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BUSINESS IN BRIEF 16/6
Confectionery
firm Kinh Do announces share buy-back
Confectionery
Kinh Do Corporation (KDC) still wants to buy back another 55.5 million shares
to complete its plan of re-acquiring almost 77 million shares in the company.
This was
revealed in a KDC document sent to shareholders on Thursday ahead of its
annual shareholders' meeting.
In
December, 2014, KDC approved a buy-back of 77 million shares, equivalent to
30 per cent of its total issued shares. So far, it has purchased nearly 21.5
million shares.
The
company plans to buy another 55.5 million shares. The offering price will not
exceed VND50,000 (US$2.29) a share.
KDC's
shares have risen again for the past month, closing yesterday at VND43,800
($2) a share on the HCM City Stock Exchange.
The
purchase would be funded from the company's capital surplus (VND3.274
trillion, or $150.2 million), undistributed profits (VND1.084 trillion, or
$49.7 million), development fund and other funds under its equity capital
(VND41.28 billion, or $1.9 million).
The
confectionery reported total net sales of almost VND5 trillion ($229.4
million) by the end of 2014 and the pre-tax profit of VND600 billion ($27.5
million). Its net profit reached VND537 billion ($24.6 million).
The 2014
dividend rate was 10 per cent and the payout was made on May 20. Ending 2014,
its total assets reached VND7.875 trillion ($361.2 million).
This
year, KDC has targeted lower revenues of just VND3 trillion ($137.6 million)
but its pre-tax profit is set at VND6.5 trillion ($298.2 million). This
figure includes the profit from the sale of 80 per cent of stakes in its
snack business Binh Duong Kinh Do Corp to US-based confectionery giant
Mondelez International Corp.
The plan
for 2015 dividends is set at 14 per cent in cash.
Earlier
this year, the company agreed to pay special cash dividends to shareholders
with an impressive rate of 200 per cent after the sale of stakes in the snack
business to Mondelez was completed.
Support
industries need help
More
Government support for local companies involved in the support industries was
needed, according to the managing director of the Japan External Trade
Organistion (JETRO)'s
Hirotaka
Yasusumi said the investment by Japanese companies in
According
to a JETRO survey, the percentage of local procurement in
But it
was still low compared to 66 per cent in
Although
the supply of industrial materials and sub-components by Vietnamese firms to
Japanese businesses had gone up by 2.5 per cent in the 2013-14 period, it
still accounted for less than 45 per cent of total local procurement in
Yasusumi
said Japanese firms investing in
But
since most Vietnamese companies involved in the support industries are small-
and medium-sized, many of them lack funds to invest in modern technology, as
well as human resource training or necessary technologies.
Duangdej
Yuaikwarmdee, deputy managing director and general manager of Reed Tradex Co,
Ltd in
"It
is vital for industry to understand factors affecting supporting industries,
which play a major role in industrial development," he said.
Most of
the global electronic brands have assembly plants in
"Compared
to other ASEAN countries, you have good fundamentals, and the key thing is
how we can develop the electronic support industry," he said.
"I
think that the key concern is how to make local manufacturers adapt to new
technologies to increase production.
Pho Nam
Phuong, director of the Investment and Trade Promotion Center of HCM City,
said in the first five months of the year, the city attracted around US$1.05
billion in new investments and additional capital of foreign investors, a
year-on-year increase of 33 per cent.
"Japanese,
Korean and Taiwanese manufacturers have been moving many of their factories
and technology to
This
offers an opportunity for domestic parts producers to become suppliers of
these corporations, she said.
Vinaphone
launches new download app with Opera Software
VinaPhone,
one of
For just
VND15,000 (0.7 cent) a week, VinaPhone subscribers can download unlimited
applications and games from AppMarket.
AppMarket
is a combination of Ovi and Opera Mobile Store and offers around 300,000
applications and games for Android, Java, Blackberry, and Symbian operating
systems.
Customers
will be able to enjoy thousand of premier applications and games, which will
otherwise not be free or come with advertisements and even harmful software.
"The
limited number of easy payment channels is the biggest challenge in bridging
the gap between customers and application developers," Nguyen Hoang Hai,
a VinaPhone spokesperson, said.
Money
sought for rural roads
The
city's People's Committee has asked the Ministry of Transport to allocate
state funds and to call for private investors to build roads and bridges in
rural areas.
From now
to 2020, the city, as part of the National Programme of Building New Rural
Areas, plans to complete linkages between all rural roads.
It also
aims to have all axis roads in communes to have at least two lanes and be
asphalted or cemented by 2020.
In
addition, all small canals used for transport purposes will be upgraded to
prevent bank erosion.
The city
also targets having bus services in all communes by 2020. Twenty-seven of 56
rural communes in
The 56
rural communes have built or upgraded more than 1,100 roads with a total
length of 754 km. The costs were mobilised from various sources, including
the State budget, investors, local residents and loans.
Under
the programme, local residents have donated more than 1.2 million sq.m of
land worth VND1 trillion (US$47.6 million) to build infrastructure projects,
mostly transport infrastructure projects.
Japanese
firm eyes metro line centre
A
Japanese firm is exploring opportunities to develop a commercial centre in
the underground portion of
The plan
was discussed during a meeting between Japanese Deputy Minister for Land,
Infrastructure, Transport and Tourism Kisaburo Ishii and Nguyen Huu Tin,
deputy chairman of the city People's Committee on Wednesday.
Ishii is
quoted by Tuoi Tre (Youth) newspaper as saying that a company called Toshin
Development was keen and would like to speed up the investment process.
A model
of the commercial centre was displayed at the meeting.
On May
28 the firm had submitted its design for the Ben Thanh Commercial Centre to
the People's Committee, Ishii said.
This was
an important project, a "landmark" in the development of
It will
be a big-ticket project, and the Japanese investor is expected to fund it
with loans.
Ishii
said his government could consider providing official development assistance
(ODA) loans for it.
It takes
ten to eleven years to refund construction costs for this project, Ishii
added.
Power
tariffs to follow market mechanism
Local retail
electricity price will be adjusted under a market mechanism by 2016, said
Minister of Industry and Trade Vu Huy Hoang.
Hoang
said that power supply has been better since 2011, with preventive capacity
meeting 25-30 per cent of the country's total demand.
He noted
that power price has to follow a market-based mechanism under the
Government's supervision to ensure profits.
However,
most businesses, especially FDI firms, expressed their concern about power
shortage in the southern region.
A Viet
Nam Business Forum (VBF)'s report revealed that FDI companies have not been
worrying about increasing power prices as much as about unstable supply. The
Government can increase the electricity tariff of enterprises that consume
more power while ensuring adequate supply.
Responding
to this situation, the minister remarked that it would require the
Electricity of Viet Nam (EVN) to ensure capital for a proper power
transmission system.
"We
have asked the EVN to implement nine supplemental power projects to supply
electricity to the southern region, following a forecast of power shortage in
2017-18," he added.
Economist
Nguyen Minh Phong said a market mechanism can be implemented if there is free
competition. It meant that all economic sectors, including private,
State-owned, and FDI, will be allowed to compete to sell electricity to
distributors.
However,
the retail price of electricity faces no competition as it is decided by the
Government.
Phong
pointed out it is impossible to have a market-based retail price by 2016 as
the sector has been enjoying a monopoly. The Government's role still accounts
for 97 per cent of the total production and distribution, thus ensuring no
competition.
He
proposed to divide production and distribution to set the price of power
under a market mechanism.
Sharing
the ideas, Pham Quy Tho, a public policy specialist with the Ministry of
Planning and Investment, said
According
to Tho, the country should have a preference power price to help guide
producers to clarify production costs.
SHN
names strategic investors
Investment
General Corporation (SHN) yesterday announced a list of strategic investors
who will hold a total of 95 million shares in the company, equivalent to
VND950 billion (US$43.6 million) based on the share value.
This
amount is also three times SHN current charter capital.
Major
shareholders included Ha Noi General Export and Import Corporation
(Geleximco), expected to buy 19.8 million shares, and Geleximco's chairman
and CEO Vu Van Tien, who registered to buy almost 11 million shares.
Tien's
brother and brother-in-law also booked combined shares of 15.84 million.
On
Monday, SHN, Geleximco and An Binh Investment Group (ABFG) signed a strategic
co-operation agreement under which the two latter parties would transfer
business know-how and provide consultancy to help SHN to develop an
appropriate business model, and improve its management, branding and
marketing products and services.
To the
market's surprise, finding strong investors like Geleximco has been a big
success for SHN, after the threat of being delisted from the Ha Noi Stock
Exchange.
The
manufacturer of construction materials, spare parts and transportation
services is undergoing a comprehensive overhaul. It has been on the verge of
bankruptcy for years after posting losses for three of the last four recent
years.
SHN
reported a loss of almost VND77.4 billion ($3.6 million) last fiscal year,
lifting the accumulated losses to VND326 billion ($15 million) at the end of
2014.
Its
shares have also been put under the warning status from April 24, 2014 due to
negative profits.
According
to Vu Van Tien, SHN still had a lot of potential, especially in the areas
where it has strengths like imports and exports, real estate and labour
exports.
"In
addition, SHN also has the advantage of being a listed company, a thing that
Geleximco is keen on and wants to make a push to diversify the group's
businesses," Tien was quoted as saying on the online newspaper Tri thuc
tre (Youth Intellectual).
Ministries
urged to promote integration
Ministries
and sectors should enhance communication regarding international integration
that will help management units, business community and other people timely
in updating their knowledge, Nguyen Cam Tu, deputy minister of Industry and
Trade (MoIT), has said.
Speaking
at a forum held in Ha Noi on Wednesday, Tu said international integration has
become popular in recent years, thanks to some outstanding developments, such
as the plan to build ASEAN Economic Community (AEC) 2015 and negotiations
about and participation in Free Trade Agreement (FTA).
"Integration
will focus on creating a transparent and favourable competitive environment
for all economic sectors, especially businesses," he said, adding that
once such integration takes place, those exploring opportunities would start
looking at firms, instead of localities.
However,
a large number of people, enterprises and staff do not have adequate
information. That was the reason the ministry chalked up plans to enhance
communication on international economic integration.
Trinh
Minh Anh, MoIT's deputy chief officer said the plan would point out
shortcomings and provide solutions in communication to effectively promote
integration in future.
"The
plan will have overall strategy each year, suitable for each (particular)
locality, region and subject," he said.
Dang
Hoang An, deputy general director of Electricity of Viet Nam said media
should be given training on FTA, tax policies and customs to better
communicate information to people.
"The
communication work should be upgraded into a national programme to help
businesses actively access information sources."
Hoang Ve
Dung, deputy general director of Vinatex, said the plan should clearly point
out how businesses will benefit.
"We
have always paid attention to communication on integration and the average
growth rate of 15-20 per cent in the past 10 years has been the evidence of
the impact on businesses."
Shrimp
exporters win top world award
According
to the Viet Nam Association of Seafood Exporters and Producers (VASEP), the
four-star BAP certification is the highest level issued by Global Aquaculture
Alliance.
It
defines the most important elements of responsible aquaculture and provides
quantitative guidelines to evaluate adherence to practices for processing
plants, farms, hatcheries, and feed mills.
Some 67
Vietnamese businesses hold the BAP certification, of which 12 are four-star
certification. Meanwhile,
VASEP
said
Besides
them,
VASEP
noted that domestic firms should take advantage of the country's leading
position in exporting large-sized tiger prawns by ensuring stable supply
sources, good processing capacity, prestige, and quality in the market. They
should not only meet regulations on food safety but also take responsibility
for the safety of the society and environment as well.
Measures
proposed to help private sector develop
Chairman
of the Viet Nam Chamber of Commerce and Industry (VCCI) Vu Tien Loc on
Tuesday gave nine recommendations to the Government to help tackle
difficulties facing the local private economic sector.
Loc said
the Government should form an overall action plan to promote the development
of the private sector, given that its operational efficiency had not improved
much and that nearly 70 per cent of them operated without profits.
Although
the private economic sector contributed nearly 50 per cent of GDP, over 33
per cent of the figure was made up by households businesses, proving that the
private sector remained scattered, he said.
According
to Loc, it was firstly essential to build and implement a start-up national
programme to help provide career orientation guidance for students and help
establish businesses with innovative technology to support sectors that Viet
Nam had competitive advantages in.
Sectors
and areas that Viet Nam has competitive advantages include agriculture,
electronics, information technology, garments and textiles, wood processing
and tourism. Support for these sectors should be collectively given to a
whole chain or complex, not to single businesses.
Secondly,
it was important to simplify business conditions and administrative
procedures relating to the establishment and operation of businesses,
increase professional training and build a compulsory training programme
about start-ups for business owners.
Thirdly,
priority should be given to credit flow because small and medium-sized
businesses needed effective credit programmes to help deal with capital
issues. This could be done by reducing interest rates for medium and
long-term loans, simplifying loan conditions and procedures and starting
small and medium-sized business development funds, as well as developing
private funds and funds for scientific and technological applications.
Other
recommendations include enhancing IT systems and speeding up trade and investment
promotions; reviewing and cutting unnecessary business procedures and
licences; ensuring safety for businesses; and updating businesses with
information relating to commitments, opportunities and challenges from Free
Trade Agreements.
Loc's
proposals were put forward at the Viet Nam Business Forum co-organised by the
Ministry of Planning and Investment, the International Finance Corporation
and the World Bank.
The
Ministry of Finance reported that nearly 35,000 businesses were established
in the first five months of this year, bringing the total number of
businesses in operation nationwide to more than 506,000.
Of the
total number of businesses operating in the private sector, large and
medium-sized businesses accounted for less than two per cent each, while the
remaining 96 per cent were small and super small businesses.
Cars
imports will not rise sharply over tax cut, says official
More
than 17,920 cars were sold in Viet Nam in May, which were fewer than the
month before, but still higher than the same period last year.
In a
press release on June 11, the Viet Nam Automobile Manufacturers Association
(VAMA) said that passenger buses took the lead in sales, with 8,946 units.
That was followed by commercial vehicles and special-use vehicles, with 7,796
and 1,179 units, respectively.
Although
the passenger bus was leading in sales, its revenues were reportedly 5.1 per
cent lower than in April, while revenues from commercial vehicles increased
by 5 per cent and special-use vehicles fell by 10 per cent.
Truong
Hai Automobile JSC (Thaco), Toyota Motor Vietnam and Ford Vietnam continued
to hold their top three positions in the market, with sales of 6,603 units,
3,880 units and 1,747 units, respectively.
Domestic
vehicle manufacturers in May assembled 14,032 vehicles, 0.4 per cent higher
than the previous month, while importing 3,889 complete built-up units
(CBUs), decreasing by 7 per cent compared with April.
With a
population of more than 90 million people, the Vietnamese market holds great
potential for auto manufacturers. Though the country's automobile industry
has not developed, many car manufacturers are standing at a crossroads,
wondering whether to continue domestic production or move to import cars from
other countries in ASEAN.
To
develop domestic production, the car makers will need further support from
the Vietnamese Government, but there has been no concrete policy set for
them.
By 2018,
when import taxes on cars from ASEAN countries will be zero per cent, cars
will become much cheaper. However, imports will not be easy, as they will
depend on many factors, said Deputy Head of the Finance Ministry's
International Co-operation Department, Ha Duy Tung.
Tung
explained this issue to Dau tu (Investment) newspaper, noting that to enjoy
zero per cent import taxes, cars from ASEAN would be required to meet many
standards, including their origin and the rate of spare parts made in ASEAN
countries.
"In
the coming time, the use of zero per cent import taxes to export CBUs to Viet
Nam will also depend on whether investors pour more money into production to
meet the standards as regulated," said Tung.
While
the volume of import cars will be increased, it will not grow massively, he
added.
At
present, the imports of CBUs from Thailand to Viet Nam have been carried out
by subsidiary companies of giant groups, such as Toyota, Honda, Ford and
Nissan. Therefore, imports will have to follow the parent companies'
regulations in importing models, as well as prices, for the Vietnamese
market.
Additionally,
importing cars from Thailand, where there has been large investment in
automobile production, to Viet Nam, is impossible by commercial companies
because Thailand cars' have their steering wheels on the opposite said to
what is needed in Viet Nam.
Apart
from the import tax of vehicles with nine seats being lowered from ASEAN to
zero per cent by 2018, other free trade agreements (FTA) have not committed
to lower import taxes on cars to zero per cent.
Along
with Viet Nam – South Korea FTAs, which will come into effect on January 1,
2016, Tung said there would be two kinds of cars reducing import taxes, but
both will have zero per cent import taxes by 2025.
As for
China, according to the ASEAN – China FTA, import taxes for passenger carriers
will be cut by 50 per cent by 2018, said Tung.
Mekong
Delta farmers well profit from summer autumn rice
Farmers
earn a profit of VND10-15 million (US$459-688) per hectare of summer autumn
rice crop which is amid peak harvest time in the Mekong Delta.
On
Sunday, traders paid VND4,100-4,200 a kilogram of fresh normal rice and
VND4,400-4,600 a kilogram of fresh long grain variety in Dong Thap, Hau Giang
and Vinh Long provinces and Can Tho city.
Farmer
Vo Van Rot from Can Tho said that he had reaped one hectare of summer autumn
rice and sold them out at VND4,500 a kilogram to pocket VND14 million.
According
to departments of agriculture and rural development in the delta, the rice
price is not high but farmers still profit from bumper crop and high productivity.
The
Vietnam Food Association reported that businesses have exported over 2.1
million tons of rice worth US$874.9 million in the first five months this
year.
Japan’s
electric company to increase production in Vietnam
The
Japan-based Tabuchi Electronic Co. Ltd., a renowned manufacturer of power
components and transformers, will invest 1.5 billion JPY (12.1 million USD)
in building a workshop in its plant in Vietnam’s northern Bac Ninh province.
Under
the company’s plan to increase production in Vietnam, the workshop will be
able to manufacture an additional 60 million units in 2016, up 20 percent
from the plant’s current output.
Among
the products, power components used in printers and photocopiers will be sold
to office machine manufacturers which are looking to move their production
from China to Southeast Asian countries. Meanwhile, electric automotive
components will be exported to Japanese companies in Thailand.
Tabuchi
also plans to transfer production technology to its plant in Vietnam.
In the
2014 fiscal year, which ended in March, 80 percent of the company’s revenue
came from the production of electric equipment used in solar inverters.
Increasing its output in Vietnam is part of its plan to diversify its
products and expand its markets in Asia.
Lychee
marketers on a roll
Wholesale
markets and distributors in Ho Chi Minh City have plans in place to boost
sales of lychee, a city leader told a meeting in HCM City on June 10.
Nguyen
Thi Hong, People's Committee deputy chairwoman, said last year the city had
consumed 60,000 tonnes, or 50 percent of the nation's total.
About
80,000 tonnes are expected to be sold in the city this year, she said, adding
that wholesalers and retailers had met with businesses in Hai Duong and Bac
Giang provinces to discuss transport of the fruits to the south.
According
to the Ministry of Industry and Trade, the country's lychee output is likely
to top 200,000 tonnes this year, with 40 percent being exported.
Trinh
Diep Thanh Thao, deputy director of the Thu Duc Wholesale Market, said the
market has set up three new stalls to sell lychee after getting 11,500 tonnes
in the period between May 17 and June 9.
Co-opMart
supermarket chain expects to sell 800 tonnes of lychees this year.
It now
sells 10-15 tonnes daily and the volume could reach 30 tonnes at times,
Nguyen Thi Thu Thuy, deputy general director of Sai GonCo.op, said, adding
that the supermarket offers promotions to boost consumption.
Ho Quoc
Nguyen, Big C's public relations director, said the supermarket is likely to sell
more than 300 tonnes this year and it too offers promotions.
Previously,
Hanoi authorities also said that they will soon grant trading licences to
lychee traders in Hai Duong Province so they can open mobile lychee shops at
vacant places in Hanoi.
At the
meeting in HCM City, authorities also called on lychee farmers to adopt
VietGap and Global-Gap standards on more areas to improve the quality of
their fruits and meet hygiene and food safety requirements in both domestic
and export markets.
Hong
said lychee is now mainly consumed as fresh fruit, and so preservation
methods to keep it fresh for longer are needed.
Besides,
research should be done into processing fresh lychee so that a spike in
supply after a harvest would not send prices crashing, she said.
Thao
said businesses should pay attention to packaging and building brands for the
fruit.
Deputy
Minister of Industry and Trade Tran Tuan Anh said building a value chain for
the fruit is very important.
Also on
June 10, with the shipment of more than three tonnes of lychees to Australia
and two tonnes to the US, Rong Do Company was the second company to export
lychees to the US and the first Vietnamese company to ship the fruit to
Australia.
Robert
Guillermo, pre-clearance specialist with the US Department of Agriculture,
who inspected the shipment, said the lychee quality met the standards for
export to the US market.
"It
is fresh and sweet, and meets the quality standard," he said. "We
have had two previous shipments sent to the US. They were the same quality as
this one," Guillermo said.
He
predicted that the volume of lychees exported to the US would increase
sharply in the near future, depending on the state of the US economy.
Alex
Alexopoulos, national sales manager for PanasiaFresh, which imports litchis
from Vietnam and sells them in Australia, said he is satisfied with the
quality of the lychees in Vietnam and that the packaging facility is very
good.
All of
the lychees will be sold in wholesale markets and supermarkets in Australia.
After this first shipment, his company plans to buy as much as possible if
customers in Australia like the Vietnamese lychees.
"We
hope this season we can import 15 to 20 tonnes of lychees every week for
distribution in Australia," Alexopoulos said, adding his company also
plans to import coconut, mango and dragon fruit from Vietnam.
Deputy
Trade Minister Tuan Anh said his ministry will work with the ministries of
Agriculture and Rural Development and Science and Technology to fix quality
standards for fruits, including lychee.
It will
also work with relevant ministries to find packaging and post-harvest
solutions, he said.
Authorities
from BacGiang and Hai Duong provinces said they will increase the area under
lychee adopting VietGap and GlobalGap standards to improve quality.
Nguyen
Doan Quang, director of the Hai Duong Department of Industry and Trade, said
the province will strive to ensure safe production processes are adopted on
50 percent of the cultivation area by 2020, including VietGap and GlobalGap
standards on 20-30 percent.
RoK’s
63 mln USD electronics project to be set up in HCM City
The
Saigon Hi-tech Park (SHTP) has granted an investment licence to a 63 million
USD-project from the Republic of Korea (RoK) to produce electronic components
and LED screens, reported the Dau Tu (Investment) newspaper.
The
project, by Daeyoung Electronics Vina Co., Ltd, was the first in a series of
projects to supply the ongoing Samsung CE Complex project which began in May
15 this year with a total investment of 1.4 billion USD.
Authorities
of the Ho Chi Minh City-based SHTP said that 2-3 more RoK projects in
electronics and consumer electronics will be approved in the coming time.
Dau Tu
newspaper also quoted a report of the municipal Department of Planning and
Investment as saying that foreign direct investment in the city for the first
five months of this year is estimated at slightly over 1 billion USD, up 33
percent from the same period last year.
The
figure includes 669 million USD poured into new projects and 386 million USD
added to existing projects.
Japan
expresses interest in underground commercial complex
A
Japanese delegation held a working session with Ho Chi Minh City authorities
on June 10 to seek cooperation opportunities with the city on the
construction of the main metro station and an underground commercial centre
in front of the Ben Thanh market.
Kisaburo
Ishii, Deputy Minister of Land, Transport Infrastructure and Tourism and
leader of the delegation, told city authorities that the underground complex
will be the cynosure marking the development of the city.
Despite
the high cost, the project will bring a number of benefits and has high
profit prospects, Ishii said, predicting it will take 10 to 11 years for
investors to recover their investments.
A model
of the project was demonstrated at the meeting.
The
Japanese government can consider providing official development assistance
(ODA) loans to the underground commercial centre, Ishii added.
If the
commercial centre project goes according to plan, the construction of the
central underground station may also receive ODA capital, according to the
deputy minister.
State
budget disbursement lags behind
The
Finance Ministry has reported that the disbursement of State budget in cities
and provinces nationwide during the first quarter of this year has been slow.
Deputy
Finance Minister, Tran Van Hieu said that 63 cities and provinces had
disbursed more than VND7.55 trillion (US$346.3 million ) from State budget,
accounting for 20.7% of the total funding the Government will to allocate
them this year.
Four
localities have spent half of their allocated funding, including northern Ha
Nam Province, Ninh Binh Province, Hanoi and southern Dong Thap Province.
HCM City
and the two southern provinces of Binh Duong and Ba Ria-Vung Tau reported no
disbursement of State budget money.
Southern
Dong Nai Province spent 0.5% of allocated State budget, southern An Giang
Province 4.3%.
The
disbursement of Government bonds and counterpart capitals in ODA projects was
also slow, the report said.
This
year, Government plans to allocate over VND 30.7 trillion (US$1.4 billion) by
selling Government bonds to development transport, healthcare, irrigation and
other national projects.
Sixty-two
localities reportedly disbursed more than VND4.44 trillion (US$203.7 million)
or 14.4% of allocated funds from Government bonds.
The
disbursement rate is less than one per cent in nine localities, about zero
per cent in five localities and from 1.3% to 9.1% in 21 localities.
Deputy Minister
Hieu said that localities must keep a watchful eye on the speed of projects
using State budget and Government bonds.
They
were asked to speed up disbursement for the projects.
They
were also asked to identify bottlenecks, including land clearance and
disbursement.
Highway
to connect HCM City to border
A HCM
City company has asked the Transport Ministry to approve a VND30 trillion
(US$1.37 billion) project to build a expressway that will connect HCM City
with a southern border province.
The
proposal was made by the Cuu Long Transport Infratructure Management
Investment and Development in HCM City.
The
proposed expressway would link the city's Thu Duc District with Moc Bai
Border Gate in the southern Tay Ninh province that borders Cambodia. It will
have 84.5 km in length and 15 metres wide for four lanes.
The
project is expected to be developed under the Build-Operate-Transfer (BOT)
form in the two phases.
About
55.5 km would be built in the first phase with cost estimated at VND14.46
trillion (US$669.5 million). In the second phase, a combined 38 km of viaduct
totally worth VND15.5 trillion (US$718 million) will be constructed.
The
project's investment capital is expected to be raised from sources such as
official development assistance (ODA), the State Budget, and loans from Asian
Development Bank.
The
expressway would connect the Moc Bai Border Gate with the city's beltways 3
and 4, creating an uninterrupted traffic network linking the city with
southern key economic regions.
Bosch
Rexroth showcases solutions for sugar industry
Local
and foreign companies gathered at Sugarex Vietnam 2015 held in HCM City on
June 10-11, to showcase their latest advanced equipment and technologies in
the sugar industry as well as support industries.
Bosch
Rexroth - the Drive & Control Company - introduced hydraulic Hägglunds
system solutions from Sweden, which can be applied in the sugar industry in
Vietnam.
With
these solutions, Bosch Rexroth hoped to help businesses cope with challenges
in the global integration process and improve competitive edge in
international and regional markets.
Bosch
Rexroth is a global company with experience in the market segments of Mobile
Applications, Machinery Applications and Engineering, Factory Automation, and
Renewable Energies to develop innovative components as well as tailored
system solutions and services.
Bosch
Rexroth also provides customers with hydraulics, electric drives and
controls, gear technology, and linear motion and assembly technology all from
one source.
Asian
banks see big business in Vietnam's growing foreign sector
Foreign
banks, especially those from Asia, are strengthening their foothold in
Vietnam to cater to a growing number of multinational companies and crowd out
local lenders.
In
March, Malaysia's Public Bank Bhd was allowed to acquire the stake owned by
Vietnamese lender BIDV in their US$62.6 million joint venture VID Public
Bank.
After
the deal, the Malaysian bank will turn the Vietnam-based venture into a 100%
foreign-owned bank.
Singapore's
United Overseas Bank (UOB) has also submitted an application for upgrading
its branch in Ho Chi Minh City into a wholly foreign-owned bank in Vietnam.
However, the request has not been approved.
The
Ministry of Planning and Investment has recently urged Prime Minister Nguyen
Tan Dung to ask the central bank to accept UOB's application.
Singapore
is now the third largest investor in Vietnam, but there has not been any
Singaporean bank in the country, the ministry said. Some other economies,
whose investments in Vietnam have been smaller than that of Singapore, have
already been allowed to open their banks, it added.
Banks
from Japan and the Republic of Korea have also planned to enter Vietnam.
The
country has some 10 representative offices of Korean banks. Many Japanese
banks have opened their branches and representative offices here, while
dozens of others have recently come to study the market.
Economist
Nguyen Tri Hieu said many foreign banks want to get into the market to serve
an increasing number of foreign invested enterprises, which often use
services provided by banks coming from their own countries instead of local
lenders.
Vietnam
received a total disbursement of US$12.35 billion from foreign investors last
year, up 7% from the previous year, according to the Ministry of Planning and
Investment.
Lending
of Bangkok Bank in Vietnam grew 10% in the first eight months of last year,
Thai newspaper The Nation quoted Tharabodee Serng-Adichaiwit, senior vice
president and general manager, as saying.
He said
Bangkok Bank had seen an influx of foreign investment in Vietnam and it had
participated in offering credit to foreign investors, which account for 90%
of its new loans here.
"We
will serve the flow of investment by using the bank's network, especially in
China, as Chinese investors are coming here to set up production bases.
Furthermore, we will increase the focus on local small and medium-sized
enterprises that are supply chains of larger corporates in Vietnam," he
was quoted as saying.
Keith
Pogson, managing partner of EY’s Financial Services in the Asia Pacific
region, said the country’s economic development and deeper international
trade integration are also factors that help Vietnamese banking sector become
more attractive to overseas investors.
The
country has been chasing a series of trade pacts, including the Trans-Pacific
Partnership (TPP) and the EU-Vietnam Free Trade Agreement, as part of its
ambition to attract more investment and become a regional manufacturing hub.
Vietnam's
US$184 billion economy is expected to expand by 6.1% this year, and 6.2% in
2016, with the foreign-invested sector an important driver, according to a
report from the Asian Development Bank.
The
economy grew 6% last year, the highest rate since 2011.
David
Hovenden, Southeast Asia of Strategy&, part of the PwC network, said
Vietnam has been ranked third in the region for the attractiveness of its
banking market.
Most of
Vietnamese banks have seen Japanese lenders as their biggest competitors
while others have considered European banks their key rivals.
However,
Pogson said major threats to local banks could come from within Southeast
Asia, which has many strong players in the field of retail banking.
They may
break into the domestic market after the launch of the ASEAN economic community
later this year and the removal of banking barriers.
Thai’s
bank Kbank has opened two representative offices in Hanoi and HCMC. Its main
target clients are Thai, Chinese, Japanese and Korean companies that want to
expand into Vietnam.
The
president of the bank, Predee Daochai, said: “Vietnam is one of the most
important investment magnets among Thai and foreign investors, given the
country’s ample labor force with diligence, patience, and a positive attitude
towards self-development. While Vietnam is a great source of raw materials,
the country is also home to more than 90 million consumers, a high-growth
potential market.”
Foreign
banks are likely to attract most of foreign enterprises in Vietnam. These
companies are without a doubt lucrative customers, with high demand for
capital and banking services. They contribute to 70% of the country’s total
export revenues.
Experts
believe local banks have failed to tap this market segment because of their
high interest rates and limited range of services.
Economist
Bui Kien Thanh said foreign banks are very competitive because they can
attract cheap funding sources in their home countries. Vietnamese banks, on
the other hand, have to pay much higher interest rates on deposits, he said.
Thanh
noted that multinational companies would typically use services of a
particular bank or banks for many years, instead of switching to local banks.
Foreign
banks know very well the financial situation of these companies and this can
lower lending risks which in turn will lower borrowing costs, he said.
Thanh
also said some foreign banks are more flexible than local banks in accessing
credit applications because their main criteria is the feasibility of the
business plan, while local banks focus on collateral.
"Foreign
banks are often considered more reliable and professional. So it is not
surprising that foreign firms prefer to work with them," he said.
Vietnam
now has one state-owned bank, 37 joint stock commercial banks, six wholly
foreign-owned ones -- HSBC, Standard Chartered Bank, ANZ, the Republic of
Korea's Shinhan Bank, Malaysia's Hong Leong Bank Berhad, and Public Bank
Berhad -- and nearly 100 branches and representative offices of foreign
banks.
Vietnam
aims to boost consumption of biofuel
Deputy
Prime Minister Hoang Trung Hai ordered preparations to be made to boost the
distribution and consumption of biofuel E5 RON 92 nationwide.
The
minister was speaking at a meeting on June 9 to review the results achieved
in the first half of this year.
Statistics
revealed at the meeting showed that the consumption of biofuel E5 remained
modest and far below expectations. It is estimated to account for some 3% of
petrol retail sales.
According
to the Ministry of Industry and Trade's report, biofuel E5 was put on sale in
eight provinces and cities across the country: Quang Ngai, Danang, Hanoi, HCM
City, Haiphong, Ba Ria-Vung Tau, Can Tho and Quang Nam. More than 87,087
tonnes were sold in the first four months of this year.
Deputy
Director of Hanoi Department of Industry and Trade Tran Thi Lan Phuong
pointed out that consumers were still hesitant to use biofuel E5 due to the
lack of knowledge about its features and benefits.
Meanwhile,
low consumption discouraged petrol traders from investing in the distribution
of biofuel E5 as the investment and transportation costs could be high.
At the
meeting, Hai asked biofuel E5 wholesalers to strictly follow the roadmap for
biofuel E5 distribution raised in Decision No 53/2012/QD-TTg.
Hai said
raising awareness among consumers about biofuel E5 was also an important job
along with raising the appropriate technical standards for biofuel.
Local
authorities should closely co-operate with petrol wholesalers in producing
and distributing biofuel E5 to prevent a shortage in the retail market.
Central
Quang Ngai Province sold biofuel E5 from July last year, becoming the first
province in the country to sell biofuel E5, with most of its retail petrol
stations participating in selling the fuel.
Some 70%
of stations in Danang now sell biofuel E5, while percentages in Ba Ria-Vung
Tau, Hanoi, Can Tho and Haiphong were 24, 20.4, 16.4 and 7, respectively.
Other
provinces and cities were gearing up to push E5 RON 92 into the market, and
the biofuel was expected to be widely used throughout the country from this
December.
Source :VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Hai, 15 tháng 6, 2015
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