Thứ Năm, 28 tháng 5, 2015

BUSINESS IN BRIEF 28/5

Vietnam joins Russia's biggest travel expo
The Vietnam Consulate General to Vladivostok led a delegation on May 22-25 to participate in the Pacific International Tourism Expo (PITE), which attracted tens of thousands of guests.
The event, which took place at the Far Eastern Federal University in Vladivostok, provided an excellent platform for Vietnam to promote the country’s tourism events and attractions.
It also provided an opportunity to meet and network with local tour agents, airlines, and media in hopes of boosting arrivals from the Far East Russian market.
All told the event attracted 268 delegations from 20 countries around the globe, including Japan, the Republic of Korea, China, Malaysia, Indonesia, Guam and Vietnam.
Vietnam was pleased to participate in PITE as it is regarded as one the most important travel expos in Eastern Russia
First containers of lychee go to the US on May 30
The first containers of Vietnam’s lychee will undergo irradiation treatment and be shipped to the United States and Australia in a few days, according to the Ministry of Agriculture and Rural Development (MARD).
Nguyen Huu Dat, Director of the Post-Export Plant Quarantine Centre No 2 under the MARD’s Plant Protection Department (PPD), said the Anh Duong Sao Company will ship their first consignments of lychee to the US on May 30.
Meanwhile, the first containers to Australia will be freighted on June 10 by the Rong Do Company.
More shipments are expected to follow, Dat said.
Hoang Trung, Deputy Head of the PPD, said that enterprises are completing necessary procedures, including inviting Australian and American experts to examine the quality of fruits, for exports.
Once going through to such tough markets as the US and Australia, Vietnamese lychee could enter other markets in the future, Trung added.
There are only four companies participating in collecting and exporting lychee to the US and Australia.
The total harvested output of lychees in the largest lychee growing provinces of Bac Giang and Hai Duong is likely to hit 200,000 tonnes in the 2015 crop, according to the MARD.
Of the total amount, 60 percent or 120,000 tonnes will be consumed domestically while the remaining 80,000 tonnes will be left for exports.
Besides the traditional Chinese market, Vietnamese lychee are expected to go to Laos, Cambodia, Thailand, Singapore, European countries, the US, Australia, Japan and the Republic of Korea.
Malaysia says VN is dumping steel
The Ministry of Industry and Trade is checking stories in Malaysia about the dumping of cold rolled stainless steel from nine countries and territories, including Viet Nam.
According to the Malaysian Ministry of International Trade and Industry, the countries and territories are Taiwan, France, Hong Kong, Japan, China, Finland, Indonesia, South Korea and Viet Nam.
The Malaysian investigation is in response to a petition from a domestic producer calling for the imposition of anti-dumping duty on imports of cold rolled stainless steel.
The Malaysian maker said that the steel was being dumped in Malaysia at prices much lower than on the domestic markets of those countries.
A representative from the Vietnamese Ministry of Industry and Trade, said Vietnamese cold rolled stainless steel was being investigated because its export prices to Malaysia had fallen for three consecutive years.
Statistics from Malaysia showed that Viet Nam exported about 3,583 tonnes stainless steel into Malaysia during the investigation period, accounting for about 2.8 per cent of Malaysia's imports.
A set of questionnaires has been sent to importers, producers, exporters and associations by the Ministry of Industry and May 28 set as the deadline for providing additional evidence. Six Vietnamese companies are under investigation.
In accordance with the Countervailing and Anti-Dumping Duties Act 1993 and its related regulations, a preliminary determination will be made within 120 days from the date of initiation.
Late last year, Viet Nam, for the first time, decided to apply anti-dumping duties on certain products of cold rolled stainless steel imported from Malaysia, Indonesia, China and Taiwan at rates ranging between 3.07 per cent to 37.29 per cent.
Statistics from the Viet Nam Chamber of Commerce and Industry showed that as of October, 2014, Viet Nam faced 47 cases of anti-dumping. During 1994-2013, the country also encountered 52 investigations on anti-dumping initiated by 15 countries.
Real estate expo opens in HCM City
Many real estate projects offering apartments and housing lots at affordable prices, around 1 billion VND (47,000 USD) each, are being introduced at the 2015 Home Expo, which opened in Ho Chi Minh City on May 27.
The expo aims to create a transparent market in order to promote property sales as well as investment in the field.
Chairman of the Vietnam Real Estate Association Nguyen Tran Nam said real estate transactions saw strong increases in the two major cities of Hanoi and Ho Chi Minh City in the first five months of this year, while prices also rose slightly by 1-3 percent, helping to reduce the inventory by 47 percent.
Director of the municipal Department of Construction Tran Trong Tuan said the event was held in the context of positive signs in the economy. The city has over 11,000 start-up businesses in the past five months, including more than 2,600 operating in the field of construction and real estate.
Organised by the municipal Real Estate Association and Trade Promotion and Service JSC, the expo will run until May 31.
SBV suspends GP Bank leaders
The State Bank of Vietnam (SBV) announced yesterday that it recently suspended the rights and obligations of the representatives of Global Petroleum Joint Stock Commercial Bank (GP Bank).
The SBV said that pursuant to the Law on Credit Institutions and a review of GP Bank's management and administration status, it decided to suspend the rights and obligations of Ta Ba Long from two positions: the chairmanship and membership of the bank's board of directors.
The SBV also suspended the rights and obligations of Doan Van An as deputy chairman and member of the board of directors as well as Ta Thu Thuy as member of the board.
To ensure the smooth operation of GP Bank, the SBV has decided to appoint Tran Thi Le Nga as its representative, including legal representative, from April 8, 2015. Nga was Chief Supervisor of VietinBank.
Among the weak banks that had been urged since 2012 to restructure, GP Bank was the only one that failed to comply.
Agriculture exports earn less
Viet Nam exported agricultural, forest and fisheries products worth US$11.4 billion in the first five months of this year, the agriculture and rural development ministry's latest report said.
This is a year-on-year decrease of 7.3 per cent.
In May alone, the sector recorded an export turnover of $2.37 billion.
Of the total, seafood exports contributed $2.41 billion in the five-month period, down 17 per cent in comparison with the same period last year. Seafood exports saw a strong decline in the United States. In the first four months of this year, seafood exports to the United States reached $370.3 million, a year-on-year decrease of 30.1 per cent. However, the United States remains the largest market for Viet Nam's seafood exports, accounting for 19.6 per cent of the total export value.
Seafood exports to Japan, Korea and China also fell.
However, seafood exports to Thailand and the Netherlands during the period increased 13.52 per cent and 0.21 per cent, respectively.
Farm produce worth $5.62 billion were exported in the five-month period, down 7.4 per cent in comparison with the same period last year. Rice and coffee saw the largest decline of 14.6 per cent and 38 per cent, respectively.
Meanwhile, the export value of forest products increased year-on-year by seven per cent to touch $2.69 billion.
Vietnamese people spend over US$12 mil daily on car imports
Vietnam imported 5,455 complete built units (CBU) for the first half of May valued at roughly US$184 million, according to the General Department of Vietnam Customs.
It means that each day Vietnam spends US$12 million importing 364 CBUs, roughly US$37,000 each unit. The value includes just import tariffs at customs agencies, excluding special consumption taxes and other fees.
Of the total imported cars, 847 are tourism cars, 75 are 9-seater cars while the remaining are trucks and specialized vehicles.
The department said from the beginning of the year until May 15, total imported CBUs reached 40,465 worth US$10.6 billion, overall a two-fold increase in quantity, and a three-fold surge in value over the corresponding period.
Ministry cuts interest on State investment
In a move to ease businesses' access to loans, the Ministry of Finance this week cut interest rates on State investment and export credit.
According to the ministry's newly issued Circular 76/2015/TT-BTC, effective from May 19, 2015, interest rate on State investment credit has been cut by 1.05 per cent to 8.55 per cent per year, while interest rate on State export credit has been reduced by 0.3 per cent to 6.9 per cent per year.
The interest rates, which stood at 12 per cent in 2012, have been adjusted down consecutively for the past three years.
The circular replaces Circular 189/2014/TT-BTC, dated December 11, 2014, on interest rates on State investment credit, export credit, and interest rate difference calculated for after-investment support.
However, businesses said that only a few firms qualified for the low interest rates while many others had to continue paying high interest rates on bank loans.
They noted that interest rates commonly applied to businesses currently remained too high, averaging at 8-8.5 per cent for short-term loans and 10-11 per cent for long-term loans, causing them difficulty in the context of several power and petrol price hikes as well as the recent devaluation of the dong.
Director of a company, who declined to be named, said that late last year, his company had expected to break even this year by borrowing bank loans to procure modern equipment.
However, he said, his company failed to meet its target and continuously made losses this year because of several consecutive power and petrol price hikes in the early months of this year, while medium- and long-term interest rates did not decrease much and remained high at 11 per cent.
He remarked that although petrol price this year surged by VND4,800 per litre and electricity costs rose 7.5 per cent, his company did not increase its sale prices for fear of losing customers.
Businesses said that lending rates in Viet Nam had remained too high when compared with inflation and other regional countries. Inflation in April did not increase and index for the entire year was estimated roughly at 3 per cent, they added.
Vietnamese firms can successfully compete against other countries if the interest rate remains roughly at 7 per cent on short-term loans and 9 per cent on long-term loans, they said.
However, a representative of Asia Commercial Bank said that the rate of 11 per cent was mainly applicable to non-production borrowers. State-owned commercial banks currently lend at 9 per cent per year.
Thai tourism, AirAsia join hands on marketing push
The Tourism Authority of Thailand and budget carrier AirAsia are organising the Green Season campaign to stimulate travel to Thailand by offering discounts, premiums, and privileges with the "Thailand Shopping Paradise with AirASia".
The campaign features a road show in several Southeast and East Asian countries, starting with HCM City's Aeon Mall on Saturday.
Wiboon Nimitrwanich of TAT said: "The co-operation between TAT and AirASia as well as leading department stores and other partners will result in a high-value travel and shopping experience in Thailand."
Pornpun Ratanapitakkul, Indochina marketing manager of Thai AirAsia, said Viet Nam was among the countries sending the largest number of tourists to Thailand, which many of the people choosing to fly with AirAsia.
Top architects, property developers receive awards
BCI Asia gave away the BCI Asia Top 10 Awards for Vietnamese architectural firms and property developers at a ceremony in HCM City on Friday.
The portfolios of the architecture firms contain US$3.45 billion worth of properties construction of which is scheduled to start this year, while the portfolios of the top developers were worth close to $1 billion.
The BCI Asia Top 10 Developers Award for 2015 were given to BIM Group, Dat Xanh Real Estate Service and Construction Joint Stock Company, Him Lam Corporation, Hung Thinh Real Estate Business Investment Corporation, Keppel Land Vietnam, Novaland Investment Group Corporation, Phu My Hung Development Corporation, Thao Dien Investment Joint Stock Company, Van Phu Invest Joint Stock Company, and Vingroup Joint Stock Company.
The BCI Asia Awards are annually given to companies in seven Asian jurisdictions — Hong Kong, Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Viet Nam.
They are aimed at encouraging socially-responsible architecture and serve as a platform for domestic and international networking by elite architecture firms, property developers, manufacturers, and service providers.
OCB's profit drops due to risk management budget
The Orient Commercial Bank (OCB) yesterday reported that it recorded a pre-tax profit of only VND16 billion (US$740,000) in the first quarter of this year.
The fall in pre-tax profits was caused by a sharp increase in OCB's financial risk management budget, which rose fourfold to VND88 billion ($4 million) in the first quarter. The bank's total pre-tax profit, however, was VND104 billion ($4.8 million), an increase of 76 per cent.
Thus, the bank's after-tax profit was only VND13 billion ($600,000), half of last year's number.
In the first quarter, OCB achieved a credit growth rate of 8.07 per cent with total outstanding loans of VND23 trillion ($1 billion). Customer deposits rose by 3.4 per cent to VND24.7 trillion ($1.14 billion) and total assets declined by 2.9 per cent to VND39 trillion ($1.8 billion).
The bank's revenue for the first quarter increased by 4.3 per cent to VND243 billion ($11.2 million) over last year. Some sectors profited, including services, securities trading and securities investment.
Hopes rise as real-estate market improves
Viet Nam's social and economic factors are supporting the growth of its real estate market, which has bottomed out, an executive at property consulting firm Savills Vietnam has said.
Managing director Neal Macgregor told a press briefing on the HCM City property market over the past 20 years that 17 – 20 per cent of remittances flowing into the country went into direct property investment.
"Viet Nam is in the top 10 foreign remittance recipients globally, with last year's figure at around US$12.5 billion. This is up from less than $2 billion in 2000.
"The quantitative easing throughout the region will benefit the respective domestic economies and also encourage foreign investment into other regional targets."
Recently outward flow of capital had accelerated, noticeably from Singapore, Korea, and Japan.
The amended Law on Housing effective from July 1, 2015, which would enable overseas Vietnamese and foreigners to own houses in the country, was expected to attract a new wave of investment.
Singaporeans had shown interest, especially in projects developed by companies from their country.
Viet Nam's coastline could quickly draw foreign investors, with residential products of international standards and oriented towards foreign purchasers already being available.
"Viet Nam's current [lending] interest rate is around 9 per cent, however this low cost of debt has only recently emerged.
"In 1995 it was around 20 per cent."
The low rate was helping revive the market.
The shrinking of household size from an average of 4.7 people in 1995 to 3.6 last year had increased demand for housing.
"As younger people gain greater independence, there has been a gradual erosion of the three-generation household, the effect has been to fuel residential apartment development."
The country's urbanisation rate, from less than 20 per cent in 1995 to 34 per cent last year and its rapidly growing middle class — expected to reach 33 million by 2020 from 12 million in 2012 — were positive factors for the property market.
Stock exchanges to manage SOE shares
The Ministry of Finance, currently drafting a circular to regulate the sale of share lots offered by equitising State-owned enterprises (SOE), said it hopes to finalise the draft by the end of the month.
In recent years, the Government has encouraged SOEs to equitise, meaning many of these companies are entering the stock market. As they enter the market, they must auction off their stock packages in large share lots.
Before the draft is finalised, some of its current content was made public in order to garner a response and constructive feedback from investors and traders in Viet Nam's stock markets.
Firstly, the circular would govern any SOE either unlisted on the stock market, or unregistered for trading on the Unlisted Public Company Market (UPCOM).
The draft circular will likely require investors interested in an SOE's share lot to purchase the entire package in the form of a public placement during the auction. Just how SOEs, one-member companies and management agencies, such as ministries and provincial people's committees, will ensure the transparency and fairness of these auctions has not been enumerated.
The management of share lot auctions would likely fall on the HCM City Stock Exchange and the Ha Noi Stock Exchange. They would be responsible for setting and managing certain basics like the number of lots offered in an auction, the number of shares in each lot, the initial price of the offered share lot, qualifications for the investor and solutions to settle problems that might arise.
The initial price of a share lot, according to the Ministry's recent round of proposals, should be calculated off share prices set by an independent organisation or company. The costs involved in setting share prices would be covered by the Fund for Business Development, launched in 2002 to support the equitisation process of SOEs.
SOEs entering the market will have to decide how big they want their share lots to be. Besides taking into account market conditions, proposals have said that an SOE be limited to offering only one lot per auction and that each lot is at least 5 per cent of the enterprise's chartered capital.
If an SOE decides it wants to sells its shares at a value lower than the independently set price, or sell off its stakes in financial institutions or commercial banks, both sellers and buyers must stay in accordance with regulations set out in Decision 51/2014/QD-TTg issued on September 15.
If an auction somehow ends in a stalemate between two potential buyers, it is proposed that the draft circular would require that a private auction occur between those investors to conclude the matter.
Rental growth slows on new logistics services across Asia-Pacific region
In the first quarter this year the Asia Pacific region saw demand for logistics space being driven by third party logistics suppliers (3PLs), e-commerce, and automotive manufacturers, according to a report released by property consultant CBRE last week.
There is a projected 65.6 million square feet of new logistics warehouse space being built in 2015, and a majority of this will be in Seoul (20 per cent), Shanghai (20 per cent), and Tokyo (17 per cent).
This year's upcoming supply pipeline may result in rental rates moderating if there are signs of slowing demand. Coming off a record year of warehouse completion, the Singapore and Melbourne markets continue to digest the new supply, impeding rental growth.
The steady increase in new supply continued to dampen the strong regional rental growth witnessed over the past four years. The CBRE Asia Pacific Logistics Rental Index increased by 1.1 per cent year-on-year in Q1 2015, the slowest annual growth since Q1 2010.
The Philippines continued to be the fastest growing manufacturing country in the region, with industrial production forecast to increase by 10.8 per cent in 2015, while Viet Nam recorded steady growth despite a slight fall in employment in March.
These economies continue to offer lower costs and cheaper labour and as a result are attracting electronics and textile production to relocate from their traditional base in China.
Due to favorable exchange rates, Japan and Australia saw increased external demand for manufacturing, but domestic demand remains weak.
Subdued manufacturing conditions led to modest rental increases in factory rents across Asia in Q1. The CBRE Asia Manufacturing Rental Index increased by 0.2 per cent quarter-on-quarter, the slowest rate of growth recorded since the start of 2013. The increase was driven by Guangzhou, Shanghai, and Shenzhen.
Private consumption is forecast to improve in most Asia Pacific markets this year. China, Malaysia, and Indonesia are expected to expand, but at a slower pace than in 2014.
Consumption patterns in Viet Nam, India, and the Philippines are growing at a quicker pace in 2015 due to rising income levels. Viet Nam has attained consumption growth of 7.3 per cent, India 7.1 per cent, and the Philippines 6 per cent.
Figures from the US-based not-to-profit professional organisation for Project Management Institute (PMI) in March 2015 all show expansion, with external demand remaining healthy.
While there were reports of a slight fall in employment in Viet Nam in March, the sector had recorded steady growth in the previous six months.
India is still hesitant to increase capacity as employment levels have been flat for the past 14 months.
Darren Benson, executive director, industrial & logistics, brokerage services, CBRE Asia, said: "The industrial and logistics sector—in Asia specifically—continues to be driven by e-commerce firms and 3PLs, a trend that is driving demand for modern logistics developments and networks across the region.
"In particular, we see that e-commerce is having a changing effect on most markets, especially China, Japan, South Korea, and India.
Putting firms in the dock
The amended Penal Code draft consists of some major changes which are directly relevant to the business community.
One of them – currently the subject of a heated debate – is should businesses, as legal entities, be subject to criminal proceedings. To date, criminal acts must always be directed at personal individuals in order to come in line with the current laws.
The amended Penal Code draft has, however, tried to address the criminal behaviour of businesses by defining them as individual legal entities. The question of what sanctions to apply, or whether businesses should be regarded as legal entities subject to criminal proceedings at all, has sparked a hot debate, with both lawyers and members of the public weighing in with their opinions.
According to Nguyen Van Hoan, deputy head of the Department of Criminal and Administrative Law under the Ministry of Justice, it is important to allow for the criminal liability of businesses as legal entities because violations have become increasingly widespread in recent years, causing serious consequences economically and socially.
For example, in past years there have been rising cases where businesses deliberately discharged wastewater into the environment, with huge negative impacts on the health and means of living for people in the surrounding areas. However, under current regulations such violators are not subject to criminal proceedings, and will instead only incur meagre fines – the equivalent to a rap on the knuckles – but nothing approaching a meaningful deterrent to reoffending.
Meanwhile, when those affected are seeking compensation they must provide concrete evidence proving how much damage they incurred and how this has been evaluated. Using civil law to handle these cases is often time-consuming and ends with claimants coming away empty-handed.
Within this context, the amended Penal Code draft has proposed a range of sanctions applicable to misdeeds by businesses, including fines; temporarily suspending business licences, or temporarily suspending the operation of businesses; permanently revoking  business licences, or suspending their operations; or barring offending businesses from operating in certain areas; or barring them from raising capital.
Lawyer Le Viet Ha, director of Vinh Duc Law & Associates said that 119 member countries of the International Convention on Anti-Corruption had regulated the criminal liabilities of business legal entities. As such, Vietnam should follow suit to ensure the fair treatment for local businesses.
The proposed new sanctions have, however, generated a backlash of concern. For example, in cases where a business faces having its licence taken back permanently, this would also affect the lives of its labourers, who may be completely blameless in the firm’s misconduct. In such a case, objectors have asked, who will bear the responsibility of creating new jobs or paying compensation to the out-of-work labourers?
First project opens in Da Nang Hi-tech Park
Tokyo Keiki Precision Technology Inc. inaugurated its first plant outside Japan at the city 's Hi-Tech Park on May 22, following eight months of construction.
The US$40-million plant is the first to being operating in the 1,010-hectare park in Hoa Vang District, 20km west of the city centre.
The plant will manufacture electro-magnetic and hydraulic equipment, targeting to export more than 50,000 digital directional valves per month for the Asia-Pacific region.
According to members of the managing board of the Hi-Tech Park, another Japanese investor, Niwa Foundry company, a partner of Keiki company, also has begun construction of its first engine castings plant, at a cost of US$30 million.
It's scheduled to be put into operation in 2016.
Japanese businesses have invested US$330 million in 68 projects in the city, employing more than 27,000 people.
The city has reserved a 100-hectare industrial park for Japanese businesses and a Japanese Culture Centre, as well as more favourable conditions and priority offerings for Japanese investors.
Exports from Japanese enterprises accounted for 37 per cent of the city's total imports, while 30 per cent of the city's industrial production value comes from Japanese FDI projects.
Thuong Dinh Footwear Company to hold public offering in June
The Ha Noi Stock Exchange (HNX) will organise an initial public offerings (IPO) for Thuong Dinh Footwear One on June 8.
The company will offer 1.9 million shares with an initial price of VND10,000 per share. These shares are valued at 20.46 per cent of the company's chartered capital post-equitisation.
The company will offer 1.9 million shares with an initial price of VND10,000 per share. These shares are valued at 20.46 per cent of the company's chartered capital post-equitisation.
The company expects a chartered capital of VND93 billion ($4.3 million) after IPO, with 36 per cent of stakes held by the state, 23.54 per cent held by its employees, 20 per cent purchased by strategic investors and 20.46 per cent sold on the market.
The company has stakes in two other firms in Ha Noi - 86.85 per cent of stakes in the Ha Noi Rubber Joint Stock Company and 18.67 per cent of stakes in Ha Noi Truc Bach Paper Joint Stock Company.
Thuong Dinh Footwear Company produces sneakers, sport shoes, sandals and slippers. The company's sales volume averaged over 3.9 million pairs a year from 2012 to 2014.
The company's after-tax profit in 2013 and 2014 were VND930 million ($42,649) and VND3.67 billion ($168,000) respectively.
Partnership brings “affordable luxury” to capital city
HBI Joint Stock Company last week signed co-operation agreements with a range of prestigious partners to co-develop the Imperia Garden complex in Hanoi.
Accordingly, MIK will be the project’s developer, VPBank will become financial supporter and STDA will be the exclusive distributor for the Imperia Garden.
Located on a 42,000 square metre site in Thanh Xuan district, Imperia Garden was the first project of HBI Joint Stock Company.
Imperia Garden is a mix-used development consisting of offices, residences, and a trading centre that can cater to a population of 5,000.
The project will be integrated with a school, four-season swimming pool, healthcare services, a beauty spa, a gym, a supermarket and spacious parking allotments.
Ranging from 65 to 174 square metres, each apartment is designed to modern and eco-friendly standards.
Imperia Garden has an ideal location as it lies adjacent to the new sky-train and the elevated ring road. The locality offers convenient access to the city centre and other neighbouring new urban developments.
“With our commitment to choose inclusive and professional partners to co-develop this project, we believe that we will create the highest quality apartments for our residents. Imperia Garden will become a model project in Hanoi when it comes into use,” said Nguyen Hong Ngoc, general director of HBI Joint Stock Company.
Ngoc said that Imperial Garden will be a pilot project for HBI Joint Stock Company in further plans to develop a chain of real estate projects in the near future.
According to Ngoc, the project was designed by the Singaporean CPG, the contractor is Coteccons, while the Australian PTW Architect and the French NKB Archi is responsible for the landscape design.
Drawing from a wide range of  project experience in Ho Chi Minh City, MIK will develop Imperial Garden under the marketing guise of “affordable luxury” – a gimmick which has been very successful in Ho Chi Minh City amongst other countries.
Imperia Garden will provide more than 1,600 apartments. However, the distributor has to date refused to reveal sales prices.
MIK is currently the developer of a range of projects such as Villa Park, Imperia An Phu, and The Park Residence in Ho Chi Minh City. Scheduled for handing over apartments in the second quarter of 2017, the hype builds as Imperia Garden will be officially opened for sale this July.
Electricity, petrol price hike sends businesses to perfunctory operation
Production and trade activities briefly returned to be eventful as the economy showed signs of recovery early this year. However after electricity price was increased 7.5 percent in March and petrol price was lifted twice in May, many businesses have operated moderately to keep customers.
In May, petrol and diesel prices were raised to VND20,430 and VND500 a liter respectively.
Mr. Nguyen Trung Binh, director of Hoang Thanh Trade Production Company in Binh Tan District, said that the rise in gas, electricity and petrol prices has led material costs to move upwards. Meantime, the company has met with difficulties in consuming its plastic household appliances because of weak purchasing power.
The company now operates moderately, conducts layoffs and tightens expenditure. If the prices continue increasing, it might have to accept less profit or non-profit to keep customers, Binh added.
Tran Thanh Hong, director general of Thien Hong Phat Trade Production in District 12 said that their wooden products had mainly been exported abroad or sold to other provinces. the fuel and electricity price rise has sent additional costs to exceed 20 percent.
The company belongs to small and medium scale group and faces severe competition from other wood companies in surrounding nations. It is impossible for the company to raise selling prices, therefore it has accepted less profit to make up costs, according to director Hong.
They are operating moderately with traditional orders and waiting for upcoming price changes, Hong added.
Most businesses said that temporary measures for up electricity and petrol prices were cost reduction, energy saving and layoffs.
Fuel and power prices should not change continuously and highly surge as present. Authorized agencies should have solutions to stabilize the prices in relatively long periods, they said.
Economic expert Nguyen Duc Minh Hai from the HCMC National University said that direct impacts from the petrol and electricity price increase was rather high and indirect impacts were much higher. The price of some goods and services has been rocketed unreasonably, which will increase input material costs causing difficulties for businesses.
Authorized agencies should have measures to prevent an excessive increase of goods and service prices, Hai said.
The Price Management Agency under the Ministry of Finance has proposed finance departments to work with relevant agencies to intensify price management and stabilization in the market, said the agency head Nguyen Anh Tuan.
They should closely follow supply and demand to timely supply provincial and municipal people’s committees with solutions to stabilize the prices.
Inspection will be strengthened over essential items such as milk products for below six year old children or medicines, cement, steel and gas and transport fee also.
Relevant agencies should keep a close eye on the price declaration of subsidized products to prevent irrational price increase.
Vietnam textile and garment exports see strong growth in Q1
The export revenue of garment and textile products in the first quarter of 2015 was estimated at US$4.85 billion, an increase of 10.5% compared to the same period last year.
According to statistics from the Industry and Trade Information Centre, under the Ministry of Industry and Trade, traditional markets for Vietnam’s textile and garment industry such as the US, the EU, Japan and the Republic of Korea posted high growth.
The US market ranked first in growth, with US$2.37 billion in revenue, an increase of 9.5% compared to the same period last year, followed by Japan with US$635.95 million, a year-on-year increase of 7.9%.
2015 is expected to open up more opportunities for Vietnam textile and garment exports as the negotiation process of a number of trade agreements may come to an end.
Although there are many opportunities for export growth, textile companies still face many difficulties and challenges.
The added value of Vietnam textile products remains low as domestic enterprises do mostly processing and outwork for foreign companies.
Currently, the textile sector depends largely on imported materials. Thus, more investment in the development of materials would help increase the localisation rate of the sector, increase the value of the products and reduce the trade deficit. The textile industry is expected to achieve a localisation rate of 60% by 2015 and 70% by 2020.
AB InBev brewery commissioned
nheuser-Busch InBev Vietnam Brewery Co. Ltd. (AB InBev) on May 21 commissioned a factory at Vietnam-Singapore Industrial Park in Binh Duong Province to produce Budweiser and Beck’s beer.
The brewery can turn out 50 million liters of beer a year in the first phase and will double the capacity in the next phase.
The brewery’s products will be sold in Vietnam and exported to India. Other export markets will be Laos, Cambodia and the Philippines.
Ricardo Vasques, general director of AB InBev Vietnam, said 99% of the employees at the brewery in Binh Duong Province are Vietnamese and that the company has invested in the facility to cash in on growing demand for beer in this market.
Nguyen Van Viet, chairman of the Vietnam Beer, Alcohol and Beverage Association, told the Daily at the brewery that Vietnam consumed 3.14 billion liters of beer last year, up 8.1% compared to 2013. The sales volume is forecast to reach nearly 3.3 billion liters this year.
Replacements of old condos slow
Reconstruction of old apartment buildings in HCMC is moving at a snail’s pace due to a lack of supporting policies for real estate enterprises, according to the HCMC Real Estate Association (HoREA).
HCMC now has around 200 deteriorating apartment buildings that have been in use for over 50 years, including those at 727 Tran Hung Dao Boulevard in District 5 and on Co Giang Street in District 1. The city plans to dismantle some 70 of these buildings that are now home to over 7,200 families, and repair three with total floor space of 10,000 square meters.
Besides, 61 new condo buildings with floor space of over 900,000 square meters and around 9,870 units will be built to replace the old ones in the city.
In the past five years, the city has seen ten condo buildings with total floor space of 40,000 square meters demolished and a new resettlement apartment building, Tan Phuoc 3, in District 11 has been put into use with 440 families, according to the HCMC Department of Construction.
In addition, district-level authorities have inspected 35 old condo buildings to work out plans to repair and construct new buildings for replacement.
In a document sent to the Ministry of Construction to comment on a draft decree on upgrade and construction of apartment buildings, HoREA said building new apartment buildings in the city has been slow, making life tough for those living in shabby condo buildings.
HoREA said realty companies were not keen to invest in those projects as it took them too much time to negotiate with and compensate the families living in old buildings.
For instance, around 15 households have refused to move out of the crumbling condo building on Tran Hung Dao Boulevard as they have not agreed on compensation although the city government has approved a firm to construct a new apartment building there.
The ministry has passed around the draft decree for comment with an aim to create favorable conditions for companies to participate in condo reconstruction projects.
However, HoREA said the draft decree lacked regulations governing rights and responsibilities of households in case their apartment buildings are dismantled to make room for new buildings. Therefore, the association proposed the ministry find effective measures to force households living in crumbling buildings move out to facilitate demolition and reconstruction.
If these regulations are in place, real estate enterprises will be eager to invest in condo renovation projects.
HoREA suggested legitimate owners of old apartment buildings be allowed to rebuild their buildings if they have financial capacity in line with the 2014 Housing Law.
Economic restructuring too slow - seminar
Experts stressed at a seminar in Hanoi on May 21 that the Government should speed up economic restructuring as it has been too slow in the past years.
Nguyen Dinh Cung, president of the Central Institute for Economic Management (CIEM), told the seminar that the economic restructuring process has been moving so slowly.
Economic expert Luu Bich Ho shared Cung’s view, saying economic restructuring is still at the starting point.
“Restructuring has relied on the old mindset and the decisive role of the State economic sector,” he said, adding that three years have gone but fundamental problems have not been solved thoroughly.   
Former CIEM president Le Xuan Ba emphasized that Vietnam could fall far behind other countries if the restructuring of the economy is as sluggish as ever.
Ba noted the cost of economic restructuring is high indeed as inefficient enterprises will go and State budget collections will be affected.
“We have to accept economic growth of as low as 4-5% in the short run in order to achieve growth of 8-10% in the medium term,” Ba said.
The report on Vietnam’s economic restructuring in the 2011-2014 period released by CIEM last Thursday showed macro-economic uncertainties are still out there due to inefficient economic restructuring and a rapid increase in public debt.  
Expert Nguyen Tu Anh from CIEM said routine expenditures have increased on State budget constraints while the Government still has to spend on development investments.
High interest rates have led to a decline in private investments but public investments have swollen, showing a lack of fiscal discipline.
Anh warned that bad debt has not settled effectively and the cost of bad debt is now being shouldered by depositors and borrowers. Credit will not grow highly if bad debt in the banking system is not solved drastically.
According to Anh, equitization of State-owned enterprises has been slower than targeted and too many incentives for State-owned enterprises have left negative impact on the local economy.
Sawaco to sell water to IPs in Long An
Saigon Water Corporation (Sawaco) will sell some 10,000 cubic meters of fresh water per day to industrial parks in the Mekong Delta province of Long An from next month.
Bach Vu Hai, deputy general director of Sawaco, told the Daily that the water will be supplied to industrial parts in the neighboring province via the water pipe system along Provincial Road 10 in HCMC’s Binh Chanh District.
Hai Sawaco will also build a pipeline in HCMC’s outlying district of Nha Be to supply over 20,000 cubic meters of water to households in Long An Province’s districts of Can Giuoc, Duc Hoa and Duc Hue. The fresh water will be sourced from Tan Hiep Water Plant in Hoc Mon District.
Hai said Long An Province has requested Sawaco supply water to the districts as a number of residential areas in the province lack fresh water for daily activities.
Water supply in HCMC will go up by 50% at the end of this year when new water plants with a combined daily capacity of 830,000 cubic meters will be up and running.
Sawaco’s current water supply capacity is over 1.7 million cubic meters a day and will be expanded to nearly 2.6 million cubic meters by the end of this year.
The new water plants to be put into operation later this year include Thu Duc 3 and Tan Hiep 2 with each having a daily processing capacity of 300,000 cubic meters, and Kenh Dong 2 with 150,000 cubic meters per day.
Lao Cai to build border economic zone with China’s county
Officials of the northern mountainous province of Lao Cai held a working session with a delegation from Hong He county in China’s southern Yunnan province on May 25 to discuss preparations for a bilateral cross-border economic cooperation zone.
Vice Chairman of the Lao Cai People’s Committee Le Ngoc Hung said local authorities are pushing ahead with surveys, planning work, mechanism building and human resources training for the zone, so that it can be put into operation immediately after receiving Government approval.
In fact, the two countries’ Governments as well as relevant ministries and sectors have agreed on principles to the building of the zone, and necessary preparations are underway, he said.
Vice head of the Hong He county Nie Ming highlighted the bridging role of the county and Lao Cai province on the Kunming– Hanoi – Hai Phong – Quang Ninh economic corridor and the Vietnam-China cross-border economic belt.
He said the cross-border economic cooperation zone, once operational, will facilitate the transport and transit of export goods from Yunnan and other southwest localities of China via Lao Cai to Hai Phong port city, and help to promote economic development in Yunnan ’s southern region and Vietnam ’s northwestern provinces.
Lao Cai and Yunnan share more than 200 kilometres of border line. The Lao Cai – Hekou international border gate plays an important role in facilitating trade across the economic corridor.
South African firms seek partners in HCM City
opportunities in Ho Chi Minh City, Vietnam’s southern economic hub.
The enterprises are active in a variety of fields, ranging from footwear, garments and textiles, wood and timber products to computers, mobile phones and spare parts, seafood and agriculture.
Speaking at a workshop held in the city on May 25, the Director of Investment Promotion under the South African Department of Industry and Trade, Brian Soldaat, acknowledged Vietnam and HCM City in particular as one of attractive destinations for South African firms.
He said South Africa offered a number of incentives for foreign investors, including its investment refund policy, depending on the scale of investments.
The country applies preferential regulations in certain fields, such as the manufacturing of household utensils and electronic equipment, garments and textiles, and wood and timber products. Furthermore, the country is applying a number of policies to boost domestic and foreign investment in automobile spare parts, green industry and green energy, tourism, medical equipment and pharmaceutical products.
The Deputy Director of the Vietnam Chamber of Commerce and Industry (VCCI)’s branch in HCM City, Nguyen The Hung, highlighted the signing of a cooperation agreement between the VCCI and the Chambers of Commerce and Industry of South Africa (CHAMSA) and the establishment of the Vietnam-South Africa Business Council in 2010 as a strong foundation for promoting the two countries’ enterprises.
He noted that bilateral trade reached over 962 million USD last year, with Vietnamese exports accounting for 815 million USD.
Lao Cai hosts farm produce export promotion event
Eighty-five domestic and Chinese businesses are expected to take part in a conference on promoting exports of farm produce, seafood and timber products which will be held in the northern province of Lao Cai on May 27 and 28.
At a meeting on May 25, the provincial People’s Committee heard reports on preparations for the conference, including working trips to other localities and China’s southern Yunnan province to seek potential partners.
Vice Chairman of the provincial People’s Committee Le Ngoc Hung said the conference will create a good chance for domestic companies to introduce their products to potential Chinese partners and increase sales to the market.
Lao Cai province, which shares more than 200km of border line of Yunnan, plays a crucial role in connecting the domestic market with China ’s south western market.
Dong Nai talks to raise local business competitiveness
The Department of Industry and Trade in southern Dong Nai province had a working session with relevant departments and sectors to seek ways to enhance the competitiveness of local businesses.
They discussed local products for exports to the Southeast Asian nations, as well as imports from the region in order to devise appropriate incentives for businesses in the province.
According to Director of the department Le Van Danh, assistance on credit, science-technology and trade promotion activities will be provided for a number of local key products in agriculture, industry and services.
Dong Nai is one of Vietnam’s most attractive destinations for FDI investors.
Dong Nai also leads the nation in modernising rural areas with 52 out of its 136 communes and two districts recognised as fulfilling the standards of the new-style rural building programme.-
Source : VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR

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