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BUSINESS IN BRIEF 22/7
Food
producers find ray of hope in byproducts
While
many food producers are struggling to find markets, some companies have found
success in exporting byproducts.
Nguyen
Van Dao, CEO of Go Dang Company in Tien Giang province, said they invested
VND50 billion (USD2.4 million) in a second production line in Ben Tre
province for fish oil and fish flour. "Consumption of these goods is
stable in Asian markets such as
The
high demand for fish oil and flour also brought back millions of USD to Thuan
An Production Trading and Service Company in An Giang province, accounting
for 70% of its total revenue.
Nguyen
Van Phan, CEO of Hiep Thanh Group in Can Tho province, also shared that they
have successfully started to produce biodiesel from basa fish oil and other
fish parts. The biodiesel will not be exported, however, but used as fuel to
supply Hiep Thanh Group's own factories as a cost cutting measure.
Meanwhile,
Truong Thanh Phong, President of Vietnam Food Association, pointed out that
According
to Nguyen Van Dao, CEO of Go Dang Company, many small-sized factories have
been established recently without proper expertise in their fields. He added
that this could have an adverse effect on the reputation of Vietnamese
products.
As a
result, a number of firms asked the government for tighter management to keep
up high standards. The Vietnam Association of Seafood Exporters and Producers
(VASEP) affirmed that high-tech equipment, competent staff and adequate
financing prerequisites to a quality factory. In addition, they stated, the
government must provide suitable policies to support the industry.
In
early August, VASEP will partner with Vietnam Cleaner Production Centre,
Hanoi University of Science and Technology, WWF-Austria and other
stakeholders to start the “Establishing a Sustainable Pangasius Supply Chain
in
More
sluice gates to get off ground in city next year
Four
sluice gates costing a total of nearly VND2.6 trillion are scheduled to get
off the ground in the southern part of HCMC next year and be completed in
2017.
These
works are designed to reduce flooding triggered by rising tide in the
low-lying areas along the Ben Nghe Canal in districts 1 and 4, the Te Canal
in districts 4 and 7, the Phu Xuan River in District 7 and Nha Be District,
and to control water levels and regulate water transportation.
Funding
for these sluice gates will be sourced from the municipal and central
budgets, says a report the
Currently,
the city is developing a sluice gate to reduce flooding in the areas along
the Nhieu Loc-Thi Nghe Canal in District 1 and Binh Thanh District, with
total investment of VND290 billion from the city’s budget. Some 75% of the
workload has been done and the sluice gate is expected to be operational in
late 2013.
In
addition to the four sluice gates scheduled to get going in 2014, three
others are set for groundbreaking in 2015 and completion in 2017, namely Song
Kinh, Rach Tra and Vam Thuat sluice gates. The total cost of these three
projects is nearly VND2.3 trillion.
The
above sluice gate projects are named in the plan for irrigation and flood
prevention in HCMC approved in 2008. Under the plan, 13 sluice gates, with a
length of 20-120 meters each, and a 173-km dike running along the Saigon
River from HCMC and Long An will be developed.
Do Tan
Long, head of the drainage unit under the
To
tackle flooding triggered by rain and high tide in the populated areas,
nearly 6,000 kilometers of sewers must be completed soon, but so far, the
city has had only 3,200 kilometers, said the center.
Exhibition
to bring new foreign technology to town
Local
manufacturers will have a chance to learn new foreign machinery and
technology at an international exhibition on plastics, rubber, packaging,
printing, food technologies and automation to be held in HCMC from September
3 to 6.
VietnamPlas,
VnPackPrint, VnFoodtech, VnPrintLabel & Linkage
Vietnamese
participants are mainly sales agents of foreign firms or those importing
components for assembly, said Pham Quynh Giang, deputy general director of
Vietnam National Trade Fair & Advertising Company (VINEXAD), at a press
conference on Wednesday.
The
exhibition is co-organized by VINEXAD, Chan Chao International Co. of Taiwan,
Yorkers Trade & Marketing Service Co. of Hong Kong, Paper Communication
Exhibition Services Co. of
Advanced
technology products and services will go on display at the exhibition,
offering chances for trade, market approach, partner search and technology
exchange.
Huynh
Thi My, general secretary of VPA, said the exhibition would give local firms
access to modern machinery.
Despite
the tough times, plastics makers have still invested in machinery and
technology to improve their competitiveness. In the first half of 2013,
plastics exports generated over US$1 billion, up 9.3% year-on-year.
Tran
Thi Thuy Hoa, secretary general of VRA, said the event would help Vietnamese
businesses introduce their natural rubber production capacity and
locally-made rubber products.
Hoa
said export of products made from rubber like tires, rubber gloves and
mattresses had recorded good growth despite the shrinking demand from the
Chinese market. In 2012, exports of rubber products brought in over US$1
billion.
VPA
members will have 10 booths at the exhibition. VRA members will also set up
10 booths to display their products.
TKV
says higher tariff hinders coal export
The
imposition of a higher export tariff has forced Vietnam National Coal and
Mineral Industries Group (TKV) to raise coal price and thus chased buyers
away, the company lamented.
TKV
has failed to sign any big export contracts since June 20 as its coal price
is higher than that of other suppliers, the group’s deputy general director
Nguyen Van Bien said.
The
group has lately signed contracts of exporting only thousands of tons of some
high-quality coal categories while it is unable to sell medium-grade coal
which is often exported under contracts of over one million tons each.
The
reason for this as explained by Bien is the export tax increase from 10% to
13% on July 7, causing TKV to raise the export price correspondingly by at
least US$3 per ton depending on different categories.
The
prices of different categories of coal offered by TKV have gone up by a
couple to dozens of U.S. dollars per ton.
“We
have continuously reduced production costs but still had to increase the
prices,” said Bien. While many countries impose a 0% export tax, the export
tax in
To reduce
costs, TKV cut workers’ wage by 10% last year from the previous year and by
5% early this year. However, as coal is now exploited at greater depth and
even if technological costs are cut, it is impossible to lower the prices.
According
to TKV, if the consumption reduces by 10%, some 10,000 workers will lose
jobs.
With
the tax increase of 3 percentage points and supposing that TKV exports three
million tons of coal each month, the State budget will have an additional
VND100 billion of tax sums. However, due to the high prices, TKV will fail to
compete with other exporters, so the export volume will tumbled, resulting in
a loss of over VND1 trillion for the State coffer in terms of natural
resource tax, environmental fee and VAT, according to Bien.
TKV has
proposed the Ministry of Industry and Trade and the Ministry of Finance to
lower the export tax. Nevertheless, the new tax rate has been imposed
recently, which will impact the group’s export volume.
As per
the group’s business plan, TKV’s coal consumption volume, including both
domestic consumption and export, will be around 43 million tons this year,
but only 38-39 million tons is obtainable.
The
power industry is the largest consumer of coal. However, the price of coal
sold to the power industry is equivalent to 83-87% of the coal production
cost. Normally, TKV uses profits earned from coal export to cover losses
caused by such low selling price.
Cai
Mep-Thi Vai port to be leased in 30 years
The
Vietnam Maritime Administration are conducting procedures in preparation for
a bidding round to select operators of Cai Mep International Terminal and Thi
Vai General Cargo Terminal in Ba Ria-Vung Tau Province in 30 years.
For
Cai Mep terminal, the fixed package price is US$219.57 million, while the
package price for the other terminal is US$130.51 million, all for a term of
30 years.
The
selection of terminal operators will be made via bidding which is scheduled
for the third or the fourth quarters.
Nguyen
Nhat, director of the Vietnam Maritime Administration, said his agency has
set up teams in charge of technical, financial and procedure issues to help
accelerate preparations for the bidding. The bidding is held to ensure that
terminals are run by units with financial capability and professional
capacity in operating terminals.
The
Government has previously agreed to the plan of leasing Cai Mep and Thi Vai
terminals.
The
Cai Mep-Thi Vai port complex located in Ba Ria-Vung Tau Province’s Tan Thanh
District was opened in late January. The project worth nearly VND13 trillion
was financed by
Cai
Mep terminal consisting of two piers of 600 meters in length can handle
vessels of up to 100,000 DWT and has an annual capacity of around 700,000
TEUs. Thi Vai terminal also has two piers but handles ships of 50,000 tons
with a capacity of 1.6-2 million tons per year.
Chances
still there for property investors, says CapitaLand
The
property market which is going down has placed many investors on fire, but in
the eyes of CapitaLand the market still has many opportunities for patient
investors.
Olivier
Lim, group deputy CEO of Singapore-based CapitaLand, said
Speaking
at a press meeting on Wednesday, Lim said that CapitaLand has decided to
reduce housing investments in
Nevertheless,
the group will keep on following the long-term investment strategies in
According
to Lim, the total asset value of CapitaLand in
CapitaLand
has moved its office from Kumho building on
Consisting
of five towers, The Vista supplies the market with around 750 commercial
apartments, 100 serviced apartments and some 4,200 square meters of office
space.
According
to Lim, business conditions are improving as the number of customers caring
about projects has increased considerably in the past six months, and the
property market is expected to improve more in the coming time.
Local
farms still lukewarm to electronic traceability
Local
agricultural enterprises have shown little interest in an electronic
traceability system that the Danish Embassy wants to provide them to replace
the current manual information record, hear a seminar in
At the
seminar “Raising the competitive capability for Vietnam’s farm produce and
seafood: information transparency-the way for development” in Hanoi on
Wednesday, Danish Ambassador to Vietnam John Nielsen said making information
transparent via electronic traceability is one of the effective ways to
export Vietnamese farm produce to choosy markets like the U.S., the EU and
Japan.
The
Traceverified program is part of a development assistance program of the
Danish government aimed at increasing the capability for the Vietnamese
private economic sector with a total cost of VND216 billion.
However,
despite its deployment since October, 2012 with free supports for
participants until 2014, the program has only attracted 14 enterprises so
far, mainly big seafood companies.
Nguyen
Huu Dung, vice chairman of the Vietnam Association of Seafood Exporters and
Producers, ascribed the unexpected situation to the fact that local firms are
afraid of publicizing information and they only join the program when
demanded by partners.
To
make the farm produce market transparent and to enhance food hygiene and
safety management, John Nielsen suggested that the State should apply
regulations and sanctions to force entities, especially small- and medium-sized
enterprises, to join the advanced system.
Ly
Hoang Hai, deputy director of the scheme, meanwhile, said the project aims to
build up and provide seafood and agricultural product supply chain with
information on electronic traceability, laboratory management services and
how to upgrade training activities for technicians.
Traceability
helps related sides get right information on products at all processes in
production and consumption chains. It also helps establish if suppliers make
great efforts in making high-quality products or if these products’ quality
is controlled strictly in the whole supply chain. But in fact, a majority of
local companies have still carried out the manual method, with information
recorded by hand and kept as hardcopies.
“This
method is non-transparent and risky since only entities can read and
understand the code for tracking the origin of products while consumers don’t
really know about the products they buy. Furthermore, as information of many
kinds of products must be kept within six months to two years, companies will
need a lot of space to store the information, which is very risky,” Hai
noted.
In the
meantime, with the electronic traceability system, information will be stored
in the computer system as the sole code for original track for every shipment
in line with international standards. On top of that, information of the
system could be accessed anytime and anywhere swiftly.
One-fifth
of firms eye expansion
One-fifth
of respondents to a business survey conducted by the Enterprises Development
Institute said they might expand operations in the second half of 2013
despite the current tough economic conditions.
Of the
700 corporate respondents, 66.7% said they would maintain their scale, 22%
might expand operations, 10.9% would reduce scale and 0.3% would likely
suspend operations, said the institute under the Vietnam Chamber of Commerce
and Industry (VCCI).
Some
28.1% of the firms said business expansion was aimed at catching the
opportunities from the recovery of exports. A respective 20.7% and 18.3% said
they wanted to make good use of tax incentives and business support programs.
About
18% of respondents said they found the economic outlook getting brighter and
thus wanted to expand their business.
Pham
Minh Dong, director of Asia Door, said many construction projects had been
put on hold due to economic difficulties, leading to a decline in his
company’s wooden door sales. This year, the company decides to diversify its
products and upgrade its services to cater to civil works.
“We
intend to make plastic doors, with machines and equipment imported from
Explaining
the decision to build a new factory in the current difficult context, Dong
said the individual customer segment had recorded the strongest growth in
recent years despite the crisis. “Under this decision, we will serve a wider
range of customers, from high- to low-end, with various incomes,” he said.
Ngo
Duc Hoa, chairman of Thang Loi International Garment JSC, said importers had
shifted their orders from
“This
time last year, we were struggling to find new orders. Now, we have to turn
down small orders, which is such a waste. Therefore, we have decided to
invest in new workshops,” said Hoa.
Thang
Loi has decided to borrow VND10 billion to expand its operations after
carefully considering the market growth prospect, the production capacity of
the company and the lending rates.
Housing
stimulus set to benefit all
The
Government's VND30 trillion (US$1.44 billion) bank loan package designed to
assist low-income property seekers would not be limited to State-owned
enterprises (SoEs), the Ministry of Construction has said as it moves to
dispel doubts the loans would not reach the private sector.
Do Duc
Duy, head of the ministry's secretariat, said out of 30 approved projects,
only four were from SoEs. These included the Viet Nam Glass and Ceramics
Corporation (Viglacera), Building Materials Corporation No1 (FICO) and Viet
Nam Urban and Industrial Zone Development Investment Corporation (IDICO) who
would be able access the loans.
Miniter
of Construction Trinh Dinh Dung said the difficulties of the real estate
market, property stock and developing social housing projects were closely
related.
Dung
said if businesses were able to access the loans, they could build new
projects or complete those that were half-finished to provide social houses
for low- and middle-income earners.
He
added that few investors were willing to embark on projects due to the narrow
profit margins.
"This
is the reason why we should encourage companies to join projects, while
seeking solutions to unpick their problems," he said.
The
minister said the Government had also provided support initiatives including
land-use tax exemption and value-added tax reduction in certain cases.
The
high stock in the market was due to an oversupply of high-end projects and a
lack of affordable options.
He
said the package would provide mid-term loans and that businesses would not
be able to borrow more than 30 per cent of the package.
"The
target of the loan package was to help low-income earners buy houses. The
more enterprises that take part in the projects, the more houses will be
provided to people," he said.
The
ministry noted
It
intended to convert some commercial housing projects into social ones and
would submit the approved list of loan recipients to the State Bank of Viet
Nam (SBV) in the next two weeks.
In
addition, the ministry and the SBV would discuss how to resolve
administrative difficulties to accelerate disbursement to home buyers.
Bilateral
trade between
During
the period,
The
SeABank
among top 50 famous brands in Viet Nam
The
Southeast Asia Joint Stock Commercial Bank (SeABank) has been recognised as
one of the 2013 "Top 50 most famous brands in
It is
the third time in a row that the bank has been named on the list since 2010.
In
recent years, the bank has continuously achieved steady growth in business
performance and developed transaction bureaus in 22 provinces and cities
across the country. The award is part of an annual celebration of well-known
and competitive brands launched annually by the Viet Nam Intellectual
Property Association (VIPA).
Rules
on re-exporting to be tightened
The
Ministry of Finance has asked provincial customs departments to tighten the
management of goods which have been temporarily imported for re-exporting or
stored in bonded warehouses, in a move to prevent trade fraud and smuggling.
The
ministry also announced a halt to the procedure for transporting goods from
abroad to bonded warehouses in
Regarding
temporarily-imported sugar for re-export, the ministry said that the taxes
due must be paid to customs departments, and they will then be refunded at a
later date, after the sugar is re-exported.
On-site
checks must be carried out on every container that holds temporarily-imported
sugar and smuggling or the illegal transportation of sugar must be handled
very firmly, said the ministry.
Recently,
the Viet Nam Sugarcane and Sugar Association said that domestic sugar
producers were experiencing difficulties due to low prices on the market,
increasing stockpiles and illegal imports from
The
volume of unsold sugar totalled almost 490,000 tonnes in June, higher than
figures released for the same period in 2012.
RoK
businesses seek VN opportunities
Businesses
from the RoK have invested nearly US$61 million in 12 projects in central
Nghe An province, employing more than 10,000 locals. The figures were
released at a meeting in Ha Noi last Friday, assessing the provincial
investment environment and encouraging even more Korean investors to the
province.
Nghe
An People's Committee chairman Nguyen Xuan Duong said the province would soon
complete its administrative reforms and better facilitate foreign investors,
particularly those implementing projects using advanced technology in the
locality.
The
meeting also saw the signing of agreements between the provincial People's
Committee and the Korean Trade Promotion Agency (KOTRA), the approval of
Korean Strong Plus Elevator's US$10 million provincial project and the
authorisation of Korean Global Sourcing International's $2.5 million garment
export investment.
Bac
Ninh holds dialogue with enterprises
Enterprises
operating in the
During
the event, the authorities and relevant sectors vowed to continue supporting
local enterprises while speeding up procedural reforms to make its market
more competitive.
Fishing
teams need Government support
Fishing
boats that work in teams play an important role in increasing the amount of
catch, but they need more support policies from the government, according to
experts.
The
teams, which were created as part of a cooperative-model project, have been
able to reduce production costs. Post-harvest services and rescue activities
have also improved.
The
country has 3,691 fishing teams, up from 1,600 two years ago. As of June 20,
the teams had a total of 22,846 fishing boats and 158,723 fishermen,
according to the Directorate of Fisheries.
The
teams were first organised by fishermen in one province, and then other
provinces followed suit.
However,
some teams have fared better than others. Some of them have not organised
logistic services well and have not worked together to sign contracts with
processors. This has pushed down prices.
Also,
many of the more ineffective teams have little contact with administrative
agencies, and lack knowledge about weather forecasting and rescue activities.
Hoang
Dinh Yen of the Directorate of Fisheries said that the fishing sector was
currently facing a decline of fish resources and inclement weather.
The
increase in prices for petrol and other input materials has also had an
impact, but the price of fish has not gone up.
Some
fishing boats have had to stay onshore because they are not earning enough money.
To
stay in business, some fishermen on the teams have had to borrow loans from
fish traders and then sell their fish to them, Yen said.
Vu Van
Tam, deputy minister of the Ministry of Agriculture and Rural Development,
said the loans were borrowed at high interest rates.
Government
support policies for fishing teams are needed, especially for fishing boats
with an engine of more than 150 horsepower.
The
heads of fishing teams should also be reporting risks and accidents of their
teams to administrative agencies, Tam said.
Many
industry experts also agree that more policies are needed to help the fishing
teams.
The
loan support policy, they said, should involve the provincial People's
Committees. The committees would act as guarantors for fishermen to borrow
loans from banks.
Experts
also expressed concerns about how to enhance the responsibility of members
and the heads of fishing teams.
An
official from the Ministry of Defense's Economy Department said a regulation
should be created to require members to pay a fee to be part of a team. This
would ensure that they remain on the team after getting help for a loan.
In the
first half of the year, fishermen nationwide have caught about 1.3 million
tonnes of various kinds of fish, up 3.9 per cent against the same period last
year, according to the Directorate of Fisheries.
Of the
figure, 1.23 million tonnes were caught from the sea and 81,000 tonnes from
rivers, canals and ponds.
Green
Globe Certification for Movenpick’s
The
Movenpick Hotel Hanoi and the Movenpick Hotel Saigon, owned by Movenpick
Hotels and Resorts, have become the first hotels in
The
two hotels were audited according to 337 criteria spanning customer
satisfaction, water consumption, waste management, energy use, community
commitment, and internal training.
“The
hospitality industry is a large consumer of energy and other resources. The
Movenpick Hanoi aims to reduce its consumption through the use of basic
measures such as energy efficient lighting, water consumption reduction, and
a better management of waste and chemicals,” said Movenpick Hotel Hanoi
General Manager Philip Jones.
He
promised the hotel’s management board will set specific objectives and
monitor progress as part of its efforts to fulfill the “Green Globe”
programme.
The
Green Globe Certification is internationally renowned as an indicator of
sustainable tourism. It affirms Movenpick Hotels and Resorts’ commitment to
operating in an economically, environmentally, and socially responsible
manner.
Movenpick
Hotel Saigon General Manager Craig Smith stressed the chain’s initiatives are
designed to foster a social conscience beyond its staff. It asks “our
customers, partners, suppliers, and the community to join hands with us to
make a better world”.
Dubious
agents give bad name to tourism industry
Several
officials of large travel companies have pointed out various shortcomings in
the industry and proposed ways to improve domestic tourism services.
According
to the Vietnam Society of Travel Agents (VISTA), around 1,000 foreign and
10,000 domestic tourism firms are currently operating in
A
number of companies have been established with names very similar to
well-known travel firms so as to fool customers. "This can be very
confusing for tourists, and make it difficult for them to distinguish which
company can be trusted," said the director of Lua Viet Tours Company,
Nguyen Van My.
Le Thi
Nhu Ha, Deputy Director of Peace Tour Company said, "One day some
customers came to file complaints about our services. After checking the
information, we found that another company had taken a name very similar to
ours and had copied our website."
The
laws do not protect against this type of brand infringement, because the
brand can technically be changed with just one slight change in the name.
"Our
laws on business registration don't require any degree or experiences from
representatives of travel agent. That's why so many companies have been
established, even though they are weak in terms of finance and expertise.
Authorities should appraise these companies before granting permits,"
said attorney Bui Quang Nghiem.
Most
of discounted or cheap tours are accompanied by poor services.
Phan
Duc Man, deputy head of
Well-known
travel agents are able to provide discount tours because they have built up
relationships with transport companies, and can get discounted fares.
Recently,
the HCM City-based company, Travel Life, was fined VND80 million (USD3,800)
for abandoning 701 visitors in
La
Quoc Khanh, deputy head of HCMC Ministry of Culture, Sports and Tourism, said
they might establish a police department for tourism to clean up the market.
Vietnamese
businesses encouraged to invest in Myanmar
Businesses
should invest in
Speaking
at a seminar on investment opportunities in
Ha
advised Vietnamese enterprises to conduct long-term and sustainable
investments in
The
quick economic reforms process in
Vietnamese
enterprises have more advantage, thanks to good relations which the two
countries have built over the years. Two-way trade has grown to 60 percent of
market value since 2009 and
The
Association of Vietnamese Business Investors in Myanmar (AVIM) has organized
trips for nearly 1,800 enterprises to
Besides,
Vietnamese companies are also planning to further invest in 18 other
projects.
According
to Tran Bac Ha,
For
instance,
The
Law will also permit openness of foreign invested banks in the next two
years, Ha said.
Vu Van
Chung, Deputy Head of the Foreign Investment Agency, said that
He
said that
Cho
Cho Wynn, representative from the Myanmar Investment Commission, said that
Burmese Government will build a strong foundation for market economy and create
an advantageous investment environment.
Although
Highway
project gets priority
Contractors
responsible for construction delays in the project to expand National Highway
1A should be replaced immediately.
Traffic
flows on National Highway 1A in the Mekong Delta province of Vinh Long. Site
clearance is considered a key issue in the highway's
At a
conference in Da Nang yesterday, Deputy Prime Minister Nguyen Xuan Phuc urged
the transport sector to take such drastic actions if any construction delays
arouse. The conference focused on site clearance and safety issues related to
the country's two major highway construction projects.
"Site
clearance for the projects is a major issue and a key factor in meeting the
completion schedule by 2016," Phuc said.
He
also urged leaders from 23 provinces and cities, as well as contractors,
investors and officials from the ministry of transport to find more effective
methods for site clearance to ensure that the two projects are completed by
2016.
"Site
clearance, compensation and resettlement in the provinces and cities will be
crucial to helping ensure that the two projects are finished on time. These
are complicated issues and require hard work from local authorities,
contractors, investors and the ministry of transport," Phuc said.
"The
deadline for the completion of the two projects is fixed. We have only three
years to reach the target, so preparations for site clearance and the issues
of resettlement and compensation must be completed first."
He
also criticised some provinces and contractors for carrying out their
projects too slowly, pointing to the case of Quang Tri Province, which had to
spend five years to complete only five of the 13km section on National
Highway 1A, while Ha Tinh Province completed a similar project much faster.
The
deputy Prime Minister asked leaders from the provinces and cities to make
every effort necessary to catch up to the proposed time schedule.
Minister
of Transport Dinh La Thang said that involvement of local authorities would
be crucial for creating the conditions necessary to complete the projects
smoothly.
"Solving
the delays in site clearance is the primary responsibility for local
authorities. I ask the local authorities to create priorities for
contractors, investors and bidders and to ensure that they carry out their
projects on time," Thang said.
National
Highway 1A runs from the north to the south of the country. An expansion of
672km of its 1,887-km length is expected to be completed by the end of this
year. The 663-km Ho Chi Minh Highway Project through the Central Highland
region has a budget of VND533 billion (US$25.1 million) and requires 220ha of
land and the resettlement of 620 households.
HCMC to sanction
projects running behind schedule
The
People’s Committee of Ho Chi Minh City recently decided to cut investment
capital on 86 projects funded by the State, which were running behind
schedule by end of last year, and had disbursement ratio of less than 30
percent.
In
addition, the committee also criticized 53 departments, committees,
districts, and investors whose projects had lower disbursement ratio than
planned. The City will now introduce stricter sanctions on governing units
and investors of these projects.
Moreover,
by the end of 2012, there were 34 projects with disbursement ratio below 50
percent. The City will consider giving further extension to these projects,
and any project in future not being carried out will be terminated.
Earlier,
the Department of Natural Resources and Environment had suggested terminating
a housing project, whose site clearance compensation was below 50 percent,
right at the beginning of the year. Other projects will only receive further
extension till the end of this year.
Ways
sought for homebuyers to access stimulus package
The
HCMC branch of the State Bank of Vietnam (SBV) suggested that the housing
status of individuals wanting to take out loans from the VND30-trillion
preferential home credit package be confirmed by banks instead of grassroots
authorities.
The
proposal has been sent to SBV and the Ministry of Construction, said Nguyen
Hoang Minh, deputy director of the central bank’s HCMC branch.
As per
the current regulation, only those without houses can access the preferential
loan, and a housing status confirmation must be done before lenders appraise
collateral for loans.
Multiple
homebuyers have failed to get a housing status confirmation and thus they
have been unable to borrow loans from the VND30-trillion package.
To
benefit from the low-cost home credit package, homebuyers have to submit home
purchase contracts and confirmations that they have not owned a house.
It is
easy for State employees to meet this requirement as they simply need
confirmations from the heads of the agencies where they are working.
Meanwhile, those working in non-State sectors must seek confirmations from
the authorities of the wards where they are residing, and many of them have
failed to overcome this obstacle.
Nguyen
Huu Nghia, deputy director of the Saigon West branch of Bank for Investment
and Development of Vietnam (BIDV), said a lot of people had contacted the
branch to ask about the VND30-trillion home loan package, but most of them
had difficulty getting housing status confirmations from authorities.
BIDV
Saigon West is offering a preferential credit package for the Khang Gia-Tan
Huong project in Tan Phu District. Few homebuyers have taken out loans from
this package.
In
HCMC, so far only 18 loan applications have received the nod, with seven of
them approved by BIDV and eleven by Vietcombank. Meanwhile other banks
entrusted to provide such loans, namely VietinBank, Agribank and MHB, have
not given out loans to any borrower, said Minh.
As for
property developers, Hung Phu and Hoang Quan are the only two companies that
have applied for low-interest loans, around VND1 trillion. BIDV is still
considering their applications.
Le
Hoang Chau, chairman of the HCMC Real Estate Association, said the
preferential home loan package was aimed at stimulating housing demand and
thus settling inventory and a part of bad debt in the property market. In
addition, it offers a chance for low-income people to own a home.
However,
loan disbursement will remain sluggish without a determination of lenders and
solutions to break down the procedure barriers so that homebuyers can have
easier access to the credit package.
Apart
from Khang Gia-Tan Huong, BIDV Saigon West is working with the owners of two
other projects over preferential loans, said Nghia.
As
State-run banks are still cautious about disbursing the VND30-trillion credit
package, a number of property developers are launching budget housing
projects with low-interest loans provided by joint stock banks outside the
stimulus package.
For
example, Nam Long Investment Corporation said its low-cost condos at the
Ehome 4 Saigon North project in Binh Duong’s Thuan An District would go on
sale at an average price of VND450 million per unit.
Although
this project is eligible for the VND30-trillion package, Nam Long still joins
hands with VPBank to provide its customers with another choice when they need
financial support, said Nguyen Vinh Tran, deputy general director of Nam
Long.
VPBank
pledges to offer customers of the Ehome 4 Saigon North project a fixed
lending rate of 6-8% in the first two years. The first 322 Ehome 4 apartments
will go on sale next month.
Processing,
manufacturing sectors top the list for bad debt
The
National Financial Supervisory Commission has announced a report listing six
areas with the highest rates of bad debts in Vietnam.
The
processing and manufacturing sector topped the list, with an estimated bad
debt rate of 21.15%, followed by the wholesale and retail, with 16.93%; other
portions of the service sector clocked in at 12.51%. After these came real
estate at 11.37%, construction at 10.13% and transport and depot service area
with 9.43%.
The
rate of bad debt within these sectors is between two and five times more than
average in other areas.
In the
first half of this year, only the transport and depot service sectors saw any
considerable decrease in bad debt, down to 9.34% at the end of April from
13.4% by late 2011. Meanwhile, for the rest of the areas mentioned, bad debt
has only slightly decreased or even gone up.
The
report indicated that state-owned enterprises account for 11.82% of credit
organisations’ total bad debt. In addition, this figure excludes Vinashin’s
debts, which have been restructured under government decision.
The
National Financial Supervisory Commission said that bad debt from state-owned
enterprises poses an especially large challenge because they generally have
low liquidity.
Nguyen
Van Binh, Governor of the State Bank of Vietnam, recently said that Vietnam
Asset Management Company (VAMC) could help to solve between VND40,000 (USD1.9
billion) and VND70,000 trillion (USD3.33 billion) in bad debts this year.
However, some local economists remain skeptical.
Economist
Le Xuan Nghia, head of the Business Development Institute, said the company
started operations on July 9, but its two most important regulations,
Internal Operation Regulation and Special Bond Issue Regulation, have not yet
been signed.
He added
that even ideally, VAMC will only deal with one third of bad debt, leaving
private banks responsible another third and the Ministry of Finance for the
remainder.
Banks
lower deposit rates, keep lending rates intact
Four
State-run banks earlier this week began bringing down their deposit rates
after Vietcombank had cut its interest rate for one-month deposits in the
dong to 5% last Thursday. However, the lending rate remains unchanged.
BIDV
on Monday lowered the interest rate for one-month dong deposits from 6% to
5%, which is also similar at Agribank.
Meanwhile,
the interest rate for one-month deposits is currently 6% at VietinBank, down
from 6.5% in the week earlier. The rate for two-month deposits set by
VietinBank is 6%, lower than 6.5% quoted by Agribank and Vietcombank.
Joint
stock banks like ACB, Eximbank and DongA Bank have not revised down their
interest rates for dong deposits with terms of one to three months.
This
can be seen as a positive signal as deposit rates now vary among banks and
each bank sets different rates for deposits with different terms. However,
for those deposits with terms of six months or longer the interest rates are
largely the same, around 7-8% per year.
This
long-term rate is considered as reasonable, ensuring positive real interest
rates as inflation this year is expected to range from 6% to 7%.
Earlier,
a banker said the ceiling deposit rate reduction to 7% in late June might be
the final cut this year. If the ceiling rate was slashed further, deposits in
banks might be drained out into other investment channels like gold and
foreign currency, especially when the liquidity of these types of asset is
quite good in Vietnam.
In a
recent report on Asian economies, HSBC predicts the deposit rate cap will
hardly be reduced further this year as inflationary pressure persists.
A
senior executive from Vietcombank said the recent deposit rate cut of his
bank was simply a move to gauge the market response, not a signal for lower
interest rates across the board.
The
lending rate, however, remains unchanged now.
“The
deposit rate reduction has its lag and thus it is impossible to bring down
lending rates right after the deposit rate cut,” said the Vietcombank
executive.
Phan
Huy Khang, general director of Sacombank, said his bank had no plan for dong
deposit rate adjustments yet because it could affect capital mobilization of
the bank. Thus, lending rates have not been revised either.
He
informed his bank was providing various loan packages with different interest
rates. The lowest level is 9% per annum.
At
present, corporate clients are given lending rates of around 9-10% a year,
which can be lowered if enterprises have good performances and debt repayment
records.
As per
a report by the central bank, State-run banks earlier this month set lending
rates at 7-9% for the priority sectors, namely agriculture, export, small and
medium enterprises, supporting industries and enterprises with high-tech
applications. For other sectors, they quoted the rates at 9-10.5% for short-term
loans and 11.5-12.8% for medium- and long-term loans.
Meanwhile,
at joint stock banks, the common lending rates for the preferred sectors were
8-9% per annum. For other sectors, the rates ranged from 9.5% to 11.5% for
short-term loans and 12-13% for medium- and long-term loans.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Chủ Nhật, 21 tháng 7, 2013
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