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BUSINESS IN BRIEF 5/7
VOF
starts to pay for Novaland stocks
The
close-ended VinaCapital Vietnam Opportunity Fund (VOF) has paid US$15 million
towards acquiring convertible preferred stocks of Novaland Group under a
syndicated investment deal worth $47 million.
VOF's
managing director Andy Ho said, "We have confidence in the leading
position of Novaland in developing projects in
"This
investment is included in our strategy to make indirect investments in the
real estate sector via listed or private companies in the sector while making
divestments from property projects."
He
expects Novaland to stick to its IPO plan over the next two years, he added.
Projects
under the Novaland brand name are valued at $753.4 million. It has spent over
$190 million to buy land-use rights for several lands for future development.
VinaCapital
manages VOF and two other funds that are listed at the AIM of the London
Stock Exchange.
It also
co-manages technology fund DFJ VinaCapital L.P. along with Draper Fisher
Jurvetson.
Bphone
recalled for software upgrades less than fortnight after delivery
Although
Bkav is trying to market its Bphone as the world’s leading smartphone, the
road now proves rough for the Hanoi-based company, as it is recalling the
first batche of handsets shortly after delivery for software upgrades.
Those
customers who had the Bphone delivered to their doors on June 18 will have to
return it to the manufacturer for software upgrades, Do Thu Hang, director of
public relations with Bkav, confirmed to Tuoi Tre (Youth) newspaper on
Monday.
The
Vietnamese company, known for its Bkav antivirus software, had previously
said the upgrades would be done online.
Bkav
took the wraps off its brainchild, the Bphone, on May 26 and officially put
it on sale a week later.
Delivery
has been delayed many times and the new date is July 3, according to the
company’s spokesperson.
The
Internet security firm-turned-smartphone maker recorded 11,822 orders in its
first day of sales, but refused to say how many phones had been delivered in
the first batch on June 18.
The
recalled products will have their firmware upgraded by Bkav engineers,
whereas their cameras will also be improved to “enable them to take better
photos than the iPhone 6 Plus,” Hang asserted.
Bkav has
consistently asserted its Bphone is capable of rivaling Apple’s iPhone and
Samsung’s Galaxy S gadgets.
The
products will be returned on July 3 with a gift voucher of VND200,000 ($10),
applicable to purchases at vala.vn, which is Bkav’s shopping site and the
only channel via which the Bphone is distributed.
Bkav CEO
Nguyen Tu Quang hailed the Bphone as the world’s best smartphone at the
launch ceremony, attended by more than 2,000 people, in
However,
the device has been hamstrung by a series of scandals since the launch, which
illustrates that it is nowhere near the world level.
On June
5, Bkav began displaying demo versions of the Bphone at two FPT Shop mobile
phone stores, one each in
However,
only three days later, the company suddenly removed these devices from
shelves, apparently because they had received negative comments from those
who tested them out.
The demo
versions reportedly have screens with poor display and slow performance
quality that is even lower than some low-cost handsets, with Bkav protesting
that these are only “demo, experimental versions rather than the official
commercial devices.”
Bkav
said it has developed its own operating system, called BOS, for the Bphone.
The
platform is in fact developed from the core of Google’s Android, and local
tech enthusiasts have also discovered that Bkav has yet to sign a Mobile
Application Distribution Agreement with Google.
Saigon
Port Company Limited sold out 35.71 million shares bringing VND411.13 billion
(US$18.83 million) in its initial public offering organized at the Ho Chi
Minh City Stock Exchange on Tuesday.
The sold
shares account for 16.51 percent of the company’s chartered capital.
Thirty
nine investors attended the auction session, including three organizations
and 36 individuals.
The
shares were offered at the starting price of VND11,500 per share, which
increased to the highest price of VND22,500 in the session. Average price was
14 dong higher than the starting price.
The
auction session for normal investors had been successful.
Three
strategic investors registering to buy
Finance
Ministry cracks down on troublesome tax, customs officials
The Ministry
of Finance handled 136 civil servants and officials in tax, customs and
treasury agencies for causing difficulties for residents and businesses in
the first six months this year, reported deputy minister Vu Thi Mai at a news
conference on Tuesday.
Besides,
2,800 officials with bad attitude at work were rotated from these agencies
after 1,500 inspections.
The
ministry had drastically instructed relevant agencies to remove civil
servants with negative attitude at work, however they have yet to be able to
handle all, she said.
Several
measures had been applied such as procedure simplification and e-tax
declaration and payment, aiming to limit direct contacts between tax payers
and officials.
At the
meeting, deputy head of the Department of Banking and Financial Institutions
Phan Thi Thu Hien reported capital mobilization from Government bonds in the
first half.
It
reached VND115 trillion (US$5.27 billion), down 23 percent over the same
period last year, she said.
The
reduction was due to high year on year credit growth rate touching 6.28
percent. The rate was 2.03 percent in the first six months last year.
Cafe
owners lose as customers take refuge from heat
Cafe
owners in
While
cafes in the Dich Vong, Nga Tu So or Nam Trung Yen areas are crowded,
customers are ordering free filtered water or a cheap drink so they can enjoy
the cool air, and then stay for hours.
Real
estate brokers and multi-level marketing employees are using cafes as offices
during the summer.
Nguyen
Thi Linh, a cafe owner on
"Our
menu has some light courses but they do not want it. They call for meals from
other restaurants and we still have to clean everything up after," Linh
said.
She used
to serve iced tea as free drink, but after most of a group of 20 customers
only wanted the free tea, she had to start charging for it.
Tuan,
another owner on
SOE
equitization far behind schedule
The
Government’s target to have 289 State-owned enterprises (SOEs) equitized this
year seems unobtainable as only 43 of them had gone public as of the end of
May, according to a report of the Ministry of Finance.
To
realize the target, 246 SOEs must be equitized between now and December, or
one enterprise each day.
Last
year, the nation saw 143 enterprises going public, doubling that in 2013.
SOEs’
capital divestments from sensitive non-core business sectors including
securities, banking, finance, insurance, real estate and investment funds
progressed as scheduled in the first six months of this year. But the pace of
capital divestments and equitization has remained slow, the report said.
The
ministry is completing mechanisms to better manage State capital and
investments, improve the performance of State-run groups and corporations,
and supervise the agencies in charge of SOEs. The ministry will urge SOEs to
press on with their restructuring schemes approved by the Government.
In the
second half of this year, the ministry will speed up SOE restructuring,
equitization, State capital divestments and supervision. The agency will also
take bold moves to secure transparent operations of SOEs.
According
to the report, State budget collections in the first six months were put at
VND446 trillion, up 6% year-on-year but 1% lower than the target. The revenue
target for the whole year is VND911 trillion (US$41.7 billion).
Some 52
out of the nation’s 63 provinces and cities have realized at least 50% of
their targets for tax and fee collection targets for this year.
Meanwhile,
the nation’s budget spending in the first half was estimated at VND545
trillion, an 8.2% year-on-year increase but meeting only 47.5% of the target.
The full-year target is VND1,147 trillion.
The
budget deficit in the first six months was some VND99 trillion, or 43.8% of
the year’s estimate.
By June
29, the State Treasury had issued around VND115 trillion worth of government
bonds to finance the budget overspending and development investments, meeting
46% of this year’s target.
HCM
City sees 16,500 condos sold in H1
A
staggering 16,500 apartments in HCMC were sold in the first half of this
year, reports of CBRE Vietnam show.
The
reports of the property service provider say customers bought over 10,000
apartment units at old and new housing projects in the city in the second
quarter and another 6,500 in the previous quarter.
The
number of apartments offered for sale in the second quarter increased sharply
to more than 8,500 units, mainly at high-end projects like
The
average price of the apartments picked up 3.2% in quarter two against quarter
one, according to CBRE Vietnam.
Duong
Thuy Dung, head of research and consulting at CBRE Vietnam, told an event
held on June 30 to release the quarter two report that high-end apartments
sold well in the period with 97% of the offered units snapped up at Gateway
Thao Dien, all at Masteri Thao Dien and over 70% at
Though
the investors of the housing projects said their apartments were selling like
hot cakes, homes can still be found on the secondary market and their selling
prices are 5-10% higher than the levels announced by developers.
Participants
at the event wondered whether housing developers and exchanges are trying to
stimulate demand and boost prices by making their products scarce. Dung said
housing developers and distributors often secured contracts with customers
long before they launched sales events, so at these events, homebuyers could
hardly find a lot of products on offer.
However,
an executive at a major property exchange told the Daily that normally
relatives and friends of employees at trading floors registered to buy
apartments before employees found actual buyers to sell products at higher
prices.
Regarding
business results in the first two quarters, Hung Thinh said it had sold
almost all apartments at
Meanwhile,
1,600 apartments of Dat Xanh Group’s
Danang-Quang
Ngai expy cost cut by VND2.5 trillion
The
Ministry of Transport has said the total investment cost of Danang-Quang Ngai
expressway has been reduced by nearly VND2.5 trillion after reviews and
design adjustments of the project.
Of the
total investment reduction, VND2.37 trillion is from component installation
cost and VND93 billion from construction cost.
Besides,
Vietnam Expressway Corporation (VEC) has proposed adjusting expansion joints
of bridges on the expressway to save around VND25 billion but these
replacements still meet technical standards.
Deputy
Minister of Transport Nguyen Ngoc Dong told a review meeting on the
Danang-Quang Ngai expressway project on Monday that design reviews are
important to not only the expressway but also other construction works as
they could help lower investment costs. These adjustments still ensure
technical requirements and operation efficiency when they are put into use.
Last
year, the ministry reviewed 44 projects and saved a total of VND39.4
trillion. Danang-Quang Ngai expressway is designed to stretch nearly 140
kilometers, have four lanes and allow for a designed speed of 120 kilometers
per hour. The US$1.47-billion road consists of nine interchanges, 126
bridges, a tunnel and many other components.
The
expressway, part of the north-south expressway invested by VEC, kicked off
construction on May 19, 2013 and is scheduled for completion in 2018.
Seafood
exporters face tough times ahead
The General
Department of Fisheries has warned that local seafood exporters will continue
to face fierce competition from other seafood exporting countries, technical
barriers in importing markets and unpredictable disease epidemics.
The
department under the Ministry of Agriculture and Rural Development gave the
warning at a review meeting on seafood output and processing in the first
half of this year in
The
fisheries sector yielded three million tons in the January-June period, up
3.6% compared to the same period last year. The volume included 1.8 million
tons of farmed fish and 1.2 million tons of fish caught from the sea.
However,
challenges still lingered in the period. Seafood exporters had to deal with
mounting competition from regional countries which were plagued by diseases
in shrimp in previous years and technical barriers for tra fish fillets in
importing markets and the depreciation of currencies in importing markets
against the U.S. dollar, among others.
Figures
of the Vietnam Association of Seafood Exporters and Producers (VASEP) showed
The
nation’s outbound shrimp sales in the first five months dropped 29.4% to more
than US$1 billion while tra fish shipments reached US$616.5 million, a
year-on-year decrease of 9.6%.
Fishermen
still found it difficult to benefit from State support for building new
offshore fishing vessels in line with the Government’s Decree 67/2014/ND-CP.
According to the department, 25 out of 28 cities and provinces have approved
lists of fishermen eligible to get State aid to build a total of 674 new
fishing boats, or 30% of the target.
By June
15, commercial banks had pledged to lend VND721 billion to 70 new fishing
vessels and five boat upgrades, with VND190 billion of it already disbursed.
However,
Nguyen Van Trung of the department said there remained problems related to
requirements for machines used for the new fishing boats, fishermen’s lack of
reciprocal capital for new vessel projects and value-added tax refunds.
Trung
said toward the year-end relevant agencies would join hands to removing
hurdles to implementing the decree, developing infrastructure for the sector
and helping farmers look for quality breeder shrimp and fish.
Nguyen
Huy Dien, deputy head of the department, said weather conditions have turned
favorable for fish farming when summer temperatures have dropped. In the
coming time, farmers will get more assistance in production of
The
department expects fish output to reach 6.4 million tons this year.
Domestic
sugar output down 13%
ust as
the 2014-2015 sugarcane crop has ended, 42 sugar mills have turned out over
1.4 million tons of sugar, down 13% against the previous crop, according to
the Department of Processing and Trade for Agro-Forestry-Fisheries Products
and Salt Production.
The
sugar output fall has sent down inventories at mills nationwide. By June 15,
sugar mills had reported combined inventories of 389,440 tons, 159,500 tons
lower than in the same period last year.
A
kilogram of white sugar is now priced at VND14,200-14,800. The Vietnam Sugar
and Sugarcane Association (VSSA) said the sugar selling price at mills is
normally VND500 per kilogram lower than the market price due to transport
cost.
Despite
shrinking inventories this year, local sugar mills are still coping with
pressure from illegal sugar imports as sugar smuggled from Thailand is sold
at VND13,000 per kilogram.
Sugar
produced by Hoang Anh Gia Lai (HAGL) in Laos is also offered for sale on the
local market at VND13,300-13,500 a kilo. VSSA said HAGL sold its sugar at
VND14,000 per kilogram earlier but then lowered the price to VND13,300-13,500
per kilogram to attract buyers.
According
to the director of a sugar mill, the reason HAGL lowered its price is that it
had seen a hindrance to exporting sugar to China.
In
previous years, sugar companies had to export sugar to China via unofficial
channels as a measure to cope with an oversupply on the domestic market and
illegal sugar imports from Thailand. However, exports to the northern
neighbor are risky as it regularly closes border gates to imports from
Vietnam.
A survey
of VSSA showed a Vietnamese consumer uses 16 kilograms of sugar a year, so
the domestic sugar output of the 2014-2015 crop is sufficient to meet the
local demand.
Nevertheless,
the local price of sugar is always affected by imports as sugar imports from
Laos of this year are 81,000 tons in line with Vietnam’s commitment to the
global trade club WTO.
Of
course, sugar smuggled from Thailand has also hit local mills. VSSA
calculated 300,000-400,000 tons of sugar is illegally imported into Vietnam
from Thailand a year.
Bac
Lieu enjoys growth in seafood exports
The
southern province of Bac Lieu posted a 4 percent growth in seafood export
value in the first six months of this year to earn 212 million USD despite a
2 percent drop in export volume to 18,749 tonnes.
The
results are attributable to local seafood processing enterprises’ efforts to
improve product quality through strict control of input materials and
processing.
Many
enterprises have invested in upgrading machinery and technology, thus
enhancing their products’ added value and subsequently selling prices.
The
province has also successfully engaged processors in a production chain,
facilitating the tracking of origin of products.
In
addition, provincial agencies have kept local enterprises regularly updated
on export markets to help them adjust production and business plans
accordingly.
Bac
Lieu’s success is worthy of note in the context that the country’s export of
aquatic products fell in value by 16 percent to 2.97 billion USD in the first
half of the year.
Vietnamese
firms should prepare for Vietnam-EAEU FTA
Necessary
preparations by domestic businesses for the free trade agreement (FTA)
between Vietnam and the Eurasian Economic Union (EAEU) was the focus of
discussions among experts at a workshop held in Ho Chi Minh City.
At the
event, co-organised on July 2 by the municipal Department of Industry and
Trade, the Centre of the World Trade Organisation (WTO) and the Ho Chi Minh
City Enterprises Association, they highlighted the huge potential for
domestic businesses from access to the 175 million-people market with a GDP
of nearly 2.5 trillion USD.
Nguyen
Khanh Ngoc from the Ministry of Industry and Trade attached significance to
the accuracy of certificates of origin for products, saying that errors take
away any incentives from the agreement for the sector.
Domestic
firms should enhance their understanding of the FTA to overcome difficulties,
raise product competitiveness and improve product quality to meet the strict
requirements of these markets.
Participants
pointed to the impact of the FTA on a number of domestic sectors, saying that
FTA commitments will include cutting 82 percent of tax lines on the
garment-textile sector and 72 percent for the rubber sector.
The free
trade agreement between Vietnam and the Eurasia Economic Union (EAEU)
(grouping Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan) was signed on
May 29 after more than two years of negotiations, opening up a new chapter in
the partnership between Vietnam and the union as well as each EAEU member
nation in particular.
The
agreement is expected to be effective from early next year, after all
signatories complete their domestic procedures.
Lao,
Vietnamese companies send goods to Vientiane
Around
200 enterprises from Vietnam and Laos took place in the Vietnam-Laos Trade
Fair which opened at the International Convention and Exhibition Centre in
Laos’ capital city of Vientiane on July 2.
Vietnamese
goods on display at the fair include pharmaceutical and medical equipment,
industrial machinery, construction and building materials,
agro-forestry-fisheries products, processed foods, garments and textiles,
handicrafts, interior furniture, plastics and consumer goods.
According
to Deputy Minister of Industry and Trade Nguyen Cam Tu, the fair is a good
opportunity to promote brands, boost exports and expand their shares in Laos
and the northeast region of Thailand.
Meanwhile,
Lao Deputy Minister of Industry and Trade Somchith Inthamith considered the
fair an effective bridge for trade organisations, producers and investors
from the two countries to exchange opinions, transfer technology or form
joint ventures.
Vietnam-Laos
trade reached 1.29 billion USD in 2014, up 30 percent from 2013.
Cashew
exports maintains strong growth in first half of 2015
Cashew
nut exports in the first half of this year posted strong growth, reaching
150,000 tonnes in volume and 1.08 billion USD in value, according to a
conference on promoting the production and consumption of cashews in 2015.
The
figures released at the conference, held by the Department for Processing and
Trade for Agro-forestry-fisheries products and salt production in Ho Chi Minh
City on July 2, showed a 14 percent increase in volume and a 28.2 percent
surge in value compared with the same period last year.
The average
cost of each tonne of cashews was 7,080 USD, up 11.64 percent year-on-year.
Vietnamese
cashew products have been exported to more than 50 countries with the United
States, China and the Netherlands as the largest importers accounting for
39.98 percent, 13.12 percent and 10.89 percent, respectively.
In
addition to the positive results, the delegates at the conference also
pointed out challenges the sector will need to face to maintain the growth
trend in the second half of the year.
The
biggest challenge facing cashew processors is their dependence on imported
raw cashews, which account for 70 percent of the cashew input.
This
dependence also led to instability in price and quality of nuts, which
eventually affects the quality of finished products for exports.
According
to statistics from the Vietnam Cashew Association (VINACAS), Vietnam imported
197.5 tonnes of raw cashew nuts in the first four months of this year, an
annual surge of 175.7 percent.
In
addition, most cashews processors lack the financial capability to invest in
advanced technology to add more values to their products because of their
relatively small size.
Super
sorghum plantation project launched
SOL
Holdings VN held a ceremony in HCM City on July 2 to get an investment
licence to grow, process and sell super sorghum products in Vietnam.
A
representative from Japan’s SOL Holdings group said Vietnam is the most
important market in Southeast Asia that the group targets at to develop super
sorghum and related processing systems.
SOL
Holdings Vietnam General Director Nguyen Thai Son said after the Ministry of
Agriculture and Rural Development (MARD) allowed the company to grow super
sorghum widely in Vietnam, the company has worked with localities and farmers
to prepare for technology transfer.
The
growing of super sorghum has been piloted in Dong Nai province to prepare
materials for an animal feed processing plant which is expected to be
operational early next year, Son said.
GEM
invests US$20 million in local real estate company
The US
Global Emerging Market (GEM) will invest US$20 million in Vietnamese real
estate company - Hoang Quan Company (HQC).
The
signing ceremony between the two firms took place in New Work on July 1 under
the witness of representatives from the Ministry of Finance, the Stock
Securities Commission (SSC) and the HCM City Stock Exchange.
Accordingly,
GEM will purchase HQC shares within 30 months since the date of signing.
GEM CEO
Christopher F Brown said GEM is keen on HQC social housing development
strategy in Vietnam and believes that social housing will thrive in the near
future thanks to Vietnam’s better social welfare policy.
HQC
President Truong Anh Tuan said the company will use the capital to develop
social housing projects in the coming times.
GEM will
be the third international partner of HQC, after LC and Huyndai.
The US
group, with asset worth of US$3.4 billion, has successfully conducted 305
transactions in 65 countries.
Hanoi
to host Vietnam Int’l Motor Show 2015
Vietnam
International Motor Show 2015 is set to get underway at Vietnam Exhibition
and Fair Centre in Hanoi on October 10-13.
Nine
authorized importers of Audi, BMW, Jaguar, Land Rover, Luxgen, MINI, Porsche,
Renault and BAIC have registered to take part in the event.
The
event, organized by Vietnam Automobile Manufacturers’ Association (VAMA) is
expected to showcase the latest vehicle models, engines and advanced
technologies. It also provides a good chance for enterprises to meet and
exchange.
Laurent
Genet, representing the participating car importers, affirmed that they
understand the Vietnamese market and can meet Vietnamese customers’
diversified demand.
Through
the event, car importers hoped that customers can make the best buying
decision, he noted.
ACE
Ltd to acquire Chubb for $28.3b
ACE
Limited and The Chubb Corporation announced on Wednesday that the Board of
Directors of both companies had approved an agreement under which ACE will
acquire Chubb.
Under
the terms of the transaction, Chubb shareholders will receive US$62.93 per
share in cash and 0.6019 shares of ACE stock.
Upon
closing of the transaction, ACE shareholders will own 70 per cent of the
combined company, and Chubb shareholders will own 30 per cent.
The
consideration represents an approximately 30 per cent premium to Chubb's
closing price of $95.14 on June 30, 2015.
Outside
the US, ACE is a premier commercial insurer with a presence in 54 countries
and a broad product, customer and distribution capability. Chubb's operations
in 25 countries will complement and deepen ACE's presence.
The
acquisition is expected to create a global leader in commercial and personal
property and casualty insurance.
ACE
intends to finance the cash portion of the transaction through a combination
of $9 billion of ACE and Chubb excess cash plus $5.3 billion of senior notes
with a range of maturities to be determined.
ACE
intends to target a debt-to-total capital ratio of approximately 20 per cent
following the acquisition, within the guidelines for the company's ratings.
The
transaction is expected to close during the first quarter of 2016, subject to
approval by ACE and Chubb shareholders, the expiration or termination of the
applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, and regulatory approvals.
Based on
the closing price of ACE stock on June 30, the total value is approximately
$124.13 per Chubb share, or $28.3 billion in the aggregate.
This is
the equivalent of $125.87 per Chubb share using ACE's 20-day volume weighted
average share price for the period ending June 30.
As of
December 31, 2014, the combined company had total shareholders' equity of
nearly $46 billion and cash, investments and other assets of $150 billion.
ACE
Limited is the parent company of ACE Group, one of the world's largest
multiline property and casualty insurers.
MARD
targets H2 recovery
The
Ministry of Agriculture and Rural Development (MARD) will deal with
difficulties in production and export of agricultural products to help growth
recovery in the second half of this year.
Minister
Cao Duc Phat spoke about the production and business of the agricultural
sector in the first half of this year at a news conference of the ministry on
Wednesday.
The
ministry would resolve the challenges in production and improve the business
environment to create favourable conditions for enterprises to invest in the
agricultural sector, he said.
"The
ministry will set up working teams to review all kinds of charges and fees in
order to reduce them. That will simplify administrative procedures," Phat
said. "The ministry will use information technology to help enterprises
reduce time and expenses in using public services."
Meanwhile,
"many free-trade agreements will continue to be signed in the coming
time. Under the agreements, almost tax lines will fall, but the export
markets will establish technical and administrative procedure barriers,"
he said.
"In
the second half of this year, the ministry and its relevant departments will
work with partners in specific export countries to erase the barriers for
opening markets for local farming, husbandry and seafood products."
Pham Anh
Tuan, deputy head of the General Department of Fisheries, said as the current
weather was good for white-leg shrimp and prawn production by the end of this
year, the shrimp output was expected to increase, promoting growth of the
fisheries industry this year.
However,
the fisheries sector should study carefully the reasons for the recent fall
in seafood exports, including the exchange rate, supply and purchasing power,
to have reasonable management for production and exports in the future, Tuan
said.
Hoang
Thanh Van, head of the livestock department, said this year, cattle and
poultry diseases were under control, while the prices of animal feed and
husbandry products were stable.
"Several
enterprises have recently registered a huge investment in the livestock
industry, including one investment of US$1 billion by 2020," Van said.
Large
enterprises were rearing beef and dairy cattle, he said, which was the right
way path for the local livestock industry.
Head of
the Livestock Institute Nguyen Thanh Son said the State should reduce
administrative procedures, and the agricultural industry should restructure
production to attract more investment to the industry and create a positive
environment for the export of farm products.
According
to the General Statistics Office, the growth in the gross domestic product
(GDP) of agriculture, forestry and fisheries in the first half of this year
reached 2.36 per cent, lower than 2.9 per cent in the same period last year,
but higher than 2.14 per cent in the first half of 2013.
The
agricultural sector gained a year-on-year increase of 2.41 per cent in
production value in the first half of the year to reach VND489 trillion
($22.43 billion).
The
sector faced several challenges in consumption in the first half of this
year, the ministry said.
The
government, ministries and enterprises have sought solutions and an improved
business environment to overcome difficulties in the consumption of farm
products.
But in
the first six months, five of 12 Vietnamese exporters of farm products saw
their export volume and value fall, including in tea, rubber, rice and
coffee, besides seafood.
The
sector suffered a year-on-year fall of 2.8 per cent in export value to $14.42
billion for the first half of this year.
PM
upholds unchanged VAT for rice
The
Prime Minister has approved the Ministry of Finance's decision to not slash
the value added tax (VAT) imposed on rice in the domestic market.
Accordingly,
the tax rate will be retained at the current level of 5 per cent.
Previously,
the Viet Nam Food Association had proposed that the VAT on rice consumed in
the domestic market be cut to 0.5 per cent to develop a rice brand in the
domestic market.
However,
in response to the proposal, the Ministry of Finance said that the existing
Law on VAT did not have a 0.5 per cent tax rate. If this tax rate was added,
it will not be in line with the VAT reform strategy for the 2011-20 period,
aimed at narrowing down the number of subjects for VAT imposition.
The
Finance Ministry also said that the proposal was not in line with
international practices, which allow zero tax rate only on export products.
Statistics
from the Ministry of Agriculture and Rural Development showed that domestic rice
consumption, which was imposed with a 5 per cent VAT, accounted for less than
15 per cent of the country's total rice output.
On
average, during the 2010-15 period, Viet Nam produced about 22 million tonnes
of rice, of which 18.5 million tonnes were not subjected to any tax as they
were used for exports and self-consumption. Meanwhile, some 3.5 million
tonnes of rice was taxed each year.
Regarding
animal feed and fertilisers, the Ministry of Finance has proposed to continue
animal feed in the list of goods receiving VAT exemption, while the impact of
VAT exemption on fertilisers should continue to be evaluated to raise
proposals for amendments to law.
Vietnam
– third largest importer of Chinese steel
Vietnam purchased
3.5 million tonnes of steel from China from January-May, accounting for 8.9
percent of the market share and ranking third among the nation’s importers,
according to the Latin American Steel Association (Alacero).
Alacero’s
latest data shows that in the period, the Republic of Korea imported the
biggest volume of Chinese steel with 5.2 million tonnes or 13.3 percent of
the market share.
It was
followed by Latin America with 3.8 million tonnes, up 12 percent from the
same period last year.
According
to Alacero, China exported 39.5 million tonnes of steel to the world in the
first five months of this year, an annual rise of 30 percent.-
Import-export
turnover through Noi Bai airport increases
The
import-export turnover of goods through Noi Bai International Airport hit 2.7
billion USD in the first six months of 2015, according to the Airport Customs
Department.
During
the reviewed period, nearly 2.8 million passengers on 23,758 flights entered
and went out Hanoi through Noi Bai International Airport .
Vu Quoc
Hung, head of the department, said the airport’s Terminal 2 has a capacity of
handling ten million passengers a year and is expected to cater 15 million
passengers a year.
The
airport has applied risk management through the e-customs system for both
passengers and cargos in T2 has helped the sector cut down the time required
to deal with procedures, he said, adding the staff’s capacity and sense of
responsibility have also improved substantially.
Thai
Binh looks for investment from Singapore
A delegation
from the northern province of Thai Binh held a working session with
Singaporean enterprises in the city state on July 2 to call for investment in
the Vietnamese locality.
Speaking
at the event, Vice Chairman of the Thai Binh People’s Committee Pham Van Ca
said his locality is looking for foreign investment flows in hospital
development, transport infrastructure, climate change prevention, natural
gas-used industrial development, public-private partnership, food and farm
product processing and development of agricultural production areas.
Representatives
from Singaporean companies asked Thai Binh leaders to point out incentive
policies and required conditions to invest in the locality and in Vietnam in
general.
In his
reply, Ca announced that Thai Binh has established two centres to provide
consulting services for investors and help them access information related to
administrative procedures and investment promotion in the locality.
VNREA
announces Real Estate Expo in Hanoi
Aiming
to promote a healthy sustainable real estate market and increase connectivity
between buyer and seller, the Vietnam National Real Estate Association
(VNREA) on July 31-August 3 will stage its first-ever real estate expo.
With
over 100 booths, the fair at the National Exhibition Centre in My Dinh, Hanoi
is expected to attract the participation of hundreds of entities displaying a
wide variety of products encompassing residential and commercial real estate.
Most
notably there will be a large number of vendors displaying building materials,
interior and exterior decorating products along with home repairs, furniture
and other housewares.
Representatives
from a host of financial institutions will also be on hand to provide
consumers with loads of information of a variety of low interest home and
business financing packages.
In
addition, seminars and dialogues will be held, giving out free advice and
answers to investing and legal questions including those pertaining to recent
changes regarding foreign ownership of real estate.
Vietnam’s
first-half cell phone production tops 107 million units
With
major foreign phone makers expanding production, Vietnam’s mobile phone
industry posted strong growth in the first half of this year, the latest
figures show.
The
first six months saw 107.3 million mobile phones made and assembled in the
Southeast Asian country, a massive 68.8% increase compared to the same period
last year, according to the General Statistics Office.
The
export value of cellphones and components in the six-month period topped US$14.7
billion, up 27% from the first half of 2014.
The
General Statistics Office also reported that 2.16 million televisions, 1.38
million motorbikes, and 88,100 cars were made in Vietnam from the start of
the year to the end of June.
The TV
and car sectors also posted solid production growth rates of 40.3% and 57.6%,
respectively.
The
robust manufacturing of mobile phones in Vietnam was mostly driven by foreign
players, including Samsung Electronics Vietnam, Microsoft Mobile Vietnam, and
LG Electronics.
Samsung
is operating seven projects worth a total of US$11.3 billion in the Southeast
Asian country, the two biggest of which are mobile phone production complexes
in Bac Ninh and Thai Nguyen, two provinces in the north.
The
Republic of Korea's electronics behemoth has so far channeled US$2.5 billion
and US$5 billion into these complexes, respectively.
Microsoft,
meanwhile, inaugurated its first authorized resale store in Vietnam last
week.
It was
reportedly shutting down two handset plants it inherited from Nokia in China
and relocating part of the manufacturing to Vietnam, according to media
reports in February.
The
General Statistics Office also said Vietnam’s gross domestic product expanded
6.28% year-on-year in the first six month of this year, whereas the country
suffered a US$3.8 billion trade deficit.
In the
first half of 2014, the country enjoyed a US$1.9 billion trade surplus.
Vietnam’s
exports in the six-month period of 2015 topped US$77.7 billion, up 9.3% from
the same period last year, but imports soared 17.7% to US$81.5 billion,
according to the office.
Manufacturing
is Vietnam’s rock star
With all
the turbulence in the world, Vietnam stands out with the more upbeat news
flow and economic data, according to HSBC.
Exports
accelerated in June by 18% year-on-year, defying gravity, and taking the
year-to-date growth close to 10%. The PMI is equally positive, expanding
sharply in the second quarter. While the June number decelerated to 52.2 from
54.8, the leading indicator – new orders minus inventories - rose sharply,
suggesting output will rise in the months ahead. Credit growth, too, picked
up by 17% year-on-year thanks to improving demand.
Unequivocally,
the Trans-Pacific Partnership (TPP) will be very beneficial for Vietnam, said
HSBC.
The
country is rich in cheap labour and the trend will continue for the next two
decades. Labour productivity is amongst the lowest in the region, but growing
the fastest, thanks to more efficient FDI sectors.
Since
joining the WTO in January 2007, domestic firms have been ailing, thanks to
inefficient allocation of resources and unfocused industrial policy. Despite
numerous reforms, the state sector continues to dominate investment,
contributing less to output.
HSBC
believes that Vietnam is slowly liberalizing its economy. That said, it will
unlikely do it overnight. Whether it’s state-owned-enterprise equitisation
efforts or liberalization of public equity to foreign investment, it is
important to pay attention to the details of the laws as well as the
implementation.
HSBC
evaluated that Vietnam’s biggest growth driver in the coming years will be
trade, facilitated by key trade agreements such as the TPP and labour cost
endowment. The biggest risks will come from within Vietnam, where inefficient
allocation of resources will sap productivity and leave the country caught in
the low-middle income trap.
Experiences
from other countries show that escaping this is an anomaly and requires
proactive efforts to boost efficiency of investment, whether on soft or hard
infrastructure.
Power
output increases by 12.35%
The
total amount of power produced during the first six months of this year was
78.74 billion kWh, a 12.35% increase compared to the same period last year,
according to a report issued by the Electricity of Vietnam (EVN).
The EVN
put an additional five turbines into operation, with a total capacity of
2,654 MW, providing electricity to the national grid.
In the
face of the electricity overload caused by the prolonged heat wave, the EVN
has undertaken efforts to ensure sufficient power supply.
For the
last six months of this year, the imported and produced power capacity is
estimated at 80.32 billion kWh, the EVN said. The group aims to provide
enough power for production and business, while exploring further hydropower
options and load conditions to set up a plan for next year’s power supply.
Minister
of Industry and Trade Vu Huy Hoang asked the EVN to accelerate the
electrification process in remote areas, such as Cham Island in central Quang
Nam province and Lai Son in southern Kien Giang province, in order to achieve
the national socio-economic development target.
Source : VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Chủ Nhật, 5 tháng 7, 2015
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