BUSINESS IN BRIEF 30/4
The Ministry of Agriculture a nd Rural Development has recommended that the State's budget concentrate on developing infrastructure and logistic facilities for five regional fishery centres along the Vietnamese coastline.
The five centres are located in coastal provinces of Khanh Hoa, Ba Ria Vung Tau, Kien Giang in the South,
The recommendation was made at an online conference between Deputy Prime Minister Vu Van Ninh and concerned localities to discuss Government Decision 67. The decision set goals for the development of
Deputy minister of MARD Vo Vam Tam said 22 cities and 28 provinces directly under the umbrella of Decision 67 had finished compiling their lists of eligible recipients for financial support to upgrade their fishing boats. Commercial banks committed VND243 billion (US$11.5 million) to upgrade 28 of the fishing boats with mortgage term of 11 years and disbursement rate from 60 to 95 per cent.
Fishermen from 21 of the 28 coastal communes in Viet Nam bought insurance policies for their boats, equipment and personal accidents with total amount up to VND2,700 billion ($127.4 million).
The country's effort to build a full fleet of steel-hulled fishing boats is on the right track with more than 50 per cent of the planned fishing boats getting steel-hulls and 60 per cent with more than 800hp.
However, a MARD report indicated that there were limitations to the programme and issues with the current policy.
A number of localities and fishermen experienced difficulty with the administrative procedures required to secure the upgrade funds for their boats.
There have been complaints by fishermen that there were so many legal documents that it made it almost impossibly difficult to follow them all.
Some localities are blamed for failing to co-ordinate efforts and implement supporting policies to boost the development of local fishing industries. Others said they were simply waiting to learn more about what to do before taking steps by themselves.
Issues with current credit policies also arose. Some credit policies offered interest rates at 7 per cent to fishermen but involved too many administrative procedures that it discouraged many from taking advantage of the deal.
Other fishermen weren't eligible for a loan unless they agreed to upgrade their boat engines even if they only wanted the loan to purchase or upgrade fishing equipment.
MARD made several recommendations to improve the effectiveness of policies aimed at boosting the fishing industry, like granting loans without the engine-upgrade requirement if the boat already has at least 400hp, and designing a variety of boat models more compatible with traditional fishing practices.
VASCO starts Can Tho - Da Lat flight
The Vietnam Air Services Company (VASCO) will launch a new flight route connecting the southern Can Tho Province and the central highlands city of
Vasco and Vietravel inked a partnership with the governments of Can Tho and
Vu Duc Bien, deputy director of VASCO, said it would operate its 65-seat ATR72 aircraft on two flights a week on Thursday and Sunday during the first period and increase the fight frequency based on demand.
Bien said it currently took one hour and five minutes for the flight between Da Lat, an attractive tourist destination in the Central Highland region, and Can Tho City, the tourist and economic hub of the Mekong Delta.
The route will help save much time for visitors. According to the Deputy Chairman of the Lam Dong People's Committee, Nguyen Van Yen, his province received more than 1 million visitors from the southern provinces each year. Without a flight, they must spend more than 12 hours on a bus between the two destinations.
The international airport in Can Tho received more than 1,05,279 passengers in the first quarter of 2015, reflecting an increase of 64 per cent over the same period last year. The new route is expected to boost the development of tourism, as well as help facilitate the transport of fruits and vegetables between the two provinces.
As the flight operator, Vietravel, would book at least 40 seats on each flight, while the last 25 seats would be sold at a promotional price of VND990,000 (US$45.8) for a one-way ticket.
With two decade-long operational experience, VASCO currently operates in passenger transportation on routes from
Life insurance records strong growth in first two months
The Vietnamese life insurance segment recorded a strong growth in total premiums, total value of new business and contract numbers in the first two months of this year, implying the beginning of the economic recovery.
Growth rates averaged around 6.03 per cent on year in the first quarter, a five-year record high, showed a recent report by the Insurance Supervisory Authority (ISA) under the Ministry of Finance.
The segment’s total value of new business (VONB) soared by 44 per cent on year to VND1.249 trillion ($59.47 million) between January and February, when life insurance companies signed 179,828 contracts.
Mixed insurance accounted for 43 per cent of total revenues, while investment-linked insurance, Term Life Insurance and pension insurance made up 39.89 per cent, a growth of 4.74 per cent and 0.64 per cent, respectively. Other services including whole life insurance, pure endowment insurance and annuity insurance accounted for 1.2 per cent.
Industrial insiders attributed the strong growth in VONB between January and February to efforts exerted by top insurers to maintain their market share and positive business results among the wave of newcomers. The launch of a strategy to introduce new products among insurers in late 2014 has also contributed to the growth.
Prudential, Manulife, Dai-ichi, Hanwha Life,
In terms of new business market share, Baoviet Insurance took the lead with 23.11 per cent, followed by Prudential with 22.1 per cent, Manulife 12.26 per cent, AIA 10.43 per cent, Dai-ichi 9.35 per cent, Generali 6.33 per cent, ACE Life 4.18 per cent, Hanwha Life 3.29 per cent, Prevoir 2.09 per cent, PVI Sun Life 1.58 per cent, Aviva 0.79 per cent and Cathay 0.7 per cent. (we could make this into a table?)
Hanwha Life Vietnam saw its value of new business grow by 126 per cent, to nearly VND50 billion ($2.38 million) in the first two months, while Generali Vietnam’s premiums rose by nearly 300 per cent on year in 2014. Generali also took the lead among the insurers that had the highest average value per new contract of VND30.92 million ($1,472).
Data from the ISA has also estimated that total premiums of life insurance players in the first two months were at VND3.074 trillion ($146.38 million), up 25 per cent from the same period last year. The number of valid contracts has also increased by 13.5 per cent to nearly 5.85 million.
In terms of premium market share, as of end-February 2015, Prudential took the lead with 30.1 per cent, followed by Baoviet Insurance with 27,7 per cent, Manulife 12.1 per cent, AIA 10.7 per cent, Dai-ichi 7.7 per cent, ACE 4 per cent, Generali and Hanwha 2.1 per cent each and Prevoir 1.2 per cent.
However, life insurers need to take proper measures to maintain their growth rates in the coming months as failure of some players would adversely affect market performance. In fact, many insurers’ yearly business results failed to meet market expectations, although they reported a strong growth in revenue the first months. For example, in the first half of 2014, a strong increase of 244 per cent in the number of insurance contracts failed to cover a fall of 12 per cent in the figure of individual contracts, according to statistics by the Association of Vietnamese Insurers.
In 2013, PVI Sunlife made a record revenue of VND1 trillion ($47.6 million) after nearly one year of operation, contributing to the segment’s increasing total VONB to nearly 47 per cent, to VND7.603 trillion ($363.05 million). However, in 2014, this newcomer had its ranking fallen to 9th from the earlier 3rd in terms of new business market share with 2.56 per cent.
200 enterprises attend 2015 Vietnamese high quality goods fair
The Vietnamese High-Quality Goods Association said the Vietnamese high-quality products fair will be organized in Phu Tho Indoor Stadium’s District 11 of Ho Chi Minh City from April 28 to May 5.
The fair themed “The creative and innovative initiatives to enhance business’s competition in the integration environment” will set up many activities, aiming to help businesses develop the domestic market as well as penetrate the regional leading markets.
The fair attracts over 700 stalls of 200 enterprises and the association said that Vietnamese enterprises will introduce thousands of products with favorable cost and high quality to consumers through the fair.
Export of Vietnamese tropical fruits increased
Nguyen Huu Dat, director of the
n the first quarter this year, 169 batches of dragon fruits have been exported to nations in the world; of them, 227.4 tons, 189 tons, 3 tons went to Japan; South Korea and New Zealand. The center liaised with the US Center to check 197 batches of dragon fruits (or 532.9 tons); 67 batches of rambutan (or 146.9 tons); 17 batches of longan (or 22.4 tons) into American market
Accordingly, only in the first quarter this year, 952.4 tons of dragons, nearly 147 tons of rambutan, 22.4 tons of longan and 57 tons of mangos have been sold into the
Binh Dinh grants investment certificate for FLC Group
The management board of Binh Dinh Economic Zone yesterday granted the investment certificate in
The Nhon Ly project has the investment capital of VND 3,5trillion, covering an area of 162.5 hectares in Nhon Ly -Cat Tien tourism area in Nhon Hoi economic zone in the central province of Binh Dinh.
FLC Group said the project is expected to be completed in 2018 with many high-level items such as rerosrt, hotels, entertainment areas and buildings.
Sharp rise in imports of Chinese machinery
The General Department of Customs said that in the first three months of 2015,
Bui Ngoc Son, head of the international relations division of the Institute for the World Economics and Politics, said China was selling obsolete machinery as it modernises, offering Vietnam cheaper prices than equipment from Japan or Germany.
Imports included complete assembly lines, office equipment, plastic molding machines and hydropower plant machinery.
Son said problems were emerging in the bilateral trade, where that state-owned enterprises import cheap machinery from
He cited the case of Vietnam Shipping Lines (Vinalines) importing an old Russia floating dock through a Singapore broker in 2007. Vinalines bought the dock at USD9m from the broker, while the Russian owner, Nakhodka Co, had offered to sell it for USD5m. After the deal, the broker ttransferred USD1.7m to officials of Vinalines.
“This is a loophole in Vietnam’s marco-economic management policies," Son said. "Not much attention is paid to the quality of imported machinery, so long as they work."
He raised concerns about lax management of state-owned enterprises.
Tourism firms enjoy bumper holiday week
Tour companies are having a bumper holiday season, with most out-bound and in-bound tours sold out for Reunification Day on April 30 and the May Day holiday on May 1, with few slots left for remaining travel.
Many tourism firms report the demand for this year's long six-day holiday is up sharply on previous years, and popular tours sold out two months ago.
Travellers have been attracted by the long holiday break, attractive promotional campaigns and discounted tickets. The recent spate of hot weather has made sea and mountain resorts extremely popular.
Unlike Tet, when family commitments occupy much of the holiday break, Reunification Day and May Day allow people to simply enjoy themselves, tour companies say.
Vietravel Company said it had taken bookings from 20,000 customers, up 50 percent on last year. CP Hanoi Redtour reported 6,000 customer, an increase by 30 percent.
Many firms are seeing an average 50 percent jump in business.
Representative from Vietnam Airlines said 545 flights have been added during the April 25 to May 4 period, an increase of 17.8 percent on normal schedules and 82.9 percent more than last year.
"The most sought-after flights are from Hanoi and HCM City to Danang, Phu Quoc and Nha Trang," he said.
Vietnam Airlines has added 106 flights to Phu Quoc Island, but with the boost in ticket sales the airline is worried about airport congestion and the increased likelihood of delays.
Jetstar Pacific has increased flight numbers, but has been unable to meet demand.
There has also been a surge in demand for rail and bus tickets, with more staff being added for the holiday period to handle increased frequency of services.
Hanoi to drop stagnant FDI projects
Hanoi authorities said they would drop foreign direct investment (FDI) projects that are behind schedule or where investors are found to be unable to follow through on commitments.
“Investors need to proactively speed up the implementation of their projects,” said Nguyen Ngoc Tuan, vice chairman of the municipal People’s Committee. “We’ll take measures to deal with stagnant projects and even withdraw investment licenses of investors who are proved to be incompetent.”
By the end of 2014, Hanoi had attracted 3,169 projects with a combined registered capital of USD26.3bn by investors from 63 countries and territories. Total capital disbursement was USD11.3bn, or 52 percent of total registered capital.
In the first quarter of this year, Hanoi approved a further 80 FDI projects worth USD160.2m.
The municipal Department of Planning and Investment said 12 projects have yet to start due to planning-related issues, while eight had encountered problems with site clearance and 13 projects had met with other difficulties.
Nguyen Ngoc Tuan has asked local departments and relevant agencies to work out solutions to support investors.
To that end, the Department of Architecture Planning will examine the city’s planning regulations and make a response to investors in May, and the Site Clearance Board will try to resolve problems with land use so projects can get back on schedule.
Vietnam Airlines told to intensify staff checks after gold smuggling case
Vietnamese aviation authorities have asked national carrier Vietnam Airlines to increase internal staff supervision after a pilot was arrested in South Korea for smuggling six kilograms of gold.
On March 10, pilot Nguyen Van Dung and flight attendant Nguyen Tuan Phong, off Vietnam Airlines’ Flight VN426 from Hanoi to Busan, were arrested at Gimhae International Airport for trying to smuggle six kilograms of gold in their shoes.
The Vietnam Civil Aviation Authority (CAAV) alleged there was a lack of supervision of staff by Vietnam Airlines, security checks were inefficient, and there were loopholes in the Transport Ministry's action programme on anti-trade fraud and smuggling.
Pending the outcome of an investigation into the gold smuggling case, the CAAV asked Vietnam Airlines to intensify internal supervision over its pilots and flight attendants to prevent similar incidents.
The Airport Corporation of Vietnam has been ordered to review its internal security checks at airports, especially for international flights.
Authorities at Hanoi's Noi Bai International Airport have reviewed security camera footage at the airport, but found no irregularities.
Vietnamese aviation authorities are coordinating with South Korean authorities in the investigation.
Vietnam consumer confidence dips for second month - survey
Vietnam’s consumer confidence has continued dropping slightly this month although the economy has shown clearer signs of recovery as reflected in a recent survey of ANZ Vietnam Bank.
The ANZ-Roy Morgan Vietnam Consumer Confidence has fallen for the second month to 140.2, down 1.3 points, this month with the fall driven by small declines in four components of the survey. Despite the fall, the index remains well above its 2014 average of 133.3.
In terms of personal finances now, 35% of Vietnamese, down one percentage point, said their families are ‘better off’ financially than this time last year compared to 19% (unchanged) who said their families are ‘worse off’ financially, the lowest for this indicator for more than a year since March 2014.
Of the respondents, 57% of Vietnamese, down one percentage point, expect their families to be ‘better off’ financially this time next year compared to just 5%, up one percentage point, who expect to be ‘worse off’ financially.
In addition, 55% of Vietnamese, unchanged, said Vietnam will have ‘good times’ financially during the next 12 months and only 11%, up two percentage points, expect ‘bad times’ financially.
Finally, 47% of Vietnamese, up one percentage point, said now is a ‘good time to buy’ major household items compared to 15%, up three percentage points, who said now is a ‘bad time to buy’ major household items, the highest for this indicator since September 2014.
Glenn Maguire, ANZ chief economist for South Asia, ASEAN & Pacific, said though headline consumer confidence continued to pull back slightly in April, the details of the survey are consistent with an economy where the domestic components of growth are finally gaining surer recovery traction.
“Our broad macro assessment is that the Vietnamese economy has now bottomed and we foresee an ongoing recovery for 2015 and 2016. Indeed, we recently revised our gross domestic product (GDP) growth forecasts for 2015 and 2016 to 6.5%,” Maguire said in the report.
The transmission mechanism of a firming economic recovery to consumer confidence should be relatively straightforward. In the first quarter, industry growth posted its fastest pace of growth in the past three years in line with stronger growth in industrial production.
“As this translates to firmer output and most probably employment, we would expect to see both confidence and aggregate income formation improving over coming quarters. The ongoing firming recovery should create an environment where households become more confident to spend, further strengthening the recovery in domestic demand,” the expert said.
The obvious caveat is that for an emerging economy, this transmission mechanism may play out with uncertain lags or be only partially transmitted given high savings rates. Still, the Vietnamese economy appears to be entering a sweeter spot and both consumer confidence and spending will play a key role in ensuring that is where the economy is likely to stay in the medium term.
HCM City imports up, exports down in January-April
Imports in HCMC have increased 15.5% while exports (including crude oil) have dipped in the first four months of this year, heard a review meeting in the city yesterday.
A report released at the four-month review meeting showed imports have neared US$10.2 billion between January and April, up 15.5% against the same period last year.
Businesses in HCMC have imported more dairy products, materials for apparel and footwear production, steel and iron, pharmaceuticals and plastic items in the first four months of this year.
Imports of dairy products have risen by 13.7%; garment, textile and shoe materials by 7.3%; cloth by 1.8%, steel and iron by 28.4%, pharmaceuticals by 4.6% and plastic products by 1.4%.
This is a good sign as local enterprises have speeded up imports to meet their growing production demands, according to Thai Van Re, director of the HCMC Department of Planning and Investment.
Meanwhile, the city has reported exports of nearly US$9.3 billion in the first four months, down 3.4% year-on-year. Excluding crude oil, export value is put at over US$8 billion, a year-on-year rise of 8.3%.
Besides, total outstanding loans in the city have reached VND1,100 trillion (US$50.9 billion), rising by 16% year-on-year. This indicates that production and business activities have turned bustling.
Re said total investments in basic construction have exceeded VND26.8 trillion, marking a 4.5% year-on-year increase compared to 2.1% in 2014’s first four months.
Dao Thi Huong Lan, director of the HCMC Department of Finance, said budget collections have reached over VND98 trillion in the period, up 9.63% year-on-year. Of the figure, the economic sector has contributed VND41.2 trillion, a 9.21% increase.
Budget collections from both foreign-invested and non-State-owned enterprises have edged up, Lan said.
According to the HCMC Institute for Development Studies, medium and long-term credits have grown and market confidence and industrial indexes have improved. The number of suspended enterprises is just 3.8% of newly established firms in the period, proving stability and positive business improvements.
However, imports of steel and iron and dairy products remain high, suggesting that local manufacturers still rely much on foreign markets, the institute said.
Customs officers accused of asking for bribes
Representatives of many enterprises said at a dialogue in HCMC on April 23 that they had had to pay informal fees for customs officers to have their goods cleared as scheduled otherwise they would cope with a host of difficulties.
Dinh Cong Khuong, chairman of Khuong Mai Steel Service and Trading Co. Ltd., told the dialogue with leaders of the HCMC Department of Customs that customs officers often insisted on determining higher prices for its steel imports than the levels the firm declared based on contracts, letters of credit and bank transfers.
He gave an example that Khuong Mai imported a batch of goods at US$370 a ton but customs officers required the company to register up to US$640 a ton.
“Yesterday, we imported goods at US$373 a ton but port customs officers wanted the figure to be US$400 a ton. Our employees told me that the goods would be cleared with US$373 a ton if they paid them VND1 million (less than US$50),” Khuong said.
A representative of another steel company said his company recently imported rolled steel products from China via Haiphong Port with a certificate of origin and documents proving that these products are subject to special import tax incentives, but a 5% tax rate was still applied as we forgot enclosing these papers with the customs declaration form.
“We finally discovered our mistake and requested attaching the documents to the form but the customs agency at the port asked for half of the tax differential if we wanted our request to be met,” the representative said.
Executives of other companies questioned why they had had to complete more procedures and be subject to more checks to have their imports cleared at border gates. For instance, CGM Vietnam complained that it was asked to submit print customs declaration forms though the shipping line made it online.
Nguyen Quoc Toan, deputy head of the import-export tax division at the HCMC Department of Customs, told the dialogue that the agency does not allow its officers to demand informal fees and enterprises should provide the names of those officers to help the agency deal with them.
Toan, however, said many enterprises have been requested to adjust prices of their imports though they have submitted sufficient papers as import tax collections associate with tax revenue for the State budget. Enterprises need to ask customs officers to clarify their cases and send their comments to customs leaders if they do not agree with the way customs officers deal with their shipments.
“Enterprises should be well aware of relevant regulations,” Toan said.
Nguyen Thanh Long, deputy head of the management supervision division of the HCMC Department of Customs, said enterprises can request customs officers compensate the unexpected fees for their goods subject to further checks if customs officers do not detect any problem with their shipments.
First gas turbine reconditioning workshop in Vietnam inaugurated
The Vietnam Electricity Group (EVN) and France’s Alstom held a ceremony on April 24 at Phu My 1 Industrial Park, Tan Thanh district, Ba Ria-Vung Tau province to inaugurate the first gas turbine reconditioning workshop in Vietnam.
The ceremony was attended by Deputy Prime Minister Hoang Trung Hai, leaders of Ba Ria-Vung Tau province and representative of the Vietnam Electricity Group (EVN), as well as France’s Alstom.
The EUR 22million project, which is part of the joint venture formed in 2012 between Alstom and EVN, will create about 150 new jobs. It covers 5,500 square metres and houses the latest machinery for the reconditioning of hot gas path parts, many of which are available for the first time in South-East Asia.
At full capacity, the workshop will be able to refurbish several hundred sets of gas turbine components per year. It is already setting the benchmark in terms of EHS (Environment, Health and Safety), with some 2,000 hours of trainings in the past year, and a total of 500 days without LTAs (Lost Time Accidents) since the beginning of operations in December 2013.
Addressing the ceremony, Deputy Prime Minister Hoang Trung Hai said the establishment of the joint venture was meant to assist electricity consumers, first in Vietnam. The project will later be expanded to Southeast Asia and across Asia.
Japan's Nitori to build second furniture plant in Vietnam
Japan's Nitori Holdings Co.,Ltd has announced it will build a second furniture production plant in Ba Ria-Vung Tau province after the first one of its kind in Hanoi.
The plant, which is scheduled to be a large-scale operation, will be built in 2017 on an area of 400,000 square metres. The plant will produce materials and spare parts for furniture products, along with producing assembly line items which will be exported and sold in Japan.
The capacity of the plant has yet to be confirmed but it is expected to be 2.5 times higher than the plant in Hanoi. It will produce key products such as cupboards, sofas and cushions, and it is scheduled to put into operation in February 2018.
Nitori Holdings, the largest group of its kind in Japan, currently has two furniture plants in Indonesia and Vietnam. It owns a chain of more than 340 furniture stores in Japan and 27 in the US, China and Taiwan (China).
Nitori plans to open more than 40 stores in Japan and14 abroad in 2015 ─ it expects to increase the number of stores to 1,000 by 2022.
Experts propose flexible forex policy
Economic experts have suggested the State Bank of Vietnam (SBV) adopt a flexible foreign exchange policy and adjust it based on supply and demand, instead of forcing the Vietnam dong-U.S. dollar exchange rate to move within 2% a year.
Dr. Nguyen Thuong Lang from National Economics University said the SBV should stop the scheme to devalue Vietnam dong by only 2% every year as there are no scientific foundations for this. Instead, the central bank should let market forces to decide the price of the greenback on the local market.
Lang acknowledged that the SBV’s forex rate policy has produced positive effects, helping stabilize the value of the domestic currency during the economic slowdown. But he noted that as the balance of payments has run a surplus in three consecutive years, the 2% dong devaluation plan every year is unnecessary.
Besides, implementing the plan is against the basic rules of a market economy.
However, Nguyen Thi Hong, deputy governor of the central bank, told the Spring Economic Forum 2015 in Nghe An Province on Wednesday that as the forex rate is a sensitive issue as it is driven by many factors including supply and demand, psychology and expectations, the central bank controls it based on developments of the entire economy.
This year, the central bank will still stick to keeping the forex rate move within a 2% band based on exports and imports, foreign reserves, balance of payments, inflation and public debt influence. However, the agency will closely follow market developments to adopt suitable policies, Hong said.
She said strong forex rate fluctuations in recent days are normal.
Dr. Nguyen Duc Do from the Institute of Economics and Finance cast doubt on dollar speculation given forex rate fluctuations though the central bank said there was strong dollar supply.
Do proposed if Vietnam’s economy grows 6-6.2% this year and deflation is in sight, the central bank should consider devaluing the dong devaluation by 3%, especially when the task to lower bank interest rates by one to 1.5 percentage points is difficult to realize amid the current context of bad debt, budget deficit and high public debt.
Local cashew processors on tenterhook
Africa’s cashew yield falls by 15-30% this year have made domestic cashew processors worried about possible material shortages as Vietnam imports a large volume of unprocessed cashew from the continent.
Ghana, a big exporter of unprocessed cashew in Africa, is expected to yield only 730,000 tons of cashew this year, down 23%, according to Ecobank, a bank which is present in 36 African countries.
Many other African countries have reported their cashew yields would be affected by unfavorable weather conditions this year.
Besides Ghana, Ivory Coast, Nigeria and Benin are among the major cashew growing countries in Africa.
The Vietnam Cashew Association (Vinacas) said limited supply has forced many local enterprises to scramble for unprocessed cashew at a higher price, at US$1,300 per ton, up US$100-200 against the previous year.
Nguyen Duc Thanh, chairman of Vinacas, said enterprises would earn no profit if they import cashew at higher prices for export processing.
Vinacas said this could hardly be a tactic by African cashew exporters to push up the price of this farm produce. Whether their output drops or not will be made known at the end of June when the harvest season in Africa ends.
According to the Ministry of Agriculture and Rural Development, the average export price of cashew nuts was US$7,138 per ton in the first two months of this year, up nearly 17% against the same period last year.
Though cashew exports dropped 1.3% in volume in the first quarter of this year, the value picked up almost 15%. In the period, Vietnam exported 51,000 tons of cashew worth US$370 million and imported 145,000 tons of raw cashew, or 2.75 times higher than the January-March period of last year.
Last year, Vietnam exported 306,000 tons of cashew nuts, equivalent to around 900,000 tons of raw cashew. The country imported nearly 579,000 tons of unprocessed cashew.
More office tenants return to CBDs
More companies have come back to lease offices in the central business districts (CBD) of HCMC as the cityscape has changed for the better and the rent gap between office buildings in the downtown area and fringe areas has narrowed.
Property service provider CB Richard Ellis Vietnam (CBRE) said there have been significant cityscape changes in the center of the city over the past time, especially since work started last year on a project to transform Nguyen Hue Boulevard in District 1 into a pedestrian-only street, and new hotel and office buildings were put into service.
Greg Ohan, director of office services at CBRE Vietnam, said those changes have captured the attention of domestic and multinational corporations in the CBDs.
Data of CBRE showed many tenants left offices in the downtown area five or eight years ago to cut costs but they had begun to return since rent for offices in the center of the city has almost matched that in out-of-town areas.
The monthly rental of Grade B offices outside the CBDs has risen to nearly US$22 per square meter compared to US$15 five years ago, and tends to advance. Meanwhile, the average rental in the downtown area has been stable in recent years at around US$32-35 per square meter per month.
The office rental in the CBD area is forecast to stay the same from now until the end of the year.
According to another property service provider Cushman & Wakefield Vietnam, total Grade A office supply in the city will increase 25% in the second quarter of this year when Vietcombank Tower in District 1 is put into service.
More Grade A office space will pile pressure on this segment as its occupancy has fallen over the past two years.
At present, nine Grade A buildings in HCMC supply more than 150,000 square meters of office space with the average occupancy rate of around 91%.
As for the Grade B segment, the city has 47 office buildings, offering around 671,000 square meters of office space with the average occupancy rate of around 94%.
Vietnam Thuong Tin Commercial Joint Stock Bank (VietBank) opened its head office building on Nguyen Thi Minh Khai Street in District 3 on Tuesday, providing 15,000 square meters of Grade A office space for the market.
Rice farmers to get more financial support
The Government will provide farmers with VND1 million for each hectare under rice cultivation in the coming time, up VND500,000 against the current level.
More financial support for rice farmers is specified in the Government’s Decree 35/2015/ND-CP on management and use of rice farming land. The decree will come into force on July 1.
Le Thanh Tung from the Department of Crop Production said the rise in financial aid for farmers from VND500,000 to VND1 million per hectare will be of great help for rice growers at a time when their profit is being affected by many factors.
Though Decree 35 aims to maintain 3.8 million hectares of land for rice farming, farmers are still permitted to grow other crops on land for rice farming is not cost-efficient.
The Ministry of Agriculture and Rural Development has plans to plant high-yielding crops on around 112,000 hectares inappropriate for rice farming. When farmers shift to new crops, they will get financial support of VND1-2 million to buy seeds.
According to the Department of Crop Production, many farmers in Binh Thuan and Long An provinces have planted dragon fruit on their rice farms as profit from dragon fruit is 6-10 times higher than rice.
Construction ministry backs more cement exports
Further cement production is not encouraged as it guzzles much electricity and pollutes the environment, but Deputy Minister of Construction Nguyen Tran Nam told a seminar in Hanoi on April 23 that cement exports should be promoted as local material supply is abundant.
Nam said Vietnam still had to import cement in 2009, and exported 1.2 million tons and imported one million tons of cement in 2010. However, four years later, the country produced 71 million tons and exported 21 million tons worth nearly US$1 billion.
Nam said he threw support behind more cement exports to back local producers, especially at a time when domestic consumption is declining.
The country has more than 12 billion tons of limestone, which is enough for cement production for hundreds of years.
According to Deputy Minister of Industry and Trade Tran Tuan Anh, the quality of Vietnamese-made cement has improved and is recognized by importing markets. Cement export is no longer a short-term solution as it has helped reduce inventories and balance supply and demand on the domestic market.
However, the biggest problem of the cement industry, according to Nam, is that enterprises are competing with one another by undercutting prices instead of improving product quality and seeking consumption markets.
Anh said cement exports are not sustainable. Cement exporters are mainly small, have not gained much international trade experience and cannot meet strict requirements of importers.
Nguyen Anh Quan, head of markets at Vietnam Cement Industry Corporation (Vicem), said Vietnam has emerged as a major cement exporting country in the region in recent years. However, local enterprises lack cooperation, he added.
“Many partners told us that domestic enterprises often undercut their prices to attract customers even though their customers do not force them to do so,” Quan said.
He added that while the world cement price rises by US$4, the price in Vietnam picks up US$1, and when the world price falls by US$0.5, the domestic price declines by up to US$2.
Cement exports will not be as favorable as last year as global supply surges, piling pressure on cement exporters in Vietnam. Some big exporters like Japan, South Korea, China, Thailand and India will increase their shipments and commission more production lines.
In addition, import demand in some markets like Indonesia, Malaysia, the Philippines and Taiwan are lower than forecast. “The cement price this year has dropped significantly against last year,” Quan said.
Cement makers at the seminar emphasized the need to have a channel for them to get market updates so as to avoid losses in case of market volatility.
HBC targets after-tax profit of VND180 billion this year
Hoa Binh Construction & Real Estate Corporation (HBC) is looking to after-tax profit of VND180 billion (US$8.4 million) on revenue of VND5.3 trillion this year, up 2.5-fold and 40% against last year’s earnings respectively.
HBC plans to pay a 2015 dividend in cash for shareholders at 15% and issue 1.3 million employee stock ownership plan (ESOP) shares at VND10,000 each, heard the corporation’s annual general meeting in HCMC on Wednesday.
In addition, the corporation will issue an additional 20 million shares for strategic investors at VND10,000 each to raise its chartered capital and mobilize funds for business operations.
Le Viet Hai, chairman of HBC, said the corporation has chosen 2015 as the beginning of a new business era with an aim to post revenue of VND45 trillion in 2024. To realize this target, it will expand operations to infrastructure development projects, realty trading and building management.
HBC earned over VND3.5 trillion in net revenue while its holding company gained VND71 billion in after-tax profit last year, rising by 2.5% and 2.7-fold year-on-year respectively. However, the results just met 70% and 40% of the whole year’s targets due to the property market slowdown and losses of its affiliates.
HBC said it would pay a 2014 dividend in cash at 15% and give bonus shares at a 10:3 ratio to shareholders.
Last year, the corporation won contracts for 22 projects having a combined over one million square meters of floor space.
Experts: Forex volatility, bad debt still cause for concern
Exchange rate fluctuations and bad debts in the banking system remain big worries for the local economy, according to experts who on April 21 start attending the two-day Spring Economic Forum 2015 in the central province of Nghe An.
Ha Huy Tuan, vice chairman of the National Financial Supervisory Commission, said this year’s exchange rate would be under more pressure than last year.
According to Tuan, the exchange rate is still affected by multiple factors though it was adjusted up by 1% early this year and would not be revised up more than 2% in a year as targeted by the central bank.
There is little room left for the exchange rate movement this year while the price of the U.S. dollar has been firmer against many foreign currencies and is projected to further appreciate this June.
Le Dinh An, former director of the National Center for Socioeconomic Information and Forecast, said the dollar is on the rise and the strong depreciation of other currencies will continue. This will make Vietnam dong appreciate but reduce the competitiveness of Vietnamese goods exported to foreign countries.
According to An, enterprises and individuals tend to keep more dollars, especially when the deposit interest rate of this currency remains low. Policymakers need to take into consideration long-term benefits of the economy to decide whether or not to adjust the exchange rate in line with supply and demand.
An said the central bank’s plan to keep the exchange rate stable might work as incoming remittances reached US$12.1 billion last year and are predicted to grow by 10% a year. Last year, foreign direct investment (FDI) disbursements amounted to US$12.4 billion, up 7.4% against 2013, and foreign reserves reached around US$36 billion.
Tran Dinh Thien, director of the Vietnam Institute of Economics, said the pegging of the local currency to the dollar helps reduce transaction costs and risks but poses risks in a developing financial market like in Vietnam.
The Vietnam dong is overvalued, piling pressure on the exchange rate and market stability.
Regarding bad debt, An said the settlement of bad debts is improving as the central bank has decided to issue VND80 trillion worth of special five-year bonds to Vietnam Asset Management Company (VAMC) to buy bad debts at credit institutions. Besides, the central bank has proposed the Government adjust the duties of VAMC to enable it to better handle bad debts, targeting to bring the bad debt ratio down to less than 3% this year.
According to Thien, the major challenge of the financial-monetary market lies in the restructuring of the banking sector and the settlement of bad debts in the system.
VAMC has bought VND125-130 trillion of bad debts from banks. However, as of December 24 last year, it was able to recover around VND4.16 trillion.
Thien said the financial-monetary market was more stable last year than in the two previous years. Nevertheless, the management and supervision capacities of the entire system remain limited and this can be seen via growing bad debts and non-market measures used to settle bad debts.
Ministry told to review Quang Ninh airport project
The Government has ordered the Ministry of Transport to work with relevant agencies to review the master zoning plan for the Quang Ninh airport project in the northern province of the same name.
The order came after authorities detected the build-operate-transfer (BOT) airport project was drawn up based on the design and technical figures of Phan Thiet airport in the central
According to the Government Office’s announcement last week, the Government wanted ministries to check and report the zoning plan, investment capital and effectiveness of the project in June this year.
The province postponed the groundbreaking ceremony for the project at the end of March and attributed it to an incomplete road leading to the construction site of the airport.
However, the Construction Management Department under the Ministry of Construction later said some data of Quang Ninh airport project had been copied from that of Phan Thiet airport, rendering the project irrelevant.
The provincial government said the groundbreaking delay was necessary for relevant parties to collect comments from ministries and agencies on the feasibility study of the project before work on the project starts.
Quang Ninh airport covers an area of 290 hectares in Doan Ket Commune in Van Don District. The airport is designed to have one runway meeting 4E standards of the International Civil Aviation Organization (ICAO) and a parking area for at least four Boeing B777 and Airbus A321 aircraft.
The project would require nearly VND7.5 trillion, including more than VND5.25 trillion for construction and equipment, and VND734.2 billion for site clearance. The project’s main investor, Sun Group, expects to recover the investment over 45 years.
Source : VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
Thứ Năm, 30 tháng 4, 2015
Prime Minister calls for upholding great 1975 spring victory
Prime Minister Nguyen Tan Dung underscored the need to bring into full play the spirit of the great Victory of 1975 spring and strive for a more prosperous country in his speech delivered at a commemoration ceremony of the 40th Anniversary of the Liberation of the South and National Reunification (April 30, 1975 – April 30, 2015).
Following is the full text of the PM’s speech.
“ Leaders, former Leaders of the Party, State and Fatherland Front of Vietnam,
Revolutionary veterans, Vietnamese heroic mothers, heroes of the People’s Armed forces,
Ladies and gentlemen,
Today, amidst the glorious ambience of the historical April days, the entire Party, people and army of
On behalf of the Party, State and Vietnam Fatherland Front, I would like to convey to revolutionary veterans, Vietnamese heroic mothers, heroes of the armed forces; officers and soldiers of the People's Army and the People’s Public Security; international guests, fellow countrymen and comrades across the country, my warmest greetings and congratulations.
Dear compatriots and comrades,
Ladies and Gentlemen,
The great victory of 1975 Spring is a glorious chapter in our great history of national construction and defense. With that victory, we accomplished a historic mission of liberating the South and reunifying the country, bringing
At this very sacred and touching moment, the Party, State and people and army pay tribute with deepest gratitude to our great President Ho Chi Minh – the genius leader, the hero of national liberation and the cultural figure of the world – the man who brought glory to our nation.
We have always enshrined in our hearts the gratitude to outstanding leaders of the Party and country; heroic martyrs, comrades and compatriots who sacrificed and dedicated their whole life to the struggle for national independence, freedom and reunification.
We are also grateful to the revolutionary veterans, Vietnamese heroic mothers, heroes of the armed forces, war invalids, martyr families, families with meritorious contribution to the country, veterans, former youth volunteers, battlefield civil workers, as well as compatriots and comrades all over the country and abroad for devoting their sweat and blood, wisdom, talent, energy, and wealth to the great war of resistance.
At this solemn ceremony, once again, we would like to express our sincere thanks to the people of socialist countries, especially the Soviet Union and
Dear compatriots and comrades,
Ladies and Gentlemen,
After gaining the victory in the struggle against French colonialists, the people of
However, the people of
Under the wise leadership of the Party and our beloved Uncle Ho, the army and people of the entire nation overcame numerous hardships and difficulties and remained resilient, creative to conduct heroic battles, made sacrifice to bring about the final resounding victory. Under the motto drive the American away, defeat the Nguy, the 1975 spring general offensive and uprising was ended with the triumph of the historic Ho Chi Minh Campaign to accomplish the liberation of the South and reunification of the North - South of Vietnam. Our people were overwhelmed with joy on this day of victory. This great victory was also rejoiced whole-heartedly by our friend s near and far and by the peace loving people around the world.
The victory of the war against America is the victory of the ardent patriotism, the burning desire for peace, independence, freedom and unification of our compatriots; and to the military policy and art of Vietnam under the brilliant and creative leadership of the Party; of the synergy of our great national unity; of the absolute loyalty and the fighting and winning spirit of our people's armed forces with the excellent leadership of talented commanders; of the friendship and valuable support by international friends; of the alliance of the peoples of three countries, Vietnam, Laos, Cambodia, to fight shoulder to shoulder against the common enemy.
The 1975 Great Spring Victory, the liberation of the South and national unification are of great historical significance. In the Political Report presented at the Fourth Party Congress on December 14th 1976, Comrade General Secretary Le Duan reaffirmed that "Time will pass by, but the victory of our people in the cause of resistance against America will ever go down in the history of our nation as one of the most glorious pages, a shining symbol of a triumph thanks to the revolutionary heroism and humanity intelligence, and this will go down in the world history as a great victory of the twentieth century, a landmark event of great international significance and of the time ".
Compatriots and comrades,
Ladies and Gentlemen,
After accomplishing the liberation of the South and national unification, our country had to confront with a multitude of challenges. Under the leadership of the Party, the management of the State, the solidarity and unified efforts of our people and army, we have exerted great efforts to overcome the severe consequences of the war, break the embargo, and bravely fought to protect the northern and southwestern borders, helped the people of Cambodia escape from the genocidal regime and carried out the reform for national development and defense.
After 30 years of reform, we have recorded great achievements of historical significance. From an underdeveloped nation, we have become a middle income developing country with annual average growth of 7 percent. The economic structure has seen positive transformation. Industries and services have accounted for 83 percent of the total GDP. The economy kept growing; GDP and export expanded by 7 folds and 200 folds respectively. GDP per capita in 2015 amounts to 2,200 USD. Economic and social infrastructure has strongly developed with many modern projects to create a new image for the country.
Social progress, justice, cultural development and the cause of new rural building also achieved positive results. Social security was basically ensured , social welfare and people’s life was greatly improved. Poverty rate fell sharply to less than 6 percent. More than 98 percent of households have used electricity from the national grid. Life expectancy increased from 64.8 in 1986 to 73.5 in 2015.
National defense and security were reinforced, national sovereignty firmly safeguarded. Foreign affairs and international integration were actively promoted, achieving encouraging results. To date, our country has established diplomatic, trade and investment relations with almost countries and territories around the world; at present,
The building of the Party, rule of law and political system has been stepped up and socialist democracy widely promoted. Our great national unity was further consolidated.
In the past years, given the adverse impacts of the global financial crisis and economic recession, we have been able to control inflation, maintain macroeconomic stability and economic growth at a reasonable level and improve social security.
Achievements in various fields in the last 40 years have provided an important and precious basis and premise for our country to continue with more comprehensive reforms in the new period.
Besides the achievements and progress made, we are also aware that: Socio-economic development is not commensurate with our potentials. We have not created a platform to turn our country into an industrial nation. The growth quality, business environment and the economy’s competitiveness remained limited. The socialist-oriented market institutions have not really become strong driving force for socio-economic development. The quality of human resources and socio-economic infrastructure has yet met the requirements. The gap in economic development compared to many countries in the region was not narrowed down as expected. There remained weaknesses in the cultural, social areas and environmental protection that have not been addressed properly. Rich and poor gap was widened. The socio-economic management remained ineffective in various aspects. The political system was not reformed comprehensively, its capacity and performance were not commensurate with the entrusted mandate. The degradation in political ideology, ethics and lifestyle of a number of cadres and Party members, as well as redtape, corruption, wastefulness were not removed. Our socialist building and national defence still encounter various difficulties and challenges.
Compatriots and comrades,
In the new development phase, the national construction and defence are presented with both opportunities and challenges. To bring into full play the spirit of the Great Victory in the Spring of 1975, the entire Party, people and army are committed to joining hands together and striving to take advantage of opportunities - advantages and overcome all difficulties - challenges, to translate our beloved Uncle Ho's desire into reality to build a more prosperous nation, a united socialist country, and a strong country with wealthy people, democratic, just and civilized society. We are also committed and determined to safeguarding independence, sovereignty and territorial integrity to be worthy of the noble sacrifice of our comrades, fellow heroes and martyrs.
The whole Party, people, army - each of us, please join hands together to bring into full play our patriotism spirit; step up the comprehensive reform process; strengthen our great national unity; to build a strong Party, state and political system, ensure political and social stability, and promote rapid and sustainable socio-economic development, thus creating a more solid foundation to soon turn our country into an industrial and modern nation.
We should continue improving the institution and operation of the socialist- oriented market economy, maintaining macroeconomic stability, accelerating the three strategic breakthroughs associated with the restructuring of the economy, the transformation of growth model, improving productivity, quality and competitiveness. We should also mobilise and utilise resources at home and abroad, promote the development of Vietnamese businesses, create favorable conditions for the people to do business freely and creatively. Besides, we need to improve our economy’s self-reliance.
Economic growth should be closely linked with social progress, justice, cultural development, environmental protection, climate change response and the promotion of new rural building. To ensure social security, we should constantly improve social welfare, material and spiritual life of the people. Also, we should attach importance to the implementation of policies for persons with great contributions to the nation.
Focus should be placed on building our Party cleaner, stronger, truly ethical and civilized as Uncle Ho ever wished; enhancing the Party’s leadership capacity, combat spirit, and reforming the leadership and ruling methodology. It is important to further improve the socialist rule-of-law State; ensure human and citizen rights; and strongly promote democracy and freedom of the people. Steps should be taken to accelerate administrative reform; develop a modern, professional, dynamic, and responsible administration that puts highest priority to serving the people, businesses and national interests. In addition, we need to perform our leading and exemplary role in combating and preventing corruption, wastefulness, red-tape, as well as the degradation in the political ideology, ethics and lifestyle of Party’s members. It is equally important to maintain and strengthen the confidence in the people, and closely knit ties between the Party and the people because this is the root of power of our Party. We must also renew the operation and enhance the role of the Vietnam Fatherland Front and mass organisations.
We also need to strengthen national defense and security; safeguard national sovereignty, territorial integrity, as well as public order and security. Efforts should also be undertaken to develop strong army and public security as well as entire people’s defense and security strategies.
We continue to pursue a foreign policy of independence, self-reliance, peace, friendship, cooperation, development, multilateralisation and diversification of international relations, active and proactive international integration and cooperation for national interests, creating a favorable environment and conditions for national construction and defence.
Proceeding from the tradition of peace and friendship, it is our consistent policy to put the past behind and look forward to the future.
Following President Ho Chi Minh’s teaching on Solidarity, solidarity, great solidarity – Success, success, great success, the Vietnamese people at home and abroad, let us uphold the sense of nationalism, patriotism and compassion the tradition of humanity, justice, tolerance, regardless of the past and differences, join hands in national reconciliation, nuture and bring into full play the national solidarity, all for a peaceful, united, independent, democratic, and prosperous Vietnam as our beloved Uncle Ho last wished in his will.
Compatriots, comrades and distinguished delegates,
Today, we celebrate the 40th anniversary of liberation of the South and national reunification, and the International Labor Day, May 1st. We would like to extend our sincere thanks and solidarity to working people worldwide for their strong support accorded to Vietnam and for their tireless efforts in the struggle for peace, development, justice and progress across the globe.
We warmly congratulate, praise, and honor all the people who are working hard and making contribution in all fields across the country and especially those who are nights and days safeguarding the border and islands of the Fatherland as well as the people’s peaceful life.
Our Party, State, and people count on and create every favorable condition for the Vietnamese young generations to nurture their dreams, aspirations, take the lead and innovative role in cause of science and technology and cultural development, improve their ethics and lifestyle, carry on the glorious revolutionary cause of their predecessors, become the vanguard in the reform, national building and defence.
This year, Vietnam commemorates a host of significant festivals and events. Building upon the tradition of our nation, Party, heroic people’s armed forces and inspired by the Great Spring 1975 Victory, the entire Party, people, and army exert all efforts to achieve the best possible outcomes of the 5-year plan 2011-2015 and successfully organise the Party congresses at all levels and the 12th National Party Congress. We will continue to strive for fulfilling all tasks of national building and defence in the new phase stated in the Party’s political program and the Constitution.
Long live the spirit of 1975 Great Spring Victory
Long live the glorious Communist Party of Vietnam
Long live the Socialist Republic of Vietnam
Great President Ho Chi Minh live forever in our cause
Finally, I wish all compatriots, comrades, and delegates health, happiness and success.
Thank you very much."