huy Hoang
urged concerned organisations to keep a close watch on the market to prevent
smuggling, counterfeit goods, low-quality goods and trade frauds during the
holiday.
According to EVN, in January this year, the sector produced
12.3 billion kWh of electricity and roughly 11 billion kWh of commercial
power output, up 24.5 percent and 12.6 percent, respectively, from the same
period last year.
The same month, crude oil production of was estimated at 1.62
million tonnes; natural gases at 0.9 billion cubic metres; and oil and petrol
at 570,000 tonnes, all representing increases between 4-9 percent.
Electricity price to remain unchanged until Tet
The electricity price will remain unchanged from now to Tet
(Lunar New Year which falls on February 19 this year), said Deputy Minister
of Industry and Trade Do Thang Hai.
The deputy minister told the media at a press briefing on
February 2 that if Electricity of Vietnam proposes a price hike after Tet,
the ministry will consider the situation before making any decision.
Regarding the petrol price, Deputy Minister Hai said the price
is managed under the market economy control in line with Decree 83, which
means when the world price drops, the domestic price will be adjusted
accordingly.
However, the level of adjustment should take into
consideration domestic situation, including purchasing power, people’s income
and businesses’ competitiveness, the official said.
He also affirmed that goods supply is abundant from now to
Tet, and market inspection is being intensified to prevent price
manipulation, smuggling and the trade of banned goods in the biggest shopping
season of the year.
Banks are to set up funds for bad debts
Domestic banks will have to establish provisional funds for
bad debts this year with a total value of about VND37.6 trillion (US$1.79
billion).
The funds will help reduce the overall non-performing loan
(NPL) ratio to less than 3 per cent.
These funds' combined value equals nearly half of the
pre-provision profits that banks are set to earn in 2015.
The Tien phong (Vanguard) online newspaper reported estimates
by Saigon Securities Inc. researchers, who said these figures are based on
the bad loan handling situation and current regulations.
National debt dealer Viet Nam Asset Management Company (VAMC)
plans to buy NPLs worth VND100 trillion ($4.76 billion), or 2.5 per cent of
banks' total outstanding loans, this year.
Last year, the company bought NPLs worth about VND96 trillion
($4.57 billion), raising the total bad debts it had purchased from 38 credit
institutions to VND135 trillion ($6.43 billion), or 3.4 per cent of the total
outstanding loans.
By September 30, 2014, the average NPL ratio that banks listed
on domestic stock exchanges as resolved was 0.2 per cent of their total
outstanding loans. The Military Bank, with a resolved rate of 1.25 per cent,
and the Bank for Investment and Development of Viet Nam with 0.82 per cent,
were the exceptions.
State Bank of Viet Nam (SBV) Deputy Governor Nguyen Thi Hong
confirmed on January 30 that resolving bad debts will be among the key tasks
this year, and a revised decree on NPL resolution had been submitted to the
Government for consideration.
On January 27, the SBV urged credit institutions to step up
resolution of bad debts, aiming to lower NPLs to less than 3 per cent of
outstanding loans in 2015, from the 4.7 per cent recorded at the end of the
third quarter of last year.
The central bank asked the institutions to submit monthly
plans and reports about the progress of the debt-handling process, including
specific schemes to use risk provisional funds and sell debts to the VAMC.
The lenders have to resolve by June 30, at least 60 per cent
of the total number of bad loans that they are supposed to handle in 2015.
They have to transfer at least 75 per cent of the total debts that they
register for sale to VAMC this year, within that deadline.
The SBV said Prime Minister Nguyen Tan Dung is expected to
adopt a plan that will enable VAMC to trade debts through market mechanisms
this year.
It has also asked the company to enhance its financial
capacity and tighten links with credit institutions for recovering and
restructuring debts, and create advantageous conditions for investors in debt
and mortgage transactions.
These measures should be closely associated with efforts to
accelerate credit institution reorganisation, it noted.
The Standard Chartered Bank said in its recently published
global research report that the success of structural reforms is delivering
tangible economic benefits for Viet Nam, and further progress on reforms is
expected in 2015.
Minister seeks to calm producers as Vietnam opens markets
Opening Vietnam's market to more imports from ASEAN and other
trade partners will be done in a gradual and measured manner to limit the
impact of more competition on local producers, the Minister of Industry and
Trade, Vu Huy Hoang said.
Vietnamese producers should not be too worried about market
share as the government has a roadmap for opening the country to more
imports, he told the weekly television programme "People Ask, Ministers
Answer", broadcast on February 1.
Hoang said that when Vietnam opens its market, it has to
comply with certain rules that will see a boost in exports of certain products
in tandem with more imports.
“When the government of Vietnam decides to start free trade
agreement with any country, attention has already been paid to ensure the
advantage (of exports) as well as a roadmap to protect local production,”
Hoang said.
Vietnam's key exports include garments and textitle, leather
shoes, fisheries and agro production, as well as some processed products.
Hanoi has negotiated seven free-trade agreements, including
the Trans-Pacific Partnership (TPP) with the US and a free-trade agreement
with the Custom Union of Russia, Belarus and Kazakhstan (VCUFTA).
Hoang said Vietnam works out its own roadmap for market
opening and seeks an agreement with trade partners to allow local producers
time to improve their competitiveness.
“Thanks to such roadmaps, it would be groundless to be worried
too much about fierce competition or any threat to local production,” Hoang
said.
Concerning the recent flow of foreign retailers into the
Vietnamese market, the minister said this is a sensitive sector and Vietnam
will only gradually open its markets.
He said foreign product imports were tightly controlled in
terms of quantity and category, and, with "suitable policies and enough
attention to the protection of local producers and consumers, we should be
not scared about opening market to the ASEAN communities.”
Aquaculture exports exceed US$8 bln in 2015
Aquatic exports in 2015 are expected to increase and reach
more than US$8 billion, according to the Viet Nam Association of Seafood
Exporters and Producers (VASEP).
In 2014, Viet Nam exported aquatic products to 166 markets,
gaining US$7.84 billion, a year-on-year increase of 16.5% and exceeding 12%
compared to the goal set for the year (US$7 billion).
The exports of shrimps witnessed the highest increase, posting
the growth rate of 27% and accounting for 50.4% of the total export turnover.
The shrimp shipment value of US$3.95 billion included US$2.3
billion from white-leg shrimps, up 46% and US$1.4 billion from common tiger
prawns, up 4%.
When Decree No.67/2014/ND-CP dated July 07, 2014, several
policies on fishery development took effect, more investments and
preferential policies in shipbuilding, insurance and tax have created forces
for aquaculture development.
January CBU imports triple last year
The number of completely built-up (CBU) autos imported into
Vietnam in January increased 3.2 times against a year ago to around 10,000
units, according to the General Statistics Office (GSO).
GSO data showed Vietnam spent US$156 million importing CBU
autos in the first month of 2015, up a staggering 144.5% over a year ago.
Industry sources said the strong growth of CBU imports is not
surprising because January is the month in which people normally buy new cars
for the Lunar New Year holiday, or Tet.
CBU imports are forecast to keep rising strongly this year
because most auto-assembly joint ventures in Vietnam import CBU autos for
domestic distribution while they have no plan to assemble those models
locally, while import tariffs on CBU vehicles are falling.
Even Mercedes-Benz, the only luxury automaker which has an
assembly factory in Vietnam, might be less affected by Vietnam’s tariff
reductions on thousands of items imported from Southeast Asian countries as
committed to the ASEAN Trade in Goods Agreement (ATIGA), as it is switching
from car assembly to CBU auto import.
Under ATIGA, the duty on CBU autos of under 10 seats imported
into Vietnam from other ASEAN countries will go down to 0% in 2018, which
will affect sales of popular car models assembled domestically because
Toyota, Honda, Ford and Mazda all have factories in other ASEAN countries.
Leaders of Mercedes-Benz Vietnam said the company would
introduce 20 new models on the market, most of them CBU autos. The first four
auto models that the firm presented on the market this year are all imported.
Several other domestic auto joint ventures said they will
shift to importing CBU vehicles.
Vinastar, an automobile joint venture with Japanese firm
Mitsubishi, recently announced a plan to import CBU autos because their
tariffs will fall gradually until 2018.
It said it would import CBU cars, citing the ad hoc nature of
Vietnam’s policy change for the auto sector.
Imports of CBU autos have grown strongly since early last
year. The country imported 72,000 CBU units worth a combined US$1.57 billion
during the year, up a staggering 103.8% in volume and 117.3% in value against
the previous year.
The number of CBU cars accounted for nearly half of the local
car market. According to the Vietnam Automobile Manufacturers Association
(VAMA), auto sales hit 157,800 units last year, soaring 43% against 2013.
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Thứ Tư, 4 tháng 2, 2015
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