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BUSINESS IN BRIEF 25/3
Tax problems resolved at
Representatives of more than 400 businesses operating in
The gathering addressed issues of business concern. Tax
department leaders directly responded to inquiries from the businesses on all
aspects of tax procedures.
One of major concern was related to foreign workers. SCS
Global Consulting Vietnam wondered how to settle the personal income tax
(PIT) liability of its Japanese workers that had been residing in
Deputy head of Ho Chi Minch City Tax Department Tran Thi Le
Nga said that the Japanese employee was considered a tax resident of
Likewise, she provided guidelines for Shibusawa Logistics
Vietnam Co. Ltd to calculate PIT for its foreign employers.
Regarding investment incentives, a Nippon Express
representative wondered about the preferential enterprise income tax when the
company expands businesses in the
According to Nga, the tax department received the
recommendation from the company and sent a dispatch to General Department of
Taxation (GDT) for further guideline.
Meanwhile, Japanese-based Gunze
“Based on Circular 78/2014/TT-BTC dated June 18, 2014,” Nga
said, “the company does not meet the criteria for preferential treatment
because it is located in the Tan Thuan Export Processing Zone in
At the dialogue, most of problems have been addressed clearly
and thoughtfully. For unresolved issue, the city tax department promised to
hold a direct meeting with each firm in the near future.
Banks slash deposit rates early March
Numerous banks are lowering their interest rates for
depositors, citing low inflation, an intended drop in lending rates and ample
liquidity as major reasons.
Within the first two weeks of March, deposit rates at various
banks have dropped between 0.1 to 0.4 per cent a year, depending on different
tenors. At Agribank, rates for deposits of one-month tenor have been lowered
from 4.3 per cent to 4 per cent, while those of 12 to 18-month tenor fell 0.1
per cent to 6.2 per cent a year.
On March 11, Sacombank also announced a 0.1 per cent drop. As
a result, deposit rates for four-month and five-month tenors at the bank are
currently 4.8 per cent and 5 per cent, respectively. Similarly, depositors at
HDBank, Eximbank, Techcombank and Dong A Bank are now experiencing a 0.1 to
0.4 per cent decrease in their interest rates.
The first reason for this widespread drop is the low inflation
rate. According to banking expert Nguyen Tri Hieu, lower inflation forecasts
have allowed banks to drop their deposit interest rates more easily. Indeed,
a recent macroeconomic report from HSBC predicts the inflation rate to stay
below 1 per cent for the next six months, before rising to 2.8 per cent in
the latter half of 2015.
Another major reason is the possible cut on lending rates for
2015. The SBV expects interest rates on medium to long-term loans to drop at
least by 1 per cent compared to 2014. This move is intended to boost credit
and equip companies with enough capital to operate and expand.
Chairman of Dong A Bank Cao Sy Kiem stated, “To make profit,
banks cannot lend money at lower rates than their deposit interest rates. As
a result, it is understandable that banks are now slashing their deposit
rates to be able to cut loan rates later.”
He added that the current margin between loan and deposit
interest rates for Dong A Bank is 3.5 to 3.7 per cent a year.
The third reason is ample liquidity, which is a common theme
for banks after the Lunar New Year. According to reports by the SBV’s
Monetary Statistics and Forecast Department, the amount of bank deposits will
rise by 4.5 per cent for the first quarter of 2015 and by 14.35 per cent for
the entire year.
Credit outgrows deposits
The Bureau of Statistics of Hanoi (BSH) reveals that during
the first three months of 2015 the capital’s credit has grown 1.8 per cent
compared to the end of 2014 and has also outgrown deposits, turning the tide
of negative credit growth experienced in the last two years.
Credit institutions have been reported to meet the capital
demand for business operation and investment purposes while maintaining
sufficient liquidity.
It is worthwhile to note that the first few months of the year
are not always considered as credit season, and in the past banks often
moaned about negative credit growth in the first quarter. During the first
three months of last year, for instance, credit dropped 1.74 per cent
compared to the end of 2013. In a similar fashion, in 2013 the first quarter
credit was recorded at 0.5 per cent lower compared to the end of 2012.
In addition, according to the BSH, both the deposit and
lending interest rates across credit institutions tend to plunge in March.
Lending rates for prioritised sectors such as agriculture, rural areas,
export, SMEs, supporting industries and high-tech enterprises are standing at
seven per cent a year for short-term loans and 8.5-11 per cent a year for medium
and long-term loans.
To achieve the 15-17 per cent credit growth in 2015 as
dictated by the State Bank of Vietnam (SBV), credit institutions are seen to
boost their credit growth as soon as the first quarter of the year via the
offering of preferential lending rate packages to attract both personal and
corporate customers..
Meanwhile, according to SBV data, lending activities across
the banking system have been boosted relatively in the first two months of
the year compared to the same period of prior years. In particular, credit
has grown 0.68 per cent while total means of payment has bolstered up 2.67
per cent year-to-date.
The SBV stressed that positive credit growth was attributed to
the gradual reduction in interest rates. Since the beginning of March,
deposit interest rates have been applied well below the ceiling deposit rate
of 5.5 per cent a year, for one to six-month term deposits. The authority is
thus considering this as a motion to lower the lending interest rates further
down 1-1.5 per cent a year in 2015.
At present, deposit rates are recorded at 0.8-1 per cent a
year for demand deposits and time deposits under a month, while one to
six-month and six to 12-month term deposits are offered at 5-5.5 per cent a
year and 5.7-6.7 per cent a year, respectively. Fixed term deposits of 12
months and above are reported at 6.7-7.3 per cent a year across banks.
Not a good time, say banks as central bank urges listing
Although the State Bank of Viet Nam (SBV) has been pushing
joint stock banks to list on exchanges, the progress has remained slow.
Transactions are carried out at HDBank. HDBank is among a few
banks that have planned to list shares on the HCM City Stock Exchange for
several years. File Photo
This is because many banks expressed the view that it was not
a good time for them to list due to the ongoing restructuring of the banking
sector.
The Government has developed a roadmap for all commercial
banks that must be listed on stock exchanges by the end of this year, with
the aim of enhancing their operational transparency and reduce cross-share
holdings.
Accordingly, 25 commercial banks have to be listed this year
out of nearly 1,000 public companies.
During the latest effort related to this project, SBV Governor
Nguyen Van Binh had issued a directive at the end of January in a bid to push
the listing process of commercial banks on exchanges.
Binh had ordered the central bank's provincial branches to
push commercial banks to realise their listing plan and closely monitor their
progress.
This is not the first time that such an effort had been made.
At the end of 2013, the State Securities Commission and SBV had pressed
public banks to get listed in order to improve management and reduce
cross-share holdings. In July 2014, the policy was re-emphasised with the
target that all commercial banks must be listed in 2015.
Although many banks have already formulated listing plans, the
plans are still existent only on paper as banks feel it is not to their
advantage to list at the moment. Also, banks are seeking to enhance financial
capacity before listing their shares on exchanges, in order to attract
investors' attention or prioritise other plans during the restructuring
process rather than the listing.
The Southern Bank, NamA Bank, HD Bank were among the banks,
which had planned to list on the HCM City Stock Exchange several years ago.
HD Bank said it would list when the stock market saw better
recovery, the Dau Tu Chung Khoan (Securities Investment) magazine reported,
adding that the bank was seeking foreign capital before listing.
Meanwhile, the Nam A Bank has also stepped up the progress of
its plan to list on the exchange within this year.
Dong A Bank had delayed its listing plan four years ago as the
market was on a decline, saying at the time that the bank would list when the
market was stronger so that it could prevent losses for its stakeholders.
Currently, there are eight banks listed on exchanges,
including Vietcombank (VCB), Vietinbank (CTG), Eximbank (EIB), Sacombank
(STB), A Chau Bank (ACB), Military Bank (MBB), Citizen Bank (NVB), Sai Gon Ha
Noi (SHB) and BIDV (BID), which have a combined market capitalisation of
VND134 trillion ($6.3 billion).
If all commercial banks were listed, their total share value
was estimated to reach VND150 trillion ($7 billion).
VP Bank buys
Vinalines plans to sells off its 51 per cent of stakes in Cai
Lan International Container Terminal (CICT), Thoi bao Kinh te Sai Gon (Sai
Gon Economic Times) newspaper reported this week.
Containers are moved out of Cai Lan International Container
Terminal in
Vinalines, a State-owned company, proposed selling its
majority stake in the terminal to VP Bank as a solution for its outstanding
debt. The deal is pending for revision and approval from the Government, the
Ministry of Transport and other related ministries.
By the end of 2014, Vinalines amassed debts of nearly VND9
trillion (US$428.5 million), the major reason for the recent deal proposal.
If the transfer to VP Bank goes through, they will become the
majority shareholder whose first task will be the handling of the CICT firm's
debts.
CICT has been in operation for two years already, yet has only
utilised 20 per cent of its potential capacity, which is 520,000 TEU/year.
Shipping companies have been cutting back the number of their
ships docking at the port because of its distant and inconvenient location,
as well as its high port fees.
The CICT firm took large amounts of bank loans they haven't
been able to pay back due to poor profits. CICT's bank debts tripled from
US$4.4 million in 2012 to $13.6 million last year.
The Cai Lan Terminal faced additional difficulties after the
Baltic Dry Index (BDI), used to measure changes in the cost of transporting
raw materials, decreased sharply from 770 points in the end of last year to
560 points this month. Forecasters says it seems unlikely to improve anytime
this year.
CICT now faces difficulty calling in $20 million in investment
money from its two shareholders, Vinalines' CPI and SSA Marine, an American
cargo-shipping company. The capital is sorely needed to allow the firm to
stay in operation and deal with its financial situation.
However, the foreign shareholder, SSA Marine, has said it will
not make additional investments as it wants to maintain its current 49 per
cent stakes.
Towers Watson
Towers Watson Vietnam officially kicked off a seminar in Ho
Chi Minh City last week highlighting the results of its 2015 wage and welfare
survey.
The survey of industry opinion, conducted between February and
March, showed that 71 per cent of respondents have a positive outlook on business
growth in 2015. Accordingly, they have plans to increase their workforce,
especially in the areas of sales, manufacturing, and engineering.
The survey also reflects how companies will make efficient use
of their budgets, with 88 per cent of respondents planning to tighten
spending on training, development, wages, bonuses, and recruitment.
Vu Thi Huyen Trang, manager of global data services at Towers
Watson
The respondents forecast that wages will increase by 10 per
cent this year, a slight rise compared with 9.6 per cent in 2014. Meanwhile,
69 per cent of businesses plan to increase their wage budget, and 63 per cent
of respondents will expand their welfare budget.
According to the managing director at Towers Watson
Vietnamese-made rice noodles favored in EU,
When Pham Thanh Binh says his company’s pretax profit last
year was even bigger than its charter capital, he is not joking at all.
The chief executive of Bich Chi JSC, a food producer and
exporter based in the southern Vietnamese
More than 60 percent of the company’s 20,000 tons of products
were exported in 2014, raking in pretax earnings worth VND50 billion (US$2.33
million), Binh said.
Bich Chi makes 160 different types of products in four
categories: noodles, rice paper, nutrition powder, and prawn crackers, and
exports them to the EU, the
“Even though Bich Chi has been shipping its pho [Vietnamese
noodle] to Japan for 12 years, I never cease feeling happy whenever I see our
products used by Japanese pho restaurants,” Binh said, adding Japanese
consumers are very fond of the iconic Vietnamese dish.
“There are 120 pho restaurant in
Sa Giang Co, another food exporter in Dong Thap, last week
began exporting their first batches of noodles to
The Japanese side sent two experts to examine the company’s
facilities two weeks before officially closing the contract, after seeing
that Sa Giang meets all required standards.
“AEON has a huge demand for the product and their requirements
are also very strict,” deputy director Mat Bich Khuay said, adding that the
importer is willing to pay good prices for the products.
Exporting products made from rice yields far bigger profit
than selling the grain itself, according to the Bich Chi boss.
“Rice can be exported at an average of VND10,000 a kg, whereas
ourpho noodles are sold at $2, or VND44,000, a kg,” he elaborated.
Bich Chi and Sa Giang thus do not hesitate to pump money into
research and develop for new products as well as employing modern technology
to expand production as their products are favored by consumers in many high
demand markets.
Both of the companies are located in Sa Dec, home to a craft
village that has a history of more than 100 years of making rice
flour-related products.
The village consumes up to 36,000 tons of rice a year to make
rice flour that will be used by companies like Bich Chi and Sa Giang to make
noodles.
“The strong growth of the rice product exports also benefits
the powder-making villagers,” said Nguyen Quoc Chanh, deputy head of the
city’s economic bureau.
“The Sa Dec administration is investing in the village so that
they can adapt modern and automated technology to enhance production and
increase the quality of their flours.”
Transport infrastructure transfer - pros and cons
The Ministry of Transport’s policy of selling operation rights
of some transport infrastructure works has drawn public interest, the Quan
doi Nhan dan (People’s Army) reported.
Last year, the Ministry’s Vietnam Expressway Corporation
planned to invite foreign investors to buy five highway projects including
Noi Bai- Lao Cai, Cau Gie- Ninh Binh, Ben Luc- Long Thanh, HCM City- Long
Thanh-Dau Giay and Da Nang- Quang Ngai.
The ministry has since allowed 70 percent of the Hanoi-Hai
Phong Expressway to be sold to an Indian investor to raise funds for other
road projects.
Minister of Transport Dinh La Thang has also given the green
light for a pilot plan to sell the operation rights of international airports
to raise funds for national aviation infrastructure projects, including the
Both national flag carrier Vietnam Airlines and low-cost
carrier VietjetAir are seeking permission to purchase the T1 terminal at
The airlines said that owning the terminal will allow them to
cut operation costs and improve the efficiency of services.
Users of public transport facilities also hope for better
services and road maintenance when private operators take management.
However, there are concerns about overcharging, and how the
State will monitor the operation of transport works in question.
Therefore, a detailed legal framework on the infrastructure
transfer needs to be built to ensure harmonious benefits among the
Government, investors and the public.
Highways, terminals and sea ports are considered to be a
“fertilised land” to attract investors due to low-risk investment. The pilot
infrastructure transfer promises to attract capital for new projects and
increase the efficiency of the transport system towards realising a
comprehensive infrastructure network in the country.
The government of
According to the resolution released March 12 on key tasks and
solutions to improve the business environment and enhance national
competitiveness in the 2015-2016 period, the local business environment’s
indicators will surpass the average level of the ASEAN-6, a group of six
smaller ASEAN economies including
ASEAN stands for Association of Southeast Asian Nations,
including
A number of key indicators will be raised to the minimum
average level of the ASEAN-4 group, the top four biggest ASEAN economies,
including
To achieve the targets, relevant state agencies are tasked
with focusing on improving the business environment, promoting the reform of
administrative procedures to shorten the time needed to complete them,
reducing paperwork, and cutting costs for local businesses.
In addition, state administrative agencies will have to ensure
transparency and accountability.
Moreover, there will be comprehensive reform of regulations on
business conditions and professional management of goods and export-import
services so that they will be consistent with international practice.
In particular, the tax payment time will be shortened to less
than 121.5 hours per year, while the time to complete premium payments for
social insurance will be less than 49.5 hours per year.
The percentage of local enterprises conducting electronic tax
declarations will be over 95 percent, and the rate of electronic filings for
corporate tax payment will be at least 90 percent.
Bui Quang Vinh, Minister of Planning and Investment, late last
month told Tuoi Tre (Youth) newspaper in an exclusive interview that 2015
should be considered the Year of Enterprises, during which actions must be
taken to further improve the business environment for the sake of
enterprises.
He stressed that only when the business climate is improved
can authorities gain confidence in enterprises and thereby encourage them to
invest their money in business.
The minister expressed his hope that the revised Enterprise
Law and Investment Law, which were both approved by the National Assembly
late last year, will create new momentum to boost investment in
Besides the two amended laws, the country’s economic
institutions should also be further renovated to better suit the business
environment in
Nguyen Dinh Cung, head of the Hanoi-based Central Institute
for Economic Management, told newswire Tri Thuc Tre that Resolution No. 19,
which was promulgated in March 2014 and the predecessor of the resolution
passed last week, has yielded some fruitful results.
Resolution No.19, focusing on a number of measures to improve
the business environment and enhance national competitiveness, was tailored
for
After a year of implementation, the business environment of
In particular, some important results have been achieved, for
example the number of administrative procedures needed to start a business
has been reduced from 10 to five, and the time to complete all of them has
been shortened from 31 days to six days, Cung said.
The duration needed to pay tax and social insurance premiums
has also been cut from 872 hours to about 400 hours, he said.
In terms of power, the Ministry of Industry and Trade and
Vietnam Electricity have built a chart to bring the time for power access to
36 business days.
CPI nudges up in Hanoi and HCM City
The March consumer price indices (CPI) in the country’s two
largest cities have both recorded a rise, according to the statistics offices
of
The Hanoi Statistics Office said that surging demand for
livestock and poultry during the period pushed up the prices of food and
restaurant services by 0.74 percent, contributing to the CPI rise.
In addition, a gas price hike of 5,000 VND (0.24 USD) from
March 1 has lifted prices in housing, electricity, water and building
materials up by 0.33 percent over February.
The gold price plunged 3.25 percent and the USD price lifted
0.02 percent against the previous month.
The Ho Chi Minh City Statistics Office also reported a growth
of 0.16 percent in the city’s CPI for March. The figure for the first three
months also represented a 0.54 percent annual increase.
The office said that the increase was triggered by a sharp
rise in demands of food and restaurant services (0.51 percent), garments,
hats and shoes (0.05 percent), culture and entertainment (0.05 percent) and
housing, electricity, water and building materials (0.02 percent).
Meanwhile, decreases were seen in commodities and services
(0.48 percent), transportation (0.43 percent), family appliances (0.04
percent) and beverages and tobacco (0.22 percent).
In contrast to the CPI, the price of gold fell by 0.54 percent
while the USD exchange rate rose 0.82 percent.
Healthy environment needs to help SMEs compete in ASEAN
Experts have suggested Government and State management
agencies create a healthy investment climate for small- and medium-sized
enterprises (SMEs) to compete in the 600-million-strong ASEAN market in
anticipation of the year-end establishment of the ASEAN Economic Community
(AEC).
They suggested speeding up administrative reform through the
implementation of one-stop-shop customs procedures, simplifying required
paperwork and facilitating the flows of vehicles and goods.
According to the 2014 Business Climate Report conducted by the
World Bank and the International Finance Corporation, the average time spent
on tax procedures in
To improve the business climate, the Government has recently
issued Resolution 19 to streamline procedures for enterprises to prepare,
file and pay taxes in an average of 171 hours annually, in line with that of
the ASEAN-6:
An The Dung, Office Chief of the inter-sectoral steering
committee for economic integration said the Government could support
businesses through implementing anti-dumping tax measures and building
quality standards for products in line with the commitments of the World
Trade Organisation (WTO) and other signed agreements.
Cao Sy Kiem, Chairman of the
The State should improve the business administration mechanism
in accordance with international practices to help business confidence during
integration, as well as assist them in human resources training and
administrative procedures, he added.
An The Dung warned that the biggest hurdles to overcome are
the quality of goods and services, investment attraction and trade protection
measures.
Competition is expected to intensify after the formation of
the AEC in late 2015, which will remove virtually all tariffs on goods traded
between
He called on businesses to make full use of opportunities
resulting from the regional economic integration and requested joint
supporting efforts from State-run management agencies and businesses to
remove bottlenecks.
Small- and medium-sized enterprises account for up to 96
percent of the businesses operating in
Three additions to vital projects list
Deputy Prime Minister Hoang Trung Hai has agreed to add three
more projects to the list of key transport projects, given their significance
for socio-economic development.
The three projects are: the Deo Ca Pass Tunnel (including
sub-projects), the Tan Vu –
Nguyen Hoang, Director of the Planning and Investment
Department of the Transport Ministry, told Vietnam News that the projects'
inclusion in the list will require all agencies concerned to step up efforts
to ensure that they are completed on time.
The four-lane Deo Ca Pass Tunnel on National Highway 1,
connecting Phu Yen province and Khanh Hoa province in the central region,
will have a total length of 13.4km.
The project combines several components including the Deo Ca
tunnel itself (3.9km), the Co Ma tunnel (0.5km) and approach roads and
bridges (totaling 9km).
The project is slated for completion in late 2016 or early
2017.
The tunnel will shorten the travel distance between either
side of the
The project to build the 15.6km
The project to upgrade the Cho Gao Cannal in the Mekong Delta
by dredging and embanking will run for 28.68km, starting at the Vam Co River
convergence and ending at the
The 2.263 trillion VND (105 million USD) project aims to
facilitate rising traffic on the two major rivers.
At a working session with the city’s National Assembly
deputies, Ha acknowledged that the city has focused solely on SOE
equitisation while lacking sufficient attention towards divestment.
As of February 28 of this year, 10 of 14 State-owned
corporations and parent-subsidiary companies in
The city is scheduled to divest more than 3.6 trillion VND
(1.71 billion USD) from non-core businesses in 2015.
Huynh Trung Lam, Deputy Head of the city’s business management
renovation board, attributed the sluggish divestment to economic hardships
limiting the number of partners interested in buying shares.
The large volume of shares offered by other firms in a
condensed period of time also affected SOE divestment plans. It took time to
follow the divestment process set by the Prime Minister’s Decision No.51
dated September 15, 2014, he added.
The municipal People’s Committee has adjusted its plan to
focus on steering SOE divestment this year, Lam noted.
Divesting non-core assets is among efforts to restructure SOEs
as part of the economic restructuring scheme stated in the National
Assembly’s Resolution No.10/2011/QH13 on the socio-economic development plan
for 2011-2015. Public investment and the banking system are also undergoing
restructuring.
Conger processing factory construction begins in Bac Lieu
province
The construction of a conger eel processing plant began in
Hong Dan commune in the southern
The plant is a joint project between the Hong Dan Seafood JSC
and the
Built across 8,000 square meters with a total cost of over 60
billion VND (2.86 million USD), the plant is designed to process 7 tonnes of
raw fish each day.
It is scheduled to be commissioned in the first quarter of
2016, including workshops, worker accommodations, water supply and drainage
and environmental treatment systems.
Speaking at the launching ceremony, RoK representatives
pledged to work closely with Vietnamese partners to put the plant into
operation on schedule.
The two sides have exchanged experiences in breeding conger in
Hong Dan commune since September 2012.
The plant is expected to make conger processed products a
local staple for exports and increase farmer incomes in the commune and the
vicinity.
Programmes to boost business competitiveness in Can Tho
The branch of the Vietnam Chamber of Commerce and Industry in
the Mekong Delta city of
The programmes are designed to provide training services for
local businesses to build their human resource capacity, connect them with
foreign investors and potential partners, and strengthen performance of
relevant associations to ensure benefits for local businesses, especially
small- and medium-sized enterprises.
Local businesses are advised to devise measures to lower their
products’ prices by using alternative domestic sources, reducing reliance on
imported materials, and cutting down on intermediaries by working directly
with clients and foreign partners.
They are also encouraged to apply advanced technology and
international standards in production; connect with
The programmes also aim to boost business competitiveness in
finance, product quality, environmental-friendliness, food safety and social
responsibility.
Other targets include establishing product brand names,
developing distribution networks domestically and internationally, and
holding marketing and promotion activities.
The Mekong Delta is home to more than 78,000 enterprises, many
of which lack information on international and domestic markets, their
competitors, and labourer skills and knowledge, among others.
They also face unstable exports and financial difficulties for
investing in facilities, production, and waste treatment systems.-
Roadmap to adjust business minimum wage
Deputy Prime Minister Vu Van Ninh has ordered the design of a
roadmap to adjust the minimum wage for businesses in line with their
respective manufacturing sectors.
The minimum wage adjustment is made annually but has yet to
satisfy workers’ needs, especially those paid through the State budget.
Therefore, the Deputy PM, who is also Head of the National
Steering Committee on salary reform and social insurance, directed ministries
to study and propose an adequate level of payment for joint-stock businesses
in which the State holds a dominant stake.
For the administrative sector, he requested the Ministry of
Home Affairs coordinate with the Ministry of Finance and relevant agencies to
devise a salary scale on the basis of meeting workers’ minimum needs and
review some positions such as medical staff at schools and State agencies.
The Ministry of Finance must proactively study and suggest
mechanisms for State budget allocation and support for the public sector
along the direction of gradually reducing State funding for public
administrative sector.
The ministry is also required to devise ways to adjust the
base salary for the administrative and non-productive sector, possibly from
2016.
Vinatex to build factory complex in Quang Nam
The Vietnam National Textile and Garment Group (Vinatex) will
commence the construction of a factory complex in the central Quang
Spread over 20ha in Que Son district, the 1.14 trillion VND
(53.5 million USD) project will include a fibre factory that will produce
4,600 tonnes of products per year, a textile and dyeing factory with a 5,000
– tonne annual capacity, and Huong An garment factory with 20 knitwear
production lines, which will produce 20 to 25 million products per year.
Vinatex will also build a factory that will treat 5,000cu.m of
wastewater per day to serve the production needs at the complex.
After it becomes operational, the complex will supply
materials to cities and provinces nationwide, including
The project's first phase is expected to earn nearly 1.7
trillion VND (80 million USD) in revenue per year, contributing about 30
billion VND (1.4 million USD) to 35 billion VND (1.64 million USD) to the
local budget, and generating stable jobs for about 2,000 workers with an
average income of 4 million VND (188 USD) to 5 million VND (235 USD) per head
per month.
The group plans to spend 9.4 trillion VND (448 million USD) on
textile and garment, weaving and dyeing and infrastructure projects in the
2015-17 period. About 60 percent of the capital will be poured into weaving,
dyeing and infrastructure projects to lure other businesses.
In 2015, nearly 2.4 trillion VND (113.8 million USD) will be disbursed
for the above-mentioned projects.
Vinatex has equitised its operations from January 1 this year.
It has set a target for its parent company to earn 900 billion VND (42.25
million USD) in revenue, and an after-tax profit of 288.4 billion VND (135.39
million USD) in 2015.-
Vietnamese businesses in
Solidarity among Vietnamese enterprises operating in
The event was held by the Business Association in Russia (VBR)
to discuss challenges faced by overseas Vietnamese businesses in 2015 and put
forth support measures.
Concluding the function, Ambassador to Russia Nguyen Thanh Son
noted that
He also emphasised the embassy’s readiness to assist the
development of the business community.
Vinh Long focuses on export stimulus plan
The Mekong Delta
High value added commodities, processed goods and high-tech
products will gradually become the locality’s major exports, the plan states.
Vinh Long intends to build a number of new production
facilities dedicated to agricultural goods serving foreign markets. This
method is based on successful pilot models, such as farms in My Hoa, Tuong
Loc and My Thanh Trung communes that cultivate pomelo to international
standards.
Attracting investments in export production is also now a
priority. Three construction projects at Binh Minh industrial park are
receiving particular attention: a cold storage warehouse, a fruit and
vegetable processing factory, and a plant producing electronic devices and
computers.
According to Phan Anh Vu, Deputy Chairman of the provincial
People’s Committee, rice has been the main driving force behind the local
growth in export revenue in recent years.
Meanwhile, commodities such as handicrafts and aquacultural
products have not successfully sold overseas due to the weak performances of
related associations and enterprises, he said.
In 2015, as part of efforts to earn 330 million USD in trade
revenue, the province is to bolster the export of rice to African countries,
and handicrafts and apparel to the
Hanoi retailers enjoy strong Q1
The total sales of for goods and services in
Retail sales earned more than 104 trillion VND (4.9 billion
USD), an annual increase of 11.7 percent.
Retailers in the private sector sold the most goods and
services, followed by foreign-invested enterprises and state-owned
businesses.
Despite the first quarter coinciding with the long Tet
festival holiday; the market price remained considerably stable.
Many commercial centres and supermarkets in the capital have
launched promotions aiming to attract more customers and elevate sales
further.-
Vinh Phuc chases business investments
From the beginning of 2015, the
According to a report from the provincial department for
investment,Vinh Phuc has licensed five foreign direct investment (FDI)
projects, with total registered capital of over 48.37 million USD in the
first 3 months of 2015.
The province has provided investment certificates for three
domestic direct investment (DDI) developments, with total registered capital
of over 1.5 trillion VND (nearly 73 million USD) .
To date, the province has been home to 189 valid FDI projects
with total registered investment of over 3.1 billion USD and 578 valid DDI
projects worth over 41 trillion VND (1.9 billion USD).
Looking forwards, the province will promote investment
promoting activities to potential overseas markets which boast advanced
technological and engineering capabilities.
Additionally, the province will request local district
governments to focus on infrastructural development, improving local-based
human resources and creating favourable conditions for enterprises to operate
businesses in the province.
So far, many industrial parks and urban areas in the province have
created jobs for thousands of local labourers with average income up to 6
million VND (285 USD) per person a month.
Strengthening USD stirs concerns over depreciation of VND
The recent sharp increase in foreign exchange following the
appreciation of the greenback on the world market has sparked public concerns
over further depreciation of the Vietnamese dong.
The official exchange rates between the Vietnamese dong and
the dollar quoted at many state-run and joint-stock commercial banks on March
23 surged around 0.5-0.6% in comparison with those of late last week.
The price of the greenback quoted at state-run Vietcombank,
often considered the benchmark for other joint-stock commercial banks, rose
VND125 per dollar to VND21,450-21,510 for bid and ask, respectively.
At other banks, the exchange rate adjustment ranged from
VND100 to VND120 per dollar.
Notably, the difference between the bid and ask prices of the
greenback continuously expanded, even up to VND80 per dollar, instead of the
normal discrepancy of VND40-50 per dollar, an unusual signal of the domestic
foreign exchange market, according to newswire Vietnamplus.
Many experts told that they believe that the difference in
gold prices inside and outside the country is one of many reasons for the
surge in foreign exchange rates.
The local price is now around VND5.4 million per tael more
expensive than its world counterpart. (1 tael = 37.5 grams)
The cheaper world gold price has triggered higher local demand
for gold, causing many small hoarders to grab dollars by all possible means
to import gold to sell on the domestic market.
Currently, the US dollar is at a 12-year high against a basket
of currencies due to the US’s economic growth exceeding expectations, coupled
with the increasing possibility that the Federal Reserve will raise interest
rates in the middle of this week's policy meeting.
The rise in value of the greenback has driven a series of
central banks around the world to devalue their currency.
Many Vietnamese experts have shared their opinions on a
further foreign exchange rate adjustment to back local goods and support
exports.
As the currencies of many other countries have depreciated,
their exports to Vietnam will be relatively cheaper than their Vietnamese
counterparts, thus making it hard for local goods to compete in their home
market, according to a report on Vietnam’s macroeconomic situation of
the Hanoi-based Vietnam Institute for Economic and Policy Research.
Moreover, Vietnamese shipments to a specific market, like the
The State Bank of Vietnam (SBV) should actively devalue the
Vietnam dong by 3-4% every year for the next two-three years, through a
number of smaller steps within the 1-1.5% range, to help raise the competitiveness
of Vietnamese goods, said the report, which was released on February 25.
In early 2015, SBV Governor Nguyen Van Binh confirmed that the
central bank will adjust the exchange rate between VND and US$ flexibly, but
the rate will not exceed 2%.
But Thanh Tuyen, an economics columnist of Tuoi Tre (Youth)
newspaper, wrote that a promise from the chief of the central bank is not
enough, and the pledge needs to be realized via concrete actions.
“The decision to hold the Vietnamese dong or US dollar depends
on the efforts by the SBV to strengthen confidence in the Vietnam dong,”
Tuyen said.
A rate adjustment will be welcomed by exporters and experts
who want to promote exports, he said, adding that local people will not be
happy when it happens as it devalues their currencies against the US dollar,
and brings in inflation.
Perhaps with the message of "allowing the rate to rise no
more than two percent" of the SBV governor, and a 1-percent rate
adjustment to take the initiative at the beginning of the year, the future of
foreign exchange rates would be clear, the columnist commented.
Given the concerns of the market, the SBV had chosen to stay
silent, Tuyen said.
It would be better if the SBV reiterates that it will keep its
promises whatever happens, as doing so will definitely build more trust among
the public, he suggested.
Public confidence has not been strengthened dramatically, as
it will take much longer for trust to be developed, the columnist remarked,
concluding that the promise is not enough to win the heart of the public, for
the time being the SBV must offer timely and comprehensive information to
explain what and why it has chosen to do.
Source : VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
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Thứ Tư, 25 tháng 3, 2015
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