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BUSINESS IN BRIEF 23/6
VN
Airlines to get its first Airbus A350
Vietnam
Airlines will get delivery of its first Airbus A350 XWB by the end of this
year and become the first carrier in
Vietnam
Airlines will get delivery of its first Airbus A350 XWB by the end of this
year . Photo airbus.com
It plans
to acquire 14 A350s, buying 10 from Airbus and leasing the four others, for
long-haul flights to the EU.
On
Wednesday, Rolls Royce announced it would supply Trent XWB engines for
Vietnam Airlines' new A350.
The
British company claims the engine's fuel consumption per passenger per
kilometre is the same as that of a car.
It has
sold more than 1,500 engines so far to 40 customers.
Upgraded
facilities of Bac Giang's fertiliser plant inaugurated
The
upgraded and expanded facilities of Ha Bac fertiliser plant were inaugurated
in the
Deputy
Prime Minister Hoang Trung Hai (centre) talks to Hanichemco officials as the
company inaugurates new facilities on June 19. Photo chinhphu.vn
The
expansion project of the factory, which is run by Ha Bac Nitrogenous
Fertiliser and Chemical Company Limited (Hanichemco), a subsidiary of Viet
Nam National Chemical Group, cost about US$568.6 million and covers an area
of 33.4 hectares across Tho Xuong District and Xuan Huong Commune.
The new
facility is expected to produce some 500,000 tonnes of urea fertiliser and
300,000 tonnes of liquid ammonia per year.
Hanichemco
had implemented the project in November 2010 in conjunction with Wuhuan, CMC,
and CECO contractors. It expects that the new facilities will generate jobs
for some 2,000 local workers.
Deputy
Prime Minister Hoang Trung Hai said during the inauguration ceremony that the
project has been in line with the national master plan for industrial
development.
Hai
noted that the slow recovery of the global economy in general, and oil prices
in particular, is likely to have significant impacts on fertiliser prices and
might result in stiffer competition in the fertiliser market.
He urged
the chemical and fertiliser sector to cut costs, improve quality, and promote
the trade names of domestic products.
HSG
starts work on new steel plant, completes another
Giant
steel maker Hoa Sen Group (HSG) on Friday began construction of a giant plant
in the Dong Hoi Industrial Zone in the central
Located
on an area of 35ha, the VND5 trillion (US$238 million) plant will have nine
production lines churning out steel sheets starting in March next year.
On the
same day the company's new plant at the Nam Cam Industrial Zone, also in Nghe
An, began production. Its first phase with six of the proposed 13 production
lines is complete and manufacture of steel pipes has begun.
On the
same day the company's new plant at the Nam Cam Industrial Zone, also in Nghe
An, began production. VNS Photo
The
remaining lines will produce steel pipes other specialised products in
December 2015 when the company hopes to complete the plant.
The two
plants will together provide jobs to 1,000 workers.
Their
products will be consumed in the central and northern regions and exported to
E-payment
of import-export duties surpasses 63 percent
The
e-payment of import-export duties has increased ten percent to 63 percent
after a circular aiming to streamline tariff payment processes was enforced,
an official said.
Lo Thi
Nhu, Director of the Import-Export Duty Department under the General
Department of Vietnam Customs, said Circular 126/2014/TT-BTC has helped saved
time and resources of businesses and State managerial agencies.
The
Ministry of Finance’s circular, taking effect on October 1, 2014, stipulates
procedures for declaration, collection, and payment of taxes as well as
overdue interest, fines, and other charges on exports and imports. It focuses
on the e-payment of export-import duties with a view to minimise payment
processes.
At a
meeting reviewing the circular on June 19, participants heard that it only
takes five to seven minutes for customs clearance using e-payment systems
instead of the prior 30-minute wait time.
It only
takes five seconds for goods to be cleared after customs agencies’ e-payment
gateways receive a notification that the banks have transferred the tax
funds.
Enterprises
can also pay duties at various locations, during or outside working times and
on days off.
The
meeting in
Impacts
of FTAs on state budget collection discussed
A
workshop assessing the impacts of free trade agreements (FTAs) on State
budget revenues was organised in
According
to NIF Deputy Director Truong Ba Tuan, the USAID and NIF have been working
together in the Vietnam Governance for Inclusive Growth (GIG) project to
establish a set of assessment tools for FTA impacts on key sectors as well as
state budget collection.
The
workshop would provide a platform for attendees to discuss methodologies for
assessing the potential impacts of FTAs, such as the Trans-Pacific
Partnership (TTP), on state budget, he noted.
Prof.
Inkyo Cheong from
NIF
Director Nguyen Duc Thanh believed that
As the
private sector, including the SMEs, is the key driver of economic growth,
there should be reform of administrative institutions and favourable business
climate for them to develop, the director added.
Integration
has double-edged effect on domestic production, requiring efforts of not only
the government but also the entrepreneurs. Domestic firms need to actively
look for information on the FTAs and its impacts on the market.
EU
clean technology firms eye Vietnamese market
A
workshop was held in
The
event was attended by representatives from over 30 European firms
specialising in air pollution control, energy conservation and management and
water and waste treatment. The firms are currently visiting
Nicholas
Merriman, Marketing Director of the ANDRITZ Group that operates in air
pollution control, shared that his firm wants to establish a partnership with
Vietnamese businesses and implement long-term projects in the nation.
According
to EU Business Avenues, the trip aims to promote the transfer of clean
technology and environmentally-friendly measures to developing countries in
By
accessing clean technologies provided by leading EU companies,
Ha Bac
fertilizer factory completes upgrades, expansion
The
upgrading and expansion of the Ha Bac Nitrogenous Fertiliser Factory in the
The
project, which cost 568.6 million USD and began on November 8, 2010, included
upgrades to the old factory, construction of a new one and the application of
latest technology to increase capacity, improve the competitiveness of
products and reduce impact on the environment.
The new
factory, which covers 33.4 hectares, has a capacity of 500,000 tonnes of
fertiliser and generates jobs for 2,000 local labourers.
Addressing
the event, Deputy Prime Minister Hoang Trung Hai asked the Vinachem and the
Ha Bac Fertiliser Factory to improve product quality and raise
competitiveness.
He noted
that the chemical sector has now met more than 80 percent of domestic demand
for fertiliser.-
Natural
rubber export prices pick up from May
Natural
rubber export prices are on a rising trend since the beginning of May
following concerted efforts from the Ministry of Agriculture and Rural
Development and the Vietnam Rubber Association (VRA), reported the Thoi bao
Kinh Te
In the
first half of May, natural rubber export prices increased to 1,655 USD per
tonne, up 73 USD or 4.6 percent, from the average price in April, and the
increasing trend continues, reaching 1,790 USD per tonne on June 12.
It is
forecast that prices will maintain their momentum throughout June due to
boosted imports from Chinese partners for stockpile.
Vietnamese
natural rubber export to
According
to Dr. Tran Thi Thuy Hoa, Head of the VRA Office, rubber prices will be
fluctuating between 1,500 and 2,500 USD per tonne and will remain in that
range until 2020 due to high stock.
In
addition, natural rubber export prices are under pressure as the fall of
crude oil prices make synthetic rubber cheaper, Hoa added.
Hoa said
the rubber sector needs to increase land use efficiency, reduce both outputs
and production costs while replacing aging trees which produce less latex.
Hoa
advised the industry to shift according to market demands, ensure the quality
of natural rubber, expand markets, build brands, develop the processing
industry and manage planning.
The
National Agro-Forestry-Fisheries Quality Assurance Department under the
Ministry of Agriculture and Rural Development has asked rubber processors to
strictly supervise the process of collection, transportation, preservation
and quality control to ensure product quality.
The
department will coordinate with the VRA to develop and publish quality
standards for raw latex and finished products at processing factories.
Construction
of big steel sheet factory begins in Nghe An
Steel
maker Hoa Sen group began the construction of a 5 trillion VND (230 million
USD) steel sheet factory at the Dong Hoi industrial zone in Hoang Mai town in
the central
The factory
has one c old rolling line with a designed capacity of 1 million tonnes per
year; two coating lines with a combined capacity of 500,000 tonnes per year
and one colour coating line with a designated capacity of 120,000 tonnes per
year.
It is
scheduled to start production in March 2016.
On the
same day, the Hoa Sen group inaugurated phase I of its steel sheet factory at
the Nam Cam industrial zone in Nghe An’s Nghi Loc district.
On the
occasion, the group presented 50 bicycles to impoverished students with good
academic achievements in Quynh Lap commune, Hoang Mai town and donated 222
million VND (10,180 USD) to 53 impoverished households and 169 leprosy
patients.
LaoVietBank,
LVI – models for Vietnam-Laos economic cooperation
A
ceremony was organised in
Lao
Deputy Prime Minister and Chairman of the Laos-Vietnam Cooperation Committee
Somsavath Lengsavath and Envoy at the Vietnamese Embassy in Laos Hoang Xuan
Hai attended the event.
Established
on June 22, 1999 under cooperation between the Bank for Investment and
Development of Vietnam (BIDV) and the Banque Pour Le Commerce Exierieur Lao
(BCEL), the LaoVietBank has become one of the largest commercial banks in
The
bank’s total assets have reached 800 million USD with an annual average
growth rate over 30 percent. Along with serving inter-governmental economic
cooperation projects, the bank also provides payment and credit services for
businesses and individuals.
Meanwhile,
the Lao-Viet Insurance Company (LVI), a joint venture between the BIDV Insurance
Corporation and the BCEL, has risen to become the second biggest insurance
company in
Speaking
at the ceremony, BIDV General Director Phan Duc Tu thanked the Lao Party,
Government, ministries and central bank as well as BIDV partners and consumers
for supporting the LaoVietBank and the LVI.
On the
occasion, the bank announced a credit package with preferential interest rate
worth 800 billion LAK (100 million USD) to support enterprises operating in
import-export, trade and services.
The launching
of the credit package is also a commitment from the bank and the Lao
Government and central bank to reduce interest rates to support production
and business and boost the country’s economic growth.
Tourism
skills advisory council expected in Vietnam
The
council is expected to involve businesses, the Government, training
institutions and other stakeholders, who would identify ways to improve
training and skills development in this promising industry amid the global
economic integration and intense competition.
According
to the Vietnam National Administration of Tourism, tourism is one of the
country’s major earning sources thanks to its stretching coastline of 3,300km
and 7.8 million international arrivals each year.
The
industry employs 1.7 million workers, including 550,000 direct jobs.
However,
The
workshop was co-hosted by the General Department of Vocational Training under
the Ministry of Labour, Invalids, and Social Affairs and the International
Labour Organisation (ILO).
Science
application promotes rural socio-economic development
The
science and technology application programme serving socio-economic
development in rural and mountainous areas has contributed remarkably to
improving local living conditions, said Minister of Science and Technology
Nguyen Quan.
Minister
Quan made the announcement in his speech at a conference in
Implemented
in 62 provinces and cities across the country, the programme aims to promote
production, increase the quality and competitiveness of farm products, assist
with poverty reduction efforts and generate jobs for local communities in
remote areas.
During
the period, as many as 845 projects were carried out under the programme,
building 2,501 production models applying scientific and technological
advances with the involvement of over 80 science and technology agencies from
central to local levels.
The
conference revealed that more than 11,000 local-level technicians and 236,000
farmers were provided with training courses on science and technology
application, while around 128,500 labourers found employment as a result of
the application.
Over 1.7
trillion VND (78.2 million USD), including 700 billion VND from the State
budget and 1 trillion VND from businesses and households, was spent running
the programme.
Quan
said in the next ten years, the programme will focus on the production of key
farm products such as high-quality rice, catfish and mushrooms for use as
food and medicine.
From
2016-2020, the ministry plans to build another 1,000 production models
suitable with rural and mountainous areas.
Ninh
Binh improves rural water quality, environmental hygiene
A two-month
drive to improve rural water quality and environmental hygiene in northern
Ninh Binh province has yielded positive outcomes following a wide range of
activities.
Since
April 15, about 1,500 leaflets on the benefits of clean water have been
handed out to local people who were also encouraged to clean up the
environment around three concentrated water supply stations in Quang Son
commune; the Quynh Son farm in Quynh Luu commune; and Son Thanh, Thanh Lac,
and Thuong Hoa communes.
Local
people collected 24.5 tonnes of waste, cleaned up 32 kilometres of roads and
dredged 13.2 kilometres of sewers. Meanwhile, about 83 percent of the tested
water supply stations met Vietnamese Ministry of Health’s standards, up 8.65
percent from the last test.
More
than 15,000 families in 32 communes received concessional loans from a clean
water and household hygiene fund to build sanitary toilets. Some 2,000
households were also supported with nearly 1.6 billion VND (about 74,400 USD)
from an energy efficiency promotion programme to build biogas tanks.
Households
within specific areas have also worked together to ensure their
neighbourhoods are green and clean.
Vice
Chairman of the Ninh Binh People’s Committee Dinh Chung Phung said the
province will communicate the importance of clean water and the environment
to residents via the local radio network.
It will
also ask the Ministry of Agriculture and Rural Development to allocate
finances from the national target programme on rural clean water and
environmental hygiene for the construction of water supply facilities, which
was previously suspended due to a lack of funding, he added.
Vietnam
to resume imports of Australian fruits and vegetables
Vietnam
will start importing its first fruit and vegetables from Australia on July 1,
in a partial easing of an economic ban maintained due to the earlier
detection of the fruit fly.
The
Ministry of Agriculture and Rural Development (MARD) has confirmed the
restrictions on grapes, oranges and mandarins will be the first lifted and
allowed to transit into the country.
We hope
this will be a new start that will benefit both farmer and economy, said
Nguyen Xuan Hong, director of MARD’s Plantation Protection Department, in
making the announcement.
Hong
added that other Australian fruit and vegetables will be allowed to access
the Vietnam consumer market once they are determined to be free of insect
manifestation.
Earlier
this year MARD issued no import permits on 38 varieties of Australian fruit
and vegetables into Vietnam after it determined the fruit fly could have
‘serious consequences’ for Vietnam’s horticultural industry.
Last
year, Vietnam imported US$40 million worth of fruit and vegetables from
Australia Hong said— adding that the grape industry made up US$32 million of
that amount and was hit the hardest.
Seminar
addresses benefits of the TPP
The
National Institute for Finance (NIF) in collaboration with the US Agency for
International Development (USAID) organized a seminar on June 19 in Hanoi to
discuss the impact of the proposed Trans-Pacific Partnership (TPP) on the
nation’s tax collections.
According
to Dr. Inkyo Cheong, Professor of Economics at Inha University in the
Republic of Korea (RoK), the methodology to assess the full impact of the TPP
on state revenues is an inherently complex task, but that they could
potentially increase 20-30%.
To
maximize the benefits, he suggested the government strive to improve
infrastructure and devise policies to support small businesses in developing
an appropriate strategy to benefit from the trade pact.
Dr
Nguyen Duc Thanh, director of the Vietnam Centre for Economic and Policy
Research, in turn underscored the importance of the business community and
small businesses, which are the engines driving the country’s economic
growth.
Truong
Ba Tuan, NIF deputy director, said international integration will boost
economic growth and exports but also affect domestic production. Therefore,
the government should perfect policies to support businesses.
Vietnam
milk prices stay stubbornly high, priciest in ASEAN
The
prices of milk for Vietnamese children remain the highest in the Southeast
Asian region despite the falling cost of raw milk, which gives a leading
local milk producer room to expand and boost supply.
Dinh
Tien Dung, Minister of Finance told a recent meeting in Hanoi that milk
prices in Vietnam are on average 14%-60% higher than the rates in other ASEAN
countries.
ASEAN
members include Indonesia, Malaysia, the Philippines, Singapore, Thailand,
Brunei, Myanmar, Cambodia, Laos, and Vietnam.
The
statement was given at the meeting when the minister mentioned petitions
showing the concerns of foreign investors and business associations over
Vietnam’s milk price management mechanism.
According
to Minister Dung, though Vietnam is controlling the price of milk for
children under six years old, the country has been committed to letting the
rate fluctuate according to the market mechanism and respecting the right of
producers to set prices.
In
Vietnam, the government decided to apply policy tools to stabilize prices by
setting a ceiling price for milk for children under six years old, starting
on June 1, 2014 and ending next year.
So far,
686 dairy products for children under six have been registered with the
Ministry of Finance in terms of the maximum price, with a maximal reduction
of 34% compared to the rates before the program was implemented, partially
due to the advertising costs for the average milk price reductions of 18%.
However,
Dung also stressed that although the local dairy market is open due to
integration, the actual retail prices of milk for children under six years
old are too high.
The
average price of formula milk products for children under six years old in
Vietnam is around US$16 per kilogram, considerably higher than the prices in
other areas of Southeast Asia.
Specifically,
the average price in Thailand is US$14 per kilogram, the Philippines US$12.9
per kilogram, Malaysia US$10.9 per kilogram, and Indonesia US$9.5 per
kilogram.
According
to figures from the ministry, on average, the price of one kilogram of this
milk in Vietnam is 14% higher than in Thailand, 24% higher than in the
Philippines, 46% higher than in Malaysia, and over 60% higher than in
Indonesia.
"As
the market is open, milk traders should explain this. There should be no such
gap given the fact that the average income of Vietnamese people is not high
compared to others in the region," Minister Dung said.
What the
management agency in Vietnam wants is the harmonization between the interests
of enterprises and those of consumers.
Vietnam
has over 10 million children under the age of six, and this group is very
sensitive, the minister said. Therefore, he asked foreign businesses and
associations to find appropriate solutions for ensuring the interests of
these consumers.
The
prices of milk and dairy ingredients around the world are now 40% lower than
the record rate set in February 2014, but those in the Vietnamese market have
remained unchanged since then.
In
April, the European Union removed milk production quotas which existed for
more than 30 years, leading to the worldwide drop in milk prices, a trend
which is expected to continue until the end of this year.
In 1984,
quotas were applied to limit the over-abundant supply in Europe, and milk
farms that produced over their quotas were fined.
Meanwhile,
the Food and Agriculture Organization of the United Nations has predicted
that prices of some raw materials such as skim milk, milk powder, full cream
milk powder, and whey powder will decrease 5.8% on average in 2015.
However,
in Vietnam, milk prices do not operate according to the formula that the
retail will be calculated based on the cost of production, distribution and
other expenses.
The milk
prices are set according to groups, as milk traders measure consumer
awareness of certain brands to determine their selling price.
The
general trend is that the pricier the milk brand, the easier it is to market
and sell it, The Gioi Tiep Thi (Marketing World) reported.
As the
local milk market still has more room to grow, Vietnam Dairy Products JSC
(Vinamilk) pushed on to increase supply by signing a deal on June 15for
cooperation with dairy farmers for breeding and raising dairy cows in the
Central Highlands province of Lam Dong from now through 2020.
The deal
will help Vinamilk, a leading firm, set up an area where the company will
obtain fresh milk and build large farms and a new milk-processing factory to
develop more products.
Lam Dong
authorities have promised to create the best conditions for Vinamilk to build
two to three milk cow husbandry farms with as many as 10,000 animals.
The
company will set up a model cow farm for local farmers to learn from, as well
as build a breeding center which will provide imported purebred Holstein
Friesian cows for local farmers and households to increase productivity and
quality, according to the Vietnam News Agency.
Vinamilk
earned VND1.56 trillion (US$716.7 million) in after-tax profit in the first
quarter of 2015, up 12% compared to the same period last year
At the
end of quarter 1/2015, Vinamilk had total assets of VND27 trillion (US$1.24
billion) with the balance of cash and cash equivalents being VND1.28 trillion
(US$59 million).
VN
textiles, garments provide a fourth of S Korean market
Viet Nam
is the second largest textile and garment exporter to South Korea, making up
one-fourth of South Korea's garment market, after China.
South
Korea imported US$627.4 million in textiles and garments from Viet Nam in the
first four months of this year, according to the Viet Nam Textile and Apparel
Association (Vitas).
The
turnover marks an increase of 8.25 per cent over the same period last year.
The
growth is part of a larger trend. After the ASEAN – Korea Free Trade
Agreement (AKFTA), Viet Nam's textile and garment industry saw significant growth.
In 2011,
the sector's export turnover to South Korea was $900 million. A year later it
increased to $1.1 billion and in 2013 it reached $1.6 billion. Last year's
total of $2.4 billion was a staggering 27 per cent increase over that of
2013.
The growth
should only continue with the recently signed AKFTA. According to its
open-access commitment, Vietnamese textile and garment products that satisfy
certificate of origin norms will enjoy zero tariffs once the agreement takes
effect from January 1, 2016. Currently, Vietnamese firms pay a tax of 8 to 13
per cent.
The FTA
would be a considerable opportunity for both countries' enterprises, said
Vitas. South Korea is Viet Nam's fourth largest importer of textiles and
garments, accounting for more than 10 per cent of the market's export
turnover, according to the Ministry of Industry and Trade. It is forecast
that textile and garment turnover in the South Korean market could reach
$16.3 billion for 2015, increasing 11.6 per cent year-on-year.
South
Korea currently provides nearly 20 per cent of Viet Nam's textiles and with
the large volume of ancillary materials it also exports.
Arbitration
could solve disputes fast
Businesses
and banks in Viet Nam still resolve disputes through the courts, even though
arbitration and mediation remain the most popular methods throughout the
world in dealing with banking disputes.
This
preference for using courts was discussed by General secretary of the Viet
Nam Banking Association Tran Thi Hanh at a workshop on the Use of Arbitration
and Mediation (A&M) in the resolution of banking and financial disputes
in Da Nang yesterday.
"Viet
Nam's economics has been deeply integrated into the world and the regional
economic community, so banking and financial disputes have rapidly become
more complicated. These needs a quick, easy procedure in solving disputes for
businesses and banks," Hanh said.
"Resolving
banking disputes by arbitration and mediation could help businesses and banks
deal with arguments and risks in a smooth way," she said, adding that
the solution would be an effective way to reduce bad debt in the banking
system.
Hanh
said the use of arbitration and mediation would be a method to reduce bad
debt to under 3 per cent in Viet Nam.
The
general secretary noted that legal proceedings on banking that go before
judges often took a long time to resolve due to complicated legal issues.
Lawyer
Vu Anh Duong, general secretary of Viet Nam International Arbitration Centre
(VIAC), said arbitration and mediation had additional advantages over courts
in resolving financial or banking disputes, including providing flexibility,
sincerity, honesty, fairness and transparency.
"In
banking and financial disputes, the state encourages the use of arbitration,
as it has a preferred legal framework and operates in accordance with
international rules. Procedures at arbitrations are not complicated, as in
civil court, and it's very comfortable during arbitrations for communities
and businesses," Duong said. "However, the use of arbitration and
mediation has yet to be used widely in Viet Nam, as people and businesses
still are unsure of its legislation and execution," he said.
Pham Chi
Dung, deputy head of legal affairs under Bank for Investment and development
of Viet Nam (BIDV), said arbitration resolutions in banking and financial
disputes offer a less complicated approach for businesses and individuals.
He said
arbitration could resolve a dispute within a year, using quick and easy
procedures, while civil tribunals often take two years.
Vu Ngoc Lan,
deputy head of the Legal Affairs department under the State Bank of Viet Nam
(SBV), said the use of arbitration is encouraged by banks in dealing with bad
debt.
"SBV
creates favourable conditions for banks and credit agencies in the use of
arbitration because of its effectiveness and the saving of time. The judgment
of arbitration has its prompt validity, while civil courts sometimes have
problems with the civil execution law," Lan said.
According
to VIAC, arbitration is conducted in 146 countries, while 124 legal
proceedings in Viet Nam were resolved by VIAC between 1993 and 2014. However,
banking and financial disputes only account for some 1 per cent of the cases
resolved, while 64 per cent were commodity trade disputes.
Viet Nam
has 288 arbitrators, along with seven centres in HCM City, Ha Noi and Can
Tho.
Last
month, Viet Nam National Oil and Gas Group (PetroVietnam) announced it had
won a major tax incentive dispute regarding a production-sharing contract for
a Vietnamese offshore oil concession, and the dispute was resolved through
international arbitration.
Transport
Ministry to sell SOE share lots
Deputy
Prime Minister Vu Van Ninh on Tuesday approved a Ministry of Transport
request to sell Government stakes in seven State-owned enterprises (SOEs) in
the form of share lots or share packages.
Of the
companies, the Deputy PM asked Vietnam Railways Corporation to sell stakes in
four companies - the Dong Mo Quarry Company, Railway Equipment Import Export
Joint Stock Company (Virasimex), Railway Material Joint Stock Company and Hai
Van Nam Hotel.
He also
asked the Vietnam Motor Industry Corporation Joint Stock Company (Vinamotor)
to sell stakes in the Transportation Investment Joint Stock Company.
In
addition, the Deputy PM also gave approval for the transport ministry to sell
all Government stakes in Civil Engineering Construction Corporation No 5
Joint Stock Company (Cienco 5) and Cienco 6.
These
companies will be privatised after the Prime Minister issues a decision that
regulates the sale of SOE stakes in share lots.
In fact,
the Government has allowed the State Capital Investment Company (SCIC) to
experiment with the sales of Government stakes in SOEs in share lots in
recent years.
Government
share lots in SOEs are sold to strategic investors who are able to make big
investments and commit long-term future to these firms.
SCIC has
to auction the share lots in SOEs on the stock exchange if the value of a
share lot exceeds VND10 billion (US$463,000) from June to the end of this
year.
Firms
for sale are required to be unlisted and to have made profits during the last
two years.
The SCIC
will auction the first share lots on the Ha Noi Stock Exchange next week.
The Ha
Noi Stock Exchange said that the auctions were expected to be good
experiences for other SOEs in the future.
HOSE
holds talks with investors
The HCM
City Stock Exchange (HOSE) yesterday started its weekly Friday afternoon talk
shows with investors.
The talk
show is expected to connect listed companies to their investors over the next
three months, providing new information and business strategies.
On the
talk show, listed companies, securities companies and investors will speak
about business results, financial reports and other topics related to the
securities market and listed companies.
In the
next three months, 13 companies will talk to investors, including HCM
Securities Joint Stock Company (HCM), Vietcombank (VCB), PetroVietnam Gas
Corporation (GAS), Vietnam Dairy Products Joint Stock Corporation (VNM) and
Vingroup Joint Stock Company (VIC).
The
Prime Minister yesterday issued Decision 21/2015/QD-TTg, in which HOSE will
raise its chartered capital by 100 per cent to VND2 trillion (US$92.5
million) on August 8.
Under
the Decision, HOSE can raise its chartered capital from the State budget,
after-tax profits and other sources.
Phu
My optimistic of first-half results
PetroVietnam
Fertiliser and Chemicals Corporation (PVFCCo), better known as Phu My
Fertiliser (DPM), estimated its first-half revenues will reach VND4.945 trillion
(US$226.8 million) and pull in profits of VND810 billion ($37.2 million). The
prediction would mean 3 per cent more in revenues and 13 per cent more in
profits than the target it set at the start of the year.
Other
fertiliser companies including Phu My urea, Phu My NPK, Phu My Kali
(potassium), Phu My SA and Phu My DAP also did well, surpassing their
targets.
According
to PVFCCo General Director Cao Hoi Duong, the encouraging results could be
attributed to lower oil prices in the global market, which helped reduce gas
input costs at the Phu My Fertiliser Plant.
The
rising quality and reputation of Phu My fertiliser products in the market and
a strong distribution network both contributed to positive sales in the first
six months, Duong said.
Phu My fertiliser
products currently hold 48 per cent of the domestic market share. According
to a 2014 survey conducted by the market research firm Nielsen Vietnam, the
Phu My fertiliser brand continued to best other major fertiliser brands in
Viet Nam.
On June
7, PVFCCo signed an engineering, procurement, construction and commissioning
(EPC) contract with a contractor consortium to expand Phu My's NH3 Unit and
build the Phu My NPK Complex.
The
complex project, with a total investment capital of VND5 trillion ($229.4
million), will use up to date technology to produce local high-quality NPK
fertiliser to take over the import dominated NPK market. The complex is
slated to operate from the second quarter of next year.
According
to Duong, growing competition, rising input costs due to non-deductible VAT
for fertiliser products, as well as volatile foreign exchange rates and
globally declining prices are the main challenge to the company's second half
of the year.
PVFCCo
projects its total sales will reach over VND4.3 trillion ($197.2 million) and
bring in a profit of VND720 billion ($33 million) in the last six months of
the year, slightly lower than the first half.
DPM
shares were traded around VND29,000 ($1.33) on the HCM Stock Exchange in
recent sessions.
In
March, its subsidiary South-East PetroVietnam Fertiliser & Chemicals Co
listed 12.5 million shares on the Ha Noi Stock Exchange under the code of
PSE. The company said other subsidiaries including PVFCCo South-West, PVFCCo
Central, PVFCCo North and PVFCCo Packaging would debut shares in the next two
quarters of the year.
VN
improves business environment, surpassing ASEAN level 6 average
Viet Nam
has improved some criteria in business environment, exceeding the average
level in ASEAN 6, namely Brunei, Indonesia, Malaysia, the Philippines,
Singapore, and Thailand.
The
latest study conducted by Central Institute for Economic Management (CIEM) on
the implementation of Resolution 19 on key tasks and measures to improve the
business environment and national competitiveness capacity of Viet Nam during
the 2015-16 phase.
Accordingly,
measures will be taken to improve the country's business environment,
accelerate administrative procedures, ensure the transparency and
responsibility of State administrative agencies, as well as reform
regulations on business conditions so that commodities, exports and imports
satisfy international rules.
The
study that was announced on Thursday highlighted that Viet Nam surpassed the
target duration for a business registration from six days to three days.
In terms
of protecting investors, with the Law on Enterprises 2014, the index improved
to the 105th rank and reached the average level of 52.1 in ASEAN 6.
The
country reached the 44th place in the access to electricity index. However,
despite jumping 12 places, the index did not meet the average level of 37 in
ASEAN 6.
Viet
Nam's indices of tax payment and social insurance also improved 27 places to
reach the 121st position. However, the level was far from the ASEAN 6
average.
The
institute noted that some tasks and solutions such as improving the time span
of bankruptcy procedures and the redressal of contract disputes were not
taken up in 2014
Nguyen
Dinh Cung, director of CIEM, said the rankings were based on the World Bank's
calculations under the pretense that other countries had no improvement.
But Cung
said that Viet Nam would still have improved its ranking even if changes in
other countries were taken in to consideration.
Steel
firms deplore import deposits
A new
regulation, which took effect from the beginning of this week, requiring a
deposit for scrap metal import is burdening steel companies, the steel
industry's association has said.
Under
Decree No 38/2015/ND-CP on the management of wastes and scraps, importers
must pay a deposit for importing scrap metal. The deposit ranges between 10
per cent and 20 per cent of the import value, depending on the import volume.
According
to Chu Duc Khai, deputy president of the Viet Nam Steel Association, the
regulation is aimed at preventing firms from importing low-quality scraps.
However,
deposit rates are too high for steel producers who are already facing many
difficulties, including high inventories and low competitiveness. Khai added
that many steel companies were now operating at just 50 per cent of their
capacity and are seeking ways to cut costs.
Kieu Chi
Cong, director of Hoa Phat Steel Company, said many firms were on the verge
of bankruptcy as the costs of producing steel billets from scrap metals are
much higher than imported billets.
Paying
deposits would push up production costs, threatening to lower the
competitiveness of steel firms, he added.
According
to the association, a bank guarantee is more appropriate for importing scrap
metal rather than a deposit as security.
Trade
liberalisation poses problems for local firms
Vietnamese
small- and medium-sized enterprises (SMEs) face increasingly tough challenges
because of their weak competitiveness and the government's ineffective
support policies, according to economist Nguyen Tri Hieu.
SMEs in
the near future would encounter fierce competition from foreign-invested
businesses, Hieu was quoted as saying in the Nguoi Lao Dong newspaper.
Viet
Nam's policies in the past gave many preferential treatments to FDI enterprises,
while the Vietnamese private sector received fewer incentives.
"Although
FDI capital is important for socio-economic development, domestic enterprises
still need support from the State," Hieu said.
FDI
enterprises are given priority in tax, land and administrative procedures.
"Viet
Nam needs to create more favourable policies and simplify administrative
procedures for local enterprises to create a fair environment," Hieu
said.
Mai Lan
Joint-Stock Company's KissMe tissue and toilet paper brand, for example, has
been making the product for 30 years.
Pham Nhu
Bach, chairman and director of Mai Lan Co, said the KissMe brand was no
longer sold at supermarkets because of severe competition from FDI
enterprises.
The
paper brand is now distributed in smaller shops and through sales agents.
"For
three to four years, we have just produced a moderate amount in order to pay
our workers, because the outlet for the brand has become too narrow,"
Bach said.
Under
Viet Nam's World Trade Organisation (WTO) and Free Trade Agreement (FTA)
commitments, the paper sector will be protected for a few years. But the tax
on the products would decrease to zero per cent after that time.
Bach
said domestic enterprises would then be unable to compete with foreign
rivals.
Along
with big FDI enterprises, SMEs like Mai Lan Co are now confronted with China
and domestic enterprises that do not compete fairly.
Vu Tien
Loc, chairman of the Viet Nam Chamber of Commerce and Industry, said nearly
70 per cent of Vietnamese private enterprises did not make profits, although
the sector had contributed nearly 50 per cent of GDP.
The
private sector must be a key driver for the country's economic growth, but
the country lacks a sufficient number of medium-sized enterprises that can
join the global value chain or directly engage with the international market,
according to Loc.
Domestic
businesses that want to increase competitiveness must have a large amount of
capital to renovate their technologies, Vietnamese economists have said.
Truong
Chi Thien, director of Vinh Thanh Dat Co, said his company wanted to expand
instant-egg exports but interest rates on bank loans were too high.
Though
the poultry egg sector has great potential, he said interest rates of 10 per
cent per year were fixed for the first year of a loan and then fluctuated
according to the market.
"When
we set up a business plan, we have to calculate input costs, and we do not
dare take a risk with the interest rate," he said.
Other
countries such as Thailand, Indonesia and Malaysia offer interest rates of
only 1 per cent per year for a medium- and long-term loans for local
businesses.
Economists
have also said that new FTAs would create highly skilled workers who would
move to FDI firms for higher salaries and better working environment.
Sales
of consumer packaged goods rebound in Vietnam
After
seeing a sharp downturn in 2014, sales of fast moving consumer goods (FMCG)
such as food and personal care products have recovered, growing 3.4% in
volume and 4% in value in the first quarter.
Beverage
is the key category driving the growth recovery, but other categories such as
food and home care also have shown signs of recovery in the quarter, said a
new report released by Nielsen.
The
report also found that more than 80% of FMCG sales in Vietnam still come from
the traditional trade channel which includes around 1.3 million FMCG stores
across the country.
The
sheer number of traditional stores makes Vietnam one of the most complex
markets for FMCG manufacturers to build distribution and manage logistics,
said the report.
Local
instant noodle producer Hao Hao, Vinamilk and Coca-Cola are the top three
most supported brands by retailers, Nielsen said.
Source : VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Hai, 22 tháng 6, 2015
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