Thứ Năm, 21 tháng 8, 2014

BUSINESS IN BRIEF 22/8

Vietinbank pledges $81.9m for highway
Vietinbank will provide VND1.72 trillion (US$81.90 million) in funding for a national highway project of the HCM City Infrastructure Investment Joint Stock Company (CII) in Ninh Thuan Province.
The amount included loans and guaranteed money, Le Quoc Binh, CII general director, said in a news release on Monday.
In a comprehensive co-operation agreement signed in October last year, the bank pledged to help provide capital for the company and its member units.
The company's shares yesterday slid VND200 to stand at VND21,600 per share at the HCM City Stock Exchange.
Latex processor opens in Binh Phuoc
Binh Phuoc Rubber Company opened a latex processing plant yesterday in Dong Phu commune of the southern province of Binh Phuoc.
The 16ha plant is equipped with advanced technology capable of processing 7,500 tonnes of latex per year.
Investment will total about VND115 billion (US$5.4 million).
More goods flow through Da Nang
The central city's port shandled 128,700 TEUs (twenty-foot equivalent unit) in the first seven months of this year, 44 per cent growth in comparison to the same period last year.
The port aims to receive 220,000 TEUs this year.
Last year, the port received a record 5 million tonnes of cargo, earning VND480 billion (US$23 million).
There are 13 shipping companies operating at the city's ports, including Tien Sa and Lien Chieu.
The Japan International Co-operation Agency (JICA) Viet Nam has pledged to provide financial aid to upgrade the city's port system in the second phase.
Expo highlights security equipment
The latest equipment and technologies used in the security and fire safety industries are on display at an exhibition that opened in HCM City yesterday.
The seventh edition of Secutech Vietnam, the country's largest security, safety, and fire prevention and fighting exhibition has attracted more than 100 exhibitors from 10 countries and territories, including the UK, Australia, Taiwan, the US, Singapore, Turkey and Viet Nam.
The 200 booths are showcasing surveillance systems, alarms, access-control systems, intercoms, biometrics, fire safety and prevention products, rescue equipment, and industrial safety products.
Seminars on banking security and industrial parks safety and a global digital surveillance forum will be held on the sidelines of the event.
Nguyen Van Ngan, general director of the Viet Nam Advertisement and Fair Exhibition Joint Stock Company, said the exhibition offers a good opportunity for local and international manufacturers and distributors of security and safety products to connect and explore new business opportunities.
Organised by Vietfair and the Taiwan-based Messe Frankfurt New Era Business Media Ltd, the exhibition at the Sai Gon Exhibition and Convention Centre in District 7 will go on until tomorrow.
Milk prices stable after price limit takes effect
Milk prices have stabilised after the Finance Ministry applied a ceiling price in June on milk products consumed by children under six in the domestic market.
The ceiling on prices came after a long period of irregular prices being applied on milk products. The ministry would promote further price stabilisation in the near future.
In June, there were 25 milk product lines on which the ceiling price was applied. However, many enterprises have changed the commercial name of their milk products and are selling them as nutrition or supplementary foods, the ministry said.
So the Finance Ministry asked the Ministry of Health's Food Safety Department to investigate. As of August 11, the Finance Ministry has added 30 more milk product lines with 503 products to the list of milk products on which the ceiling price mechanism will be applicable, according to its Price Managing Department.
After the ceiling price was applied in June, the prices of milk for children under six in July were more stable and also fell between 0.3 per cent and 34 per cent as compared to the period before the price stabilisation decision was taken, according to the Price Managing Department.
However, there still are many milk products that have not been added to the list of price-stabilised milk products, the department said.
Truong Van Toan, legal and external relations director of FrieslandCampina, told Viet Nam News that the company has registered the prices of 45 milk products as required by the Finance Ministry, and has also made these prices public on websites of the ministry and the HCM City Finance Department.
The prices of FrieslandCampina's milk products have fallen but so has the demand for milk products in the local market, Toan said. Therefore, the consumption of the company's milk products has also plunged and is likely to affect its business.
Meanwhile, owner of the Thu Huyen shop in Tran Xuan Soan Street told Viet Nam News that "Milk prices fell in June but in July, the dairy companies started launching new products with more ingredients and higher prices."
"So, the prices of milk products have not reduced," she added.
On August 11, the Price Managing Department said that the Finance Ministry has urged provincial and municipal finance departments to stabilise the prices of milk consumed by children under six.
The ministry has asked departments to require dairy companies to adhere to the price ceiling and also urged that an inspection team should be set up to control milk prices and tackle violations in a timely manner.
Businesses unaware of competition rules
Though the Law on Competition took effect in 2005, only a small number of enterprises understand its provisions, a seminar heard yesterday in HCM City.
The law aims to preserve the rights of enterprises to compete freely and lawfully with each other, said Pham Van Cao of the Viet Nam Competition Administration Department (VCAD) under the Ministry of Industry and Trade.
Competitive practices by an enterprise that are contrary to general standards of business ethics and which cause, or may cause, damage to the interests of the State and/or the legitimate rights and interests of other enterprises or consumers are defined as unfair competitive practices, Cao said.
In order to protect consumers and to ensure competitors can compete freely, the law prohibits enterprises from undertaking following unfair competitive practices: misleading instructions; infringement of business secrets; coercion in business; defamation of other enterprises; causing disruption to the business activities of other enterprises; advertisements or promotions aimed at unfair competition; discrimination by association; and illegal multi-level selling.
Misleading instructions mean giving consumers misleading information to mislead them in their understanding of the goods and services.
Instead of working to raise their competitiveness, companies use similar brands or packages of other successful businesses to take advantage of the latter's achievements to sell their products, he said.
When enterprises discover unfair competitive practices of their rivals, they need to submit their complaints to the VCAD for investigation, he said.
However, only 1.6 per cent of polled enterprises said they fully understand the law, while 92 per cent said they are aware but are not clear.
Meanwhile, more than 70 per cent of enterprises have not established legal divisions, making it difficult for them to fight against unfair competition, he said.
"Unfair competition in businesses is on the rise and is becoming complicated," he said.
Can Dac Vi, director of the Law Consultative Centre under the HCM City Union of Business Associations, said sanctions applied to unfair competitive practices have not been strong enough.
In addition, there are not enough officials in charge of monitoring and dealing with unfair competitive practices, he said.
He suggested that HCM City establish a division for quickly dealing with unfair competitive practices.
Cao said the Decree 71/2014/ND-CP stipulating regulations for dealing with violation of competition matters, which will come into effect on September 15, will impose higher penalties in the form of warnings and fines.
Depending on the seriousness of the offence, additional sanctions may also be imposed, including withdrawal of a business registration certificate, revocation of a licence or practising certificate.
Organised by the HCM City WTO Affairs Consultation Centre, the seminar was attended by representatives of judicial departments from the city's districts as well as lawyers that represent enterprises.
Outlook positive for local markets
Viet Nam's stock market is expected to grow further towards the end of 2014, with the VN-Index possibly hitting 650 points, experts said at a meeting held here yesterday.
In the first half of this year, the index increased 14.6 per cent while the HNX-Index rose 14.9 per cent. "They will continue to be boosted by positive support from the economy," said Yun Hang Jin, Korea Investment&Securities Company's Senior Emerging Market Analyst.
In the last three years, the Vietnamese stock market had developed better than other markets, Yun added.
"Financial policies will continue to be effective in the second half of the year with a faster pace of execution," Yun said. According to the South Korean investor, money supply will be reinforced to enable the country to hit its credit growth target.
He noted that the anticipated restructuring of the Viet Nam Asset Management Company did not push through in the first half and must take place in the second half. As a result of this, non-performing loans will be reduced during the remainder of the year.
"In the near future, as the Trans-Pacific Partnership agreement is reached, investors to the Vietnamese market will increase, contributing significantly to the economy," Yun said, adding that foreign direct investment has been flowing into Viet Nam and the stock market was still benefiting from it.
Worries about US tapering and foreign investors' exit are not expected to adversely affect buying trends in the second half of the year. Meanwhile, the scheduled widening of the field for foreign ownership, coupled with the initial public offerings (IPOs) of large state corporations, are seen as supportive factors, with the scale of IPOs in the second half expected to double that of the first half.
"There is little chance that foreign investors will offload in the second half," Yun said. However, their buying power will be limited if ownership limits are not lifted.
History has shown that the VN-Index often declined one to three months before large IPOs and would bounce back as the IPOs ended, according to Le Dinh Minh Phuong, KIS Viet Nam Corporation Head of Analysis.
Phuong also suggested some sectors that might generate profits for investors, including pharmacy, steel production, information technology and oil and gas.
HCM City hosts Int’l franchise exhibition
At least 72 of the world’s top franchise trademarks have registered to attend the International Franchise & Business Opportunities (IFBO) Vietnam 2014 exhibition scheduled for HCM City from September 4-9.
The information was unveiled by representatives of the VCCI Trade and Service One Member Company Limited, and BizLink Exhibition Services Pte Ltd (a subsidiary of Singapore Press Holdings Ltd) on August 20.
Ho Khai Weng, director of the franchise sales manager (Asia) at Subway Systems Singapore, said his company is very impressed by positive signs in the Vietnamese market and is taking measures to approach the franchise market in the country.
The IFBO organising board said a number of seminars on franchise and legal aspects of the industry in Vietnam will be held at the exhibition.
The exhibition aims to bring prestigious trademarks and good initiatives for businesses, investors and experts in the franchise field, in order to develop cooperative relations and sign business contracts.
Vietnam to cut tax paperwork to 171 hours in 2015
Government Resolution 19 enacted March 18, 2014 aimed at improving the business environment and national competitiveness should cut the time for completing tax procedures by 629 hours.
The Governance for Inclusive Growth Programme funded by the US Agency for International Development (USAID) released the information at a conference held in Hanoi on August 20.  
The reduction will bring the time for completing tax information on a par with other ASEAN member countries in complying with tax laws, which on average approximate 171 hours as well.
To achieve this target, the General Department of Taxation and the Ministry of Finance are simplifying administrative procedures and promoting the application of information technology enabling 95% of businesses in Vietnam to use e-tax services by the end of the year.
Korean coffee shop chain enters Vietnam
South Korea-based coffee shop chain Caffe Bene will launch its first store at the intersection of Dong Khoi and Mac Thi Buoi streets in HCMC’s District 1 next Sunday.
Employees of the fi rst Caffe Bene shop in Vietnam pose for a group photo - Photo: TN
Caffe Bene, which debuted in South Korea in 2008, is a famous coffee brand for Korean youth. The brand name of Caffe Bene has spread to over 13 countries with 1,520 cafes under franchise.
Ho Minh Hoang, director of Caffe Bene Vina Co. Ltd. as the partner of the South Korean company, said all Caffe Bene shops are designed in European style to offer a warm and comfortable atmosphere. The Vietnamese firm plans to open cafés in major cities in Vietnam.
The first coffee shop serves a wide variety of drinks and snacks from 6:30 a.m. to 10:30 p.m.
Korean star Lee Jong Suk will be present at the opening ceremony of the first coffee shop in HCMC next Sunday.
Vietnam to cut time to clear customs by 30 pct in 2015: ministry
Businesses will have to wait a shorter time to have customs cleared for their imports and exports next year, a deputy minister of finance said Tuesday.
It will take imported goods 13 days, and exported shipments 14 days, to pass through customs in 2015, Deputy Minister of Finance Do Hoang Anh Tuan told a seminar on solutions to simplify customs and tax procedures in Hanoi.
Both imports and exports currently have to wait 21 days for customs clearance.
Tuan pressed that cutting customs time is not the mere responsibility of customs authorities, but also of the relevant agencies at seaports, border gates and especially the product quality watchdogs.
“Of the current 21-day customs time, businesses only have to work with customs authorities for around six days, and the remaining time is to deal with other agencies,” Tuan elaborated.
“What’s important is to minimize the time for the imports and exports to undergo quality or quarantine tests, while still maintaining the accuracy of the tests.”
In 2013, 34 percent of the imported goods to Vietnam had to undergo such tests, according to the deputy minister.
The ratio is 2.5 times longer than that of Singapore, he said.
“A large proportion of the imports are from markets with high risks on product quality, so they must be tested,” he explained.
Tuan added that the quality and quarantine checks on imported goods must be in accordance with eight laws, 33 decrees, and 134 circulars.
Many measures have been enacted to simplify customs procedures, including applying online for customs declarations.
“Customs procedures at 34 customs departments and 170 border gates have gone online starting on July 20 in a bid to cut customs time for businesses,” he said.
“To date, 38,000 out of 48,000 export-import businesses countrywide are declaring customs online.”
Despite these restructuring efforts from the customs sector, Tuan said the customs clearance time could not be reduced unless other relevant agencies join their hands by reducing paperwork and enhancing the quality and quarantine tests.
It is not really necessary to test all imports from reputable markets such as the EU or Japan, while those from high risk markets must be strictly tested, Tuan said.
Thaco launches new bus models for local market
Truong Hai Auto Corporation (Thaco) has introduced four new bus models with various modifications for road conditions in Vietnam.
TB75S, TB82S, TB95S and TB120S bus models are made under the Thaco Bus brand.
The energy-saving, environmentally-friendly Thaco County TB75S is equipped with the Cummins engine and parabola-shaped springs which support the bus to endure more weight and run more smoothly than normal models. It also has more space for passengers and luggage.
Thaco Town TB82S configured with 29 -34 seats and Thaco TB95S with 35-39 seats are installed with the Weichai engine which meets Euro III standards.
Apart from the same features of the aforesaid buses, Thaco Universe TB120S comes with alloy wheels made from aluminum and electromagnetic brakes that help extend the usage period of wheels. This bus has 47 seats.
Buy-to-let offers easy cash returns
Apart from popular rental areas in central Hanoi and West Lake, My Dinh and Ha Dong are emerging as popular new destinations for buy-to-let apartments.
My Dinh, in western Hanoi, is apparently becoming one of the most attractive destinations for foreigners to lease apartments mainly due to its location on routes linking Hanoi with industrial zones north of the city, as well as Bac Ninh and Thai Nguyen provinces.
This area also has several high-rise office buildings servicing international companies. It is now steadily maturing as a viable lifestyle choice location with several international schools, restaurants and shopping centers.
Among more than 380 units of Indochina Plaza Hanoi which have been sold, around 160 are currently occupied by foreigners.
With rental prices of $1,700 to $2,500 per month, these apartments are expected provide up to VND450 million ($21,400) per year in earnings for owners.
Meanwhile, Dolphin Plaza is a popular address for Japanese, Koreans and Singaporeans.
According to Nguyen Bich Son, business development director of the PMC, buy-to-let apartments are becoming more popular as homebuyers seek profits from leasing.
Apartments with high construction quality, good facilities and a pleasant environment are keenly sought by foreigners. Other factors include good quality schools and ease of access to work places.
Son said there were similar opportunities in the southern suburb of Ha Dong. Apartments at the Hyundai Hillstates development, a Korean-backed residential project, are being leased at VND14 to 16 million ($666 to $760) per month.
Out of around 300 apartments already in use, more than 100 were leased to foreigners, mostly Koreans who were working in Ha Dong and neighboring areas.
In order to attract more buyers, developers of newly built buildings in Hanoi are also offering more incentives, including being prepared to take on newly-bought apartments and putting them out to lease.
The investor of Dolphin Plaza has claimed it can guarantee rental returns of $1,000 to $1,700 per month.
The project’s investor claims the profit ratio of leased apartments in Dolphin Plaza could be from 7 to 8 per cent per year, providing better returns than US dollar deposits. Apartment owners do not have to worry about finding tenants and are exempt from management fees for the first three years.
For many years, demand for apartments and house leases have been focused in Hanoi’s central districts. The most popular areas continue to be the districts of Hoan Kiem, Tay Ho, Dong Da, Ba Dinh and Hai Ba Trung.
Real estate association against looser foreign property ownership rules
The head of the HCMC Real Estate Association said authorities should not allow foreigners to buy homes in Vietnam even though the Ministry of Construction has been considering looser restrictions.
Le Hoang Chau, chairman of the HCMC Real Estate Association, confirmed the association's stand. According to Chau, many countries only allow foreigners to buy apartments in specific locations during the first stages of opening their markets.
"For the first five years, Singapore allowed foreigners to buy only apartments. The ban was gradually lifted over the next five years, but buyers still have to pay higher taxes. We shouldn't allow foreigners buy villas and houses yet while external security threats to Vietnam still exist. This would make the situation difficult to control in the future," he said.
Overseas Vietnamese and other foreign passport holders will be permitted to own apartments for a maximum period of 50 years. The Ministry of Construction proposed allowing foreigners buy more types of housing in order to relieve the real estate market slump.
Minister of Planning and Investment Bui Quang Vinh said that investment in the housing market by foreigners could provide a huge boost to the sector.
"The maximum term of ownership for residential property will still range from 50 to 70 years. A lot of people will buy homes if we open this market. We have about 130,000 South Koreans renting apartments in Vietnam because they can't buy houses. Those renters may try to find ways to evade taxes such as claiming lesser rental fees," he said.
Prime Minister Nguyen Tan Dung also gave his support to the proposal.
Incubation key to thriving businesses
Vietnam has in recent years focused on the development and initial breakthrough of high technology business incubators (HTBIs) in developing successful businesses, the Vietnam Economic News reported on August 18.
The HTBI is an organization that links centers, research institutes, universities with groups and individuals to create a business start-up environment that helps new entrepreneurs overcome initial difficulties and successfully develop their businesses.
In other words, the HTBI provides services and facilities needed to support start-up businesses, from idea shaping to successful development.
The HTBI concept is becoming increasingly popular in both developed and developing countries. Nguyen Hai An, Director of the Agricultural High Technology Business Incubation Centre under the HCM City's Management Board of Agricultural High Technology, said that before 2003, Vietnam did not have any HTBI.
But to date, the country has recorded 11 HTBIs, including five in the north and six in the south, which have incubated more than 30 businesses.
According to the Ministry of Science and Technology's National Agency for Technology Entrepreneurship and Commercialization Development, incubated businesses have achieved some initial successes, with annual sales ranging from VND1 billion to VND150 billion (from US$47,600 to US$7.14 million).
Mai Thanh Phong, Director of the High Technology Business Incubation Centre under the HCM City University of Technology, said the Government should offer incentives for high technology business incubation establishments and incubated businesses such as long-term stable funding or preferential loans to carry out incubation, production and product testing.
The Government should also create favorable conditions for attracting international donors and non-government organizations, Phong added.
He also said high technology business incubation establishments should strengthen mutual linkages.
Russian food import ban benefits Vietnam
Russia’s recent decision to ban fruit, vegetables, meat, fish, milk and dairy imports from the US, the EU, Australia, Canada and Norway creates opportunities for Vietnamese businesses to expand exports to the Eurasian country.
The ban is valid from August 6 and will last for one year.
To meet the shortfall of banned foodstuffs for its more than 140 million population, Russia is now actively seeking alternative sources of supply, reports the Vietnam Trade Office in Russia.
Vietnamese business strengths lie in the production of fruit, vegetables, meat and agricultural products and Russian businesses are desirous of expanding cooperation for these items, Phan Quang Niem, Trade Counselor to Russia says.
He states that Russia is enhancing imports from former Soviet Union countries and actively working with Latin American nations to import seafood, fruit and vegetables. Vietnamese businesses should not miss out on this golden opportunity to prosper.
The Moscow Ministry of Industry and Trade is working with the Vietnamese Trade Office on measures to increase cooperation between the two nations and facilitate Vietnamese businesses stepping up operations in Russia, Niem said.
Vietnamese Entrepreneurs’ Association Vice Chairman Duong Hai An in Russia and Director General of the Volga-Viet Company, said taxes on Russian agriculture is very low, even at zero, which benefits Vietnamese businesses.
Currently, Volga-Viet cultivates on 80 ha, but its fruit and vegetables have not been enough for the market in the past. The Russian ban on food imports provides Volga-Viet a great opportunity to expand cultivation to supply agricultural products to Volgograd, Moscow and some other localities.
An said the crisis in relationship between Russia and Western countries will not be resolved over night. It is time for Vietnamese businesses in Russia and at home to seize the opportunity to penetrate the Russian market.
Phan Van Hau, a Vietnamese businessperson in Tambov province, said his company specializes in garments, however, the Russia embargo affects European countries and in turn negatively affected his exports.
His company is now planning on grasping the opportunity and invest in agriculture.
Market analysts are saying that Russia offers huge opportunities for Vietnamese businesses, especially with negotiations for a free trade agreement between Vietnam and Customs Union (Russia, Kazakhstan and Belarus) coming to an end.
In addition to objective factors like the great geographic distance between the two countries, lack of information about trading customs and support from local authorities, the passiveness of Vietnamese is the significant issue.
Niem underscored the point that businesses need to be proactive in accessing the market. If they want to boost exports to the market they should accelerate trade promotion activities through attending seminars, fairs, exhibitions and seeking partners.
In addition, ministries should support businesses, he adds.
Bilateral trade and investment relations have seen rapid growth over the past years hitting nearly US$1.76 billion in the first half of this year, according to Russian Customs.
Russia ranks the 18th largest foreign investor in Vietnam with 97 projects valued at US$2 billion. Vietnam has also pumped US$2.4 billion into 17 Russia-based projects.
CPI forecast to rise in August
The country's consumer price index (CPI) will likely increase in August by roughly 0.4-0.5 per cent compared to July, the Vietcombank Securities Co (VCBS) forecast.
According to the VCBS, although petrol price reductions may contribute to reducing CPI by up to 0.08 per cent, the index would increase by 4.5-4.6 per cent year-on-year in August due to increases in the price of health-care and educational services.
VCBS also anticipated that the month-on-month CPI rise in September will slow, leaving the index to rise by roughly 4.2-4.3 per cent year-on-year as the continuous hike of educational fees at many cities and provinces nationwide next month, especially in HCM City, will be lower than in the same period in 2013.
Though local consumption demands are expected to gradually increase at the end of the year, the VCBS hopes the move will not have a significant impact on the CPI. The index, therefore, might depend on the price adjustment of necessary goods managed by the State, VCBS said.
The country's CPI for July rose by 0.23 per cent over June and 4.94 per cent over the same period of one year ago, according to the General Statistics Office.
Among the baskets of goods used in the CPI calculation, transport services recorded the highest growth (0.44 per cent), followed by construction (0.43 per cent), food and services (0.26 per cent), as well as beverages, cigarettes, garments, hats, and footwear (0.2 per cent).
Da Nang housing construction falls in H1
Production volume for the property market here fell slightly by 1 per cent in the first half of 2014, a property consultancy company report showed.
The report revealed that the first half witnessed the construction of 20 buildings on a total land area of 68,300 square meters. During the same period last year, two small buildings were converted for private use and removed from the market.
Downtown Hai Chau District continued to be the main supplier, with 17 projects covering an estimated total land area of 55,700 square meters, or 81 per cent of total market share. Thanh Khe District chipped in the remaining 19 per cent with three projects covering a total land area of 12,600 square meters.
Occupancy decreased by one percentage point from 87 per cent to 86 per cent while the average monthly rent fell by 4 per cent to VND218,000 (US$10.4) per square metre.
According to the report, Grade A occupancy made up 94 per cent, increasing slightly by 1 percentage point, while Grade B made up 86 per cent. Grade C made up 84 per cent, decreasing slightly by a percentage point.
All grades saw a decrease in average monthly rent per square meter, with Grade A registering VND358,000 ($17.04) or 6 per cent lower than the same period last year and Grade B, VND243,000 ($11.57) or 5 per cent lower and Grade C, VND162,000 ($7.7) or 2 per cent lower.
The report also showed that market demand for leased land in the first half fell by 2 per cent, with a total of 58,700 square meters. The demand for offices came mainly from Hai Chau District, with 82 per cent.
Accumulated foreign direct investment (FDI) from Asian countries accounted for approximately 50 per cent of the total FDI in the property market here.
According to Viet Nam's Chamber of Commerce and Industry (VCCI), Da Nang was ranked first in the Provincial Competitiveness Index (PCI) and was one of the most attractive investment locations in Viet Nam for 2013.
Two new projects on an estimated 31,000-square meter land area are expected to add to the city's office market by 2015.
Total future office supply for the second half of this year is expected to come from 16 projects covering a total land area of 104,000 square meters. But a delay is expected in the construction schedule of a number of these projects.
No significant development was seen in the residential sector, since no villa and apartment projects were introduced this year.
The number of villas remained the same as that of 2012, with 927 dwellings from 16 projects. In 2013, the primary market witnessed a 2 per cent drop in villas, with 404 dwellings from 11 projects, while the secondary market witnessed a 2 per cent rise, with 523 dwellings from 16 projects.
Exactly 2,400 apartment units from 13 projects were built. The primary market witnessed the construction of 869 units from 12 projects, an 8 per cent fall from that of the same period last year. The secondary market witnessed the construction of 1,555 units from 13 projects, a 3 per cent rise from that of the same period last year.
Low market sentiment among buyers led to a fall in the number of villas sold, at 5 per cent or 4 percentage points lower than that of the same period last year.
The average villa price was VND23.1 million ($1,100) per square meter, or 8 per cent less than that of the same period last year, as a result of a temporary stay on sales in high-budget projects early this year.
In contrast, the apartment market showed positive movement, with a 9 per cent absorption rate in the first half of this year, a 4 percentage point increase over that of the same period last year resulting from transactions in affordable projects worth VND23.1 to VND27.3 million ($1,300) per square meter. The average price was approximately VND26.1million ($1,242) per square meter.
A survey showed that the key factors that may affect buying decisions include the reputation of the developer, construction status, price and location.
An estimated 1,300 dwellings from 12 villa projects and 13,400 units from 12 apartment projects are expected to be built for the city's property market in the second half of this year. The districts of Peninsula Son Tra and Hai Chau are expected to have the largest number of future villas and apartments.
Total retail stock in the first half of the year was approximately 129,000 square meters, a 5 per cent fall compared with that of the same period last year due to the closure of Dragon Vinh Trung Shopping Centre in Thanh Khe District. The shopping centre is to undergo upgrade.
Modern retail centers exist in only three districts: Hai Chau with 39 per cent, Thanh Khe with 36 per cent and Cam Le with 25 per cent.
Imports edge out local produce
Imported fruit has become increasingly prevalent on supermarket shelves despite being between three times to five times more expensive than domestic produce.
New Zealand kiwis, Australian grapes and American apples are now readily available in the aisles of Ha Noi supermarkets, while locally-grown fruit, such as longans, are becoming sparse despite being in season.
Local grocery stores are buying organic produce abroad in substantial quantities, denying opportunities for Vietnamese farmers to tap into domestic demand.
"Farmers mainly sell fruit to wholesalers. They are not used to marketing their products to supermarkets in the city as well as dealing with food safety and sanitation certificates," said agricultural cooperative owner Hoang The Loc.
Farmers are highly dependent on merchant wholesalers to purchase their produce and sell them to grocery stores or supermarkets.
Wholesaling also allows farmers to sell their produce without having to incur overhead costs associated with marketing, cleaning, processing and delivery to buyers.
"A lack of food safety certifications, as well as packaging and labeling standards has prevented domestic fruit from entering grocery stores and supermarkets," said chairman of the Ha Noi Association of Supermarkets, Vu Vinh Phu.
Supermarkets require producers to meet certain processing and food safety requirements, which means fruits and vegetables are rejected if they are misshapen or discolored.
The tough standards present significant challenges for farm-grown produce, which is typically not packaged, refrigerated or branded.
Fivimart's deputy general director Vu Thi Hau, says supermarkets are more likely to make deals with distributors who can supply them in large volumes.
"Farmers should come together and choose one person as their legal representative. We would sign a contract with that person," said Vu Thi Hau, deputy general director of FiviMart.
She added that her company had sent representatives to the northern province of Bac Giang when the Luc Ngan lychee season was nearing peak production. However, the company's associates failed to convince local farmers to appoint a representative to oversee the delivery the fruit and contract negotiations.
Meanwhile, domestic consumers have contributed to the absence of domestic produce on supermarket shelves, often preferring to buy farm produce at open-air markets.
Local shopper Nguyen Thu Hai said: "I usually buy lychees, longans, custard apples, mangoes, bananas and other Vietnamese fruit at outdoor markets near home.
"The price is cheaper and the fruit is fresher. And I save money spent on parking my motorbike," she said.
Loans given to Mekong Delta farmers to purchase combines
Mekong Delta provinces will loan local farmers over 2.8 trillion VND (133.3 million USD) to buy 6,800 combine harvesters from now to 2017, aiming to reduce rice losses in the harvest stage, an official said.
The new machines will bring the total number of these facilities in the region to 15,500 in order to ensure all rice fields to be cut by machinery, compared to the current rate of 44 percent.
Nguyen Phong Quang, deputy head of the standing board of the Steering Committee for the Southwestern region, said cooperatives and households who buy combines with over 60 percent of Vietnamese components will be lent the whole value of the machine. They will also receive 100 percent interest subsidy for the loan for the first two years and 50 percent in the third year.
The move is part of efforts to cut down the rate of rice lost during harvest from the current 5.6 percent to 2 percent, equivalent to 900,000 tones of un-husked rice.
The Department of Agriculture and Rural Development of Can Tho city said farmers can also regain their investment into a combine within two and a half years at the latest. Added to that, each machine can harvest at least 3 hectares of rice a day, which require 30 laborers if done by hand.
The operation costs of a machine are only 2 million VND (95.2 USD) for every hectare, 1 million VND lower than labor cost.
To further help local farmers in buying the machines, Mekong Delta localities will simplify procedures, open training courses on the use and maintenance of the machines, and upgrade the irrigation and road systems to better the facilities’ access to remote areas.
According to the Mekong Delta Rice Research Institute, the region cultivates some 4.2 million hectares of rice every year, which generate around 25 million tones of un-husked rice, accounting for 58 percent of Vietnam’s annual output.
However, due to a shortage of facilities like combine harvesters, more than 1.4 million tones of unprocessed rice or 5.6 percent are lost each year during the harvesting process.
Indian businesses seek to enter Vietnam garment market
Indian businesses currently supply 2% of raw garment and textile materials to Vietnam annually, and they are aiming to dramatically increase the market share to 25% during the next few years.
The Ministry of Industry and Trade (MoIT) reports that two-way trade turnover in the garment sector has seen remarkable growth in recent years, especially after the signing of a Free Trade Agreement (FTA) between ASEAN and India in early 2010. In 2013, Vietnam imported US$419 million worth of textile materials from India, up 36% compared to 2012’s figure.
Vietnam Customs statistics show that in the first seven months of 2014, India exported cotton, fiber, and fabric to Vietnam, earning US$224 million, US$39.2 million and US$30.96 million respectively. India’s export turnover of garment, leather, and footwear accessories to Vietnam also fetched US$58 million.
To grasp opportunities in Vietnam, Indian businesses have conducted two trade promotion programs since the beginning of the year.
The Cotton Textiles Export Promotion Council of India (TEXPROCIL) sent 20 businesses to Vietnam in February 2014 to explore the market and seek partnerships. In August, 12 Indian garment companies also arrived in HCM City for an exchange program to facilitate business connectivity between the two countries.
Indian ambassador to Vietnam Preeti Saran said that Vietnam is an important pillar in India’s “Look East” policy. Therefore, India gives priority to various areas of cooperation with Vietnam, and the garment sector is a case in point.
Moreover, India is now the world’s largest producer of natural and artificial fibers which paves the way for bilateral cooperation in the future. Meanwhile, Vietnam is the world’s fifth largest garment and textile exporter and the third largest importer of garment materials. That’s the reason India wants to become a leading supplier of raw materials to Vietnam.
Siddhartha Rajagopal, TEXPROCIL's executive director, said that TEXPROCIL recently sent several businesses specializing in supplying raw materials for the garment and textile sector to Vietnam to sound out opportunities.
During a recent visit in August, 12 large Indian businesses specialising in producing woven and knit fabrics and denim worked with 16 Vietnamese producers to learn about the import demand.
Siddhartha Rajagopal said that Indian fabric suppliers eye Vietnam as a primary market, expecting to increase their market share in Vietnam to 25% in the coming years from the current 2%.
He affirmed that Indian businesses will become a reliable supplier of high quality and right-priced raw material sources to Vietnamese garment and textile enterprises in the future.
Wage increase runs behind practice
The National Wage Council has approved a proposal to increase region-based minimum wage by 15 percent in 2015. The wage after increase is much lower than workers’ real earnings now and concerns small garment and footwear companies.
According to the proposal, the minimum wage level will be VND3.1 million a month in Region I where Ho Chi Minh City is listed in, an increase of VND400,000 over the current level.
In fact, businesses in HCMC and the neighboring provinces of Binh Duong and Dong Nai cannot recruit any worker with the above wage level. For the last several years, they have paid their workers VND4.5-5 million a month at least and 5-6.5 million at most.
Binh Hoa Garment Company in HCMC pays its 80 workers VND5 million a month at least, said director Phung Dinh Ngo.
Garment and footwear companies are facing with a lot of difficulties. The salary increase is unlikely to help workers much but worsens businesses’ difficulties because it make social and health insurances increase too.
The salary increase is expected to most affect the garment and footwear sector because 80 percent of businesses are of small and medium scales.
Tens of thousands of companies closed down last year and the number continued to run up early 2014 including a lot of garment and footwear enterprises.
Rice prices slightly reduce in Mekong Delta
After a high increase, rice prices have reduced by VND100-200 a kilogram over a week ago in the Mekong Delta.
IR 50404 variety now fetches VND5,500 a kilogram for dry rice in An Giang, Vinh Long and Dong Thap Provinces.
The prices swing from VND5,700-6,000 a kilogram of long grain rice and VND6,100-6,200 a kilogram of Jasmine rice. Export rice is paid VND7,500-7,750 a kilogram.
At present, domestic rice supply is scarce and countries such as the Philippines, Malaysia and Indonesia are in high demand of rice import.
HCMC leads in Vietnamese goods consumption campaign
Ho Chi Minh City takes the lead nationwide in ‘Vietnamese prioritize consumption of Vietnamese goods’ campaign, said Mr. Nguyen Thien Nhan, chairman of the Vietnamese Fatherland Front Committee and head of the central steering committee for the campaign on August 18.
Mr. Nhan appreciated the campaign's results at a meeting with the standing board of the city Party’s Committee to review five years of the campaign.
Vietnamese consumers are more and more appreciating Vietnamese goods in types, quality and competitiveness, said Nguyen Thi Hong, deputy chairwoman of HCMC People’s Committee,
Surveys conducted since early this year show that 96 percent of citizens support the campaign. Over 73 percent affirm that made-in-Vietnam goods are their first choice and 64 percent advise their relatives and friends to buy domestic products.
Since 2010, HCMC has run a promotion campaign, aimed to mobilize residents’ attendance, increase competitiveness of businesses and encourage consumption of Vietnamese goods, said Ms. Hong.
HCMC proposed the central government to assist the city and other provinces to boost the campaign and control over counterfeits and goods of unknown origin.
On the same day, Mr. Nhan visited Saigon Co.op and Vissan Company who are backbones of HCMC and the country in implementing socioeconomic programs.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR

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