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BUSINESS
IN BRIEF 31/3
Vietnam
enjoys trade surplus with the US
In the first two
months of the year
Two-way trade
between
Of the total,
Vietnamese export earnings hit US$3.9 billion, up 25%, and its imports
fetched US$936 million, up 22%.
Garments topped
They were followed
by shoes (US$444 million, up 23.4%) and wood products (US$293 million, up
19.25%)
Notably, export
earnings from mobile phone handsets and components to the
Gloomy
forecast for
Recent cold spells
in the northern mountainous
Coffee in the
Central Highland provinces of Dak Lak, Lam Dong, Gia Lai and Kotum has also
deteriorated as the dry season has reached its peak, resulting in water
shortages.
The region, which
boasts the country’s largest coffee growing area, is now able to ensure water
for only 60 percent of coffee cultivation land, while the remaining is
suffering from drought.
Adverse weather was
also behind the drop in coffee production last year, during which
Trade
promotion activities help firms boost exports
Under two major
programmes, namely the National Trade Promotion Programme and National Brand
Programme, promotion activities have helped boost exports and business
activities both at home and overseas.
According to the
Vietnam Business Forum (VIB Forum), the National Trade Promotion Programme
was carried out with three phases, consisting of 144 projects deployed by 71
units.
The programme
focused on supporting leading export industries of
Vietnamese enterprises
took part in well-known general trade fairs and specialised trade fairs in
Many companies also
attended trade fairs in foreign nations with different scales, with the most
frequent destination being
A wide range of
international trade fairs were organised in
Vietnamese
companies signed contracts worth of hundreds of millions of US dollars at
trade fairs in foreign nations and international trade fairs in
Trade fairs and
exhibitions belonging to the National Trade Promotion Programme supported
1,834 enterprises in 2013, representing an increase of 34% from 2012,
installed 10,623 booths, attracted 1.85 million visitors, witnessed 572
contracts and memorandums of understanding signed with a combined value of
over US$1.4 billion and VND162 billion, and raked in aggregate sales revenue
of VND400 trillion.
Activities of the
National Trade Promotion Programme always sticks to export-oriented
promotion, gives priority to the development of domestic market in
border-sharing, mountainous and offshore localities, thus contributing to the
success of the “Buy Vietnamese” Campaign which encourages Vietnamese people
to give priority to Vietnamese products.
The National Brand
Programme, also known as Vietnam Value, continued to support joining
businesses. It focused on popularising Vietnam Value-certified products.
Right from the
start of 2013, the Council for National Brand Programme held a ceremony to
announce 54 companies to be certified the National Value in 2012, including
37 companies also winning the title in 2010. As many as 25 companies earned
the title in three consecutive times.
Trade - investment
promotion agencies organised many activities throughout the year. They organised
business delegations to
Attending a similar
event in the
Together with 500
promotion programmes certified by the Vietnam Trade Promotion Agency
(Vietrade) under the Ministry of Industry and Trade, hundreds of promotion
programmes were granted by provincial/municipal Departments of Industry and
Trade.
Importantly,
competent agencies tightened supervision over promotion programmes and timely
handled unfair programmes to ensure fair competition and the legitimate
interests of consumers. Thus, promotional activities, commercial
advertisements, monthly sales, holiday stimulus programmes were effectively
carried out.
Creativity
key for handicraft boost
Domestic handicraft
exporters would gain 30-50 per cent turnover if they made efficient
investments in design and enhancing creativity for meeting the demands and
tastes of foreign markets, stated local experts.
Vietnamese artworks
and handicraft products have been favoured by many overseas markets due to
their high quality, said the deputy head of the Ministry of Industry and
Trade's Trade Promotion Agency, Ta Hoang Linh.
However, poor
design remained the biggest weakness of locally-made handicraft products,
Linh said, accounting this to a lack of professional designers and inadequate
capabilities of those currently working in the industry, who have failed to
update themselves at par with the latest trends in the world market.
Handicraft
producers agreed that creating new handicraft designs, which currently
accounted for 30 per cent of the products' value, was an urgent requirement
apart from ensuring good quality. It was also not an easy task for them due
to insufficient investments and shortage of experience in product
development, the firms claimed.
Thai Dai Phong, the
director of Duc Phong Co, a firm that recorded an annual export turnover of
US$1 million, described participating in domestic and overseas training
courses and projects on product designs run by ministries, associations, and
international trade promotion agencies, as a good opportunity for the handicraft
producers to improve their capabilities and keep abreast with the latest
trends.
Ho Tan Duong, the
deputy chairman of the Viet Nam Design Association, said that his group,
along with the ADS International Design and Art Centre and Vietrade, were
working on a handicraft sustainable development project in collaboration with
designers.
The association
will help the designers in enhancing their corporate relations, customer
research, and partnership opportunities.
The designers will
be provided up-to-date design trends by the local and international experts
via design education, training, and workshops.
Festivals,
exhibitions, and competitions will also be organised. They will also have the
opportunity to enhance their practical knowledge while working with these
businesses.
Property
firms warn of price hikes to boost sales
As the
long-sluggish property market has started showing signs of recovery this
year, certain housing developers have hinted at price hikes in an apparent
attempt to attract buyers who fear a price rise.
Hoa Binh Co., Ltd,
the investor of the
Nguyen Huu Duong,
general director of Hoa Binh, said the price hike may be around 10%. The
company is quoting the price at VND20.5 million per square meter for
unfurnished units and VND26 million for furnished units, VAT excluded. With
such prices, Hoa Binh earns almost no profit due to higher investment cost
and interest rate, Duong noted.
Early this year,
Viglacera launched a sale of apartments in the Thang Long Number One project,
which attracted attention of many customers as it is located near the city
center. Then there was a rumor that the price of Thang Long Number One
apartments could rise.
According to a
report on apartment prices recently released by the Hanoi Department of
Construction, the housing price fall has shown signs of easing since the
final quarter of last year and some projects, especially high-end ones, have
reported price rises of 1-3%.
Nguyen Quoc Khanh,
chairman of G5 property exchange, said some investors had raised apartment
prices by 3-5%.
Some high-end
projects at prime locations and those soon to be handed over to buyers have
proven attractive to customers but supply is limited.
Investors and
speculators have taken advantage of this to push up selling prices.
The price of
According to Dieu
Lanh at Thang Long property exchange, since the year’s beginning, a lot of
customers have called to ask for information, leading investors to raise
prices.
Explaining the
price hike at
“The apartment
segment is improving with many successful transactions reported by projects
at good locations or with good progress. Therefore, price adjustments are
unavoidable,” he said.
However, some have
cast doubt over what might be apartment developers’ trick to lure customers
as the property market is still in distress and transactions have improved at
some projects with affordable prices and small apartment sizes.
Exporters
object to forthcoming removal of e-customs
Exporters have
expressed outcries over an internal memo in which the Ministry of Finance
requests a strengthening of anti-fraud activity relating to e-customs
clearance procedures, which will eventually make life hard for the export
sector.
At a monthly
meeting of the Ministry of Industry and Trade last week, Dang Phuong Dung,
vice chair and general secretary of the Vietnam Textile and Apparel
Association (Vitas), asked the ministry, its import-export department, and relevant
enterprises to adopt a position against the Ministry of Finance’s move.
The Ministry of
Finance has instructed the General Department of Customs to revise
regulations governing e-customs in a way that will leave adverse impact on
exporters from early April.
The association has
written to the Ministry of Finance, the General Department of Customs, the
Ministry of Industry and Trade and the Ministry of Justice expressing grave
concern over this regulatory adjustment.
According to the
controversial plan of the Ministry of Finance, exporters would not be allowed
to file customs declarations before goods are amassed, nor exempted from
customs requirements even if they are in priority areas.
After amassing
goods, exporters should submit a statement making clear a tentative schedule
for shipment, and goods loading into containers and trucks so that customs
officers could inspect.
The places where
goods could be amassed should be seaports, airports and bonded warehouses,
among others which must be registered with the customs as areas for customs
inspection.
Export shipments of
goods currently subject to inspection exemptions would have to be
scrutinized by the customs as well.
This is a move of
the Ministry of Finance to prevent trade fraud, falsification of export
documentation and smuggling, which means customs officers must eyewitness the
goods registered for export.
The ministry has
ascribed this legal change to the fact that a host of businesses have taken
advantage of the liberal electronic customs clearance mechanism to make
illegal gains. Of more than 4,000 exporters who have chosen e-customs to have
their export documents processed, the customs have found hundreds of them
falsifying their documentation.
In many shipments,
the customs discovered no goods in containers, smuggled goods, illegal drugs
and arms. A case in point is 229 kg of heroin passed through the customs at
Dung of Vitas said
the Ministry of Finance’s internal memo would have catastrophic impact on the
export sector as it is seen as a binding legal document.
She said she shared
the difficulties faced by the customs in the fight against illegitimate
practices committed by a couple of enterprises but she objected to a tendency
in which a total ban will apply when authorities become helpless.
This will adversely
affect law-abiding exporters, especially those of
For garment
exporters, delivery time is a factor that decides the success or failure of
business, she noted.
The current rule
that permits exporters to prepare an export document and fill in the
e-customs form in advance makes life easy for exporters to fast-track
delivery, ship at any border gate they wish, and choose to package,
containerize or parcel out goods.
But when the new
rule comes into force, exports will have to transport goods to a designated
location. This will throw exporters into a difficult position as it will take
them more time to collect goods from different manufacturing sites and then
bring them to the designated area.
The resulting
outcome is exporters will have to cover extra costs for transportation and
storage.
Vitas has requested
the Ministry of Finance and the General Department of Customs to keep the
current e-customs mechanism in place and sort things out, such as increasing
inspections of just those enterprises suspected of trade fraud.
Overseas
investment path needed
The State should
provide more detailed regulations and guidance on handling overseas
investment activities for local enterprises in the latest draft amending the
Law on Investment, said an expert.
Nguyen Mai,
chairman of the Viet Nam Association of Foreign Invested Enterprises (VAFIE),
said State management of activities related to overseas investment has been
addressed by only a few regulations in the draft, reported the Thoi bao Kinh
te Viet Nam (VnEconomy) newspaper.
Meanwhile, the
process for establishing enterprises and the State management activities for
those enterprises differ completely according to whether the enterprise has
an investment in
If the committee
compiling the draft wants to maintain the regulations on overseas investment
activities, the committee should create more detailed regulations and
guidance for these activities, Mai noted, adding because in the past,
overseas investment activities were scattered, and it is unclear whether they
brought any benefits to the country.
According to the
latest statistics on investment in foreign territories and countries,
released by the Ministry of Planning and Investment,
During the period
2006-13, domestic firms made investments in 59 territories and countries, of
which the largest volume, 227 investment projects, was made in
A total of $3.8
billion has already been disbursed and includes $691 million sent to
The disbursed
investment amount was $2.9 billion for the oil and gas sector, $500 million
for the rubber industry, $400 million for the hydro power sector and $249
million for the telecom sector.
Overseas investment
activities have surged over time, but the Law on Investment 2005 has not
introduced any strict regulations for these activities.
According to the
committee compiling the draft, there are no clear regulations on State
management for overseas investment capital because each project includes
investment capital that must be transferred from
In the coming
period, the State will promote the management of the investment capital
transferred from
Dang Huy Dong,
deputy minister of planning and investment, said that the management of
overseas investment activities involved the management of investment capital.
So, the law should define which office manages the overseas investment
activities.
Dong also pointed
out that the law should encourage enterprises to provide an initial
investment in the project and then mobilise more capital in the territories
and countries where the project is located.
Therefore, the
State should manage real capital transferred to the project, not only the
registered capital, he said.
In January, the
State Bank of Viet Nam (SBV) issued Circular 36/2013/TT-NHNN on the opening
and usage of foreign currency accounts for investment activities abroad.
Under the newly
approved circular, after receiving a certificate for overseas investments, an
investor must open an account for all transactions related to investments in
foreign currencies at a competent credit institution.
The investor will
also have to register with the State Bank or its branches in the provinces
and cities. Investors with several overseas investment projects must open an
account for each project.
If a project
receives investments from multiple investors at home, each investor must open
an account for his/her investment at the same competent credit institutions,
in accordance with the investment certificate issued by the authorised
agencies of
The SBV's
Department of Foreign Currency Management is in charge of verifying the
registration of overseas investments, account changes and capital transfers.
The circular came
into effect on February 14, 2014.
Apparel
group seeks more capital in anticipation of TPP
To take full
advantage of the benefits from the Trans-Pacific Partnership Agreement (TPP)
to raise more capital for material production projects, the Vietnam National
Textile and Garment Group (Vinatex) has appealed to the Government to allow
enterprises to keep the money obtained from selling the State stakes for five
years after equitisation. An insight by the online Vietnam Economic News of
the Ministry of Industry and Trade.
General Director of
Vinatex Tran Quang Nghi said 2014 is an important and decisive year for
preparation of textile and garment enterprises in anticipation of the TPP. It
is expected that in the first half of 2014, the TPP will be officially
agreed, bringing a huge opportunity for
According to its
plan, in 2014 Vinatex will carry out 57 investment projects, including 15 on
yarn, eight on weaving, 24 on sewing and two on farm cotton.
Nghi explained that
Vinatex’s weaving and dying projects this year require a large source of
capital which will be slow to retrieve and the projects are not backed by
local authorities as they are concerned about environmental issues.
Meanwhile, the group’s charter capital is too small to meet the requirement,
meaning it needs to borrow.
According to Le
Tien Truong, Vinatex Deputy General Director, investment in material projects
is very important for the group to take full advantage of the benefits from
the TPP. However, these are capital-intensive projects and also require a
team of skillful workers. That is the reason why in 2012 and 2013, Vinatex
mainly invested in sewing and weaving projects while the yarn production and
dying projects are left for this year, close to the moment the TPP is signed,
for more efficiency.
Vinatex is now on
the horns of a dilemma because of the failure in meeting the timing of the
investment, it will not take advantage of the TPP and it is also being stuck
in capital shortage for the implementation of these projects. However, there
is still an opportunity for the group as it is going to undergo equitisation
by the end of June 2014, after which the group’s charter capital will
increase to 5 trillion VND (235 million USD), with 49 percent of the shares
to be sold, with the State retaining a 51-percent stake.
To solve Vinatex’s
capital shortage, the group’s leaders has appealed the Government to allow
enterprises to keep the money obtained from selling the state stake for five
years after their equitisation to support their investment projects,
especially in material production. They also asked for more favourable policies
in terms of lower land rent and adjustment of the environmental criteria to
attract more investment.
Making use
of EU regulation to boost exports
However, leading
experts say the GSP scheme, in fact, only provides modest benefits to
Under the scheme,
GSP is applied to most of
Tran Ngoc Quan,
deputy head of the European Market Department under the Ministry of Industry
and Trade, postulates the GSP scheme will no longer be valid when a free
trade agreement (FTA) between
Although graduation
thresholds increase from 15% to 17% on products, excluding garments, many of
Vietnamese exports are likely to reach these threshold levels and will not
enjoy EU preferences.
If the new GSP is
applied, the market share of Vietnamese coffee, tea and spices in the EU will
increase to 21.68% from the current 12.11%, meaning these products will cross
over the graduation threshold and will not receive preferences.
Similarly,
Vietnamese seafood and footwear are no exception, as these two groups of
products are expected to make up 19% and 34% of the EU’s market share
respectively.
Claudio Dordi from
the EU Investment and Trade Policy Support Project says EU tariff incentives
create a competitive advantage for Vietnamese garment businesses, especially
when their major rival, China, is paying Most-Favoured-Nation (MFN) taxes
which are 3% higher than GSP levels on average
Customers,
therefore, will place orders with
However, Dordi
warns the GSP brings a definite competitive advantage as the validity of the
GSP is not permanent.
Than Duc Viet, a
Garment 10 Corporation representative, says the most difficulty in gaining
GSP advantages is to meet Rules of Origin of materials to get certificate of
origin (C/O) form A.
Currently, the
company cannot apply for incentives for its FOB products as most of its materials
are imported from
Former Trade
Minister Truong Dinh Tuyen posits GSP does not exert sufficient pressure on
economic restructuring, thus affecting a trade balance. Exports may rise
thanks to GSP, but imports may also increase due to low competitiveness in
labour productivity, quality and production costs.
As
This means GSP
creates an external source of competitive advantage and domestic businesses
should not rely on this source, Tuyen says. Instead, he advises businesses to
grasp GSP rules to avoid obstacles, even losses when exporting products to
these markets.
To this end, the
former Trade Minister says business should make full use of GSP incentives by
improving product quality, diversifying their exports, and reducing costs and
prices to sharpen the competitive edge of Vietnamese products.
In addition, a
greater effort is needed to accelerate economic restructuring and growth
model shifting, he concludes.
Cement
export to ease overproduction
Promoting exports
is still viewed as a potential solution for a cement industry currently
domestic oversupply pressures.
Hoang Manh Truong,
chairman of the board of the Vissai Ninh Binh Group, a big multi-field
non-state economic group with cement production as one of its core functions
said the group’s cement and clinker was being exported healthily, fetching
$54-60 per tonne depending on the market.
He said that last
year although domestic consumption was low, the group reached its sales
target of 6.2 million tonnes.
Vietnam Cement
Industry Corporation (Vicem), which holds a 38 per cent market share,
exported 2.3 million tonnes of cement and clinker last year, a 7.8 per cent
increase on-year.
Chairman of the
board of Vicem Luong Quang Khai said exports were key to helping ease oversupply
pressures.
“Exports will help
offload surplus inventories and attract foreign currencies. At current the
clinker and cement export prices stand around $38 and $55 per tonne,
respectively. And at this price Vicem can get back its production cost with a
little profit,” he added.
The group aims to
export 2.6 million tonnes of both clinker and cement this year.
The Ministry of
Construction (MoC) estimates cement consumption will reach 62-63 million
tonnes this year, a mere 1.5-3 per cent increase compared to 2013. It
announced an export goal of around 14 million tonnes, on level with last
year.
Another foreign
investment wave has been forecast to come to
The forecast was
made by several experts at a recent conference about Vietnamese economics and
multi-national companies held by Bizlive News.
According to Nguyen
Mai, chairman of the Foreign Investment Association, multi-national companies
are recovering from the recession but still searching for potential markets.
Even though the
legal framework is currently considered to be incomplete,
In addition, the
upcoming trade agreements, especially the Trans-Pacific Partnership (TTP),
will expand investment opportunities in
At the conference,
deputy head of Foreign Investment Agency of Vietnam's Ministry of Planning
and Investment, Nguyen Noi, said, "In near future, multiple measures to
improve the economic environment will be implemented to streamline customs
procedures."
The US,
Vietnam Farm Expo
2014 will be held at Tan Binh Exhibition and Convention Center in
Around 250 booths
will display Vietnamese agricultural products and processed agricultural
food. There will be a seminar on building and developing brand name and
export market.
The event is a
chance for domestic enterprises to promote their products, seek business
opportunities, and develop the agricultural industry.
Australia
International Sourcing Fair 2014 featuring garment and textile products,
clothing and footwear will be organized in
Binh Duong
applies national one-door customs mechanism
Binh Duong Customs
Department was chosen by the General Department of Customs as a pilot unit in
applying and launching the national one-door customs mechanism, including
declaration, receipt, exchanges and feedbacks of information on the national
one-door customs portal.
According to the
Binh Duong online, the department is eager to apply new technology to cut
time and cost for businesses and stands ready to instruct enterprises how to
use their new system.
The project of
building and launching e-customs programme and national one-door customs
mechanism, which helps modernise the Vietnam Automated Cargo and Port
Consolidated System and the Vietnam Customs Information System (VNACCS/VCIS)
is supported by the Japanese Government.
The project’s goal
is to transfer modernisation system being applied by the Japanese customs
sector and agencies to Vietnamese partner. Once transferred, the system will
become an effective tool to support Vietnamese customs sector and relevant
agencies successfully applying the national one-door customs mechanism.
As a matter of
fact, it will create advantages of trade and investment in
Applying
VNACCS/VCIS into Vietnamese Customs sector is a high determination of the
Vietnamese Government, the Finance Ministry and the General Department of
Customs. With strong determination,Binh Duong Customs has actively launched
test of VNACCS/VCIS system.
Binh Duong Customs
invited software enterprises to co-host training classes on VNACCS/VCIS system
for about 2,000 local companies. In addition, Binh Duong Customs’ leaders
have held activities to help businesses learn about benefit and importance of
the project.
At this moment,
enterprises have been given consultancies on completing customs declaration
on the VNACCS/VCIS system at Binh Duong Customs’ branches. Customs agencies’
assistance has helped businesses master and positively participate in the
test. Especially, Binh Duong Customs and software companies are ready to help
companies to take part in this system.
Binh Duong Customs’
vice head Nguyen Truong Giang said “After training, nearly 2,000 businesses
voluntarily register to apply the VNACCS/VCIS system. To learn and listen to
business community’s ideas relating to advantages and disadvantages of the
system, Binh Duong Customs’ leaders paid visits to businesses to hear their
aspiration and solve their problems.
Masumoto Kazuya,
Vice General Director of Maruichi Sun Steel Company in Di An town said “Over
the past time, the provincial agencies, especially customs sector, have
facilitated investors’ procedure completion. Our company will double output
of import and export commodities in the coming time. We hope that local
customs sector will continue to solve difficulties for businesses.”
In March, 2014,
Binh Duong Customs will organise three dialogues with foreign businesses to
solve obstacles relating to customs procedures.-
EU-Vietnam
FTA: Opportunities and challenges
After six rounds of
negotiations,
However, experts at
the seminar "Social, Economic and Environmental Assessments of the
EU-Vietnam Free Trade Agreement" have raised concern about how the
Vietnam's economy will be impacted once the agreement is signed, Vietnam
Business Forum reported on March 17.
The seminar was organised
by the EU-Vietnam Multilateral Trade Project (EU-MUTRAP) in collaboration
with the WTO Centre in the Ho Chi Minh City.
Claudio Dordi,
Chief Advisor of the European Trade Policy and Investment Support Project
(EU-MUTRAP), was quoted as saying that in the recent agreements, the EU has
almost liberalised commodity entirely for partners or maintained the
protection under one percent of the trade turnover (as with the Republic of
Korea). The removal of tariffs tends to focus on the first year and not longer
than 10 years for the EU. Particularly for Vietnam, the EU expects that the
FTA between the EU and Vietnam the tariff lines at 95 percent will be
liberalised within 7 years. Based on the typical economic model of the
Vietnam's economy, if the EVFTA is signed, Vietnam will benefit from the
agreement, particularly related to the increase of actual salary and national
income.
"Even if EVFTA
has not been signed, the trade between Vietnam and the EU basically has also
increased; however, when the rules of the Agreement is executed, only the
negotiated tariff reduction is expected to increase the Vietnam's exports to
the EU by about 30 percent to 40 percent, higher than the rate increased in
the imports. The sectors which most likely benefit from the EVFTA include
textiles, footwear, and processed food (including seafood),” Claudio Dordi
stressed.
“However, the
expansion of the production capacity of Vietnam to meet the increasing
demands of the EU on a number of items will determine whether the overall
increase in exports will be significant or not. Also thanks to the FTA, the
service sector is also expected to expand significantly and probably
contribute to the improvement of the performance of the entire economy of
Vietnam," he added.
According to Paul
Baker, Specialist of the EU-MUTRAP project, the impacts of the EVFTA on
environment are unremarkable. The FTA has a neutral impact on the national
carbon emissions if the emission per unit of output in each sector is stable.
But basically, whether the FTA is signed or not, the carbon emission of
Vietnam will increase in correspondence to the growth of the economy today.
Former Minister of
Trade Truong Dinh Tuyen, who is also a senior expert of the EU-MUTRAP
project, said Vietnam is now negotiating many trade agreements, of which the
EVFTA is seen as a comprehensive and high-quality agreement based on the
WTO's standard. Accordingly, some fields in the WTO agreement in goods,
services, and technical barriers will be committed more intensively by
Vietnam.
Other fields in
investment, government procurement, the state-owned enterprises and
competition policies, sustainable development, and renewable energy will have
to be committed and adjusted by the EVFTA. Former Minister Tuyen recommended
that Vietnam should also set out the inquiries associated with the
negotiation process, which require EU to recognise Vietnam as a country with
market economy to help the country’s benefits be guaranteed.
In terms of legal
and business environments, the EVFTA and other agreements in negotiations
will inevitably impact the institutional and business environments of
Vietnam. Specifically, in terms of institution, Vietnam is forced to amend
and enact many laws such as corporate law, investment law, and land law. In
addition, the agreements also make impacts on the business environment
through the commitments on customs, border measures and transparency of the
legal framework.
Tuyen emphasised
that Vietnam can only take advantage of opportunities and gain power and
strength to overcome challenges after the EVFTA as well as other free trade
agreements are signed to bring more transparent investment environment,
ventilation and reduce business costs.
On the other hand,
Le Trieu Dung, Deputy Director of the Multilateral Trade Policy under the
Ministry of Industry and Trade, said the signing of the EVFTA will bring
great benefits to many industries and economic sectors of Vietnam as well as
contribute to the increase of the bilateral trade.
However, the top
concern of Vietnam relates to the non-tariff measures (SPS and TBT) that are
applied by the EU. Accordingly, Vietnam needs more consultation when making
decisions related to these rules and starts build up capacity to help the
businesses meet the new standards.
Vietnam's
institutional framework needed to support the introduction of EU procedures
to the enterprises and create favourable conditions for them to export to the
EU. In addition, Vietnam should also pay attention to the negotiations of the
EVFTA in terms of quality and standards at the same time.
Besides, Vietnam
should focus on the impacts on the key areas such as attraction of FDI,
improvement of competitiveness, job creation and improvement of quality of
life for workers, to effectively tap into every opportunity and overcome challenges.-
Vinalines
plans port share sale
Vietnam National
Shipping Lines has announced plans for an initial public offering in May for
the biggest seaport operator in the north.
The corporation
(Vinalines) general director Vu Khac Tu said the equitisation plan for
Haiphong Port would be approved by April 15 and make an initial public
offering (IPO) and sell stakes to strategic shareholders within the coming
one and a half months.
“The biggest port
in the north of the country plans to officially operate as a joint stock
company from July 1, 2014,” said Tu.
The Vinalines board
last week announced that it approved a corporate valuation for the
equitisation of Haiphong Port at VND4.32 trillion ($206 million), equivalent
to 201 per cent of its book value.
Haiphong Port is
the biggest and busiest in the north, accounting for some 40 per cent of
cargo volumes in the northern region. In 2013, Haiphong Port recorded a
profit of VND150 billion ($7.14 million) and processed VND18.8 million tonnes
of cargo.
The corporation
will sell a 25 per cent stake in the port as part of the group’s wider
restructuring plan for the 2012-2015 period.
According to
Vinalines’ restructuring plan, profitable ports such as Haiphong, Saigon,
Quang Ninh and Danang and its subsidiaries would be equitised by the end of
this year.
Deputy general
director of the Haiphong Port Bui Chien Thang said this meant that trillions
of dong worth of shares would be up for grabs, but it was proving difficult
to find buyers for such large stakes.
Thang told local
media that investors would face tight scrutiny if they were considering
becoming strategic shareholders in Haiphong Port.
He elaborated that
domestic investors would need to have at least five years of experience in
port and maritime operations, total assets of VND1 trillion ($47.6 million)
and minimum equity of VND700 billion ($33.3 million).
The strategic
shareholders would also have to boast at least three years of post-tax
profits and not already be a strategic investor or founding shareholders or
even a shareholder with a 5 per cent or greater stake in the charter capital
of any business in the port sector in the northern region.
Ho Kim Lan, general
secretary at Vietnam Seaports Association, said that it would be difficult to
find strategic shareholders based on such tight requirements, especially in
the current difficult economic situation.
However, Lan
emphasised that Haiphong Port still offered good value given the successful
equitisation seen at the city’s other port at Doan Xa.
Prior to 2001, Doan
Xa Port had never surpassed VND8 billion ($380,952) in annual revenue until
equitisation. The port’s revenue had jumped to VND40 billion ($1.9 million)
in 2004, just three years after equitisation.
Golf course
land use sparks row
The proposed shift
to turn the premium golf course Ocean Dunes Golf Club in the south-central
coastal city of Phan Thiet into a residential development has sparked
controversy.
The redefinition of
the land used by the Ocean Dunes golf course for residential development has
sparked controversy
In early March,
Rang Dong Group, headquartered in the south-central coastal province of Binh
Thuan and also the new owner of Ocean Dunes Golf Club, received the Binh
Thuan Provincial People’s Committee’s permission to change the 18-hole golf
course - one of the first in Vietnam - into a residential township
development.
Le Tien Phuong,
Chairman of the Binh Thuan Provincial People’s Committee said there was
consensus on the decision, “it proposed that the provincial party committee
consider the case. We’ll undertake the necessary procedures, including
seeking approval from the prime minister.”
The provincial
authorities said the ineffectiveness of the Ocean Dunes course was a key
reason behind the move, citing the fact that in ten years of operation during
2004-2014 it had incurred cumulative losses amounting to VND115 billion ($5.5
million), according to the Binh Thuan Provincial Tax Department.
Nguyen Van Dong,
chairman of Rang Dong Group said that if the proposal was finally approved,
the group would invest in a multi-function urban area consisting of
multi-storey buildings, villas and garden houses.
Dong said the
changing function of the project would make more efficient use of the land
and provide an estimated VND1 trillion ($47.6 million) in land taxes for the
provincial budget.
With the estimated
investment capital of around VND3 trillion ($142.8 million), a third of the
investment capital will be put into roads, power and water, drainage and
landscaping.
The proposal however,
has encountered opposition from some that still claim the golf course
promotes tourism or that instead it should be converted into a park to
improve Phan Thiet city’s environment.
Former Deputy
Chairman of the Binh Thuan Provincial People’s Committee Nguyen Van Thu was
quoted as saying by local media “in the long run, retaining the golf course
land and turning it into a park would be much more beneficial to Phan Thiet
tourism then collecting VND1 trillion in taxes from developing it into an
urban development.”
“Phan Thiet is a
tourism city but it doesn’t have a decent park. Local people mainly entertain
themselves in coffee shops or food shops, I don’t see why we’re focusing on
developing a new urban area when there are plenty of houses still available
to buy,” Thu stressed.
According to former
provincial Party Secretary Dinh Trung, there would be further discussion on
the proposed change.
Ocean Dunes was
established by US billionaire Larry Hilblom - one of the founders of global
DHL Group - in 1993. The billionaire built a 62 hectare golf course and
upgraded a state-owned hotel into the 4-star Novotel resort.
However, after the
billionaire died in an aircraft accident, the golf course and the resort were
sold twice to foreign partners before falling into the hands of Rang Dong
Group in November 2013 at the cost of about $20 million.
Although the
proposal has far from being agreed, golfers at Ocean Dunes Golf Club were
told by Rang Dong Group to move to play at the Sea Links golf course (also
managed by the group) as the Ocean Dunes course would close from early April.
Apartment
developers wring buyers in rash dash for profit
Despite continuing
difficulties with huge stockpile of apartments, some real estate developers
have marked solid sales over the past few months and are increasing prices.
On March 15, the
Hoa Binh Group - developer of the Hoa Binh Green City project in Hanoi -
suspended sales in order to adjust prices. Nguyen Huu Duong, general
director, said prices would rise by at least 10 per cent, from current
VND20.5 million ($976) per square metre of bare-shell apartments.
“The prices at Hoa
Binh Green City have been held back and are well below our high level of
quality and peace-of-mind. Compared to projects of a similar scale and
quality, we invested 25 per cent more to ensure these things,” Duong said.
Another reason Duong is confident is the high speed of construction. It is
now 70 per cent complete and aims to begin handing over finished units in
June this year.
Hoa Binh Green City
is not alone in increasing prices. Thang Long Number One, in the west of
Hanoi, put them up 9 per cent compared to those quoted in November 2013.
Another Hanoi
project, Golden West is also expected to increase its prices by 7 per cent in
the coming time.
“The gap [between
the old and new price] will recapitalise developers after a long period of
little to no returns on their investments,” said Vu Cuong Quyet, general
director of Dat Xanh North Joint Stock Company. But Quyet warned that
projects planning to increase prices should be on-schedule and of good
quality.
Apart from that,
these projects seem to be nearly finished and customers are preparing to
receive their apartments. “This schedule seems to have convinced customers,”
he added.
Nguyen Quoc Khanh,
chairman of G5 Real Estate Alliance, said increasing prices were a sign of a
warming market but that it was not out of the woods yet. He advised
developers to consider raising prices very carefully before making a
decision, lest they lose potential clients.
In several other
projects in Hanoi liquidity has remarkably increased recently with some
speculative investors selling apartments still on paper for profits of VND100
to VND200 million ($4,760 to $9,520), a level rare seen for many years.
According to the
Hanoi Construction Department, the apartment price index for the fourth
quarter of 2013 for nearly all districts in Hanoi had increased by up to 3
per cent.
Additionally, the
number of high quality apartment projects in the inner city still under
construction was few. Those projects range in price from around VND30 to
VND40 million ($1,428 to $1,900) per square metre.
Sales of high-end
apartments in Hanoi have picked up considerably in recent months after a few
years in dormancy. Thang Long Number One, for instance, have sold 90 per cent
of 970 units compared to just 40 per cent sold a year ago. Cen Group recently
sold nearly 50 apartments at StarCity Le Van Luong for average $1,600 per
square metre of bare-shell units.
Chinese
firm targets Quang Ninh expansion plans
Texhong Group, one
of the largest suppliers of cotton and spandex in the world and among the top
10 businesses in China’s textile and garment sector, is making a further push
into Vietnam with its newest $300 million cutting-edge fabric plant proposed
to open in Quang Ninh this May.
The group entered
Vietnam in 2006 with a $200 million facility in the southern province of Dong
Nai.
In the eyes of
numerous Chinese investors, Vietnam is still a highly attractive destination
for new and expansive investments. Immediately after joining a conference on
promoting investment in Quang Ninh in late February 2012, Texhong made the
bold decision to open this plant there.
Two years later the
project has been nearly realised and will boast 500,000 spindles and 4,000
workers when it opens its doors in May. The speed of the construction is a
testament to the group’s vision and confidence in the locality.
“The possibility of
the Trans-Pacific Partnership (TPP) agreement being signed in the near future
represents multiple growth opportunities and has helped fine-tune our
development vision for higher operation efficiency,” said Texhong chairman
Hong Tian Zhu.
When asked about
why Texhong decided to open a new facility in Quang Ninh’s Mong Cai Economic
Zone, Hong said “We appreciate the infrastructure conditions of the area.
They are conducive to investment and trade. We can also tap the advantage of
the available workforce in the Red River Delta.”
“The attractive
investment climate and active support of Quang Ninh’s authorities was
instrumental in our decision to settle down in Quang Ninh,” he underscored.
In reality, Texhong
is acting as a strategic partner to Quang Ninh. At this time the group is
also working on a project to build the Hai Ha seaport industrial park (IP),
slated for execution in the first quarter of this year.
The IP’s prime
target is to promote textile and garment and supporting industry chains to
address growing market needs and satisfy TPP requirements.
“We hope more domestic
and foreign investors tap Quang Ninh’s advantages and contribute to building
a more prosperous Vietnam,” Hong said.
Founded in 1997 and
listed on the Hong Kong Stock Exchange in 2004, Texhong boasts an expansive
network of more than 1,600 major customers and sales agents in Hong Kong,
China, Korea, Bangladesh and several countries throughout Europe.
To satisfy
ever-increasing global demand the group has built 11 textile and garment
plants in China’s Changjiang triangle (Shanghai, Jiangsu and Zhejiang) and
three plants in Vietnam’s northern and southern regions.
By the end of 2013
the group’s headcount surpassed 18,000 with the total production value
exceeding $1.62 billion per year.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Chủ Nhật, 30 tháng 3, 2014
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