Thứ Hai, 31 tháng 8, 2015

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 Hai Phong to serve fishing activities in the Gulf of Tonkin.
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, Vietnam will have six large-scale fisheries centres, five of them are associated with key fishing grounds.
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 Da Nang city, Hai Phong city, the central province of Ba Ria – Vung Tau and the Mekong Delta province of Kien Giang.-
FDI disbursement rises by 7.6% in 12 months
The disbursement of foreign direct investment (FDI) in Viet Nam stood at US$8.5 billion in the past eight months, a year-on-year rise of 7.6 per cent.
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 Republic of Korea continued to be the top foreign investor in Viet Nam, with a total registered capital of $5.26 billion, followed by the United Kingdom with $1.25 billion.
The northern province of Bac Ninh continued to be the recipient of the largest FDI amount of $3.33 billion, followed by HCM City and Dong Nai Province.
Among the FDI projects that were granted licences during the past eight months was one by Samsung Display Viet Nam, a subsidiary of the Samsung Group, which was allowed to invest an additional $3 billion to boost display module production in its Bac Ninh plant. The plant previously had an investment of $1 billion.
Other projects include a $1.2-billion real estate joint venture in HCM City, set up by several local firms and Denver Power Ltd from the United Kingdom, and a $660-million fibre production project in Dong Nai Province that has an investor from Turkey.
VN runs trade deficit of $3.6b
Viet Nam's trade deficit rose by around US$200 million in August to stand at $3.6 billion in the first eight months of this year, according to the latest update of the General Statistics Office.
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 Viet Nam also registered a fall in exports. For example, seafood products fell by 16.6 per cent to $4.177 billion and rice by 11 per cent to $1.812 billion.
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.
Viet Nam mainly imported machinery and equipment, worth $18.9 billion and up 33.4 per cent, electronic components and computers, worth $15.1 billion and up 35.1 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 Viet Nam, with an 8-per-cent market share. It produced nearly 1.4 million metric tonnes of feed last year, the second largest by volume. Its best-known brand is "Con Co" (Stork).
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 Institute of Agricultural Science and the Institute for Animal Husbandry under the Ministry of Agriculture and Rural Development (MARD) also have plans to divest from Proconco this year.
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's Government needs to help local companies improve their competitiveness on global markets, experts said at the Autumn Economic Forum 2015 yesterday.
"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 Viet Nam had taken advantage of opportunities to improve its global integration by deepening its cooperation with ASEAN countries and other countries in the world such as Japan, South Korea, China and the US.
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, Viet Nam still needed to help its domestic companies so that they became more competitive and important in the global value chain.
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 Viet Nam were small and medium-sized that employed less than 50 labourers, he said.
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 Viet Nam suffered from many inadequacies and shortcomings that hindered development and global integration of Vietnam-ese businesses, said Nguyen Dinh Cung, director of the Central Institute for Economic Management (CIEM).
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 Viet Nam needs 34 days for a licence while it is just one day in New Zealand. Similarly, cargo clearance in Viet Nam takes 21 days, while Singapore only takes six days.
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 Cambodia
The Tan Bien-Kampong Thom Development Company opened a rubber latex processing plant in Cambodia yesterday.
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 Cambodia, which helped develop the local economy and generated jobs for local residents.
Vietnamese firms are also been involved in social welfare activities, infrastructure building and poverty reduction efforts in Cambodia.
Minister Phat reiterated the Vietnamese Government's determination to develop its friendship and comprehensive co-operation with Cambodia across all fields, especially in agriculture.
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 Cambodia process fresh rubber latex and improve business efficiency.
The company has been licensed to grow rubber trees on over 7,000ha in Cambodia's Kampong Thom province with total investment of US$43.5 million.
Fourteen VRG affiliates are implementing 18 rubber projects in Cambodia on 90,000 of the 130,000ha of land allocated for their use.
Thai firms eye VN textiles
A delegation of more than 400 Thai garment, textile and footwear firms are visiting Viet Nam to check out the domestic market.
The businesses have already spoken to hundreds of local firms in HCM City.
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 HCM City branch, said Thai products were popular in Viet Nam and that more Vietnamese goods were present in the Thai market.
Trade turnover between Viet Nam and Thailand reached $10.6 billion in 2014, a year-on-year rise of 12.5 per cent. In the first half of this year, the figure stood at about $5.2 billion , up 8 per cent against the same time last year.
The two countries are striving to raise bilateral trade value to $20 billion by 2020.
Tien Giang set for more investment
The Mekong Delta province of Tien Giang is currently home to 73 investment projects, 47 of which are foreign direct investment, that cumulat-ively pull US$1.37 billion into the province.
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 Nam, a subsidiary of the BIM Group and the developer of Lotus Residences, said the buyers of Lotus Residence townhouses at the weekend sale were mainly those who already owned at least a resort unit in tourism hubs across the country, such as Da Nang, Nha Trang and Phu Quoc.
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 Nam said the market was showing positive signs and that Lotus Residences' quality and originality would continue to attract buyers.
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
Viet Nam's fast-growing market has attracted a large number of Taiwanese companies that plan to invest in the country in the coming years.
John Tang, director of the Taiwan Trade Centre (TAITRA) office in HCM City, said Taiwanese companies were among the first foreign investors investing in Viet Nam.
Tang spoke to the press on the sidelines of a meeting of 33 Taiwanese companies and their Vietnamese counterparts in HCM City yesterday.
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 Viet Nam's retail market, as it has a high growth rate.
In addition, Taiwanese firms plan to invest in a textile production chain in Viet Nam in the coming time to benefit from the upcoming Trans Pacific Partnership (TPP), Tang said.
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 Viet Nam, Thailand and Indonesia from August 24 to September 2.
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 Viet Nam had earlier dismissed Binh and his deputy Nguyen Thi Ngoc Van for violations on their watch, and replaced them with executives from the Bank for Investment and Development of Viet Nam (BIDV) on August 20.
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 HCM City office told Tuoi Tre newspaper, that the change was based on "practical developments" at DongA over the last few days.
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, Viet Nam planned to privatise 289 SOEs as part of an ambitious plan to privatise 432 SOEs during 2014-15. Last year, 143 SOEs were privatised, along with 61 SOEs in the first six months of 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 Vinh Phuc Province.
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 province of Quang Ninh, saw a 21 per cent jump in sales volume during the period, generating revenue of VND1.1 trillion ($51 million) and profit of VND66 billion ($3.06 million).
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 Kuwait.
The joint venture responsible for the construction of the complex is led by Japan’s JGC, and Japanese contractors such as Chiyoda, South Korea’s GS E&C, SK E&C, France’s Technip France, and Malaysia’s Technip Geoproduction.
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 province of Quang Ngai, according to Ngo Thuong San, president of the Vietnam Petroleum Association and former general director of PetroVietnam.
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 Vietnam, and considered the world’s largest wolfram mine outside China,” he stated, without offering any detailed figures.
Besra CEO John Seton also said: “Any increase, however small, would seriously impact Besra’s ability to commit further investment capital in Vietnam.”
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.
Hanoi ranking third yet striving for more
Hanoi currently ranks third out of 63 provinces and cities in attracting foreign investment, with the total investment capital of $24.05 billion as of July 20, 2015, according to statistics published by the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment.
Foreign investors have engaged in 3,209 projects in Hanoi, with the total capital of $24.05 billion. In the first seven months of this year alone, the city attracted $96.4 billion to 162 newly-registered projects and $110.68 million in added capital to 30 existing ones.
Hanoi has a strong competitive advantage compared to the northern provinces in attracting foreign investment as it has many industrial parks, including the Thang Long I Industrial Zone, the Noi Bai Industrial Zone and the Hanoi Southern Supporting Industrial Park. Furthermore, the city has access to modern infrastructure such as the Noibai International Airport, the Nhat Tan Bridge and the Hoa Lac Hi-tech Park,” Kana Miyazaki, deputy chief representative of the Japan External Trade Organization in Hanoi said at the Conference on Investment Promotion of Hanoi 2015, held on August 24.
Hanoi is one of the most important business portals in Vietnam. It is an ideal destination for foreigners, especially for Japanese investors, due to its advantages in geographical location, human resources, fast economic growth speed and many existing subsidies as well as incentives,” said Masaki Kanatsu, general manager of the development department of AeonMall Vietnam Co., Ltd.
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 Viet Nam. The Vietnam National Tea Corporation is expected to sell 75 per cent of stake to Thong Nhat Production and Investment Joint Stock Company. Photo kinhdoanhnet.vn
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.
Viet Nam's stock market has always been regarded as attractive to Japanese investors, especially with its economic growth being one of the most consistent in Asia.
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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