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BUSINESS
IN BRIEF 28/6
Vietnamese manufacturers
of building materials have been advised to exploit Middle East markets
because governments there are investing heavily in building infrastructure, a
seminar in
Organised by the
Ministry of Industry and Trade, the seminar was devoted to the potential for
new export directions to the
Hai said besides
buying materials from its usual suppliers,
Other experts said
that the Saudi Arabian market was attractive as the 5 per cent import tariff
rate there was among the lowest in the world. The low rate reflects the fact
that the nation's budget funds come largely from oil exports.
"Therefore,
Vietnamese exporters should fully utilise these advantages," Hai said.
Tran Quang Huy,
head of
He said promising
markets, especially for cement, included the
To tap the market,
he advised Vietnamese enterprises to focus on surveying what was needed and
offering quality products. Contacting building contractors was also a good
idea.
According to the
Ministry of Industry and Trade, the Middle East is the fastest growing market
for
The region's per
capita Gross Domestic Product is high due to profits from the oil industry.
The
It is also meant to
stabilise food prices in face of El Nino weather pattern which will cause
widespread draught.
According to him,
The government
plans to decide on rice import quota to Bulog next week, after considering
domestic output and supply.
The ADB on June 25
announced the establishment of the trust fund which receives a grant of 1.8
billion JPY (about 17.65 million USD) from the Government of Japan .
In a press release,
the ADB said Japan’s Minister of the Environment Nobuteru Ishihara and ADB
President Takehiko Nakao have s ign ed a Letter of Intent for Cooperation on
Environmental Issues, which will include cooperation for effective
implementation of the Japan Fund for the Joint Crediting Mechanism (JFJCM) .
The ADB quoted ADB
President Takehiko Nakao as saying at the signing ceremony on June 25 that t
he establishment of the JFJCM is a timely step to help meet the demands of
the
The fund will
provide grant finance to reduce the cost of advanced low-carbon technologies,
such as those related to waste-to-energy schemes and smart grids, which often
have initial high investment costs and long cost recovery periods.
With the
establishment of the JFJCM, ADB is the first multilateral development bank to
have a trust fund for supporting GHG reduction projects under the Joint
Crediting Mechanism (JCM) .
The eligible
countries of the JFJCM are developing member countries of ADB that have
signed memoranda of understanding for the JCM with the Government of Japan.
To date, eight DMCs are eligible—
The number of
overseas holiday-makers to
Following
The city plans to
coordinate with the Vietnam Tourism Association to organise annual promotion
activities in Japan, while working closely with Japan-based representative
office of Vietnamese tour operators to help domestic travel agents easily
access the potential market, which sees about 20 million tourists travelling
abroad each year.
In additions,
Along with the
above-mentioned efforts, the city also focuses on improving the quality of
products and services, while expanding promotional programmes with the
involvement of other areas related to tourism.
France-funded
project helps safeguard local products
A 2-million-USD
project funded by the French Government to aid
Implemented by the
United Nations Food Agriculture Organisation (FAO), the project is expect to
foster information exchange and set links between state-owned areas and
private ones to promote Vietnam’s products with geographical indications registered
in regional and international markets.
Michel Drobniak
from the French Embassy in Vietnam said the three-year project will help
beneficiary countries further boost rural development through developing
geographical indication systems , noting that the field is important for
Vietnam, especially as the country has entered into negotiations of free
trade agreements with many partners in the world.
Geographical
indication is a sign used to identify where a product originates from. The
reputation of a product bearing geographical indication is determined by the
consumer creditworthiness to that product.
Not only helping
safeguard the patent rights of famous traditional products of any country,
geographical indication also assists consumers to easily access high-quality
products.
Besides,
geographical indication increases advantages of a regional product that
similar products outside the region cannot afford. Therefore, the normal
selling price of a product with geographical indication is often higher than
that of other similar products. In EU, sales of products with geographical
indications have accounted for billions of EUR.
There have been
more than 120 geographical indication registered in
According to
statistics,
Rubber,
rice exports drop in six months
In contrast to the
majority of key agro-forestry and seafood products, which experienced
significant export growth in the first half of the year, rubber and rice
exports fell sharply.
The Ministry of
Agriculture and Rural Development (MARD) reported that exports of
agro-forestry and seafood products were US$2.227 billion in June, bringing
the six month total to US$14.67 billion, an increase of 11.2% over last year.
Of which, export
earnings from agricultural products jumped by 6.6% to US$7.15 billion,
forestry products by 14.9% to US$3.01 billion and seafood by 24.4% to US$3.45
billion.
Products with high
growth in both volume and value included coffee, pepper, cashew nuts,
seafood, wood and timber products, while other key products like rice,
rubber, tea, cassava and cassava products witnessed significant decline.
As one striking
example, pepper exports spiked up 36.2% in volume and 47.8% in value during
the first six months of the year.
In June, 16,000
tonnes of pepper were shipped abroad, earning US$127 million, bringing the
total exports for the six months to 110,000 tonnes worth US$790 million.
Meanwhile, the
country exported 109,000 tonnes of coffee in June, fetching US$229 million,
raising sixtotal -month exports to 1.04 million tonnes worth US$2.12 billion
(up 31.7% in volume and 24.7% in value).
Seafood brightened
up exports with a value of US$3.45 billion in six months, including US$536
million in June (up 24.2%).
Products witnessing
a sharp decline were rubber (down 33% in value and 11.7% in volume), cassava
(down 12.8% in value and 13% in volume) and rice (8% in value and 9.9% in
volume).
Only 3.2 million
tonnes of rice were sent abroad in the first half of this year, yielding
approximately US$1.44 billion.
Ministry:
Ask-and-give practice still exists in realty market
The Ministry of
Construction has again pointed out flaws of the local real estate market,
saying the lack of transparency in planning, investor selection and trading
has resulted in the ask-and-give practice growing popular.
The mechanism has
led to corruption, speculation and monopoly at many construction projects.
Meanwhile, the real estate market has been developing spontaneously in the
past, the ministry said in the strategy on Vietnamese real estate market
development recently submitted to the Government.
Due to such flaws,
there has been a serious supply-demand imbalance in the real estate market
with many housing products failing to find buyers. Specifically, the market
has seen a huge surplus of high-class apartments versus a shortage of budget
homes for low-income people.
Nguyen Van Duc,
vice chairman of the HCMC Real Estate Association (HoREA), told the Daily
that there remained such shortcomings as mentioned in the strategy. However,
real estate enterprises are facing other challenges as well.
Concerning the
ask-and-give mechanism, Duc said the problem has existed for years, making
life hard for enterprises when it comes to applying for an investment
license.
It seems that the
Ministry of Construction is blaming enterprises and citizens for the problems
of the realty market. In fact, the ministry should bear responsibility for
spontaneous development of the market, he said.
The ministry in the
statement suggested solutions to develop the property market, focusing on
measures to develop financial institutions. The measures will help attract
capital for the market and secure flexible credit policies for entities on
the market.
A banker in HCMC
told the Daily that to attract capital for the real estate market, it is the
central bank that must take responsibility rather than the Construction
Ministry, and the two agencies should join hands to solve the problem.
Banks are ready to
make loans to real estate companies but they will consider the financial
capability of investors carefully, the banker said.
HNX raises
VND586 trillion from G-bond sales
The Hanoi Stock
Exchange (HNX) raised VND586 trillion from Government bond auctions in the
past five years, a breakthrough in the G-bond market.
At the fifth
anniversary celebration in
Liquidity of the
G-bond market increased 4.5 times from VND366 billion each session in 2009 to
over VND1.6 trillion in 2013 and over VND2.5 trillion in the first five
months of this year.
Speaking at the
ceremony, Minister of Finance Dinh Tien Dung told HNX to better mobilize
capital to finance the State budget and help restructure public debt.
According to a
report of HNX, the number of listed firms increased 42% during the period
while their value soared by 140%. The bourse has seen 364 listed enterprises
with total value of nearly VND90 trillion.
Trading value also
grew significantly, from VND127 billion a session in the 2005-2009 period to
VND530 billion in 2010-2013 and VND768 billion in the first five months of
2014.
The UPCoM, the
market for unlisted public companies, has seen 147 firms, up 17 times. Market
capitalization reached VND28.9 trillion, up seven times versus 2009.
HNX, formerly the
Banks
struggling with low credit growth
Banks in HCMC have
been working hard to increase lending but their credit growth is forecast at
a mere 1.32% by the end of June against late 2013, according to the central
bank’s HCMC branch.
Credit expansion in
the January-June period in this southern economic hub of
Nguyen Hoang Minh,
deputy director of the central bank branch in the city, said local lenders
have been racing against time to boost capital disbursements for borrowers,
instead of buying Government bonds at low coupons. However, banks have found
a modest number of corporate borrowers in recent times.
This is why credit
growth in the first six months of this year is low, Minh said.
Dang Quang Tien,
deputy general director of Military Bank, said his bank’s credit has grown a
slight 2.27% against late 2013, much lower than last year’s 7%.
A deputy general
director of a small bank told the Daily that its total outstanding loans have
remained unchanged since early this year. The banker has just been appointed
to the position to help the bank speed up lending and earn more profit from
deposits toward the end of this year.
The banker admitted
he is facing huge pressure as it is not easy to improve credit growth at a
time when enterprises remain hesitant to take out fresh bank loans.
However, medium and
long-term credit accounts for up to 46.27% of the total outstanding loans, a
strong rise against the previous year. Medium and long-term loans have edged
up 4.26% in the first half while short-term lending has declined, Minh said.
A source told the
Daily that bad debt and the debt restructuring process have caused impacts on
outstanding loans in the banking system. Some banks have scaled down credit
to restructure operations and secure liquidity while others have been busy
recovering debt.
Meanwhile, the
bank-business connectivity program in the city has made progress.
Minh said local
banks have provided nearly VND14 trillion of preferential loans for
enterprises since early this year, higher than in all of 2013. Some 562
firms, 25 households and five cooperatives have benefited from the financing
program.
Banks will continue
lending to enterprises and households in districts 1, 3 and Go Vap from now
to the end of this month. In the first half, local banks have planned to give
loans worth VND16 trillion to borrowers in 24 districts, Minh said.
Lenders joining the
program have offered annual lending rates of 7-7.5% for short-term loans and
10-11% for medium and long-term credit, lower than market rates by one to two
percentage points.
Last year, banks
disbursed over VND13 trillion worth of loans to corporate borrowers, Minh
added.
To attract
customers, most banks have launched loan packages with interest rate
reductions in the first three months. Some even have slashed short-term
lending rates to around 6.5% per annum.
BKAV
introduces int'l-standard SmartHome solution
The first smart
home application made in
The BKAV's
SmartHome solution manages and controls houses through a 3D interface on a
smartphone or tablet.
Different systems
control light, window drapes, security, entertainment and gas cookers.
BKAV's SmartHome
uses wireless telecommunication technology from ZigBee and Wifi, and is
simple to set up.
Major technology
corporations have entered the smart home market which has a lot of potential.
For example, early
this year, Google bought Nest, a producer of smart temperature control and
smoke alarms, and Samsung has introduced its own smart home for all their
home appliances. Along with Phu My Hung, BKAV's SmartHome will be deployed in
the Ha Noi-based EcoPark soon.
Shipbuilders
get new look on path to equitisation
The new-look Ha
Long Shipbuilding One-member Co Ltd, is taking shape as the equitisation
process nears completion within three months.
According to
General Director Nguyen Tuan Anh, the company, which is an affiliate of the
Shipbuilding Industry Corporation (SBIC), has made a deal with the Damen
Shipyards Group of the
The restructured
company, which has strong ties with other shipbuilding companies in
In 2013, Ha Long
Shipbuilding posted an output value of more than VND1.3 trillion ($63
million), or 100.56 per cent of the yearly plan, and a revenue of nearly
VND1.45 trillion ($69 million), equivalent to 99.8 per cent of the target.
Foreign
investment drawn to
So far this year,
the southern
Of the total, new
investment accounts for nearly $260 million and the rest is additional
investment for existing projects.
Most of the
investment is from mainland
Tay Ninh, one of
the largest destinations for FDI, has 217 foreign invested projects with a
combined capital of $2.4 billion.
In the period under
review, foreign invested projects recorded a total revenue of $426 million,
21.8 per cent higher than for the same period last year. They paid VND148.8
billion ($7.08 million) to the State budget, 63.6 per cent more than the
first half of 2013, and created jobs for more than 80,000.
Ha Noi
Stock Exchange celebrates fifth birthday
The Ha Noi Stock
Exchange has solidified its role in raising capital for businesses and the
State budget, with the bourse celebrating five years since its establishment.
The exchange, launched
in 2009, has succeeded in developing three separate markets, including the
stock exchange, unlisted public company market (UPCoM) and bond market, said
Tran Van Dung, the exchange's general director, at its 5th anniversary
celebration yesterday.
Dung said the
number of companies listing on the northern bourse had increased 42 per cent
from 2009, reaching 364 companies. The value of listings had also risen by
140 per cent during the period, totaling VND90 trillion (US$4.3 billion).
Meanwhile, total market
capitalisation had reached more than VND120.5 trillion ($5.71 billion), while
companies had raised VND45 trillion ($2.1 billion) over the past five years
by issuing additional shares to expand operations.
Listings had also
helped boost the transparency of firms, with about 97 per cent of listed
companies regularly updating information on their websites.
Trading has also
seen improvement, with market value rising from VND127 billion ($6 million)
per session from 2005 to 2009, and to VND530 billion ($25.1 million) between
2010 and 2013. Value of trades this year also climbed to VND768 billion per
day in the first five months.
The exchange has
also developed seven new indices that have diversified the base of products
traded on the market: the HNX30, tracking the top 30 shares by market value
and liquidity, the HNX Free Float Index, three sector indices and two sets of
indices based on the scale of shares.
Regarding UPCoM
development, the number of companies registered for trading rose to 147 with
total market capitalisation reaching VND28.93 trillion ($1.37 billion), seven
times higher than in 2009.
To date, seven
companies have moved their listings to the stock exchange.
The Ha Noi Stock
Exchange has also succeeded in expanding the government bond market which
raises funds for the State budget. Over the past five years, the exchange has
raised VND586 trillion ($27.8 million) worth of bonds through auctions. The
value of bond listings on the secondary market reached VND625 trillion ($29.6
million) this year through May, four times higher than in 2009.
The exchange also
enabled IPOs (initial public offering) for 83 State enterprises, raising
VND6.784 trillion ($321.5 million), including large enterprises like Vietnam
Steel Corporation, PV Oil and Bao Viet Holdings.
Speaking at the
ceremony, Prime Minister Nguyen Tan Dung said the stock market was an
important and effective channel to raise capital, pointing out total capital
raised through the stock market made up more than 20 per cent of total
investment.
The PM also
presented the exchange with the emulative flag of the Government to mark the
occasion.
The exchange also
unveiled an investor corner at its headquarters in
Smart
device popularity drains PC, mobile sales
Personal computer
sales dropped 32 per cent in the first quarter compared to the previous one
and 20 per cent year-on-year to around 396,000, International Data
Corporation reported.
The global IT
research and marketing company said Tet in January – when people do not buy
computers and phones — and the popularity of tablets and smart phones caused
the decline.
"IDC predicts
that for the whole of this year the PC market won't grow due to economic
difficulties and strong attraction and reasonable prices of tablets and smart
phones," Phan Thi Hoang Yen, an IDC analyst, said.
Dell retained its
leading position followed by ASUS, thanks to its price cuts.
Though Sony stopped
sales of PCs, it still accounted for a nearly 8 per cent market share with
its competitive mid-range notebook.
Sales of mobile
phones also declined by 4.9 per cent in comparison with the previous quarter
and 0.7 per cent from the same period last year to around 6.6 million.
Feature phone sales
fell by 13.6 per cent from the previous quarter, losing out to low-priced
smart phones.
Smart phones
accounted for 38.6 per cent of sales, a sharp rise from the 21.8 per cent in
the same period last year.
"In the
Vietnamese market, low-price smart phones costing under US$150, have taken
the biggest market share," Vo Le Tam Thanh, another IDC expert, said.
"Expensive
smart phones have been facing challenges."
Only Apple bucked
the trend with its strong growth thanks to a tie-up with FPT.
Windows-based
phones recovered after a decline at the end of last year.
Sales of Windows
smart phones shot up by 61.3 per cent from the previous quarter and 361 per
cent year-on-year.
"
Fruit,
vegetable exporters search for new markets
Fruit and vegetable
traders and exporters in Cuu Long (Mekong) Delta region are seeking new
outlets such as other regional countries and the EU to reduce their heavy
reliance on
Over the last few
weeks, prices of several fruits such as durian, mango, jackfruit and dragon
fruit in the region's wholesale markets have slumped, pushing farmers to seek
new markets for their products.
Traders and
exporters have blamed this unsatisfactory performance for sluggish exports to
Nguyen Thanh Hiep,
owners of a fruit trading facility in Tien Giang's Cai Lay District, said
that he has shifted exports to
Even though
Cambodians did not consume a large volume of fruits, the proximity of the
country resulted in low transport costs, he told Tuoi Tre (Youth) newspaper.
Tran Huu Danh,
director of Long Viet Co, which specialises in exporting dragon fruit in Tien
Giang Province, noted that his company has took the initiative in expanding
markets to some Asian countries, such as Thailand, Malaysia, Indonesia and
India, where consumers favoured Vietnamese dragon fruit.
Recently, Long Viet
had successfully accessed
"
Professor Nguyen
Quoc Vong, an agricultural expert, said that there was a great demand for
fresh and quality agricultural products in the world market.
However, in order
to take full advantage of these opportunities,
Other experts
believed that entering the strict markets such as the EU, the United States,
Japan, South Korea and New Zealand would not be a hard task for Vietnamese
firms if they well-complied with international standards.
VCBF Blue
Chip Fund kicks off IPO
The initial public
offering of Vietcombank Fund Management's VCBF Blue Chip Fund opened last
Thursday and ended on July 25.
VCBF–BCF is the
first open-ended equity fund from the joint venture between Vietcombank and
Franklin Templeton Investments, a leading global fund management company.
The fund will
invest in listed shares with large market capitalisation and high liquidity.
It is benchmarked
against the VN100 Index, which comprises the top 100 stocks in terms of
market cap on the HCM City Stock Exchange.
VCBF Blue Chip Fund
focuses on generating long-term returns from investments and should be
attractive for all types of investors with an investment horizon of three to
five years or more.
Avinash Satwalekar,
CEO of VCBF, said: "We believe the underlying economic fundamentals of
Vietnam continue to improve and are positive on its long-term prospects and
ability to deliver value."
Investors have to
buy units worth a minimum of VND5 million (US$238) and increments of VND1
million ($48).
Deutsche Bank AG's
HCM City branch will provide the supervisory, custodial, transfer, and fund
administration services for the fund. Vietcombank owns 51 per cent in VCBF.
Ha Noi
Budget funds estimated at $2.94b in H1
Ha Noi is estimated
to collect VND62.5 trillion ($2.94 billion) of the State budget in the first
half of this year, making it to the list of top State budget collection
cities and provinces nationwide, reported the Government's portal
chinhphu.vn.
The collection
rises 5.3 per cent against the same period last year and meets 49.5 per cent
of the annual plan.
The city's State
budget spending in the period is estimated at VND21.024 trillion ($991.6
million), fulfilling 45.2 per cent of the annual plan.
In the second half
of the year, Ha Noi will focus on boosting the State budget collections
through improving management, preventing losses and handling tax arrears.
Construction
material demand set to increase
The consumption of
building materials in the domestic market at present is just 30 to 50 per
cent of production, although peak time for construction is approaching.
Chairman of Viet
Nam Building Materials Association, Tran Van Huynh said that consumption saw
a slight increase compared to the same period in previous years, when Viet
Nam's real estate was gloomy because of high inventories.
He said that this
year was still a difficult time for building material producers because the domestic
real estate market was just warming up.
Increased
production costs had also pushed up prices of building materials, he said.
"This leads to
a modest consumption of building materials despite the fact that this was
considered peak time for construction," he said.
However, he said,
the consumption of cement was quite high, almost 80 per cent of production,
thanks to the export promotion policy.
Owner of a steel
and iron store in Ha Noi's De La Thanh Street, Nguyen Ngoc Anh, said that
prices of steel and iron had increased 5-10 per cent due to increased
transport and warehouse costs.
"My sale has
been five per cent higher than that of the last few months," she said.
Director General of
Thach Ban Group Joint Stocks Company – a brick producer, Nguyen The Cuong
said that input costs of electricity, fuel and transport had increased, which
made it difficult for firms.
Cuong said that the
situation was not too bright in the near future.
"It's time for
firms to think further about restructuring their production and renovating
technologies," he said.
A representative
from Viet-Uc Steel Company said that the health of the housing market
directly affected the consumption of all building materials, including steel.
Moreover, domestic
steel companies faced a major difficulty that related to the import of steel
containing boron.
Overseas exporters
mixed a little concentration of boron to the steel before exporting to Viet
Nam so that they could avoid paying import tax.
The representative
said that a little concentration of boron could not change the physical
characteristic of steel, but the action was a kind of trade fraud to evade
taxes.
The imported
products were then sold as rolled construction steel, while authentic
construction steel is subject to a 10 per cent import tariff.
Huynh, from Viet
Nam Building Material Association, said that reducing production or lay-off
was just a temporary solution for domestic producers.
He suggested that
enterprises in the sector pay more attention to finding ways to export their
products.
Firms try
to cut reliance on imports
Increasing the
localisation rate would be one measure that could reduce enterprises'
reliance on imported raw materials, according to independent market
watchdogs.
Analysts said that
such reliance, including the high rate of materials sourced from the Chinese
market, was affecting the economy.
According to the
Viet Nam Garment and Textile Association (VGTA), in 2013 the domestic apparel
industry used 7.4 billion square metres of fabric, of which up to six billion
square metres were imported.
Of the imported
fabrics, between three and four billion square metres were from China.
Apparel enterprises
using Chinese materials and accessories accounted for up to 80 per cent of
the total. Such reliance was causing difficulties as supplies were not
stable.
Tran Viet Anh, vice
chairman of the HCM City Rubber and Plastics Association, also said that
local plastics enterprises were heavily dependent on the Chinese market.
Ninety per cent of
machinery and equipment, and 80 per cent of raw materials and accessories
used in the local plastics industry came from China, Anh said.
To reduce this
reliance, analysts said that domestic businesses needed immediately to
diversify materials sources by importing from various countries instead of
only China.
Pham Ngoc Hung,
deputy head of the HCM City Enterprises Association, however said that many
domestic enterprises still lacked information on overseas markets so it would
be difficult to find various import markets.
To solve the
problem, Hung called on Vietnamese trade promotion agencies abroad and the
Viet Nam Chamber of Commerce and Industry to provide domestic enterprises
with more detailed information on import markets.
Over the long term,
however, Hung said that domestic producers should develop raw material
resources inside Viet Nam.
Domestic raw
material sources would enable enterprises to take the initiative in their
production plans, thus ensuring sustainable development, Hung said.
He said domestic
enterprises should increase investment in production technologies and
equipment that can help them manufacture standard materials.
In other words,
developing support industries was a key measure to help domestic producers
reduce reliance on imported materials, he said.
VGTA vice chairman
Le Tien Truong said that the association had recently sent an official letter
to textile and garment firms calling for them to seek other potential markets
to import raw materials and accessories instead of only China.
The agency
suggested the domestic textile and garment firms should import fibers from
Thailand, South Korea and Indonesia, and import fabrics from South Korea,
Thailand and Malaysia, said Truong.
"At present,
many large-scale fiber production enterprises have already prepared plans to
expand production activities in order to improve their production capacity,
meet the fabrics demand of domestic apparel which is expected to increase
when Viet Nam officially takes part in the Trans-Pacific Partnership Agreement,"
he told Tin Tuc (News) newspaper.
However, to
increase the localisation rate, the domestic textile and garment industry
needs more support policies from the Government, he said.
Le Van Khoa,
director of the HCM City Department of Commerce and Industry, proposed that
the municipal People's Committee give credit preferences to firms involved in
production of raw materials and accessories for the textile and garment
industry.
To develop more
local raw material sources, Anh of the HCM City Plastics and Rubber
Association said that banks should give more loans to enterprises involved in
support industries, and the government should give tax preferences.
Such policies would
encourage domestic support industries to increase their production activities
to ensure supplies of raw materials and limit imports.
More
policies needed to develop high-tech support industry
So far, high-tech
industries have recorded the lowest localisation rates, accounting for only
15-20 percent of product prices. Therefore, more policies are needed to
encourage investment and development in this segment, the Vietnam Economic
News reported.
According to head
of the Saigon Hi-Tech Park (SHTP) management board Le Hoai Quoc, the
localisation rates in new industrial products account for only 20 percent and
the remainder depends on imported materials. Take the electricity –
electronics sector which is growing strongly in Ho Chi Minh City for example,
although the localisation rates increase but account for only 20-30 percent,
which remains too low compared with requirements. Operating electronic
enterprises in Vietnam mainly deal with assembling and integrating
accessories and parts to make products based on imported basic electronic
parts like circuit boards and transistor components.
General Director of
Intel Products Vietnam Sherry Boger said Intel has become one of the
investors that have the biggest export revenue in the SHTP. However, until
2013, the localisation rate of this group only reached 10 percent, equal to
about 11 million USD. Even though the group wants to increase this rate but
the capabilities of Vietnamese enterprises to meet Intel’s requirements
remain quite modest.
Like Intel Group,
Director of the Japan External Trade Organization (JETRO) in Ho Chi Minh City
Kazuhiko Osato said in 2013 Japan undertook over 500 projects in Vietnam with
total capital of nearly 6 billion USD but unfortunately, the Vietnam’s
localisation rate for Japanese enterprises have not reached 32 percent yet,
equal to half of the rates of China and Thailand.
Deputy head of SHTP
management board Le Bich Loan said the high-tech enterprises in SHTP have
been aware of the importance of localisation and given more priorities to
seeking domestic partners.
However, material
sources for localisation are mainly to make simple products like packaging
and plastic trays. Vietnamese enterprises have not been capable to produce
high tech demanding electronic spare parts like transistor components or
electronic mechanical parts.
Vietnamese
enterprises are just at the stage of doing research or piloting production on
small scales like wafer FRED of the SHTP’s R&D Centre or pressure sensors
jointly produced by SHTP and Vietnam National University Integrated Circuit
Design Research and Education Centre (ICDREC).
According to
Director of the Ho Chi Minh City Investment and Trade Promotion Centre (ITPC)
Pho Nam Phuong, apart from current preferential treatments for enterprises
working in the support industry, the city has asked relevant departments and
sectors, including the SHTP management board to study and offer better
preferential packages regarding tax, infrastructure and training workforce to
encourage domestic enterprises join the support industry.
In terms of
infrastructure, preferential policies on land lease need to be adopted. In
pieces of land where no infrastructure has been built, the land lease rentals
should be calculated like those levels in the High-tech Park in District 9:
from 12,300-18,500 VND/sq.m a year. As for pieces of land with
infrastructure: from 17,200-26,000 VND/sq.m a year and workshop rentals from
4-5 USD/sq.m a year depending on different locations.
UNDP report
promotes energy sector reform
The United Nations
Development Programme (UNDP) announced a report titled “green growth and
fossil fuel fiscal policies in Vietnam” at a meeting in Hanoi on June 16.
Presenting the main
content of the report to participants, UNDP’s Policy Advisor in Economics
Michaela Prokop acknowledged Vietnam’s commitments to promoting green growth,
including the restructuring of the energy sector.
She underlined the
significance of reforming fossil fuel fiscal policies, saying that it will
help enhance energy productivity and supply resources and ensure national
energy security.
Reform will also
contribute to speeding up GDP growth, reducing fiscal burden and protecting
the environment, Prokop added.
The report stressed
that Vietnam’s recent efforts in its restructuring of the energy sector are
expected to help the country implement a more sustainable growth model in the
future.
Measures to protect
low-income people and enterprises, who are usually affected by the price
increase of fuel, were also set forth in the report.
The report, built
on the studies of the Central Institute for Economic Management, the Vietnam
Academy of Social Sciences, the Energy Institute, the Institute of Financial
Strategy and Policy, the Gbobal Subsidies Initiative and the International
Institute for Sustainable Development, is expected to importantly contribute to
setting up a roadmap for further reform.
HCM City
seeks tax incentives for kindergarten investors
The HCMC People’s
Committee has suggested central-level agencies consider exemptions and
reductions of corporate and personal income taxes for the investors of
private kindergarten projects to help develop pre-schools in the city.
Speaking at the
13th meeting of the HCMC People’s Council opened on Saturday, HCMC vice
chairman Hua Ngoc Thuan also called for agencies of higher levels to apply
land rent breaks for private kindergartens in districts 2, 9, 8, 12, Binh
Tan, Thu Duc and Tan Phu District and a 50% reduction for the kindergartens
in Phu My Hung Urban Area in District 7 and other districts.
Huynh Cong Hung,
head of the Social and Culture Department under the council, said that
172,274 children were studying at private pre-schools in the city and 10,414
of them were taught at unlicensed kindergartens.
Hung said that the
department had agreed with the HCMC People’s Committee on preferential
treatments for investors of the projects to encourage the development of
private pre-schools here in the city.
He said the city
would give priorities to kindergarten developments in industrial zones,
export processing zones, and the 11 wards which do not have public pre-schools.
The Social and
Culture Department also supported more kindergarten investors to access the
loans whose interest rates are covered by the State budget with maturity from
seven to 15 years including two years of grace for all approved kindergarten
projects depending on their scales.
The HCMC People’s
Committee said the city would spend some VND7.6 trillion (US$358 million) on
education and training this year, accounting for 25.74% of the total spending
and nearly VND230 billion higher than initial estimation.
Maersk
Line: More cargo containers shipped to U.S., Europe
Maersk Line Vietnam
in its latest trade report said container volumes to and from Vietnam have
grown in the first months of this year compared to last year, especially the
shipments bound for the United States and Europe because of rising demand
from these markets for made-in-Vietnam goods.
In the report
released last week, the company said it saw higher container volume growth
between Vietnam and Europe compared to the United States in the first quarter
of this year. “Exports to Europe grew by 19% and imports rose by 34% compared
to the previous year. On the other hand, exports to the U.S. increased by
9%,” the report said.
Nguyen Thi Ngoc
Bich, general director of Maersk Line Vietnam and Cambodia Cluster, said the
company announced the growth rates based on different sources, including
those from the U.S. and Europe.
“The market growth
that we experienced in the first quarter of the year mirrors the trends in
Vietnam’s overall trade balance. The domestic economy may continue to be
hampered by the slow pace of structural reforms of State-owned enterprises
and the banking sector, but its heart - manufacturing and production - still
remains robust,” Bich said.
MCC Transport, the
sister company of Maersk Line which handles intra-Asia trade, said in the
report that other Asian countries such as China, Japan and Korea continued to
be Vietnam’s main trade partners.
Albert Van
Rensburg, country manager of MCC Transport, said the company was excited by
the continued strong growth of the intra-Asia market, both to and from
Vietnam. “Despite continued downwards pressure on freight rates, we have been
able to maintain healthy year-on-year growth by focusing on profitable trade
lanes, instead of just volume growth,” he said.
Maersk Line pointed
out the growth drivers for Vietnam this year as improved macro-economic
stability with inflation on target for 7%, a steady exchange rate, and a
strong export sector posting a surplus. Moreover, the country’s gross
domestic product (GDP) growth is forecast to be higher this year, at 5.5%.
Figures of the
General Statistics Office showed Vietnam’s goods export revenue in the first
five months of this year expanded 15.4% year-on-year to US$58.5 billion while
imports stood at US$56.8 billion, rising by 9.6%.
The U.S. was
Vietnam’s biggest export market in the January-May period with shipments up
22.6% to US$10.8 billion, followed by the European Union (EU) with 14% and
US$10.7 billion and ASEAN down 0.9% to US$7.5 billion.
Vietnam’s major
export markets in the first five months of this year included China with
shipments up 23.7% year-on-year to US$6.1 billion, Japan with a rise of 12.6%
to US$5.9 billion and South Korea with 34.6% to US$3.5 billion.
Maersk Line Vietnam
said with Vietnam’s trade balance on track, the country is looking for new
markets and opportunities for its goods through a number of bilateral and
multilateral free trade agreements (FTA), including the Trans-Pacific
Partnership, the pact with the EU and the Customs Union of Russia, Kazakhstan
and Belarus free trade zone.
“In negotiating
these agreements, Vietnam is hoping to leverage itself as an attractive
sourcing destination with advantages in geography, increasing investment in
infrastructure, production capabilities, and mainly with its low labor and
production costs,” the report said.
Bich said Vietnam
has been benefiting from a growing influx of young workers which has provided
the country with a competitive advantage in labor cost but the country needs
to make changes.
“It is critical to
increase our labor productivity to convince more investors to set up their
factories here, and one of the ways we can have significant productivity
gains is through technological transfer,” Bich said.
The company said
that e-commerce is one of the solutions to help enterprises improve
productivity. Automating systems and paperless transactions are the key to
increasing productivity, accuracy, transparency, visibility of date and
reducing costs.
“E-solutions mean
less time, less mistakes and less, if not, zero additional cost being
incurred due to documentation errors,” Bich said. “As
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Bảy, 28 tháng 6, 2014
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