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BUSINESS IN BRIEF 19/7
The
The
Forum was organized by the Ministry of Planning and Investment (MPI) and the
AKC and was attended by Deputy Minister of Planning and Investment Nguyen The
Phuong, South Korean Ambassador to
Mr.
Kim Young Sun said that
Trade
turnover between
The
two countries have been cooperating mostly in garments and textiles, shoes,
and light industries, and continue to enhance cooperation in high value-added
support industries, electronics, and information technology, aiming for trade
turnover of $70 billion by 2020.
According
to a representative from the Foreign Investment Agency, Vietnam’s electronics
industry has attracted 600 FDI projects with $20 billion in registered
capital, producing cell phones, electronic components, internet equipment,
electronic spare parts, and others, with export value of $35 billion, for
approximately 23 per cent of the total.
MPI
also made a commitment at the Forum to maximize support to South Korean
enterprises investing in
The
Hanoi Stock Exchange has announced that the initial public offering (IPO) of
Thang Long GTC Ltd. will be held in mid-August.
Its
charter capital is estimated at VND552.6 billion ($25.34 million), equal to
55 million shares. The company will sell 33,882,300 shares (61.3 per cent) in
the form of a public auction on the morning of August 13 at a starting price
of VND10,600 ($0.49) per share. Further information will be released shortly.
Thang
Long GTC is a subsidiary of the Hanoitourist Corporation, which primarily
operates in the trading of goods, imports and exports, tourism, travel
transportation, hotels, real estate leasing, and package printing.
Its
most valuable assets lie in joint venture investments such as
InterContinental Westlake (25 per cent), Hilton Hanoi Opera Hotel (30 per
cent) and Big C Thang Long (35 per cent). It also holds a 35 per cent share
in Thang Long Property, 29 per cent in Pacific Thang Long, 30 per cent in the
Pan Horizon Hotel, 9 per cent in
At the
end of March another subsidiary - Hanoi Toserco - conducted a successful IPO,
with the number of shares registered for purchase being four times higher
than those available.
PPP
for Ninh Binh - Thanh Hoa expressway
The
Ninh Binh - Thanh Hoa Expressway project is to receive investment under the
public-private partnership (PPP) model, Deputy Minister of Transport Nguyen
Hong Truong told a conference with related agencies on July 15. The date of
construction, however, is still to be determined.
The
expressway is a key project carrying huge volumes of traffic, according to
Vice Director of Transport Engineering Design Inc., Mr. Nguyen Minh Thang,
which is consulting on construction and design.
Vice
Chairman of the Thanh Hoa Provincial People’s Committee, Mr. Le Anh Tuan,
said the province expects the expressway project to be conducted in the
future. The expansion to National Highway No.1 has failed to ease traffic
congestion so the new expressway is very much needed.
To ensure
investment efficiency, construction will be divided into two parts, from Mai
Son commune in Ninh Binh province to National Highway No. 45 and from
National Highway No. 45 to Nghi Son commune in Thanh Hoa province. Mr. Tuan
also suggested that investment be under the build-operate-transfer mode and
be supported by the government.
The
project is part of government plans in the 2020-2030 period to develop
expressways from the north to the south of the country. The Ministry of
Transport has conducted a feasibility study but construction is yet to be
approved due to a lack of capital, but it is now calling for investment.
The
expressway is designed to have six lanes and a maximum speed of 120 km/h. In
the first stage, however, the expressway will have four lanes and a maximum
speed of 80 km/h with investment of VND17.74 trillion ($813.37 million).
Suitable
approach
The
Insurance Supervisory Authority (ISA) at the Ministry of Finance (MoF) and
insurance companies have recently put a great deal of effort into identifying
the way the sector can develop in a sustainable and efficient manner. Many
conferences have been held, where both life and non-life insurers were able
to discuss policies that would help the sector reach its undoubted potential.
At
conferences for non-life insurance companies, representatives expressed their
appreciation of the efforts made by related government agencies last year in
issuing Circular No. 194/2014/TT-BTC, creating a legal framework to develop
the insurance market by resolving difficulties, providing support, promoting
effective business growth, enhancing corporate governance, and simplifying
administrative procedures.
For
the non-life insurance sector the introduction of Circular No. 194 will truly
have a positive effect in helping it minimize bad debts from unpaid premiums,
which have become common over recent years and affected liquidity and
operational efficiency.
Moreover,
the circular included specific support to agents and details on bonuses and
rewards they may receive, which must not be more than 50 per cent of whatever
commission they receive on an insurance policy.
In
order to secure the rights of customers and the reputation of the insurance
company, the circular also indicates clearly how foreign insurance companies
can issue certificates of authority to local agencies, which requires the
name and issuance number of local agencies.
The
circular also states that leaders of insurance departments and companies
having total equity equal to legal capital are allowed to do business in the
country. This article will tighten management due to subordinates having to
complete all requirements regarding capital, management, and facilities, etc.
From
June 1, 2016, non-life insurance agencies must separate their charter capital
from premiums paid by customers.
Circular
No. 194 also has requirements on the use of insurance experts in determining
provisions and the ability to cope with losses, which aim to create
transparency and clarify the profit and losses of each business.
Mr.
Phung Ngoc Khanh, Director of ISA said the insurance sector must continue to
record growth in a sustainable manner.
In
this regard, the ISA will firstly focus on research to complete the legal
framework and policies that create favorable conditions for non-life
insurance companies.
Secondly,
the ISA will try to simplify administrative procedures, strengthening risk
management at insurance companies to create stable conditions for their
operations and minimizing any unfair competition. It will also continue to
issue regulations to encourage enterprises to develop new products and
standardize certain insurance products to support welfare and social security
efforts.
Thirdly,
the ISA will amend and supplement procedures to strengthen corporate
governance, to ensure transparency and the financial security of non-life
insurance companies.
Mr.
Khanh also said that, based on these three main issues, there have been seven
key measures taken to amend and supplement Decree No. 45/2007/ND-CP and
Decree No. 46/2007/ND-CP and nine key measures taken to amend and supplement
Circular No. 124/2012/TT-BTC and Circular No. 125/2012/TT-BTC.
MoF
has also been working with insurers on amendments and supplements to Circular
No. 124/2012/TT-BTC and Circular No. 125/2012/TT-BTC, with conferences held
and public surveys posted on its website to collect suggestions.
Vietcombank
provides credit to PCC1
Vietcombank
has signed a contract with the Power Construction JSC No. 1 (PCC1) to provide
services and a credit package worth VND1.89 trillion ($86.65 million).
A
long-term VND890 billion ($40.8 million) credit will be used for the Bao Lam
3 Hydroelectricity Project and a short-term VND1 trillion ($45.85 million)
credit for working capital.
Vietcombank
will also provide financial services to PCC1 such as underwriting, cash
management, financial advisory, bond issuance, and foreign currency provision
for its importing and exporting contracts.
PCC1
targets recording revenue of $1 billion by 2025 and to become one of five
largest companies in
Mr.
Tran Bao Toan has been appointed as Chairman of the Foreign Trade Development
& Investment Corporation of
Mr.
Toan took up the new position for the 2014-2019 term on July 13.
A
member of Fideco’s Board of Directors, Mr. Toan earned his PhD at St. Gallen
University in
Established
in 1989 as the Ho Chi Minh City Fisheries Development Corporation, Fideco
gained approval to change to its current name in 1993. It specializes in
investment in real estate projects and services, finance and financial
services, and the development of educational projects, among others.
In the
real estate sector it has developed large projects such as
According
to the report presented to its 2015 annual shareholders meeting, the
corporation recorded total revenue of VND53.9 billion ($2.47 million) and
VND15.9 billion ($732,385) in profit after tax in 2014. It targets reaching
VND66.4 billion ($3 million) in total revenue this year and VND30.6 billion
($1.4 million) in profit after tax.
Social
housing falling short of needs
According
to a study conducted by State Audit of Vietnam, even if social housing
targets for 2015 were reached there would be a shortfall of 26,732
apartments, or 36.7 per cent of total demand.
Construction
of new social housing and adjustments made to existing projects to turn them
into social housing have failed to narrow the gap between supply and demand.
Working
with management and operating organizations of nine projects in Hanoi that
have been put into use since April 30, 2014, State Audit of Vietnam found
that four projects had violated the housing use purpose. Specifically, 319
apartments (6.5 per cent) were made available to buyers outside of the
targeted segment, 441 apartments (9 per cent) remained vacant, and five
apartments (account for 0.1 per cent) were used for other purposes besides
housing.
The
nine projects audited receive government preferences totaling VND641 million
($29.4 million), cutting sale prices by 10-36 per cent. But the study by
State Audit of Vietnam showed that prices are still beyond the reach of most
households.
VBSP
On
July 14 the Vice Chairman of the Hanoi People’s Committee Nguyen Van Suu held
a meeting with the
In the
first half the branch provided significant funds to meet the needs of people
in poor and special conditions. As at June 30 mobilized capital from the
branch reached VND4.9 trillion ($228.7 million), up by VND181 billion ($8.4
million), or 3.8 per cent, compared to the same period last year.
The
total balance due of 12 credit programs was VND4.9 trillion ($228.1 million)
with over 300,000 borrowers, an increase of VND366 billion ($17 million),
excluding the student loan program, and meeting 99.7 per cent of its target.
In the first six months, through the 12 credit programs, the branch provided
loans to more than 60,000 people in poor and special conditions.
In the
first six months it also directed its transaction offices to reduce their
overdue loans and established three working groups to supervise and manage
these efforts. Total overdue loans as at June 30 were VND8.7 trillion ($406.8
million), accounting for 0.18 per cent of total loans.
In the
remaining six months, VBSP Hanoi aims to deploy Intellect software
applications to provide better services and professionalism at branches and
transaction offices in districts and towns.
Speaking
at the meeting, Mr. Suu also suggested VBSP Hanoi strengthen its
communications via the media to help borrowers understand its policies and
easily access loans. To help people escape from poverty and for students have
the opportunity to learn, he asked the branch to check on remote areas to
understand their circumstances and help poor people and students to access
loans.
Hoa
Lam begins work on new hospital
Hoa
Lam Investment Development Corporation on June 14 began construction on a new
international hospital at the Hi-Tech Healthcare Park in HCMC’s outlying
district of Binh Tan.
The
VND1.5 trillion (some US$68.8 million) Hoa Lam hospital will have 10 levels
with total floor space of more than 35,000 square meters and cover over 1.5
hectares.
The
351-bed hospital is scheduled for completion late next year and will focus on
cardiovascular, trauma and orthopedics, neurology and endocrinology.
With
the cooperation of People’s Hospital 115 and other hospitals, the forthcoming
Hoa Lam hospital will be able to help ease patient overloads and waits at
public hospitals.
To
ensure international-standard services for the new hospital, Hoa Lam is in
coordination with foreign design and consulting companies, including Kume
Sekkei Co. Ltd. and Global Health Service Network of the
Hoa
Lam international hospital is the second at the Hi-Tech Healthcare Park of
Hoa Lam-Shangri-La Healthcare Co. City International Hospital at the park was
put into service last year.
The
Hi-Tech Healthcare Park worth over US$1 billion is being developed by Hoa
Lam-Shangri-La Healthcare Co., a joint venture between
As
scheduled, the healthcare park will comprise six hospitals with a total of
1,750 beds. Besides, it will feature four healthcare, support, educational
and community facilities such as laboratory, medical suites, residences,
serviced apartments, medical exhibition center, shopping mall, international
school, residents’ clubhouse and helipad.
After
completion, the project will provide jobs for around 10,000 people.
Vinh
Tan 2 power plant pollutes air again
The
government of
The
pollution at this power station made headlines months ago as local residents
around the facility protested against the dumping of coal ash from the plant
that is heavily polluting nearby households.
In a
document sent to relevant agencies on July 14, Binh Thuan Province’s chairman
Le Tien Phuong said the provincial authorities had reported to the Government
the environmental pollution caused again by Vinh Tan 2 in Tuy Phong District.
The
province also required Power Generation Corporation 3 (GENCO 3) to work with
Vinh Tan 2 on solutions to fully solve dust pollution caused by coal ash from
the plant in recent days, including a temporary halt to Generator No.2.
Phuong
told the provincial Department of Natural Resources and Environment to
cooperate with other departments and Tuy Phong authorities to inspect,
supervise and regularly assess pollution levels when Generator No.2 works to
have effective solutions to the problem in accordance with prevailing
regulations.
Vietnam
Electricity Group (EVN) picked
Air
pollution caused by coal ash from the plant has hit around 1,370 households
in nearby areas. Consequently, a large number of people in Vinh Tan Commune
gathered on the
Many
people living near the plant claimed they have developed respiratory diseases
since the plant came into operation, according to the authority of Tuy Phong
District.
Currently,
coal-fired power plants nationwide consume roughly 20 million tons of coal
per year and discharge a total of three million tons of ash, most of it
buried within their premises or transported to other places instead of being
recycled.
Software
glitches wrongly make firms tax debtors
Many
enterprises have been mistakenly categorized as tax debtors due to glitches
of the integrated tax management system (TMS) applied by tax agencies
nationwide.
Le
Xuan Duong, deputy director of the HCMC Tax Department, said at a review
meeting on July 14 that hundreds of mishaps have been found with the
electronic tax management system though it had already been piloted in some
provinces before being applied nationwide.
For
instance, enterprises already pay taxes but the system does not recognize
this, thus making them tax debtors.
According
to Duong, due to such errors, a considerable proportion of the current tax
arrears in HCMC is incorrect. The department has asked the General Department
of Taxation and the Ministry of Finance not to send notices of late tax
payments to enterprises.
As of
June 30, tax arrears recorded by the electronic tax management system had
amounted to VND22.94 trillion, up by VND3.43 trillion (17.5%) against late
last year, Duong said.
Of the
total, bad debt accounted for VND4.97 trillion, up 36.5%, and collectable
taxes made up VND16.97 trillion, up 10%.
The
HCMC Tax Department has released the list of 21 enterprises with huge tax
debt of nearly VND300 billion. The names of 40 more tax debtors will be
announced in the coming time.
At the
meeting, HCMC vice chairwoman Nguyen Thi Hong told the departments of tax,
finance and natural resources-environment to review housing projects whose
land use fees have not been paid.
FDI
mainly poured in manufacturing, processing
The
Foreign Direct Investment (FDI) are being poured mainly into processing,
manufacturing, real estate and retail sales in
Accordingly,
total newly-registered and additional capital reached US$1.19 billion in
June, bringing the total figure in the first half of the year to US$5.49
billion, as much as 80.2% of the same period last year.
Of the
figure, the newly-registered FDI attained US$3.83 billion while the
additional FDI achieved US$1.65 billion, equal to 79% and 83% of the same
period last year.
The
total FDI disbursement was estimated at US$6.3 billion, a year-on-year
increase of 9.6%.
According
to the statistics of the Foreign Investment Agency, under the Ministry of
Planning and Investment, the processing and manufacturing industry attracted
338 newly-registered FDI projects and had 190 ones added capital, worth
US$4.18 billion, accounting for 76.2%.
The
real estate sector ranked second with 18 FDI projects, valued at US$465.5
million, making up 8.5%.
The
retail sales occupied the third place with total newly-registered and
additional capital of US$276.5 million in 145 projects, accounting for 5%.
Vinh
Long aims for 330 million USD export revenues
Exporters
in the Mekong Delta
Director
of the provincial Department of Industry and Trade Nguyen Minh Tho said, to
reach the target, the province is carrying out a project to diversify staples
with increased added value and expand markets for potential products,
including sport shoes and sportswear, pharmaceuticals and medical equipment.
Local
authorities have helped farmers to zone off cultivation land and build
trademarks for agricultural produce and fruits, such as Tam Binh orange, Nam
Roi and Vung Liem red-flesh grapefruits.
Vinh
Long will also continue to improve market forecast activities and cooperate
with neighbouring
Promoting
the export of handicrafts, seafood and fruits to Europe, the
Data
released by the provincial Department of Industry and Trade show that, local
exporters brought home 130 million USD in the first half of this year,
equivalent to 40 percent of the yearly target but down 11.5 percent against
the same period last year, mainly due to waning shipments of rice and
seafood.
PetroVietnam
targets 18.2 billion USD in revenue in last 6 months
The
Vietnam Oil and Gas Group (PetroVietnam) targets nearly 383 trillion VND
(18.2 billion USD) in revenue during the last six months of 2015, paying 87
trillion VND (4.1 billion USD) to the State coffer.
According
to the first half year report, PetroVietnam’s revenue totalled 296.1 trillion
VND (14.1 billion USD), paying 63.6 trillion VND (three billion USD) in tax
and accomplishing 41 percent of its yearly target.
The
group exploited 14.71 million tonnes of gas and oil in the first half of the
year, 8.5 percent higher than its target for the period and representing an
annual increase of 6.1 percent.
Of the
figure, crude oil output amounted to 9.28 million tonnes while that of gas
hit 5.43 billion cubic metres, 10.1 percent and 5.8 percent above the half
year target, respectively.
Other
manufacturing and supply fields including electricity, fertilisers, fibre and
petrol all saw high growth of between 36 and 41 percent compared to the same
period last year.
During
the period, the group put into operation the Vung Ang 1 thermoelectricity
plant and commenced construction on several projects such as the Song Hau 1
thermoelectricity plant, an oil and gas service port and a national oil and
gas storage facility in
The
group intends to expand its explorations of new oil fields to boost crude oil
reserves to 35-40 million tonnes, optimise ongoing projects and continue
structural reforms approved by the Prime Minister.
PetroVietnam
will also conduct portfolio classifications and give priority to urgent
initiatives or important projects in 2015.
Techcombank
honoured with “Best Bank in
Vietnam
Technological and Commercial Joint Stock Bank (Techcombank) received the Best
Bank in
Techcombank,
who is currently serving 3.7 million individual customers in
In
addition, the bank has launched a raft of customised and excellent services
such as money transfers through social networks (Facebook, Google+ or SMS)
and cash withdrawals at ATMs without physical cards. The bank has been
appreciated for providing e-banking solutions for enterprises to help
optimise their benefits.
Earlier,
the bank received a number of domestic and international valuable awards,
recognising the bank’s strong commitments to long-term investment and
sustainable development, paving way to satisfy the increasing demands of
customers.
The
Global Banking and Finance Review Awards were created to honour exceptional
financial institutions. The “Best Bank in
FTAs bear both
opportunities and challenges for footwear sector
The
signed and pending free trade agreements (FTAs) will not only provide
benefits for the Vietnamese footwear and bag sector, but also a number of
challenges due to export goods now requiring clear information on product
origin, a conference in Ho Chi Minh City heard on July 15.
In the
past five years, the Vietnamese Government has actively negotiated FTAs with
numerous countries, with most of them impacting significantly on the
development of the footwear sector, including the Trans-Pacific Partnership
agreement and FTAs with the European Union and the Eurasian Economic Union.
According
to the Deputy Head of the Ministry of Industry and Trade’s Import-Export
Department Tran Thanh Hai, the footwear sector will be a priority during the
negotiation process since it is one of
In
2014, these two markets accounted for 67 percent of
Once
the agreements are signed, export tax could be eliminated entirely, opening
up more opportunities for the sector to increase its exports and expand its
market shares, Hai said.
Additionally,
the Association of Southeast Asian Nations (ASEAN), which includes
Deputy
Minister of Industry and Trade Ho Thi Kim Thoa suggested businesses
anticipate and grasp the opportunities provided by the signed and pending
FTAs to expand their export markets. Furthermore, Vietnamese footwear
businesses should observe the domestic market, since supply only meets 50
percent of demand at present.
According
to the ministry, the sector’s export turnover is estimated at 7.35 billion
USD in the first half of 2015, up by 18 percent compared to the same period
last year.
The
ministry approved a master plan on the development of the sector until 2020
with a vision to 2030, with a focus on developing the support industry.
Accordingly, several footwear and material processing industrial zones and
complexes will be built with the purpose of providing materials and
increasing the sector’s competitiveness.
HCM
City, Japanese locality discuss cooperation prospects
Chairman
of the Ho Chi Minh City People’s Committee Le Hoang Quan met with the
visiting governor of
Quan
briefed his guest on
He
invited
For
his part, Governor Furuta said
In
addition, both sides agreed to speed up the signing of cooperation agreements
in various fields.
Nghi
Son refinery complex to double its capacity
Nghi
Son Refinery and Petrochemical Limited Liability Company (NSRP) is
considering doubling the capacity of its refinery complex, scheduled to start
operations in July 2017, to 400,000 barrels per day (bpd) to meet growing
domestic demand, said NSRP General Director Kazutoshi Shimmura.
The
project was initially designed to produce 200,000 bpd, while local demand is
estimated to hit half a million bpd in 2017.
The
NSRP is a joint venture between the Vietnam National Oil and Gas Group
(PetroVietnam) which hold a 25.1 percent stake, Kuwait Petroleum
International (35.1 percent) and other two Japan-based companies, Idemitsu
Kosan and Mitsui Chemicals (35.1 percent and 4.7 percent, respectively).
The
joint venture is also looking to enter
The
PetroVietnam owns up to 20 percent of the country’s petrol stations,
presenting huge potential for the venture.
Vietnamese
lychee makes first launch in UAE
Vietnamese
lychee has made its way to the United Arab Emirates (UAE) this summer,
available for sale in Dubai-based supermarket chain Choithrams, according to
Cong Thuong (Industry-Trade) newspaper.
The
newspaper, quoting the
The
lychee, grown under VietGAP and GlobalGAP standards, was shipped by air to
V.L.
Pamnani of Choithrams and other directors have also met with the Vietnamese
Embassy and Trade Office in the UAE to discuss plans for lychee imports next
season.
Several
other fresh Vietnamese fruits were introduced to UAE partners in the meeting,
including dragon fruits, rambutans, watermelons, bananas and seedless limes.
203
mln tonnes of cargo pass through sea ports in 6 months
Over
203 million tonnes of goods passed through sea ports nationwide in the first
half of this year, reaching 57.8 percent of the set plan for the year and
representing a year-on-year increase of 10.43 percent.
Sea
ports in the northern city of
Substantial
increases in cargo throughput at
M&A
forum slated for next month in
The
2015 merger and acquisition (M&A) forum themed “Count down to the next
market boom” will take place in the southern metropolis of
The
forum will encompass a conference that examines ongoing capital flows,
M&A trends and opportunities in potential fields, an M&A deal award,
an expo-private meeting and M&A courses for businesses.
On the
occasion, the annual M&A Outlook publication will be released.
Speaking
to a press conference in
Legal
frameworks for takeover and buyout deals are being improved, given a raft of
amended laws has been brought to life, including the laws on investment,
housing and real estate investment, among others, he added.
Dang
Xuan Minh, Deputy Head of the organising board, said M&A in
Each
deal averages 11 million USD, higher than the 5-8 million USD level recorded
three years ago.
SeABank
wins dual international awards
The
Southeast Asia Joint Stock Commercial Bank (SeABank) has been deemed the
“Best Corporate Services Bank” in
SeABank
was selected based on assessments of its financial indicators, business
scale, network and banking services alongside its contributions to the local
financial market.
Le Thu
Thuy, Standing Deputy Chairman of the SeABank Board of Directors, was also
honoured with an IFM title for the “Best Young Female Banking Leader”.
The
IFM awards shine a spotlight on individuals and organisations who make a
significant difference and add value to raise the bar in the financial
industry locally and globally.
Plastic
exports to
Plastic
exports to the European market have felt the effects of the continuous
decline of the euro over the past six months.
"Our
profit from the European market in the first half of this year fell by 10
percent," said director of a plastic company in
He
said that his company's European partners asked them to reduce their price
but he couldn't due to the high cost of raw materials. Their partners then
reduced orders from 5,000 tonnes of plastics to 3,000 tonnes, he added.
A representative
of Nam Thai Son Import - Export Joint Stock Company, said that the downtrend
of the euro affected his company because the company signed contracts with
partners when one euro exchanged for 1.3 USD. At present, the exchange is
around 1.1 USD, causing big losses for importers who are now rescheduling
orders or changing to other commodities, the representative added.
The
online newspaper Vnexpress quotes Tran Viet Anh, Deputy Chairman of the HCM
City Rubber – Plastic Manufacturers Association, saying that, beside the loss
from declining orders, enterprises now have to face competitiveness from more
local suppliers in
European
plastic producers might be able to provide products at a competitive price
since the euro is low.
To
overcome the new challenges, the chairman recommended Vietnamese enterprises,
apart from expanding to other markets or their market share, seek cheaper
materials and make changes in product structuring to lower the price for the
European market, which is vital to
Estimates
for export turnover in the plastic industry are over 1 billion USD for the
first half of the year. According to the association, the European market
accounted for 60 - 70 percent.
The
industry saw a year-on-year increase of 10.3 percent as turnover hit 4.2
billion USD for the first half of the year. The industry earned 9 billion USD
last year.
In the
larger picture, growth also depends on how
The
Department of Analysis and Forecast under the National Centre for Socio –
Economic Information and Forecast projected the nation's economic growth this
year would reach 6.48 percent.
This
projection was higher than the Government's target set at 6.2 percent this
year.
The
department said that the domestic economy was showing signs of recovery,
along with the recovery of the world economy, adding that growth rates were
forecast to rise higher than the previous year.
Growth
would be fuelled by low commodity prices, foreign direct investment and
demands from abroad, the department said.
The
construction and industry sector, especially processing and manufacturing
industries, would lead the nation's overall growth, while the service sector
was forecast to post moderate growth.
However,
the department noted that agricultural, forestry and fishery sectors were
anticipated to face many difficulties as growth rates slow.
Meanwhile,
the consumer price index was projected to increase 1.7 percent this year, as
crude oil prices were expected to recover in the world market.
The
centre forecast that
Further,
credit growth in 2015 was forecast between 13 to 15 percent, 1 percentage
point higher than last year. However, difficulties would continue for
businesses.-
Looming
FTAs drive cotton rush
Several
domestic and foreign-invested cotton projects are rushing to begin operating
in anticipation of competing across borders after Free Trade Agreements
(FTAs) go into affect.
Statistics
from the Ministry of Industry and Trade showed that total investment of FDI
in the country was US$5.49 billion for the first half of the year. Of this,
the investment in the garment and textile sector was US$1.12 billion.
Notably,
two of the largest FDI projects in the period sought to build cotton and
fibre factories, including Hyosung Dong Nai fibre production plant financed
by Turkey with an investment of $600 million, along with the $160.8 million
Lu Thai cotton factory.
Further,
several large local businesses have sought to invest in cotton production
plants in a bid to participate in the industry and increase their
competitiveness.
The Ky
Cotton Company, a joint venture with Uni Industrial&Investment
Corporation, invested $90 million to build a cotton, fibre and dyeing factory
in the southern
In
addition, Duc Quan Investment and Development Company also invested $40
million into the Fortex 6 plant. The factory is scheduled to help the company
increase turnover of 30-40 per cent as it becomes operational in the first
quarter of 2016.
Meanwhile,
Dang Phuong Dung, general secretary of the Vietnam Textile and Apparel
Association (VITAS), told Hai Quan (Customs) Newspaper that
Figures
released by VITAS showed that in the first five months of the year, the
country's imports of cotton and fibre were higher against the same period
last year, both in terms of quantity and value.
However,
the country's exports of these items were also on the rise, with 381,000
tonnes worth US$1.01 million, posting 20 per cent and 5.4 per cent
year-on-year in quantity and value, respectively.
Nguyen
Ngoc Bach, head of the Viet Thai Export Garment Company's marketing
department, said 60 to 70 per cent of garment material supplied to the
country's textile sector came from
He
said several garment and textile firms have not paid much attention to cotton
projects and mostly outsourced work through foreign contracts.
Garment
companies should change their direction and gradually reduce outsourcing to
increase the value of their products.
Freight
transport moves to e-commerce
A
transport e-commerce market place that enables all major stakeholders in the
freight transport business to easily link up is expected to be begin its
initial operating period in 2016.
Nguyen
Van Quyen, Directorate for Roads of Viet Nam (DRVN) Deputy General Director,
was quoted by Transport newspaper as saying that the formation of the online
transport market aimed to create a breakthrough to enhance the economy's
competitiveness, as transparency was expected to be enhanced and transport
fees lowered.
Quyen
said the pilot implementation of the online transport market was approved by
the transport ministry, adding that the legal framework, along with
management software, were being developed.
Following
the roadmap, the transport market would become operational at the beginning
of next year, Quyen added.
The
platform was planned to be built for operation in major transport centres,
such as Ha Noi,
Quyen
said that management of road transport remained outdated and decentralised,
which failed to ensure the quality of service, traffic safety, as well as
healthy competition among providers.
The
formation of transport market places would help tackle these problems.
Do
Cong Thuy, Deputy Director of DRVA's Transport Department, said the transport
market place was an e-commerce platform that connected all stakeholders in
the freight transport business, including logistics service providers and customers.
"Freight
transport firms which join the market place must be checked in terms of
capacity, prestige and commitments," Thuy said.
The
platform would enable transport firms to connect with each other to prevent
their returning from deliveries with empty trucks, which was expected to help
lower fees.
Sharing
Freight
transport demands and logistics information of service providers would be
available in the market place for selection and negotiations to optimise
freight transport efficiencies, which would benefit all parties, according to
Banmyong.
Meanwhile,
Nguyen Van Thanh, president of Viet Nam Automobile Transport Association,
said the transport market place would help prevent unhealthy competition
among logistics service providers.
Dollar
forecast to rise against dong
The
value of the US dollar against the dong will increase at least 3 per cent
this year, the Vietcombank Securities Co (VCBS) has forecast.
VCBS
anticipated the rise despite a pledge by the State Bank of Vietnam (SBV) to
ensure that devaluation of dong against dollar remains less than 2 per cent
this year. With the dong devalued by 1 per cent twice already, in January and
May, SBV has no room left for more foreign exchange adjustments this year.
The
next adjustment will mainly depend on when the US Federal Reserve decides to
raise its benchmark interest rate this year as the
The
dong's exchange rate will continue to be affected negatively by the rise in
the value of the dollar as the Fed is expected to take the first step to
raise the federal bond rate at some point later this year, according to VCBS.
Moreover, many major countries in the world still have to take measures to
loosen and stimulate their economies, due to instability, a slowdown or a
recession, VCBS said.
Besides
the low interest rate for dong deposits and the speculation over the dollar,
Vietnam's exchange rate for the dong in the remaining months of the year will
face pressure from the significant trade deficit, which reached US$3.7
billion in the first half of the year, VCBS said.
However,
VCBS also cited some factors that would help reduce pressure on the forex
market in the remaining months of the year.
Inflation
is forecast to remain at a low rate this year while remittances from abroad
could rise 10 per cent in 2015 to reach $13-14 billion, it said. The
disbursement of FDI capital this year is also expected to be positive, with
$6.3 billion reported in H1, it added.
In
addition, medium- and long-term foreign capital flows into
After
the two devaluations, the reference rate of the dong against the dollar
currently stands at VND21,673 per dollar. The dong is allowed to trade as
much as 1 per cent either side of this rate.
Commercial
banks currently trade the dong at VND21,830-21,840 per dollar, close to the
ceiling rate of VND21,890.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR
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Thứ Bảy, 18 tháng 7, 2015
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