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BUSINESS IN BRIEF 30/12
Danang
suggests bond issuance
The
central coastal city is facing capital shortage, especially for basic
construction. Last year, Danang issued VND1.5 trillion and expects to sell
VND3.5 trillion more in 2014, Van Huu Chien, chairman of the city, said at
the online meeting with the Government early this week.
In
addition, the city has proposed an advance of VND500 billion from the State
budget for unfinished capital construction projects.
Since
2012,
Last
year, the city collected only VND1.3 trillion from land compared to the
target of VND3.5 trillion. Therefore, the local government suggested issue of
VND5 trillion worth of municipal bonds to raise funds for investment in 2012.
After
VND1.5 trillion worth of bonds was issued, the Finance Ministry requested
local government to halt issue of the remaining VND3.5 trillion worth of
bonds, saying that the city’s loans had exceeded the allowable level.
Firms
should make use of Internet to boost marketing
As the
Internet has become an effective marketing channel, Vietnamese enterprises
should invest in this channel to get closer to customers, heard a workshop on
communications challenges held on Wednesday in HCMC.
Dang
Dinh Hoang, CEO at Masso Consulting, said at the workshop held by the 2030
Businessmen Club that enterprises should make full use of data provided by
tools of Google to improve the effectiveness of marketing campaigns.
“While
it takes electricity 50 years, telephone 30 years and television 20 years to
penetrate half of the
Tran
Thai Binh, chairman of VietAds Company, echoed the point, saying that
enterprises should use keyword search tools of Google such as search engine
optimization (SEO) and Google Analytics.
According
to a survey of Google Analytics, by using SEO enterprises’ websites can have
8,000-16,000 visitors a day. Such a high number of visitors provides
enterprises with opportunities to get closer to potential customers.
At the
workshop, enterprises also shared other experiences in online marketing to
promote the identities of products as well as brands on the Internet.
Number
of SOEs halved after 13 years
The
number of State-owned enterprises – with State ownership from 50% to 100% -
had been halved to 3,135 as of January 2013 compared to 5,759 enterprises by
2000, according to the General Statistics Office’s Industrial Statistics
Department.
Compared
to 2000, the number of State-owned enterprises early this year was equivalent
to 54.4%. However, revenues of such enterprises earned last year was 6.9
times higher than in 2000 while their total pre-tax profits and budget
contribution amounts increased by 9.4 times and 8.1 times respectively.
According
to the General Statistics Office, 2,854 out of 2,893 SOEs that responded to a
survey were actually in operation (98.7%) and 39 enterprises had stopped
operation (1.3%).
Besides,
among 39 enterprises with suspended operation, enterprises waiting for
dissolution and bankruptcy accounted for the highest proportion with 41%,
those seeking rearrangements over 33% and those suspending to business for
changing technology over 10%. Meanwhile, over 15% suspended due to other
reasons.
The
supply of products and services of State-owned enterprises accounted for a
market share of around 32%.
Among
2,893 enterprises, there were 1,347 units required to turn shareholding and
the rest had to be merged or converted into one member limited liability
companies.
According
to the survey, the ratio of profit to revenue of equitized enterprises tended
to rise, with nearly 40% of the enterprises seeing an increase of over 10%
and 37% of these enterprises recording a rise of less than 10%.
Overseas
remittance to HCMC estimated at US$4.8 billion in 2013
Overseas
national currency exchange sent to the City is estimated at US$4.8 billion in
2013, accounting for nearly 50 percent of the country’s total overseas
national currency exchange, according to Mr Nguyen Hoang Minh, deputy
director of the State Bank of Vietnam Ho Chi Minh City Branch.
By
November this year, overseas national currency exchange sent to HCMC via
commercial banks and economic institutions in the city exceeded $4.15
billion.
The
flow of overseas remittance has helped to create foreign currency supply,
stabilize exchange rate and monetary market, and contribute to the city’s
economic development.
Noticeably,
the amount of overseas remittance this year is mainly for business sector,
helping to ease financial difficulties for local businesses. Particularly, 70
percent of overseas national currency exchange transferred to HCMC was for
business sector; 20 percent was for real estate sector; and 10 percent was
affirmed as financial support to family or relatives.
Overseas
remittance sent to the City was mainly from European and US markets. However,
this year, overseas remittance from two emerging markets, namely
Last
year, the amount of overseas national currency exchange transferred to HCMC
hit $4.1 billion.
Difficulties
in fishing industry reduce productivity
The
supply of seafood in
Hundreds
of ships have returned to Tho Quang Dock in
According
to Le Dung, a ship owner, the final months of the year is usually high season
for mackerel, tuna and squid, however their ships had to seek shelter from
cold wind and rough waters much of the time.
Usually
he could expect several tonnes of fish per year, but he faced a grimmer
situation this year. After a week, Dung's ship used up 1,500 litres of fuel
and huge amount of food for ten crew mates.
"Each
trip costs VND40-50 million, but we can only earn an average of VND10
million(USD480) per venture. I want to take a few more trips times. I'm still
hoping that we will be able to catch fish. Still rising fuel prices concern
me, as now they account for 60-70% of our travel expenses," he
said.
Another
ship owner, Tran Ban, said they had to seek shelter four out of ten days at
sea. The water became colder and the waves stronger this year, so that many
types of fish have changed their migration routes, emptying the familiar
fishing waters.
Ngo
Van Cat, Deputy Manager of Tho Quang Lock said normally they receive 50-60
ships a day, but this month only three to four ships arrived. He said,
"We needed over 100 tonnes of fish a day in order to meet the demands of
hotels, restaurants and other customers, but production has sharply
decreased."
As a
result, fish prices have increased by 40-50%. Cat said the prices may
increase as Tet nears.
FDI
sector witnesses large trade surplus
The foreign
direct investment (FDI) sector gained a trade surplus of around US$ 14
billion in 2013, according to the General Statistics Office (GSO).
In
2013,
Although
the FDI sector is mushrooming and generating numerous jobs, its contribution
to the economy is still modest with low value-added processed and assembled
products, according to GSO General Director Nguyen Bich Lam.
The
country’s export turnover reached US$ 132.2 billion in 2013, a year-on-year
increase of 15.4%. The domestic sector got US$ 43.8 billion from shipping
goods abroad, up 3.5%. The FDI sector (including crude oil) earned US$ 88.4%,
up 22.4%.
Heavy
industry products and minerals pocketed US$ 58.6 billion in export revenue,
up 21.5% against last year and representing 44.3%.
The
light industry and handicraft sectors earned US$ 50.3 billion, picking 16.3%
and making up 38.1% of the country’s total export turnover.
The
agro-forestry sector gained US$ 16.5 billion, down 1.9% against last year and
holding 12.5%. Meanwhile, aquaculture exports amounted to US$ 6.7 billion,
representing a year-on-year increase of 10.6% and accounting for 5.1%.
Import
turnover valued US$ 131.1 billion, 15.4% higher than the previous year. The
domestic sector bought US$ 56.8 billion in goods (up 5.6%) and the FDI sector
US$ 74.5 billion (up 24.2%).
According
to the GSO,
Raw
materials for assembling operations held a large proportion of export
revenue. Accordingly, the country imported 33.3% of overseas telephones and
spare parts. Fabric import occupied 48.3% of export volume of the garment and
textile industry.
Public
debt may account for over 98% of GDP
Vietnam’s
real public debt may make up 98.2% of the national GDP, factoring in
state-owned enterprise debts, which are not guaranteed by the government, as
well as debt of the fundamental construction area.
These
numbers were given by Dr. Pham The Anh at a meeting on marco-economic
management policy for 2014, held by the Ministry of Planning and Investment
recently.
Dr.
Anh cited a report submitted by the government to the National Assembly
recently, which said that the total debts of wholly state-owned enterprises
(SOEs) were estimated at VND1,550 trillion (USD73.8 billion) in late 2012,
equal to around 52.5% of GDP.
After
deducting the rate of 11.7% of the debt guaranteed by the government, 40.9%
of the SOEs are not guaranteed.
Despite
not receiving the government guarantees, the government still has to support
SOEs when they make losses to save them from bankruptcy.
He
cited some typical examples, such as the USD600 million debt owed by Vietnam
Shipbuilding Industry Group (Vinashin) and the debt worth thousands of
billions of VND by Dong Banh Cement Company.
If the
SOE debts, which are not guaranteed by the government, as well as the debts
of the construction sector are included,
At the
same time, the Ministry of Finance recently announced that the country’s
public debt was just 55.7% of the national GDP, still well below the debt
ceiling of 65% of the GDP set by the National Assembly.
According
to the Vietnamese Law on Public Debt Management, which took effect from
January 1, 2010, the debts of SOEs are not considered part of the national public
debts.
However,
Dr. Anh said, in the context so many losses by SOEs, with many of them facing
the risk of bankruptcy, their debts should be considered, including both
those guaranteed and not guaranteed by the government.
According
to Dr. Anh, 105 groups' and corporations' owe an estimated total of VND1,349
trillion (USD64.2 billion), holding more than 80% of the state-owned sector
debt.
Among
those, the Electricity of Vietnam (EVN) owes VND112.6 trillion, Vietnam
Airlines VND27.8 trillion (USD1.32 billion), Vietnam Expressway Development
Corporation VND14.3 trillion (USD666.7 million) and Vietnam Posts and
Telecommunications Group VND6.9 trillion (USD333.3 million).
As of
December 13 of this year, the total losses from these groups and corporations
reached VND29 trillion (USD1.38 billion). Dr. Anh warned that in the end
government may have to bear the burden.
Electronics
retailers pin hopes on promotions
The
electronic appliance market has seen buying power recovering strongly as many
retailers have launched big promotion programs to attract shoppers during the
shopping spree season.
Some
retailers said that the current promotion programs are the biggest in the
year as they wish to boost up sales to fulfill revenue targets. They also
want to offload stockpiles to recover capital for new business plans in 2014.
In
addition, producers have also lowered sale prices to clear stockpiles,
recover capital and make room for new products.
Some
electronic supermarkets in HCMC have received a large number of customers
recently. Nguyen Kim shopping center in District 1 has seen the number of
clients surge thanks to the Big Bang promotion program.
Similarly,
the buying power at
A
representative of Nguyen Kim told the Daily that the buying power has been
positive in the first two weeks of December, rising by three to four times at
centers in HCMC and Hanoi and by four to five times in other localities. Some
centers in
Tran
Tan Hoang Hau, marketing director of Thien Hoa system, said that sales have
jumped by 200-300% in recent days compared to before the promotion program
and by 110% against the same period of last year. The retailer has applied a
strong discount program on over 100,000 products, offered lucky draws and interest-free
installment payment on the occasion of its 12th anniversary.
Dinh
Anh Huan, general director of the retail chain Dienmay.com, said that buying
power in the first half of December increased by 30% month-on-month.
Television sets, refrigerators and washing machines have sold well.
Hau of
Thien Hoa said that the electronics market is recovering. Having saved money
for a long time, local consumers are ready to disburse in new home appliances
when prices have declined to a reasonable level.
Hau
expected that electronics centers and supermarkets will launch more promotion
programs from now to the Lunar New Year holiday, or Tet, due in late January.
Retailers hope that the buying power for electronic appliances will surge by
200% to 300% compared to normal days.
Huan
of Dienmay.com also said that buying power will keep rising in the coming
time, especially 20 days ahead of the Tet holiday.
Resettlement
progress in Thu Thiem lags
The
program to build 12,500 resettlement apartments in Thu Thiem New Urban Area
in HCMC’s District 2 is underway but only one-fourth of the total has been
completed and handed over to residents.
According
to statistics of the HCMC government, the implementation of resettlement
projects in Thu Thiem such as the 17.3-hectare project in An Phu, the
projects of 38.4 hectares and 30 hectares in Binh Khanh still sticks to the
schedule.
There
will be 1,080 more apartments completed and added to the resettlement plan
late this year, raising the program’s total number of finished condos to
2,204 units.
Early
last month the city government has asked the HCMC Department of Construction
to accelerate the implementation progress of resettlement projects so that
residents can receive apartments early.
In
addition, the HCMC Department of Construction has been required to work with
districts to allocate the housing fund consisting of 3,799 apartments and
land lots to areas in need.
The
city encourages resettlement in areas close to where residents are living
instead of in far areas to avoid disturbance in living and working of
residents.
Europe:
The
Ministry of Industry and Trade’s Trade Promotion Agency and the Netherlands
Centre for the Promotion of Imports from Developing Countries (CBI) hosted a
December 20 seminar in
Europe
is
Senior
market experts attending the seminar discussed the current realities facing
Vietnamese agricultural product exports, issues exporters commonly encounter
when attempting to enter the EU and the lucrative market’s many opportunities
and challenges.
The
seminar was designed to encourage expanding export markets for local
businesses by introducing representatives to potential EU partners.
Promoting
border trade between Vietnam, Laos, and Cambodia
Nearly
200 Vietnamese, Cambodian, and Lao delegates gathered at a December 20
seminar in Tay Ninh to discuss promoting border trade between the three
countries.
Participants
examined ways of streamlining imports and exports via road networks linking
Tay
Ninh shares a 240km border with
Import-export
activities conducted through Tay Ninh accounts for one-third of the total
Vietnam-Cambodia import-export value. Two-way trade exceeded US$4.1 billion
in 2012.
Southern
businesses wanting to export products to
Exporting
via Tay Ninh would cut travel distances to only 350km.
Tay
Ninh’s infrastructure can bear the demands of travel and goods transport, but
border trade between
The
three countries should align their administration policies to attract stable
levels of investment and diversify goods and services.
Deputy
Minister of Industry and Trade Nguyen Cam Tu said border trade between the
three countries continues to grow.
Both
the US$2 billion target for Vietnam-Laos trade and the US$5 billion target
for Vietnam-Cambodia trade are well within reach.
Footwear
exports hit US$7.9 billion
The
annual US$8 billion export target is within reach.
The
The
Vietnamese
enterprises have so far committed a total of US$15.5 billion in 742 projects
abroad.
According
to the Ministry of Industry and Trade, mining industry tops the list with 99
projects totalling US$4.6 billion, equivalent to 13.3 percent of overall projects
and 46 percent of total investment capital.
Agro-forestry
and food processing comes to second with 80 projects worth of US$1.9 billion,
accounting for 10.8 percent of all projects and 23.6 percent of total
investment capital, while power projects also attracted US$1.8 billion,
accounting for 12.1 percent.
Vietnamese
has expanded their investment to 59 countries and territories across the
world.
Vietnam
to export more farm products to Japan, RoK
The
department said that apart from reducing and eliminating tariffs to promote
the export of agricultural and seafood products to
According
to the United Nations Conference on Trade and Development (UNCTAD),
non-tariff measures are generally defined as policy measures other than
ordinary customs tariffs that can potentially have an economic effect on
international trade in goods, changing quantities traded or prices or both.
Different
from normal tariff measures, non-tariff measures are difficult to quantify by
concrete figures and closely associated with security, health and social
purposes. Therefore, the impact of non-tariff measures on international trade
are difficult to define and it is also difficult to ask nations to remove
these tariffs.
The
Japanese Ministry of Health, Labour and Welfare has recently decided to
inspect Ethoxyquin (ETQ) residue in all frozen shrimps imported from
In
addition, the RoK’s strict regulations on animal plant quarantine remain the
biggest snag in the export of Vietnamese farm products, especially fresh
fruit, cattle and poultry. Like
Over
the past three years,
The
Vietnam-Japan Economic Partnership Agreement (VJEPA) took effect on October
1, 2009, marking a milestone in the cooperative relations between the two
nations. This was
The
VJEPA and AKFTA are aimed at improving bilateral trade exchange between
The
RoK has imported many agricultural and seafood products from other nations in
the world, but
Prof.
Vuong Dinh Hue, head of Party Central Committee’s Economic Commissions, made
the statement while receiving Victoria Kwakwa, WB Vietnam Country Director,
at a working session in
The
bank has also worked closely with the Economic Commission to support economic
development in the country, he said.
The
Economic Commission needs further assistance and policy consultancy from the
World Bank to make valuable recommendations on socio-economic development to
the Party Central Committee, he told Kwakwa.
He
asked the WB to help seek development partners to back
Kwakwa
hailed the close ties between the WB and
She
assured
Farm
produce’s future export prospects
According
to the latest report by the Ministry of Agriculture and Rural Development
(MARD), November’s agricultural exports were estimated at US$2.42 billion in
revenue.
Dr.
Dang Kim Son, Head of the
Metro
Cash & Carry Vietnam Director General Philippe Bacac who has ten years of
experience in developing trade infrastructure facilities and supply chains,
says domestic farmers have huge potential for seafood, fruit, and vegetable
production.
He
recommends that they focus on improving the quality and competitiveness of
products, and establishing closer links with exporters.
In
mid-November,
Metro
Singapore Office Representative Do Kim Dung said the first dragon fruit
shipment was part of a contract signed by Rong Do Company and there will be
more orders in the near future.
Dung
says Metro is seeking potential partners to ensure a steady supply of
high-quality garlic, ginger, lemons, rambutan, and strawberries from
She
emphasizes the importance of strictly adhering to origin and quality
regulations. Local exporters have to meet the British Retail Consortium (BRC)
standards, International Food Standard (IFS), and Good Agricultural Practice
(GAP), with strong commitments to providing an annual volume of 8,000 tonnes
of farm produce for Asian and European markets.
Since
early this year, Metro has purchased more than US$6 million worth of
Vietnamese fruit, vegetables, and seafood for its 747 retail centres in the
world. It plans to sign more contracts worth US$12 million with
Small
farmers at crossroads in Vietnam
In
order to increase
Currently
around 20 million people in
Despite
their modest size, such households are currently considered the backbone of
the country’s agriculture industry, which provide for both domestic
consumption and export.
The
strategy of integration poses many opportunities and challenges to these
small farms that individually have modest resources and old technology.
Their
challenges range from the effects of price fluctuations and lower profits to
the possibility of contract cancellations and effects from bubbles in the
world farm produce markets.
The
question for policy-makers now is whether it is wise to go with domestic
agriculture integration. Many say that this is the best path considering the
trends of globalisation, urbanisation and migration from rural areas to urban
ones. However the extent to which the country follows this path would depend
on the development of non-agricultural industries and government policy, they
say.
“In
order to ensure sustainability in integration, it’s necessary to drive small
households towards this goal, as well as provide them with support,” said
Nguyen Lan Huong, a specialist from the UN’s Food and Agriculture Agency
(FAO) in Vietnam, at the ISG Planary Meeting 2013 “International Economic
Integration for Agriculture in Vietnam: New Challenges and Opportunities.
However,
the problem of how to maintain such small households while at the same time
helping them to integrate along with increasing production value,
productivity and competitiveness, while the local economies further integrate
into regional and the world economy is really a great challenge.
In
order to increase the sector’s competitiveness, some economists have said
that
Truong
Dinh Tuyen, former Minister of Industry, said that it is necessary to create
a new production model to build up "multi-functional" agriculture.
Tuyen described one that combines production and processing in order to lower
the volume of exports of raw material, so as to increase productivity value
and protect the environment, while at the same time preserving traditional
Vietnamese values.
To
this end, he said, the country should take a parallel approach to the problem
by intensifying the use of technology and designing new models of production.
This, he added, would foster cooperation between Vietnamese farmers and
enterprises, especially in the case of taking advantage of public private
partnerships.
Tuyen
commented, “The GDP growth rate has been on the fall recently. Agricultural
surpluses would fall if imports increase. Farmers would also suffer from
lower profits due to the decrease in prices of farm products. This is a very
real risk for small household-based farms. The development of large,
concentrated rice fields could be a foundation for the sector."
Some
representatives of international organisations and foreign donors have said
that the increase of production is unavoidable if the country wishes to
increase competitiveness. They also suggested more careful studies on the
effects integration will have on small-sized farming households before
mapping out new policies, adding that there needs to be a support system for
smaller farms and ethnic minority groups.
Viettel,
VinaPhone switch to e-payment
Several
local mobile service providers, including Viettel and VinaPhone, now are
switching to the e-payment segment in the context that their revenues from
basic mobile services such as call, text and value added services have
declined.
Speaking
with the Daily, Nguyen Duc Hung in charge of sales and marketing of the value
added service center of VinaPhone, said basic services like phone and text
were already saturated and that charges of these services were falling due to
the fierce competition from free over-the-top (OTT) services. Because
of this, telecom enterprises now are competing with one another in terms of
the value-added service and payment service, Hung said.
“Basic
and value added services have been tapped thoroughly by telecom companies
while only payment is the final segment that is not yet utilized at present.
This is the segment bringing huge revenue,” Hung analyzed.
Viettel
and VinaPhone are two mobile service operators joining the e-payment sector
actively while MobiFone is also making a plan to enter this area.
In
particular, Viettel has launched the BankPlus service allowing customers to
make payments for water and electricity bills, air ticket purchases and money
transfers via mobile phones. The service now is connected among 16 local
banks such as Vietcombank, Vietinbank, BIDV and Sacombank, with users set to
pay VND11,000 per month to maintain the service.
Account
transfers within the same bank costs a minimum VND3,000 for one transaction
while account transfers among different banks is charged VND10,000 a time and
the transaction check fee is set at VND500. However, certain banks offer free
money transfers internally and only charge monthly service maintenance fees.
Pham
Trung Kien, director of the e-commerce center of Viettel, informed that the
BankPlus service of his firm had already connected 16 banks and attracted 2.4
million Viettel subscribers. Notably, over 1.5 million subscribers perform
monthly transactions worth some VND5 million a month each, Kien remarked.
In the
meantime, VinaPhone with the e-purse model Momo supports customers via
payments for air tickets and game card purchases and other digital contents.
At the same time, customers are also able to transfer money through the
e-purse model with a maximum amount of VND5 million a day. The service now is
being used by 700,000 VinaPhone subscribers.
Besides
the basic payment, Viettel and VinaPhone said they were looking to connect
with e-commerce websites as intermediate payment tools. According to Hung,
VinaPhone is talking with several lenders over the payment channel connection
besides cooperating with e-commerce websites to integrate the e-purse Momo as
an online payment portal.
Similarly,
Viettel is working with local e-commerce websites to launch its payment
service in the e-commerce industry next year.
Gov’t
urged to spur business support for recovery
The
Government should further boost support for enterprises to help them catch up
with opportunities surfacing alongside the economic recovery, heard a seminar
on Vietnam’s economic prospects for 2014 in Hanoi on Thursday.
Experts
at the seminar agreed that despite numerous economic problems, there are
chances for recovery from next year if the Government is consistent in its
support policies for enterprises. The seminar “Vietnam’s economic prospects
for 2014: synergy from policy effects” was organized by the National Center
for Socioeconomic Information and Forecast under the Ministry of Planning and
Investment (NCEIF).
Mai
Thi Thu, director of the center, was fairly upbeat on the economy, saying the
worst is over now. Those enterprises that remain operational now have proved
the feasibility in their business plans, she said.
“Therefore,
if the Government is consistent in its support policies for enterprises,
there will be a big chance for them to return to the growth path,” she said.
But
other experts at the gathering stressed that the business community is still
very frail now.
Doan
Thi Quyen of the Enterprise Development Institute under the Vietnam Chamber
of Commerce and Industry (VCCI) cited a recent survey conducted by VCCI to
say that enterprises could not absorb capital for business expansion.
Entrepreneurs polled in the survey said the Government’s support policies
were not effective, she said.
“Up to
53.6% of surveyed enterprises say they have demand for capital compared to
57.3% in late 2012,” she said. Even worse, among those enterprises in need of
capital, only some 36% were able to take out bank loans, Quyen added.
The
overall business picture in 2013 is diverse but choppy, according to expert
Tran Tien Cuong, with rising numbers of new business start-ups, disbanded
enterprises and those with suspended operations.
Citing
data from the Ministry of Planning and Investment, Cuong noted that there
were 71,000 enterprises established in the January-November period with total
registered capital of VND259.5 trillion, rising by 9.5% in the number of
start-ups but falling 15.4% in capital year-on-year.
As
many as 55,000 enterprises shut down in the first 11 months, rising 8.4% from
a year earlier, including 8,850 that have completed liquidation procedures.
Such
figures tell the story of blues as enterprises are still under huge pressure
to survive, according to Cuong, adding that such a situation presaged
difficulties in tax collection next year.
The
light at the end of the tunnel is that as many as 12,700 enterprises that had
earlier suspended operations have now resumed business.
A
study by the National Center for Socioeconomic Information and Forecast
suggests that despite improvements, the economy in 2013 is still facing big
challenges, especially in terms of total investment, the people’s purchasing
power, and business health.
The
overall investment in the economy as of the end of the third quarter grew
only 6.1% year-on-year, and the ratio of overall investment to the gross
domestic product (GDP) has thus been declining to around 30% now compared to
around 40% prior to 2008.
The
people’s purchasing power is also falling as the people with smaller incomes
are tightening their purse string, as seen in the slower growth of the total
retail revenue of commodities and services, at 14.26% as of end-third
quarter. The low inflation is partially attributed to the weak aggregate
demand due to economic stagnation.
The
interest rate has fallen sharply, but many enterprises still find it
difficult to access credits, according to the center. Many cash-strapped enterprises
therefore are near the verge of bankruptcy.
Another
lingering bottleneck for economic development is the amount of bad debts that
is far from being addressed, which will make the local economy lag further
behind regional peers.
Revenues
of CII’s toll stations rise strongly
Revenues
of toll stations operated by HCMC Infrastructure Investment Joint Stock
Company (CII) in HCMC increase by billions of Vietnam dong each month,
according to the firm’s report sent to investors on Thursday.
Hanoi
Highway toll station has collected VND22-27 billion a month since it began
collecting the fees to recover capital for Rach Chiec Bridge on June 1, 2013.
Meanwhile, revenues of Binh Trieu Bridge station have doubled to around VND8
billion per month since August 1, 2013 when CII was allowed to collect the
fees for both directions.
Cam
Thinh toll station in Ninh Thuan Province will increase the fees from next
year, with revenues forecast to rise by 1.5 times to VND6 billion per month.
According
to the report, the toll fee collection in the year’s second half is forecast
to double that in the first half with an average of some VND40 billion per
month. Besides, it will inch up by 25% next year due to increasing traffic
and the toll fees rising by 1.5 times to around VND600 billion.
Le
Quoc Binh, general director of CII, told the Daily that the fee increase was
only one of the factors shortening the collection duration but how much time
can be shortened depended on traffic volumes and bank loan interest.
According
to Thai Van Chung, general secretary of the HCMC Goods Transport Association,
the fee hike near the Lunar New Year holiday will push up prices of
commodities and transport fees, and the ones suffering the most from the fee
hike will still be consumers.
The
HCMC People’s Council on Tuesday approved a proposal of increasing the toll
fees at Hanoi Highway and Binh Trieu stations by a minimum amount regulated
by the Ministry of Finance as from next year.
The
toll fees imposed on under-12-seat vehicles, under-two-ton trucks and buses
will increase by 1.5 times to VND15,000 per time or VND450,000 per month.
Vehicles
of 12-30 seats and trucks of 2-4 tons will have to pay VND20,000 per time or
VND600,000 per month, rising by 1.35 times.
The fees
for vehicles of over 31 seats and trucks of 4-10 tons will be VND25,000 per
time and VND750,000 per month, rising by 1.16 times.
Meanwhile,
the fees imposed on trucks of 10-18 tons and 20-foot container trucks will
remain at VND40,000 per time and VND1.2 million per month and those for
over-18-ton trucks and 40-foot container trucks will be VND80,000 per time
and VND2.4 million per month.
Deloitte
offers ERM consultation to PVEP
Deloitte
on Thursday signed a contract with PetroVietnam Exploration Production
Corporation (PVEP) to provide consultation for the latter’s deployment of
enterprise risk management (ERM) solutions.
Under
the cooperation, Deloitte will help PVEP build its risk management strategy,
policy and process; deploy the management system and conduct other activities
to increase the enterprise management quality.
Do Van
Khanh, board member and CEO of PVEP, said in a statement that the deployment
of ERM was one of the firm’s strategic goals from now until 2015, targeting
to become a strong oil-gas exploration and exploitation firm in the region in
2025.
The
2,000-strong PVEP currently has assets of over US$5 billion and manages 65
projects in Vietnam and 14 countries worldwide.
According
to David Traylor, an expert at Deloitte, the deployment of ERM in different
sector varies. With the banking sector the key point is how to reduce risks
in investments while that for the oil and gas sector is not only how to
reduce such investment risks but also reduce risks in terms of human
livelihood and environment.
Kinh
Do to sell stake to U.S. partner
A
confectionery group from the U.S. will acquire 40 million shares of Kinh Do
Corporation (KDC) by entrusting investment funds in Asia, said KDC general
director Tran Le Nguyen.
The
U.S. partner will also allow the local firm to make products under its brands
and export them to Southeast Asian markets.
“We
cannot disclose the name of the partner given an information security
agreement between both sides. However, this is a global leader and it has
launched products in the country,” Nguyen said.
The
partner will support KDC in developing new products such as cooking oil and
instant noodles, he added.
For
the share selling price, the partner will enjoy a 20% discount of the average
closing price in the last 20 sessions. KDC expects to earn around VND1.2-1.3
trillion from this issuance.
KDC is
also negotiating with a Russian food enterprise to prepare for investment in
Moscow. In the first stage, KDC will produce fresh pies and sponge cakes for
this market.
Recently,
Cau Tre Food Company has offered to cooperate with KDC, using KDC’s ice cream
distribution network, transport system and freezers to distribute Cau Tre’s
frozen food products. The cooperation is expected to begin next year.
ACB
wants to sell bad debt to VAMC
Asia
Commercial Bank (ACB) has written to Vietnam Asset Management Company (VAMC)
proposing selling VND1.5 trillion bad debt, of which VAMC expects to take
over VND1 trillion within this year if the procedure goes smoothly.
ACB
general director Do Minh Toan told the Daily that the bank will transfer
three packages of original bad debts worth VND500 billion each to VAMC.
As the
year 2013 is nearing the end, only two packages could be transferred within
this year. The bank expects to sell the final debt package to the company in
early 2014.
All
the bad debts are not related to the real estate sector. Selling out the
VND1.5 trillion debts, ACB expects to cut its bad debt ratio from 3.1% in
late November to 2%, Toan said.
However,
around 40% of ACB’s debts were made in foreign currencies. Given the current
rules, if VAMC buys foreign currency loans, it will have to convert the loans
into dong, so banks will have to buy foreign currencies in the market to
maintain their forex positions.
Some
people have raised concerns that the regulation will affect stability of the
dong-U.S. dollar exchange rate.
Nguyen
Quoc Hung, vice chairman of VAMC, said that the enterprise is considering
foreign currency debt purchases from credit institutions with value amounting
to tens of millions of U.S. dollars.
“VAMC
has not bought any bad debts in foreign currency as we are waiting for
instructions from the central bank. We have plans to buy the first foreign
currency debts at the end of this year but will find ways to prevent any
impact on the exchange rate,” Hung said.
For
the bad debt banks have transferred to VAMC, most of it has been made to
purchase equipments for high-class construction projects.
Concerning
impacts of foreign currency debt purchases on the exchange rate, Hung said
that there is no good reason to worry about that. Only when VAMC buys huge
debts worth hundreds of millions or billions of U.S dollar, the forex rate
stability will be affected.
In
addition, VAMC will seek supports from the central bank with purchase of
foreign currency loans to avoid impacting on the forex market.
VAMC
has bought some loans in gold, which has also been converted into dong.
However, there have been no impacts caused to the gold market.
VAMC
so far has bought VND21.8 trillion worth of bad debt with special bonds,
equivalent to VND27 trillion of original debt. The enterprise expects to buy
debts from 28 to 29 credit institutions this year, Hung added.
Source:
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Chủ Nhật, 29 tháng 12, 2013
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