BUSINESS IN BRIEF 31/8
PM
gives green light to fisheries centre in Hai Phong
Prime
Minister Nguyen Tan Dung has given a nod to a project to build a large-scale
fisheries centre in the northern port city of
The
leader has assigned the municipal People’s Committee to work with the
Ministry of Agriculture and Rural Development in planning and building the
project in line with the Law on Public Investment.
Hai
Phong is one of the four most important fishing grounds nationwide. The city
has 3,376 fishing vessels, including 555 off-shore fishing boats, generating
jobs for nearly 20,000 labourers. In the first seven months of this year,
local fishermen brought ashore nearly 68,000 tonnes of seafood, worth 914
billion VND (40 million USD), contributing to the total earnings of close to
2.3 trillion VND (102 million USD) from the fishery sector.
Possible
locations for the fishery centre are Thuy Nguyen, Bach Long Vy Island and Cat
Ba Island.
Under
a master plan on fisheries development until 2020 with a vision toward 2030,
The
Ministry of Agriculture and Rural Development said based on urgent needs of
fishing grounds and regions, priority will be given to the fisheries centre
in central Khanh Hoa province in 2015 that serves fishing grounds in the
south central region and Truong Sa (Spratly) archipelago.
The
next priorities will be those in central
FDI
disbursement rises by 7.6% in 12 months
The
disbursement of foreign direct investment (FDI) in
This
was reported by the planning and investment ministry's Foreign Investment
Agency. The country attracted US$13.3 billion worth of FDI during the period,
up 30 per cent in comparison with the same period last year.
Among
1,608 FDI projects, including new projects with investment licences and
projects whose capital increased during the period, the processing and
manufacturing industry attracted the maximum FDI with 634 new projects and
290 that received more capital. Their total investment capital was $10.35
billion, accounting for 77.7 per cent of the total registered FDI capital.
Real
estate businesses ranked second in attracting FDI, with 25 projects, reaching
a total investment capital of $1.82 billion.
The
department said exports of the foreign sector continued to be a "bright
point" in the country's import and export activities, with a total
export turnover of $74.6 billion during the period (including crude oil
exports), a year-on-year surge of 14.7 per cent. The figure accounts for 70.2
per cent of the total export turnover of the whole country.
The
The
Among
the FDI projects that were granted licences during the past eight months was
one by Samsung Display Viet
Other
projects include a $1.2-billion real estate joint venture in
VN
runs trade deficit of $3.6b
Le Thi
Minh Thuy, Director of GSO's Trade Department, said the slowdown in exports,
especially due to the slump in crude oil export value, coupled with rising
imports, resulted in the widening of trade deficit.
The
country's total export value reached $106.2 billion in the first eight months
of this year, representing an increase of 9 per cent over the same period
last year. The total import value grew at 16.4 per cent during the period to
$109.8 billion.
Statistics
showed that crude oil exports in the first eight months of this year were
6.189 million tonnes, worth $2.73 billion, decreasing by only 0.6 per cent in
volume but nearly 49 per cent in value due to the plunging world prices.
Many
export products of
Coffee
exports dropped by 32.4 per cent in volume and 32.8 per cent in value to
876,000 tonnes and $1.802 billion, respectively.
Rubber,
despite registering an 11 per cent rise in export volume to touch 632,000
tonnes, posted a decline of 10.3 per cent in value to $921 million.
These
products faced an oversupply in the world market, weighing down on the prices
and competitiveness of Vietnamese products.
Notably,
the trade deficit came entirely from the domestic economic sector which
exported $31.6 billion and imported $44.667 billion worth of goods.
The
foreign direct investment (FDI) sector continued to run a trade surplus of
$9.4 billion in the eight-month period.
Mobile
phones and components were the country's major export products with a
turnover of $19.9 billion, up 31.3 per cent, followed by garment and textile
products with an turnover of $15.14 billion, up 10.9 per cent and footwear
products with a turnover of $8.75 billion, up 20.9 per cent.
Seaprodex
to sell stake in Proconco
Viet
Nam National Seaproducts Corporation (Seaprodex) has approved a plan to sell
all its stake in the Vietnamese-French Cattle Feed Joint Stock Company,
better known as Proconco.
However,
many shareholders have expressed their disagreement with the company's plan.
At the
company's extraordinary shareholders' meeting held early this week, more than
20 per cent of the shareholders voted against this plan, but with 79 per cent
agreeing to it, of which 63.4 per cent are state-owned stakes, the proposal
was adopted.
Proconco
is the third largest livestock and aquafeed manufacturer in
Seaprodex
is the third largest shareholder of Proconco with a 17.47 per cent stake. The
company plans to sell these shares at a price not lower than VND16,650, the
book value of Proconco at the end of 2014.
This
investment is considered to be one of the most valuable assets of Seaprodex,
which had VND1.25 trillion (US$55.6 million) in charter capital in 2014. The
corporation can earn at least VND582 billion (nearly $26 million) from the
sale. It plans to use this money to expand investment and pay dividend to its
shareholders.
According
to Seaprodex's leaders, the divestment plan aims to ensure the best interests
of the company's shareholders since Masan Group, Proconco's largest
shareholder with a 52 per cent stake, plans a shift in the company's
development strategy.
After
taking control of Proconco in April 2015, the Masan Group has been directing
the company towards the 3F (feed-farm-food) model, without a dividend plan in
the next five years. The group also holds a major stake in Agro Nutrition
International Co Ltd (Anco) and Masan Nutri-Science Co Ltd, and plans to
merge Proconco with these two companies.
If the
deal was inked, Seaprodex's leaders estimated its investment value in
Proconco would be halved. Proconco's currently has VND2 trillion (nearly $89
million) in charter capital.
The
Masan Group is planning to raise its stake here to 70 per cent.
Earlier,
the Dong Nai Food Industrial Corporation (Dofico), the second largest
shareholder with a 24 per cent stake, announced its plan of selling its 17.5
per cent stake in Proconco.
The
However,
Seaprodex's plan may not be carried out in the near future as MARD has just
asked the representative of State capital in Seaprodex to stop its divestment
plan in subsidiaries and associated companies. Deputy Prime Minister Vu Van
Ninh has also asked MARD to sell its entire stake in Seaprodex by the end of
this year.
Companies
need help to compete internationally
"Viet
Nam needs to put in place structures, institutions and infrastructures that
create a vibrant private sector economy in which resources can flow quickly
towards competitive firms," said Sandeep Mahajan, Lead Economist of the
World Bank in Viet Nam.
Sandeep
highly appreciated how
He
reported that the country's trade to GDP ratio reached 164 per cent in 2013 –
among the highest in ASEAN – and its manufacturing exports since 2000 had
recorded a sharp increase with an annual growth rate of 23 per cent to reach
$94.6 billion in 2013.
However,
despite such great achievements in recent years,
First
of all, they suffered disadvantages from foreign-biased policies issued by
the government that allowed a huge amount of Viet Nam's foreign direct
investment (FDI) to operate in a closed circuit, generating little technology
transfers for local firms, especially small and medium-sized companies, he
said.
As a
result, the gap in technology expertise between local and foreign companies
had increased and prevented local companies from benefiting from the world's
modern technologies, he said.
Lack
of modern technologies also reduced the quality of products and services
provided by local companies and they became less competitive on both domestic
and foreign markets, he added.
Secondly,
94 per cent of domestic companies in
Those
companies hardly drew attention from foreign companies as they lacked
necessary resources such as capital and human resource to meet the
international demand even though they may have high productivity, Sandeep
said.
However,
the problem is worse as Vietnamese big firms with more than 300 workers, most
of which are state-owned enterprises, have less productivity than small and
medium-sized ones, he added.
Nguyen
Van Giau, Chairman of the National Assembly's Committee for Economics, said
that local companies were unprepared to receive opportunities and challenges
from global integration.
Consequently,
those companies had to face tough competition from imported products that may
make them lose market share on the domestic market, he said.
However,
Nguyen Dinh Cung, Head of the Central Institute for Economic Management, said
that domestic companies should be the only one to be blamed for failing to
compete on the global market.
He
said that costs and policies were the major concerns for those companies
right now, so they were unable to have further vision to deal with global integration.
The
important thing was the Government had not paid enough attention to global
integration, which means the Government had remained a "manager" of
the economy for the last 30 years, setting a lot of barriers for private
companies.
"It
is the Government not private companies that needs to change more in order to
improve the market conditions and allow companies to improve their
businesses", Cung said.
Truong
Dinh Tuyen, former Minister of Industry and Trade, said that the country had
achieved great global integration, however, slow reform of internal
structures had made the country miss opportunities and created a lot of
problems.
He
also suggested that the State should transform into a guider and especially
improve the human resource development policies or the country would lag far
behind other countries.
Too
many rules hamper business
The
business climate in
At a
seminar on improving business environment to raise competitiveness held in
Can Tho City on Tuesday, Cung told participants that improving the business
climate was vital to ensure businesses remained competitive.
Cung
said currently over 50 per cent of legal document dealing with financial
aspects were no longer suitable and must be scrapped or amended immediately.
For instance, some legal documents required ID number of people who carry out
money transaction on behalf of two companies. This regulation was not suitable
with international rules and only annoys foreign investors.
He
said apart from overlapping of administrative formalities, investors also had
to wait long for paperwork from local authorities.
Specifically,
setting up a business in
Nguyen
Minh Thao from CIEM worried that businesses were now suffering from a heavy
burden of costs and fees. Apart from regulated taxes and fees, businesses
also pay additional ‘underground' fee to Government employees.
According
to Thao, to minimise the problem, the business environment should be made
transparent at the earliest while Government employees are in need of better
education about professional ethics and should be paid higher salary.
Experts
said administrative reforms should envisage application of information
technology to improve the business environment and make it effective.
According
to reports, over 90 per cent of the administrative bodies have applied
information technology. Actually, the lack of linkages between the bodies
remains problematic in certain localities, experts said.
Rubber
plant built in
The
Tan Bien-Kampong Thom Development Company opened a rubber latex processing
plant in
The
company is an affiliate of the Viet Nam Rubber Group (VRG).
Vietnamese
Minister of Agriculture and Rural Development Cao Duc Phat and Cambodian
Deputy Prime Minister Yim Chhay Ly were present at the opening ceremony.
The
Cambodian Deputy PM valued Vietnamese rubber plantation projects in
Vietnamese
firms are also been involved in social welfare activities, infrastructure
building and poverty reduction efforts in
Minister
Phat reiterated the Vietnamese Government's determination to develop its
friendship and comprehensive co-operation with
He
thanked the Cambodian Government and people for facilitating Vietnamese
investment in their country.
The
construction of the processing plant started last year with a designed
capacity of 3,000 tonnes per annum.
It is
expected to help the company as well as other VRG affiliates in
The
company has been licensed to grow rubber trees on over 7,000ha in
Fourteen
VRG affiliates are implementing 18 rubber projects in
Thai
firms eye VN textiles
A
delegation of more than 400 Thai garment, textile and footwear firms are
visiting
The
businesses have already spoken to hundreds of local firms in
Malinee
Harnboonsong, director of the Thai Trade Centre in the city, said Thai
businesses hoped to understand Vietnamese consumption demands and explore
market potential.
She
said Thai trade and investment agencies had funded their participation in
fairs and exhibitions, and encouraged exchanges between enterprises in both
countries.
The
Thais will also visit garment-textile and footwear plants in Binh Duong and
Dong Nai provinces.
Nguyen
The Hung, deputy director of the Viet Nam Chamber of Commerce and Industry's
Trade
turnover between
The
two countries are striving to raise bilateral trade value to $20 billion by
2020.
Tien
Giang set for more investment
The
Mekong Delta
Since
the outset of this year, the province granted investment certificates to two
new provincial industrial park projects worth $17 million.
Authorities
allowed the continuance of four existing projects, which add another $30
million in investment.
The
recent results are a welcomed uptick in the province, spurred by policy
improvements and fine-tuning administrative procedures.
Enterprises
operating in the province's four industrial zones, namely My Tho, Tan Huong,
Long Giang and Soai Rap Petroleum Service, created jobs for over 65,000
labourers, said Nguyen Thanh Liem, deputy head of the local Industrial Zones
Authority.
The
province's goals for 2020 include developing a total of seven industrial
parks and 27 industrial complexes.
The
province will focus on attracting enterprises that process farm and forest
products to make the provincial economic structure well-rounded and
vertically integrated to increase industrial output and efficiency.
Lotus
Residences sale shows growing interest in resorts
The
second sale of Van Lien (Lotus Residences) in Ha Noi last Sunday attracted
hundreds of investors from the capital city and saw a high rate of successful
transactions.
This
reflects growing interest in the luxury resort property segment amid the
recovery of the real estate market.
Syrena
Viet
Many
wealthy Hanoians were seeking to invest in quality resort projects with
promising and guaranteed profits and Lotus Residences, located in the prime
Halong Marina Urban Area, gave them valuable opportunities.
Experts
said Lotus Residences offered several advantages that made its townhouses
attractive to buyers, especially the application of rental pool – the
management model in which the parties involved share rental income from a
property, as well as the expenses associated with its ownership and
maintenance – with the high guaranteed profits from the developer.
Thu
Thuy from Ha Noi said she decided to buy a townhouse of Lotus Residences
because she saw this as a good investment opportunity compared with bank
savings. She said the developer guaranteed a whopping profit of up to 24 per
cent of the townhouse's value in the first three years of operation. In
addition, the buyers would get 60 days of use every year.
Lotus
Residences' prime location along Ha Long Beach also made the project
attractive to investors.
Ha
Long has been the investment destination of large developers such as
Vingroup, Tuan Chau Group, Sun Group and Amata, as well as Nakkeel and ISC
Corp, who have poured billions of dollars in the tourism city's resort
property market.
Syrena
Viet
Lotus
Residences, covering a total area of 40,000sq.m in Halong Marina Urban Area,
comprises 159 four-storey townhouses with environment-friendly designs that
combine retail and tourism purposes.
Taiwanese
firms flock to Viet Nam
John
Tang, director of the Taiwan Trade Centre (TAITRA) office in
Tang
spoke to the press on the sidelines of a meeting of 33 Taiwanese companies
and their Vietnamese counterparts in
About
500-600 Taiwanese firms operate in the city. Most of them make products for
export.
In the
future the companies are expected to make products for both Vietnamese and
export markets.
Many
retailers are also expected to enter
In
addition, Taiwanese firms plan to invest in a textile production chain in
The
visiting Taiwanese companies operate in two major segments, daily commodities
and industrial goods and equipment. They hope that co-operation opportunities
between Taiwanese and Vietnamese counterparts will materialise soon, Tang
said.
The
business meeting was part of a trade mission held by the Taiwan External
Trade Development Council to
DongA
Bank names temporary director
The
DongA Bank management board has nominated deputy general director Nguyen An
to run the bank until a permanent replacement is identified for sacked
general director Tran Phuong Binh.
The
State Bank of
But
then the central bank changed its mind, cancelled the duo's appointment, and
said DongA could choose its own head.
Nguyen
Hoang Minh, deputy director of the central bank's
An
will ensure routine operations are not affected while the bank awaits further
directives for appointing a new general director.
He has
worked at DongA for 22 years and became deputy general director in 2008. He
has reportedly been quoted as saying that since he had headed retail banking
– a core area for the bank – he is confident of leading the lender through
this hard period.
The
central bank has placed DongA under special supervision since the middle of
this month when inspectors uncovered illegal activities by the bank that
could cause serious financial consequences for the State and citizens. It has
also promised a thorough overhaul of the bank. DongA, which has a capital of
VND5 trillion (US$222.22 million), targets pre-tax profits of VND200 billion
($8.89 million) this year after a slump last year.
Firms
ignore rural potential
Despite
being seen as the decisive factor in achieving sustainable rural development,
the business sector still remained largely an untapped power, experts said at
a conference yesterday to discuss the subject.
In
fact, the number of businesses investing in rural development actually went
down from 1.6 per cent in 2007 to less than one per cent in 2014.
Almost
five years after the implementation of a national target programme on new
rural development, total investment now amounts to VND851.8 trillion (about
US$38 billion).
Of
this, only 4.9 per cent came from the business sector, failing to reflect the
sector's potential by a long shot, said the Central Coordination Office on
New Rural Development.
A
report by the General Statistics Office indicated only 0.96 per cent of the
country's businesses operated in agriculture, forestry and aquaculture last
year.
At the
conference, organised by the General Council of Agriculture and Rural
Development, experts said that factors such as climate change, inadequate
infrastructure and the lack of incentives to encourage businesses to invest
were hindering rural development
Truong
Cong Ngan, head of Quang Ninh's provincial rural development committee, said
it was absolutely essential for business that the country's policies and
legal mechanisms remained stable in the long term.
Fear
of frequently-changing regulations and Government policies had been a major
roadblock for many businesses wanting to invest in rural development. This
was especially true for agriculture as it often required a large amount of
investment over an extended period of time, Ngan said.
Deputy
head of the Central Committee for Business Reform and Development, Pham Quoc
Doanh, said both central Government and local authorities had not provided
sufficient incentives for private businesses to invest in agriculture. The
country also lacked an agricultural insurance scheme, which according to
Doanh, was a big hindrance to businesses. Other experts said it could be
impossible to penetrate the global market with just 10 million farmers,
Truong
Van Hien, chairman and director general of a company specialising in
agricultural production, recommended that businesses participate in the
national target programme by helping farmers set up large-scale production.
Hien
said that not only would this create more jobs for farmers, businesses would
also purchase their products, creating a sustainable model for development.
Representatives
from localities also recommended that other investment methods should also be
considered such as public-private partnership and build-operate-transfer.
Experts
also urged the Government to create incentives to attract more investment
from the business sector as well as implementing support policies for
businesses.
Government
stake sale needs regulations to prevent corruption
Deputy
Prime Minister Vu Van Ninh said the draft on selling Government stakes as
share packages must include strict regulations to prevent corruption, while
still encouraging those who seek long-term investments.
Ninh
said, during a Monday meeting with involved ministries, that selling
Government stakes in packages was considered a good measure to hasten the
privatisation of State-owned enterprises (SOEs).
However,
many problems might arise, such as corruption or causing losses to State
capital if the draft failed to anticipate those problems, Ninh warned.
According
to the Ministry of Finance, the draft decision stipulated that the sale of
Government stakes at joint stock companies which had not been listed or
registered trading on UpCoM, included State capital withdrawals from 100-per
cent State-owned corporations.
State
stakes could be divided into many packages for auction, but each package must
be worth less than 5 per cent of the charter capital. Meanwhile, appointed
sales of share packages must be carried out following the Prime Minister's
decision.
Both
domestic and foreign investors could hold unlimited stakes, except in sectors
with caps on holdings of foreign investors.
Ninh
said that the auctions must be transparent.
The
draft was expected to be submitted to the Prime Minister for approval this
month.
According
to Dang Quyet Tien, Deputy Director of the Corporate Finance Department under
the Ministry of Industry and Trade, the draft would be developed into a
decree and include a set of comprehensive solutions to hasten the progress of
SOEs' privatisation, which had slowed since the beginning of this year.
Besides
selling State stakes in packages, there would be regulations allowing SOEs to
be transferred to joint stock companies when they did not have conditions to
immediately implement IPO's.
Tien
said that coupled with the regulation on increasing foreign holdings in the
Law on Securities, which would take effect from the beginning of this month,
the draft would help stimulate market demands and hasten the privatisation
process.
This
year,
Credit
firms struggle to retrieve collateral
While
handling pledged assets was considered an effective tool for credit
institutions to retrieve debts and reduce non-performing loans, gaps in
regulation have been hindering progress on this front, experts said during a
seminar in Ha Noi last week.
According
to Nguyen Tien Dong, Director of the central bank's Department of Credit for
Economic Sectors, handling of pledged assets was becoming a pressing matter
of concern in the operation of credit institutions.
He
attributed the stagnation in handling pledged assets to the overlaps and gaps
in relevant legal documents which made it difficult to properly evaluate the
value of the pledged assets or hindered seizure of assets.
While
a majority of pledged assets were in the shape of real estate, handling such
assets involves many entities, but the lack of co-ordination among such
entities was causing delays in transferring pledged assets.
The
general secretary of Viet Nam Banks Association, Tran Thi Hong Hanh, said the
process to handle these pledged assets must be expedited as stagnation would
hurt both lenders and borrowers as well as the economy. He urged that the
legal framework needs to be improved.
Facts
show that involved parties in any pledged asset hardly reached an agreement
regarding the value of the asset, especially if the pledged assets were
evaluated lower than the loan amount, experts said. Many such cases were
brought to courts, thus taking valuable time.
According
to Pham Hong Son, head of Agribank's Department of Individual and Household
Customers, involved parties could take advantage of the gaps in regulation to
prolong any dispute over asset handling.
In
addition, auctioning process of pledged assets lacked transparency and
sometimes the assets were over-evaluated on purpose, said a representative
from Ha Noi Civil Judgement Enforcement.
According
to Dong, credit institutions should pay adequate attention to the evaluation
and management of pledged assets to prevent conflicts which might arise
later.
The
co-ordination among local authorities, banks and the police was also
important in handling pledged assets, experts said, adding that regulations
about responsibilities of the police and people's committees, in
co-ordination with credit institutions and Viet Nam Asset Management Company,
were needed to hasten resolution of bad debts.
Honda
VN to recall more than 21,000 cars
Honda
Viet Nam is recalling 21,181 Civic and CR-V units to check and replace faulty
airbags.
The
Civic units were produced between 2006 and 2011 and the CR-V units were
produced between 2008 and 2011 by Honda manufacturers in the northern
Only
10 imported cars will be recalled, including Civic units produced from 2005
to 2008 and CR-V units produced in 2008.
Honda
said overvoltage had contributed to the malfunction of the airbags in the
driver's seat and the passenger seat. The fault will be repaired in these
cases.
Honda
said no accident related to this faulty airbags has been reported so far. The
firm will inspect and replace the airbags in the affected vehicles at no
cost. The vehicles' distributors will contact customers to set appointments
for the replacement work.
The
recall work will start on November 20.
Cement
firms register solid profits
Cement
firms are upbeat as rising domestic consumption has lifted their profits in
the year to date.
According
to Tran Viet Thang, general director of state cement conglomerate Vietnam
Cement Industry Corporation (Vicem), despite unfavourable exports, Vicem
still registered a pre-tax profit of VND1.34 trillion ($62.6 million) in this
year’s first half, which is up significantly from the figure of VND1 trillion
($46.7 million) posted one year ago.
This
year, the company expects that their full-year profits will surpass VND2
trillion ($93 million).
The
most impressive business performance among Vicem members was from Vicem Ha
Tien 1 JSC, which saw their post-tax profit in the first six months of this
year spike to VND397 billion ($18.4 million), an incredible surge in growth
that dwarfs the meager VND13 billion ($604,650) in the first two quarters of
2014.
Accordingly,
the company’s net revenue jumped 19.4 per cent year-on-year to VND2.06
trillion ($96 million), and gross profit leapt 51.5 per cent to VND433
billion ($20 million).
In the
second quarter of this year, Ha Tien 1 sold about 1.6 million tonnes of
cement, an on-year jump of more than 20 per cent.
Similarly,
Vicem Hoang Mai JSC has also reported positive business results. The company
raked in nearly VND30 billion ($1.4 million) in post-tax profits in the first
six months of this year against just VND24.7 billion ($1.1 million) a year
ago.
Its
net revenue from sales and service supply in the second quarter came to
VND499 billion ($23.2 million) compared to only VND452 billion ($21 million)
in the same period last year.
The
company’s chairman Ta Quang Buu said that Vicem Hoang Mai had closely
followed the business targets set out at the year’s outset albeit the long
Lunar New Year (Tet) holiday in the first quarter of this year had somewhat
affected their product sales.
This
year, the company plans to sell 1.76 million tonnes of products (1.67 tonnes
of cement, the remainder being clinker) to reach a full year revenue of
VND1.83 trillion ($85.4 million) and pre-tax profit of VND65.4 billion ($3
million).
Apart
from Vicem’s member units, other major players in the cement industry have
also reported a promising business outlook, with two-digit growth in the
year’s first half.
For
example, Cam Pha Cement JSC, based in the north-eastern
Hoang
Xuan Vinh, the company’s general director, said that the company has been
investing in a bulk loading system and two silos each with a carrying
capacity of 3,000 tonnes of cement which will be put into service before the
end of this year.
This
was meant to diversify products and help Cam Pha surpass their designed
capacity in the near future.
The
cement industry currently operates a total of 77 production lines, with a
combined capacity of 83 million tonnes.
This
year, total cement consumption is forecast at 74-75 million tonnes, with
19-20 million tonnes of this total earmarked for export.
Approximately
40 million tonnes of cement were consumed in the first seven months of this
year, up about 7 per cent. Export volume was estimated at nine million
tonnes.
Colossal
oil refinery hungry for more capital
Domestic
and foreign investors of the Nghi Son oil refinery and petrochemical complex
may have to raise their investment capital in the country’s second oil
refinery project by at least $200 million to complete construction.
According
to its current investment certificate, the Nghi Son complex in the central
province of Thanh Hoa’s Nghi Son economic zone, in which the country’s oil
and gas group PetroVietnam has a 25.1 per cent stake, Kuwait Petroleum
International (KPI/KPE) with 35.1 per cent, Idemitsu Kosan 35.1 per
cent, and Mitsui Chemical International 4.7 per cent, has the total
investment capital of $9 billion.
The
complex received its investment certificate for the first time in April 2008,
and is now the biggest oil refinery and petrochemical project to have been
licensed in the country. The complex’s refining capacity was expected to be
200,000 barrels per day (equivalent to 10 million tonnes per year), using
crude oil imported from
The
joint venture responsible for the construction of the complex is led by
Financial
institutions have committed to providing $5 billion for the project. Of this
sum, $2.3 billion comes from the Japan Bank of International Cooperation
(JBIC) and the Korean Export and Import Bank (Kexim). The remaining $2.7
billion is borrowed from commercial banks, with a guarantee from Nippon
Export and Investment Insurance (NEXI).
By the
end of July, the investors had disbursed their capital 12 times over, with
the total investment capital of more than $2.1 billion. The banks have
disbursed more than $2.2 billion. According to the investors, pilot operation
is going to start in November 2016 and commercial operation in July 2017.
Incentives
for the Nghi Son complex are considered much more preferential than
incentives for the operating Dung Quat oil refinery in the central
For
instance, the Nghi Son complex is entitled to retain the preferential value
level, which equals 7 per cent of the import tax for oil products, 5 per cent
for LPG, and 3 per cent for petrochemical products. This mechanism will last
for 10 years from 2017, when the refinery is slated to begin commercial
operation, until 2027.
Apart
from that, in the case where the import tax of refined and petrochemical
products is lower than the preferential value level calculated for sale price
(3 per cent for petrochemical products, 5 per cent for LPG, and 7 per cent
for petrol and oil), PetroVietnam shall cover the product sale of the Nghi
Son complex and factor the preferential value level into the price of
covering the product sale.
Mining
firms object to increasing royalty tax
A
number of mining firms have raised objections against the Ministry of
Finance’s recent proposal to increase taxes on key natural resources.
Nguyen
Van Thang, deputy chairman of Nui Phao Mining Processing and Exploiting
Limited Company, said at a meeting last week that raising the royalty tax
would not help the country increase its state budget, but encourage illegal
mining activities.
Thang
made the comment after the Ministry of Finance (MoF) introduced a draft
circular on the royalty tax hike in May 2015 to collect comments from
ministries, agencies, and businesses.
As per
its calculation, tariffs on some metallic and non-metallic minerals should be
adjusted up; for instance, iron from 12 per cent to 15 per cent, titanium
from 16 per cent to 18 per cent, and gold from 15 per cent to 20 per cent.
Others like coal, sand and granite will be subject to tax increases of 3
percentage points, while taxes on precious stones such as diamond, ruby, and
sapphire will be increased by 5 percentage points.
Thang
said to VIR, “It is unreasonable for the MoF to say in the proposal that the
move aims to help cover the loss of the mineral export tax, which will be
removed in line with some free trade agreements (FTAs) that the country is
joining.”
“It is
too early to increase the tax, as these FTAs have not been signed yet.
Moreover, the country is also applying some technical barriers to reduce or
ban the export of some minerals,” he added, noting that an additional
insignificant collection from the tax hike could not help the country cover
possible serious consequences in the long term.
Not
only Nui Phao Mining, but also many other domestic and foreign firms,
including Canada’s gold mining company Besra, have complained that Vietnam’s
seven increases on taxes and fees in the extractive industry since 2007 have
caused more difficulties for them. Changeable policies have discouraged
mining companies from investing in modern assemblies, but focused on
small-scale production and raw material sales, Thang attributed.
“Tax
hikes have adversely affected our revenue and profit target for the Nui Phao
wolfram project, the largest mineral project in
Besra
CEO John Seton also said: “Any increase, however small, would seriously
impact Besra’s ability to commit further investment capital in
At
last week’s meeting, mining firms proposed that the government and the
National Assembly Standing Committee reconsider tax hikes on minerals in a
more careful and thorough manner before making any decisions, The MoF planned
to present the proposal to the committee’s session in September this year.
The new rates will be applicable from January 1, 2016 if they are approved.
Foreign
investors have engaged in 3,209 projects in
“
“
However,
FIA’s general director Do Nhat Hoang said that Vietnam, in general, and
Hanoi, in particular, was facing difficulties and challenges in attracting
FDI as enterprises were waiting in anticipation for the Law on Investment,
the Law on Enterprises and the related guiding documents.
“In
order to deal with these problems, authorities should boost the promotion of
the investment opportunities of the city and accelerate the awarding of
investment certificates and relevant procedures in order to facilitate
investors. It would also be welcome to establish a “Task Force Team” to
support investors in preparing and implementing large-scale projects,” Hoang
added.
GTN
to buy stakes in State enterprises Vinatea, Vilico
Thong
Nhat Production and Investment Joint Stock Company (GTN) plans to acquire a
75 per cent of stake in the State-owned Vietnam National Tea Corporation, or
Vinatea.
A tea
field in the northern region of
According
to a resolution approved at GTN's annual shareholders meeting in May, the
company will buy 27.75 million shares in all, more than 23.58 million shares
directly from Vinatea as a strategic investor, and the rest in the market.
GTN
shareholders also approved a fund of VND350 billion (US$15.57 million) for
acquiring State-owned enterprises to develop its business which is focuses on
areas like bamboo manufacturing, construction, infrastructure, mining,
building materials, plastics, agricultural products, and foodstuffs.
Under
an equitisation plan approved by the Government in June, Vinatea will be
fully sold. The strategic investor will be allowed to buy 63.74 per cent of
the shares and Vinatea workers, nearly 4.4 per cent, while the rest will be
sold to the public.
Vinatea
plans an initial public offering (IPO) on September 16 at an openning price
of VND10,000 each.
The
company, which produces and trades various teas and leases office space, is
expected to have a registered capital of VND370 billion ($16.46 million)
post-IPO.
GTN
has also plans to buy a 12.12 per cent stake, corresponding to 7.65 million
shares, in the Vietnam Livestock Corporation (Vilico).
SSI
launches Japanese interface for online trading
Saigon
Securities Inc (SSI) launched Japanese web and mobile interfaces for online
trading customers on August 24).
An SSI
spokesperson said it has enhanced ease of doing business for its Japanese
clients.
After
three years of sub-6 per cent growth, the economy is recovering and is
expected to top that rate this year, it said.
With
quite a few securities companies providing a Japanese interface, it said its
move was thus an important step in efforts to offer innovative and efficient
solutions to investors.
SSI is
now one of the largest securities companies in the country.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR
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Thứ Hai, 31 tháng 8, 2015
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