BUSINESS IN BRIEF 1/11
No sign of housing market cooling in
HCMC
Director of the HCMC Department of Construction Tran
Trong Tuan, speaking at a meeting last Friday on the city’s socio-economic
performance, said it is too soon to conclude the housing market is cooling.
The property market, which has turned red hot in the
last three years thanks to the loosening of home credit, should be thoroughly
reviewed, Tuan told the meeting. There were only 7,000 condo units sold in
2013, only 28.9% of the total offered, but condo sales shot up to 16,950
units (51.8%) in 2014 and 36,160 (56.8%) in 2015.
Growth momentum has continued this year. But there is
speculation that the market is cooling, something which requires a careful
review.
“In the first six months, the number of condos sold
accounted for 31.7% of the total on offer (14,970/47,252 units). This is the
first-half figure, which cannot be used to justify the claim that there is
some cooling in the market; otherwise, the market would be negatively
affected,” Tuan said.
He said with confidence that condo sales will improve
from now until the end of the year. This year his department has issued 52
permits for property developers to raise capital from the public to fund
their projects. Around 57,000 homes will be launched onto the market next
year, with 9% of them in the medium-end segment.
Though acknowledging a discrepancy between supply and
demand, Tuan said the city’s support for low-cost housing projects would pay
off as housing products on the market could be diversified to meet different
needs of different groups of homebuyers.
“With 39 low-cost housing projects underway, the
Department of Construction will seek to accelerate their development and put
the project approval process on fast track to boost the supply of affordable
homes. From now to 2020, 30,000 budget homes will be made available on the
market,” Tuan noted.
At the meeting, HCMC Vice Chairman Le Van Khoa said the
city has put under control what might lead to a property market bubble and
that next year the market may remain stable.
Khoa, however, told the construction department to
closely monitor supply and demand, and take tax and other policy measures to
prevent the market from volatility.
“The Department of Construction should join forces with
the State Bank of Vietnam to make sure the relationship between property
firms and lender banks is healthy.”
30 businesses recognised for fair
disclosure
The Hanoi Stock Exchange (HNX) will celebrate 30 listed
businesses deemed 2015-16 industry leaders in fair disclosure as part of the
Exchange's annual listed businesses conference on November 11. — Photo
tinnhanhchungkhoan.vn/ HA NOI (Biz Hub) — The Hanoi Stock Exchange (HNX) will
celebrate 30 listed businesses deemed 2015-16 industry leaders in fair
disclosure as part of the Exchange's annual listed businesses conference on
November 11.
The conference's goal this year is to provide a
comprehensive overview of the implementation of fair information publishing
and corporate management within HNX's listed companies, to boost the quality
of disclosure, and to find a solid reference for new policies on
administration.
The conference will focus on a total of 344 validated
companies currently listed on the HNX.
The 102 evaluation criteria of a company's fair
disclosure policies, based on the core principles of corporate management,
include compliance and willingness in practice.
Data used in the process of fair disclosure evaluation
came from the listed companies' official reports on their websites and from
HNX's homepage and other publications issued by the companies.
Overall evaluation showed that on a scale of 100 per
cent, the average score of fair disclosure for HNX's listed companies in 2016
was 51.3 per cent, an increase of 0.5 per cent compared to 2015.
The Asia-Pacific Institute of Management of the
National Economics University is in charge of collecting the needed data and
conducting the analysis.
Australia enhances partnership with
Vietnamese localities
The Foreign Ministry’s Department of Foreign Affairs of
Localities and the Australian Chamber of Commerce in Vietnam (AusCham) have
signed an agreement on beefing up partnership between AusCham and 63
Vietnamese provinces and cities.
Secured as part of a conference held in Hanoi on
October 31, the memorandum of understanding on cooperation also allows
Vietnamese localities to access the Australian market via the AusCham’s
network.
Speaking at the conference, Deputy Foreign Minister Bui
Thanh Son said the event aims to improve mutually beneficial ties between
Vietnam and Australia, contributing to the development of the Asia-Pacific
region.
He suggested both sides work together to promote trade
and bring Vietnamese goods to Australia.
He added that Vietnam also wants to import quality
products from Australia and welcomes Australian businesses to invest in local
public-private projects and human resources development.
Australian Ambassador to Vietnam Craig Chittick said
his Government will stimulate cooperation with Vietnam in trade,
defence-security, creative innovation and personnel’s capacity
building.
Chittick proposed a working session between Australian
firms and representatives from 63 Vietnamese localities in 2017 to exchange
information and investment opportunities.
Solutions sought for sustainable
development of pepper cultivation
Solutions for the sustainable development of pepper
cultivation were the focus of a forum held in the southeastern province of
Binh Phuoc on October 31 in the context of a surge in pepper tree acreage
across the country.
The acreage of pepper plants, at 110,000ha, has now
surpassed plans by 51,000 ha, with total peppercorn output estimated at
176,000 tonnes a year.
The Central Highlands and Southeast regions account for
more than 93 percent of pepper acreage and 95 percent of peppercorn
output.
Policy makers said the unplanned expansion of pepper
cultivation, prompted by rising prices of peppercorn, faces potential risks
from the lack of quality pepper varieties, the spread of diseases and
substandard cultivation techniques.
The Cultivation Department under the Ministry of
Agriculture and Rural Development (MARD) reported that it is reviewing the
ecological conditions in pepper growing areas in order to find areas most suitable
for the industrial crop.
The MARD will help with the selection of varieties
while encouraging the use of advanced and clean cultivation methods, with
priority given to certified farming models, in order to enhance quality of
peppercorn products.
Chairwoman of the Vietnam Pepper Association Nguyen Mai
Oanh forecast that peppercorn export can surpass 150,000 tonnes, adding that
132,000 tonnes were shipped abroad in the first nine months of this year,
earning more than 1.2 billion USD, up 32 percent year on year.
Oanh said towards sustainable development, farmers and
exporters should work together to build a chain value and obtain certificate
of origin for domestic pepper products.
Masan Group's 9M revenue up 58%
The Masan Group has announced revenues in the third
quarter of VND11 trillion ($495 million) and gross profit of VND3.2 trillion
($144 million), both up 26 per cent year-on-year.
Though financial revenue decreased by half the group’s
profits from joint ventures increased sharply, with after-tax profit reaching
VND1 trillion ($45 million), an increase of 114 per cent year-on-year.
Masan’s net revenue was VND30 trillion ($1.35 billion)
in the first nine months of the year, up 58 per cent year-on-year. Revenue
from animal feed reached VND17.5 trillion ($787.5 million), double the figure
in the same period last year. Gross profit in animal feed also doubled, to
VND3.9 trillion ($175.5 million). Its profit margin remained stable at 22 per
cent.
Food and beverages, meanwhile, recorded VND9.7 trillion
($436.5 million) in revenue, up 9 per cent year-on-year, and profit reached
VND4.2 trillion ($189 million).
Profits from its joint ventures continues to increase
and brought in more than VND700 billion ($31.5 million). In the first nine
months, after-tax profit was VND2.53 trillion ($113.8 million).
Masan Consumer, a key company of the group, recorded
revenue of VND3.2 trillion ($144 million) in the third quarter, up 9 per cent
year-on-year. Gross profit reached VND1.5 trillion ($67.5 million), up 13 per
cent, and after-tax profit reached VND719 billion ($32.2 million).
Its revenue for the first nine months was VND9.1
trillion ($409.5 million), up 6 per cent compared to the same period last
year, while after-tax profit fell 4 per cent to VND1.68 trillion ($75.6
million).
Masan is one of Vietnam’s largest companies, focused on
domestic consumption and building leading businesses in food and beverages
and the animal nutrition value chain.
Businesses include Masan Consumer Holdings, the
producer of some of Vietnam’s most trusted and loved brands, such as Chin-su,
Nam Ngu, Tam Thai Tu, Omachi, Kokomi, Vinacafe, Wake-up, Vinh Hao and Su Tu
Trang, and Masan Nutri-Science, Vietnam’s largest local animal feed company,
with brands including Proconco and Anco.
The group’s other businesses include Masan Resources,
one of the world’s largest producers of tungsten and strategic industrial
minerals. Masan also has a major shareholding in Techcombank, a joint stock
commercial bank in Vietnam.
MWG's 9M online profit up 99%
The Mobile World JSC (MWG) has announced revenue of
VND30.7 trillion ($1.37 billion) in the first nine months of this year, up 76
per cent year-on-year and equal to 90 per cent of its annual target.
After-tax profit was VND1.2 trillion ($53.8 million),
up 88 per cent year-on-year and equal to 64 per cent of the annual target.
Online turnover was VND2.2 trillion ($98.6 million), up 99 per cent
year-on-year and equal to 67 per cent of the annual target.
The company opened 419 new stores nationwide in the
first nine months, including 338 new thegioididong.com stores and 81 new
dienmayxanh.com stores. As at September 30 it had 1,052 stores, including 902
thegioididong.com stores and 150 dienmayxanh.com stores.
It also closed 22 retail stores within the Big C
Vietnam supermarket chain, as required by Big C. Mr. Dang Thanh Phong from
MWG confirmed with VET that the stores are closing one year after opening.
“This is being done under a normal business agreement,” he said. “Our stores
in Big C are in the mobile phone business. We planned to change to the
electronics business but Big C did not agree.”
Turnover at these stores has been lower than at MWG’s
1,000 other retail stores so the closure will have no effect on its total
turnover. The first thegioididong.com store under the model opened at Big C
Dong Nai in March 2015.
Six funds belonging to the London-based Genesis
Emerging Markets Fund have acquired 4.03 million shares in MWG worth nearly
$30 million. They are among 12 foreign investment funds that purchased more
than 5 million MWG shares in total from Mekong Capital, CDH Electric Bee, the
Vietnam Growth Stock Income Mother Fund, and the CAM Vietnam Mother Fund on
October 21.
Established in 1989, Genesis Emerging Markets Fund Ltd
(LSE: GSS) is a large Guernsey-incorporated, London-based closed-end
investment fund focused predominantly on holdings in the stock markets of
emerging economies.
Turkey imposes anti-dumping duty on
Vietnam plywood
The Turkey Ministry of Economy (TMoE) has issued its
final decision on the anti-dumping tax avoidance measures into plywood
imported from some countries including Vietnam, the Vietnam Competition
Authority quoted information from the Vietnam Trade Office in Turkey.
Accordingly, only two Vietnamese businesses which
provided full information for investigation agencies on schedule are not
subjected to these measures.
Other Vietnamese businesses are levied an anti-dumping
tax of US$240 per cubic metre of plywood (equivalent to the anti-dumping duty
that has been applied to the goods imported from China’s enterprises).
The decision is valid since its announcement day.
Turkey initiated an investigation on May 27, 2015 into
a possible avoidance of anti-dumping tax of plywood imported from some
countries including Vietnam from 2010 up to now.
Vietnam mulls taxing multiple-house
owners
Vietnam’s Ministry of Finance is weighing up a policy
that requires those who own more than one house to pay extra tax, a plan to
which local experts have mostly responded positively.
The ministry has tasked its tax policy department with
developing the plan, deputy minister Huynh Quang Hai confirmed to Tuoi Tre
(Youth) newspaper on October 30.
Hai admitted that it is unlikely that the new tax
policy will be issued before next year, but “it must be enacted in the
future,” given the current tight state budget and the fact that “other
countries have been collecting this kind of tax for years.”
The finance ministry began considering taxing
multiple-home owners as early as 2009, with three possible tax plans on the
table then.
The first plan was to levy fixed taxes on the second
and any subsequent homes. Buildings under two stories would be exempted,
while those with three stories and above would be subject to a tax of
VND2,000 per square meter per year, according to the tentative tax plan.
The second plan considered a 0.03 percent tax on the
value of the second and any subsequent homes after deducting VND1 billion
(US$44,643). For example, if the house is valued at VND1.2 billion
(US$53,571), the owner would pay a 0.03 percent tax on a VND200 million
(US$8,929) value per year.
The final proposal sought to tax the extra area of the
house, after deducting 200 square meters, with the tax ranging from VND2,000
to VND4,000 a square meter per year. This meant that if the house measured
300 square meters, the ‘taxable area’ is 100 square meters.
The plan failed to meet with approval from the
lawmaking National Assembly, with lawmakers saying it was not the right time
to impose housing taxes and that taxes collected would not contribute
significantly to the state coffers.
However, seven years on, the finance ministry and
several experts now believe it is high time the plan was reconsidered.
In an interview with Tuoi Tre on Sunday, Professor Dang
Hung Vo, former deputy minister of natural resources, said that Vietnam is
lagging way behind other countries in imposing property tax.
Vo said homeowners must pay taxes, and that tax rates
must be progressively increased on the second and any subsequent homes.
“Some houses are built on very large land plots so the
owners should pay taxes that ensure social equality,” he underlined.
Prof. Vo explained that the current social inequality
meant that the state only collects a modest amount of land use tax from
homeowners, which is insufficient to cover expenses that maintain working
public amenities.
Vietnam sets a land use tax of 0.03-0.07 percent based
on the government-stipulated property prices, while other countries impose
taxes of 1 to 1.5 percent on the property's market price, according to the
professor.
“The government’s prices are always much lower than
market prices,” he said.
“For instance, I have a 150 square meter house in Hanoi
but only have to pay VND1 million (US$45) in land use tax per year, which is unreasonably
low.”
Assoc. Prof. Nguyen Dinh Chien, from the tax department
of the Academy of Finance, backed the idea that people who own multiple homes
pay taxes that ensure social equality.
“Multi-home owners only live in one of their many
houses, and the remaining are up for rent,” Chien said, implying that their
rental incomes are to be taxed.
Dr. Do Thi Thin, another tax expert, said people who
own multiple houses are high-income earners so “regulating their income via
tax” will create fairness.
Other industry insiders said the multiple-home tax will
prevent property speculation.
“As they do not have to pay any taxes for the ‘extra’
properties, and the land use taxes are modest, many people are willing to
‘stockpile’ homes in the hope of deriving profit,” one financial expert said.
Property speculation sometimes sends house prices
skyrocketing, making them unaffordable for buyers with shallow pockets.
Vietnam needs 1.8 million tons of
gas next year
Vietnam needs around 1.84 million tons of gas next
year, a year-on-year increase of 8%, according to the Vietnam Gas Association
(VGA).
VGA forecast that next year domestic output will be
stable at around 45% and imports, 55%. As a result, Vietnam is able to meet
all energy requirements for production and consumption activities.
This year, Vietnam imported 1.7 million tons of gas, a
rise of 10% compared to last year.
It is predicted that gas price in the world will remain
stable next year and fluctuate at around US$318-518 per ton. Domestic price
is around VND250,000-400,000 per 12kg gas tank.
Cooking gas price rises in the south
The retail price of a 12 kg cooking gas canister in Ho
Chi Minh City and southern localities climbed by VND19,000 (US$0,85) to
nearly VND300,000 (US$13.44) per canister from November 1.
Tran Van Phuc from the Saigon Petro Company attributed
the rise to an increase in the October world gas price by US$60 compared to
October 2016 to US$415 per tonne.
The new price has been informed to local gas
distributors and consumers. It has been applied since 7:30am of November 1.
Roadmap is needed for new emission
standard
Though major changes are on the horizon for the
domestic auto industry, the Vietnamese government has so far failed to
provide a roadmap for new emission standards, and carmakers are getting
concerned.
In light of the prime ministerial Decision
No.49/2011/QD-TTg, from January 1, 2017 newly manufactured, assembled, and
imported cars are obliged to meet European emission level 4 standards (Euro
4) to be eligible to register for circulation in Vietnam.
Decision 49 provides a roadmap for the application of
these exhaust emission standards.
The Vietnam Automobile Manufacturers’ Association
(VAMA) has continued to propose the prime minister and authorised management
agencies that the organisation present the Euro 4 standards and provide the
roadmap.
VAMA’s first application of the same content was sent
to the government this May, but it has not received any feedback.
“Euro 4 fuel has yet to be supplied to the Vietnamese
market. VAMA is particularly concerned that Euro 4 engine cars and still
using Euro 2 fuel-this could seriously affect the engine operation and
durability, the car user benefits, and harm the environment”, VAMA said in a
statement.
In its latest proposal, VAMA asked not to change the
content regulated in Decision 49, which states that petrol-fueled cars must
meet Euro 4 standards from January 1, 2017. The timeline for diesel engine
cars will be one year later, starting January 1, 2018.
VAMA also proposed that the government ensure a
nationwide supply of Euro 4 fuel prior to implementing the new standards.
VAMA chairman Yoshihisa Maruta suggested converting
from the usage of Euro 2 to Euro 4 fuel to avoid fraud during the fuel supply
process.
Management agencies are also concerned about the
fast-approaching milestone. The Ministry of Industry and Trade (MoIT)
recently met relevant management agencies, the oil and gas sector’s
management authorities, and relevant business associations and enterprises to
review the implementation of Decision 49.
The MoIT has proposed diverse measures to ensure a
balance in interests between oil and gas producers and traders, and auto and
motorbike importers and traders.
The measures also aim to ensure the production, import,
and supply of fuel to meet the actual requirements for implementing the new
exhaust emission standards roadmap.
Car firm representatives commented that they would not
face any difficulties in the application of Euro 4 emission standards.
After January 1, 2017, domestic carmakers will begin to
place orders for the production of Euro 4-compliant engines from abroad. They
will then modify them locally, with corresponding components and control
software.
Vingroup announces Q3 growth
Vingroup Joint Stock Company (Vingroup) has announced
its third quarter net revenue of VND34.6 trillion (US$1.5 billion), an 80 per
cent rise compared to the same period last year.
The net revenue accounts for 77 per cent of Vingroup's
annual plan, as per its financial report for the first nine months of 2016.
The company's total revenue after tax is VND3.09
trillion ($138 million), more than triple the amount during the same period
last year, and slightly higher than the post-tax revenue target for 2016 of
VND3 trillion ($134 million).
The accumulated revenue from all of Vingroup's brands,
such as Vinhomes, Vincom Retail, Vinpearl, Vinschool and VinMart, has
increased by 47 per cent compared to the same period in 2015.
As of end September, Vingroup's total worth has touched
VND173.2 trillion ($7.7 billion), a rise of VND27.6 trillion ($1.2 billion)
from December 31, 2015, with the owners' equity totalling to VND41.9 trillion
($1.87 billion), up by VND4.3 trillion ($192.4 million).
Five of Vingroup's brands are in Việt Nam's top 50 most
valuable brands list, as per British business valuation consultancy Brand
Finance. This includes Vinhomes, which ranks the fifth most valued domestic
brand.
Bank to lend to develop HCMC
grassroots-level hospitals
The Housing Development Commercial Joint Stock Bank
(HDBank) last week signed an agreement with the HCM City Department of Health
to provide credit to buy medical equipment for grassroots-level hospitals and
set up a social work division at all hospitals by 2020.
The bank also donated 100 beds worth VND300 million
(US$13,333) to the Cu Chi District Hospital.
Besides, it will provide a credit line worth VND1
trillion ($44 million) to develop the city's health sector.
Industrial production index up 7.2
percent in 10 months
Vietnam’s industrial production index (IPI) in the
first ten months of 2016 rose 7.2 percent year-on-year, lower than the 9.8
percent level recorded in the same period last year due to a continuous
downturn in the mining industry.
According to the General Statistics Office (GSO), the
IPI of the mining industry fell 5.5 percent, while the production of crude
oil and natural gas dropped 7.5 percent.
Meanwhile, a surge from 14 to 16.7 percent was seen in
the IPI of the metal industry, textiles, engine production, electronics,
computer and optical products.
In the reviewed period, the production of some
industrial products soared compared to the same period last year, with the
highest rise in television at 79.2 percent, steel sheet at 25.7 percent,
automobiles at19.7 percent, and animal feed at 19.7 percent.
The GSO also reported that the central province of
Quang Nam posted the highest IPI rise at 29.2 percent, followed by the
northern province of Thai Nguyen with 26.6 percent. Hai Phong, Da Nang and
Can Tho cities saw an increase of under 20 percent in the index.
The IPI of thetwo major cities of Ho Chi Minh City and
Hanoi was up 8.1 and 6.8 percent, respectively.
As of October 1, the inventory index of the processing
and manufacturing sectors expanded 8.9 percent year on year, down 0.9 percent
compared to the growth of the same period last year.
Notably, some industries saw a decrease in the
inventory index such as electric devices with a fall of 7.9 percent,
pharmaceuticals and pharmaceutical chemistrywith 8.9 percent,prefabricated
metal products 12.7 percent, leather and relevant products 24.9 percent.
However, the index surged 55.4 percent in paper
production, 45 percent in electronic, computer and optical products, and
42.6percent in engined vehicles.
Local shipbuilder partners with
Russia
The local Song Thu Shipyard Corporation has agreed to cooperate
with Vostochnaya Verf shipyard (Primorye), Russia, in the production of
cruise ships for tourism development in Vietnam.
General Director of the Da Nang-based shipbuilder Ha
Son Hai said the two sides will start construction of ships to serve local
property developer Sun Group's tourism projects in Da Nang, before expanding
to mass production in Vietnam's market and for export.
Hai said Song Thu had inked an agreement on education,
science and innovation development projects with the Admiral Nevelskoy
Maritime State University, in Vladivostok, Primorye of Russia.
Russia is a very new market for local ship builders
when it launched a dredger, the TSHD2000, for Russia's Rosmorport company in
2015.
Song Thu Corporation, which is a major shipbuilder in
Vietnam, in cooperation with the Damen Group from the Netherlands, has
exported 40 vessels, including fast-crew supply ships, rescue ships, salvage
tugs and drive tugs, besides patrol boats to the Middle East, South America,
Europe and the domestic market, with an annual export volume of 55 million
USD.
Asian countries splash out on Dong
Nai in 10 months
The Republic of Korea, Japan and China’s Taiwan were
the top three investors in the southern province of Dong Nai in the first 10
months of 2016.
During the period, Dong Nai reeled in 1.75 billion USD
worth of foreign capital, surpassing its yearly plan by 75 percent.
Of the total, 1 billion USD were poured into 79 new
projects, while the remaining sum was invested in 77 existing projects.
The Republic of Korea topped the foreign direct
investment (FDI) list with 32 projects worth 146 million USD, followed by
Japan (11 projects, 52 million USD) and Taiwan (9 projects, 40.5 million
USD).
Notable projects included the Thai-funded Amata Long
Thanh city registered at 309 million USD and a Korean-funded project by Dong
Won Vietnam Co. Ltd at 60 million USD.
According to the Department of Planning and Investment,
Dong Nai is home to 1,233 valid projects with total capital hitting 25.5
billion USD. Investment from the RoK, Taiwan and Japan have been taking the
lead among 44 countries and territories investing in the province.
European home appliances brand Beko
enters Vietnam
Turkish home appliances brand Beko on October 29
announced its official entrance into the Vietnamese home appliance market
with a product launch at Crescent Mall in District 7 of Ho Chi Minh City.
At the launch, Beko introduced its product lineup. A
brand of Arçelik Group, Beko offers product lines that include major
appliances, air conditioners and small appliances.
According to Pornchai Trakultechadej, Arçelik Group’s
Asia-Pacific marketing and product management director, the company is
committed to continuously developing technology to respond to the needs of
the new generation, without sacrificing the environment both from the
products and manufacturing process.
“Beko has been successful in Europe, as the number one
brand in Europe with the fastest growth in the past seven years. For Beko,
the smart generation is the greatest source of inspiration in pioneering
future solutions. Beko is inspired by people’s ever-changing needs and
lifestyles and strives to help make consumers’ lives easier with smart home
appliance solutions. Under our global brand message ‘The Official Partner of
The Everyday’, we aim to position Beko to be the partner of everyone at every
stage of life,” he said.
Ho Xuan Loc, general manager of Arçelik Group’s
subsidiary Vietbeko said the Vietnamese market is an emerging Asian market
and is very interesting and potential to Beko.
“We believe with the outstanding strengths of Beko, our
products will be ideal choices for young generation consumers who are
tech-savvy and fond of stylishly - designed products in their unique home,”
he said.
Beko is one of the most important players in the UK’s
home appliances market and also holds top position in the French freestanding
and Polish total white goods market. Additionally, Beko has become the
fastest growing white goods brand in the German market, the biggest white
goods market in Europe, in the last five years with nearly three-fold growth.
In Vietnam, Beko would be competing with established
players in the white goods market such as Electrolux, South Korean companies
Samsung and LG and several Japanese names such as Sanyo, Panasonic, Sharp and
Toshiba.
Starting up a movement
Vietnam is mulling possible incentives to boost its
startup ecosystem, with special emphasis put on establishing private
investment funds involving local and foreign investors.
The National Assembly is scrutinising a draft law on
supporting small- and medium-sized enterprises, which includes a separate
section highlighting the country’s first-ever programme for establishing and
supporting startups, also known as innovative firms.
The programme covers a wide range of incentives for
startups to access the markets. For example, high-tech experts working at
startups will have preferential personal income tax. They will also be
supported by the government in technology transfer, piloting products, and
participation in corporate incubators.
According to the Ministry of Planning and Investment
(MPI), startups will also be supported in training, governance, legal
consultancy, investment attraction, brand promotion, and intellectual
property protection.
Notably, the new law will facilitate the establishment
of private investment funds to provide loans for startups. These funds will
be created by capital contributions from local and foreign investors,
organisations, and individuals.
According to the draft law, the government will “detail
the establishment, organisation, and management of private investment funds
for innovative companies, as well as instruct the procedures for capital and
profit transfer by these investors in and out of Vietnam”.
MPI Deputy Minister Dang Huy Dong said the incentives
for startups will help develop Vietnam’s private firms, whose number is
estimated to reach one million by 2020. This will also help improve the
competitiveness of the economy.
Dong said that though the details of incentives have
yet to be revealed, “the incentives are expected to create a wave of startups
in Vietnam”.
According to MPI, many localities and investors have
established investment funds for young businesses, from which they see great
development potential.
For example, Ho Chi Minh City will launch a VND1
trillion ($45.5 million) support package for young businesses, including tech
startups. This fund is expected to be launched in November 2016.
Eligible projects will be granted VND2 billion ($91,000)
each to operate a prototype. The long list of eligible projects include
mechanics, electronics, chemicals, food production, finance, banking,
insurance, commerce, transport, tourism, logistics, communication, real
estate, healthcare, education, and technology.
The city will also launch a programme to connect
startups with investment funds.
In March 2016, local giant FPT and investment group
Dragon Capital inked a co-operation deal on the establishment of a fund named
Vietnam Innovative Startup Accelerator (VIISA) to finance startups in
Vietnam.
VIISA is an open-ended fund with the participation of
many large firms. It trains and invests in startups in the sectors of
information technology, mobile, internet, and finance.
Currently, over 20 foreign venture capital firms have
expanded to Vietnam, where 1,800 startups are in operation. Funding into
Vietnamese startups has come from many regional venture corporations, such as
Golden Gate Ventures, Gobi Partners, and Expara Ventures, while IDG Ventures and
VinaCapital DFJ are seeking exits for their portfolios. VinaCapital DFJ is
also mulling over a second fund next year.
EU logistics centre anticipates
EVFTA
The first national-scale logistics centre in Belgium
has been planned by Belgium-based Herfurth Group and state-run Vietnamese
shipping group Vinalines, to facilitate trade and logistics operations in
advance of the EU-Vietnam Free Trade Agreement.
Herfurth, one of the world’s leading shipping,
logistics, and forwarding firms, last week signed a Memorandum of
Understanding (MoU) with Vinalines on establishing the logistics centre. The
centre – called Vietnam House – will be located at the port of Antwerp in
Flanders, the second-largest seaport and the largest conventional cargo port
in Europe. Vietnam House will be a point of entry into Europe for further
distribution into the continent and the world.
“The project will help improve the competitiveness of
goods produced in Vietnam, as it will offer competitive rates and value-added
services. It will also have incentives for firms in Vietnam when they export
and import goods to Europe. Instead of being treated [the same as any foreign
export], Vietnamese goods using logistics and warehousing services at the
centre will enjoy tax reduction, improved trading conditions, customs
facilitation, and other incentives,” Le Quang Trung, director of Vinalines’
Business and International Cooperation Department, told VIR.
The Herfurth-Vinalines centre project comes amid the
growth of 15-18 per cent in the import-export of commodities between Vietnam
and EU countries over the past several years. The EU-Vietnam Free Trade
Agreement, which was signed in December 2015 and is expected to take effect
in 2018, should serve to increase the bilateral trade between Vietnam and the
continent. It also better positions Vietnam to get direct access to a market
that accounts for around 22 per cent of the world GDP, 25 per cent of overall
export value, 21 per cent of the import value, and 40 per cent of the global
foreign direct investment sum.
There have been other Vietnamese attempts at setting up
warehousing centres overseas. However, they specialise in just retail
business, and suffer from a lack of local and international links. Vietnamese
goods exported to the EU as of now are dispersed – which prevents them from
enjoying any competitive costs and service advantages. As it stands, most
Vietnamese import cargoes are shipped on an FOB (free on board) basis, with
the export shipped on a CIF (cost, insurance, and freight) basis. This reflects
the fact that Vietnamese importers and exporters do not have much control
over transportation of their cargo.
As a focal distribution point of Vietnamese goods to
the EU, Vietnam House will take further advantage of integrated logistics
solutions and supply chain management. It will help facilitate import and
export between Vietnam and the EU with the involvement of a wide range of
foreign shipping lines, cargo owners, and exporters and importers operating
in Vietnam.
“This facility, as part of Vinalines’ overseas
logistics expansion, is the combination of resources from the Vietnamese
side, with Vinalines and its partners – including Vinafood, Vinatex, and
Lefaso – and the European side, with Herfurth’s Antwerp Port [operation] as
well as existing facilities to save investment,” Trung said.
To ensure the success of the project, Vinalines must
seek the support of shipping lines, cargo owners, and other partners.
Mitsui O.S.K. Lines, a leading Japanese transportation
company which operates many direct routes to Europe, is one of the project’s
early supporters.
“The project could be successful if the key points are
[there]. What are the advantages you can bring to Vietnamese exporters and
importers, and how can you help Vietnamese exporters promote their cargoes in
Europe?,” said Nguyen Dinh Tri, general manager of northern branches at
Mitsui O.S.K. Lines (Vietnam) Ltd.
Local trade associations are also intrigued by the
possibilities Vietnam House will offer. Nguyen Tuong, deputy general
secretary and head of the northern representative office of the Vietnam
Logistics Business Association (VLA), said that the project is in line with
VLA’s proposals to place some logistics centres abroad, particularly in
Europe. 45 per cent of VLA’s logistics providers do business with Europe.
But Tuong also sees some challenges. He said,
“Vinalines and Herfurth should consider some issues. The first is
competitiveness in this area, as nearly 800 European distribution centres are
located there, by well-known names such as Nike, Toyota, Honda, Volvo, and
Samsonite. The other is how to get support from cargo owners, as the majority
are importing on an FOB basis, and exporting on a CIF basis.”
According to Vinalines’ Trung, after signing the MoU,
the two sides will work on the investment model for the project and capital
investment for the Vinalines-Herfurth joint venture to operate the centre.
The centre is slated to begin operation in the next eight months. After
implementing this, Vinalines plans to establish similar logistics centres in
Cuba, Myanmar, and Malaysia.
Two-thirds of int’l tourists come
from Asia
Asian visitors make up more than two-thirds of all
international arrivals to Vietnam in January-October.
Data of the General Statistics Office showed
international tourist arrivals to Vietnam in the first 10 months of the year
amounted to eight million, up 25.4% year-on-year, with Chinese, South
Koreans, Japanese, Taiwanese and other Asians accounting for six million.
Asian visitors from China, South Korea and Japan number
four million, half of all international arrivals.
October marks the start of the international travel
season, which lasts until early next year. Some tour firms said they are
seeing good business prospects.
Saigontourist Travel Service Company’s cruise tourism
services have fared well as the local travel firm on October 25-26 served
1,600 tourists and crew members who came to Vietnam onboard the SuperStar
Virgo ship of international cruise line Star Cruises. The vessel is touring
northern and central provinces such as Danang, Hoi An, Hanoi and Halong.
Saigontourist Travel will arrange local tours for 8,000
international tourists who will arrive onboard this ship this November, whose
ports of call will be in Danang, Halong, Nha Trang and Phu My (Ba Ria-Vung
Tau Province).
The HCMC-based tour operator served around 185,000
international cruise passengers in January-September, a 137% increase over
the same period last year.
The Russian market has also shown positive signs after
a difficult period. Hoang Thi Phong Thu, chairwoman of Pegas Misr Travel
Vietnam Co Ltd, which serves the biggest number of Russian visitors to
Vietnam, said Russian visitor arrivals have gradually rebounded, with a 20%
year-on-year rise.
VCCI: Mekong Delta needs
restructuring
The Mekong Delta economy has long been dependent on
industry, agriculture and services, so it is time to restructure it to allow
the delta to gain further growth, said Vo Hung Dung, director of the Vietnam
Chamber of Commerce and Industry (VCCI) in Can Tho City.
Speaking at a conference in Can Tho last Friday on
socio-economic development in the southwestern region after 30 years of
renovation (doi moi), Nguyen Xuan Thang, director of the Hochiminh National
Academy of Politics, said the delta has grown fast but unsustainably over the
years.
If the delta still sees agriculture as a major sector,
he said, the industrial sector, especially processing, should be developed in
a way that helps farmers and businesses boost farm exports to foreign
markets. He noted that adding value to farm produce and improving its quality
need due attention.
Speaking to the Daily on the sidelines of the
conference, Dung of VCCI said Vietnam should draw on experience of regional
countries such as Thailand, Malaysia, Bangladesh and Myanmar to study and
devise a new economic structure for the next 50 or 100 years.
Dung said this is necessary to build scenarios and
solutions to select an appropriate economic structure for the Mekong Delta,
with unexpected factors like climate change taken into account.
He said the pillars of industry, agriculture and
services are no longer appropriate for the city, so they should be
restructured.
One scenario has one result so that the Mekong Delta region
can pick the best one, he said, and for instance, rice farming is good in the
short term but uncertain in the long run, so another scenario such as
industrialization should be chosen.
Dung said industrialization would lead to environmental
pollution rising and farmland dipping in the long run. There are many growth
models for the Mekong Delta and none of them are perfect, so the region
should opt for the most appropriate one, he said.
Dong noted most people think agriculture is the key
contributor to economic growth in the region but this is a conservative
thought.
Dung said agriculture now accounts for 5-10% of gross
domestic product but agriculture is a long-established sector of Vietnam.
He suggested the Mekong Delta venture into new sectors such as solar
power, biotechnology and information technology, and that agriculture is
important but not the number one sector.
Int’l conference promotes
sustainable concrete development
The 7th International Conference of the Asian Concrete
Federation (ACF2016) took place in Hanoi on October 31, focusing on ways to
develop sustainable concrete.
Themed “Sustainable concrete for now and the future”,
the event was organised by the Vietnam Concrete Association (VCA) and the
Asian Concrete Federation under the auspices of the Ministry of Construction
and many international organisations. It saw the participation of about 400
experts from 250 domestic and foreign organisations.
In his opening speech, Deputy Minister of Construction
Nguyen Quang Hung, who is also President of the VCA, said the conference
helps promote experience sharing in developing sustainable concrete for the
construction sector.
According to Hung, concrete becomes the most popular
building material in the world. About 35 billion tonnes of concrete are
produced globally each year and the figure is forecast to keep increasing in
the coming years.
Prof. Han Manyop, ACF President, said the event offers
a chance for major enterprises and corporations in the field to promote their
products, technologies, services and solutions as well as set up links in
scientific research and trading.
He also underlined the need to improve sustainability
of concrete in order to meet the global socio-economic development at present
and in the future.
Within the framework of the conference, participants
paid field trips to major infrastructure works and new urban areas in Hanoi.
Centrally-run localities look to
green economy
The Central Institute for Economic Management (CIEM)
held a seminar in Hanoi on October 31, focusing on making centrally run
provinces and cities aware of green growth as part of their socio-economic
plans.
According to CIEM, the national master plan on green
lifestyle and consumption consists of promoting sustainable development in
urban areas and an environmentally friendly lifestyle among residents.
Provinces and cities are urged to proactively tailor these goals to their
population characteristics and economic conditions, with priorities given to
waste treatment and pollution level.
As heard at the seminar, many localities have faced
difficulties building a green economy due to financial shortage, low capacity
of personnel and uneven local awareness on the matter, among other
factors.
Participating experts recommended local authorities to
learn from successful green growth models and come up with solutions to
mobilize resources.
They said each locality should study their pollution
level and pay attention to build a green production and lifestyle.
The application of advanced technologies and
organisation of awareness-raising campaigns are also important, they
added.
Tran Trung Hieu, deputy head of CIEM’s economic
institution, said building a green economy should be included in
socio-economic plans of provinces and cities nationwide between now and 2020,
boosting its contribution to the local GDP.
ABBank, Efora launch co-branded
debit card
ABBank and Euro-Asia Trade Joint Stock Company have
launched a co-branded ABBank-Efora debit card, with incentives offers for
customers.
Efora, run by Euro-Asia Trade JSC, is a distribution
system that sells genuine leather products made by well-known international
brands. To date, Efora has opened 16 stores in nine large cities and
provinces in Viet Nam.
The ABBank-Efora debit card, which was launched late
last week, is aimed at customers who make purchases at Efora stores but don't
have accounts in ABBank.
The card will allow customers to make online
transactions, withdraw cash from ATMs as well as pay for goods and services
at points of sales nationwide. The card will be available in three
categories: VIP, Premium and Platinum. Customers will not be charged a card
issuance fee and will enjoy fee free for current account maintenance.
Cardholders will become VIP members of Efora and get 5
per cent discount on all purchases as well as other attractive incentives.
"The co-branded card will lay a foundation for the
two enterprises to accelerate our co-operation comprehensively in the near
future, in an attempt to help each other's customers," said Le Dieu
Loan, CEO of Euro-Asia Trade JSC.
Trade surplus surpasses 3.5 billion
USD in ten months
Vietnam recorded a 3.5 billion USD trade surplus in the
January-October period of this year, statistics show.
Total export revenue reached 144 billion USD in the
period and import value amounted to 140.5 billion USD.
Major foreign currency earners are phones and phone
parts, electronic goods, textile and garments, computers, machinery and
equipment, foot wear and aquatic products.
Phones and phone parts brought in an estimated 28.3
billion USD, up more than 10 percent year on year, while textile and garments
earned nearly 20 billion USD, an increase of 5.2 percent.
The export value of agro-forestry-fishery products
reached 26.4 billion USD, a year-on-year increase of 6.3 percent.
Regarding imports, 22.7 billion USD worth of computers,
electronic goods and parts were imported in the period, a 17.5 percent
increase from the same period last year.
Meanwhile, 22.5 billion USD were spent on machinery,
equipment, tools and other parts, down 1.5 percent year on year.
The import value of phones and parts was estimated at
8.55 billion USD, falling 6.3 percent.-VNA
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR
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Thứ Ba, 1 tháng 11, 2016
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