Chủ Nhật, 16 tháng 8, 2015

BUSINESS IN BRIEF 17/8


New decree pushes trade to get in line with WTO commitments
Decision 1233/QD-TTg, which took effect August 3, has set new trade targets and regulations for the 2016-20 period, concerned with reducing the current trade deficit and getting the country in line with trade commitments.
The goals are part of a larger project to improve import management in order to foster a more transparent and stable business climate that increases predictability and import monitoring capabilities.
Import and export companies will be expected to achieve an average annual export growth rate of 11 per cent and a maximum import growth rate of 10 per cent, in addition to several other changes.
On the agenda is the creation of several tax and non-tax measures that comply with commitments to the World Trade Organisation (WTO), and bilateral and multilateral free trade agreements (FTAs).
Ceiling import tariffs will be adjusted to fulfill commitments to the WTO and a tax liberalisation roapmap will be outlined. Vietnam will also intensify enforcement of Technical Barriers to Trade, and Sanitary and Phytosanitary regulations and safeguards.
To help increase imports, tariffs and duties, such as an environmental protection tax, are expected to enhance the global competitiveness of domestically produced goods.
The country will also focus attention on improving import management measures by evaluating current measures' efficacy and cut unnecessary and timely administrative procedures.
The numerous measures are needed in order to tackle the trade deficit, reported by the General Department of Customs as being US$3.96 billion as of July 15.
Raw cashew imports jump in first six months
Trade in raw and processed cashew nuts for the six months leading up to July of 2015 has risen sharply in both volume and value, according to the most recent statistics of the General Department of Vietnam Customs.
Vietnam Customs has forecast 2015 exports could outperform last year which saw the overall value of cashew exports reach the US$2 billion benchmark for the first time ever, making the industry the fourth largest in agriculture.
Last year, businesses principally purchased raw product from African countries but due to shrinking supplies and higher prices have shifted to suppliers in Indonesia and Cambodia this year.
“Unfavourable weather has reduced supplies across the African continent and driven up the prices of raw cashew nuts,” said Nguyen Duc Thanh, chairman of the Vietnam Cashew Association (Vinacas).
This in turn has forced buyers in the industry to turn to alternative sources of supply as the nation’s domestic growers cannot keep up with demand needed to fill overseas orders, Thanh underscored.
Sales in the top three markets – the US, China and the Netherlands – were solid during the six-month period Thanh stressed, and sales in Australia, another strong market for the industry, also saw positive growth.
Thanh said businesses in the industry are upbeat having reported higher than last year’s orders for the remainder of the year and expect the upcoming Mid-Autumn Festival and Lunar New Year to bump sales up even further.
However, Thanh cautioned the cashew industry as a whole is still dogged by issues related to quality and businesses must heed more attention to improving it for the industry to develop sustainably over the long term.
Much of the problem with quality and safety issues relate to the large proportion of smallholders within the industry who lack the finances and ability to invest in modern technologies and innovate.
As of the end of last year, there were 456 cashew processing businesses with a capacity to produce 1.2 million metric tons of cashews a year, but nearly 70% of them were smallholders.
The government should carefully evaluate reducing the number of small businesses by shutting down those that are unable to ensure compliance with Vietnamese Good Agricultural Practices (VietGap) requirements, Thanh concluded.
T&T Group to buy stake in Vegetexco
The multi-sector T&T Group plans to buy 35 per cent of shares of Viet Nam National Vegetable, Fruit and Agricultural Product Corporation Ltd (Vegetexco), making it one of the strategic investors of the company.
T&T Group's other strategic investors are Sai Gon-Ha Noi Insurance Corporation (BSH) and Viet Nam Handicraft and Art Articles Export – Import JSC (Artexport), with a 15 per cent and 10 per cent stake in Vegetexco, respectively.
After equitisation, the company's charter capital is expected to be VND713 billion ($32.9 million), equal to 71.3 million shares. Of that amount, 42.78 million shares will be sold to strategic investors, and 850,200 shares will be allocated to the company's workers.
Vegetexco will hold its initial public offering (IPO) on September 4, selling 27,67 million shares with an opening price of VND10,000 per share. The volume of shares is equal to 38.8 per cent of the company's charter capital.
Established in 2003, Vegetexco operates mainly in the agricultural field. Its profit for the first six months of the year was VND19.6 billion ($904,476).
T&T Group was established in 1993. It operates in the fields of finance, industry, minerals, real estate and exports. It has charter capital of VND3 trillion ($138.4 million).
HCM City lenders' bad credit rate inches down
Non-performing loans (NPLs) of HCM City-based credit institutions by the end of last month stood at VND62.2 trillion (US$2.86 billion), equal to 5.49 per cent of total outstanding loans.
According to deputy director of the State Bank of Viet Nam's HCM City office Nguyen Hoang Minh, the rate inched down by 0.11 per cent from late June.
However, Minh said, if the NPLs of VNBC, OceanBank and GP Bank, which the central bank acquired all of their equity at a price of zero dong per share, were excluded, then the NPL rate of HCM City-based lenders was 3.7 per cent of total outstanding loans.
According to the central bank's plan, HCM City-based lenders would have to handle a total of VND25.3 trillion ($1.16 billion) in NPLs before September.
Minh said that by the end of last month, the lenders handled VND3.1 trillion ($142.85 million) in NPLs by using their provisional funds. They also sold another VND13.9 trillion ($640.55 million) in NPLs to the Viet Nam Asset Management Company.
Minh expected the lenders would meet the central bank's target to bring down the NPLs to 3 per cent by September this year.
According to the central bank's Governor Nguyen Van Binh, the target is feasible, provided that all credit institutions step up and take drastic measures to handle the NPLs to meet the deadline.
"Credit institutions must make accurate debt classifications, adequately fund risk provisions and actively sell NPLs to the Viet Nam Asset Management Company," Binh noted.
According to experts, the establishment of the Viet Nam Asset Management Company (VAMC) in 2013 was an important first step in recognising that NPLs in the banking system needed a systemic approach; however, the pace of selling these debts needs to be accelerated.
They said to move this process forward quickly, besides needing greater authority over the disposition of collateral and legal impediments and needing to resolve the disposition of collateral in the distressed assets market, the VAMC also needed a larger pool of resources – financial and human – to process NPLs that enter the distressed assets market.
Such a market in turn needed enough buyers and sellers to be functional and may need external participation and expertise, they said.
Phu Quoc reels in tourism investment
Phu Quoc Island in the southern coastal province of Kien Giang in recent years has attracted a huge number of tourism projects, with 136 projects now being implemented at a total registered capital of VND144 trillion (US$6.6 billion).
The projects cover a total area of 5,110 hectares, according to the provincial people's committee.
Major property developers, such as Vingroup, the BIM Group, the Sun Group, and the CEO Group, are ramping up their construction with the aim of opening as soon as they can.
The $1 billion Vinpearl Phu Quoc resort on Bai Dai Beach in Ganh Dau Commune opened to visitors early this year. It is the largest tourist project in Phu Quoc.
Vingroup is also developing a zoo on an area of 500 hectares in Ganh Dau and Cua Can communes.
Considered to be the world's second largest when completed, the zoo is expected to open up many opportunities for socio-economic development of the island district.
In addition, the Sun Group is developing a resort complex on South Island with a capacity of 1,000 five- to six-star rooms, scheduled to open on April 30, 2016.
The Sun Group has also received approval to build a cable car from An Thoi Town to Hon Thom island commune and a tourism complex, including hotels, resorts and entertainment facilities on Hon Thom Island with a total investment of VND10 trillion ($458.2 million).
An international passenger seaport is under construction on Phu Quoc Island with a total investment of more than VND1.6 trillion ($73.31 million). It is expected to be finished by 2017.
Huynh Quang Hung, vice chairman of the Phu Quoc District's People's Committee, said the island held great potential for investors and offered advantages that would help it develop into a high-end tourism area.
It is expected to continue to attract huge investment from local and international investors, he added.
The province provides investors with incentives on business income tax, personal income tax and land tax, among others. The central government has also asked local authorities to speed up site clearance and compensation to clear land for investors.
The land prices on Phu Quoc Island have surged sharply since the island was recognised as a second-tier urban destination last year.
In a master development plan approved by the Prime Minister, the island will be designated a special economic zone, a centre for high-quality eco-tourism, a trade and luxury services area, and a high-tech area.
Dubbed the Pearl Island in the southern sea, forest cover accounts for 62 per cent of the island's area. The island has a 150-kilometre long coastline and beautiful beaches.
The number of tourists visiting Phu Quoc Island has increased by 12 per cent annually over the last seven years, reaching more than 600,000 last year, while the current supply of rooms falls short of demand.
In for a penny: Hoa Phat reaches for top in diversification
Vietnam’s animal feed market has become something of a top attraction, with several leading businesses increasing (their) investment in the sector.
Hoa Phat Group, which holds a 20 per cent stake in the domestic market for construction steel, has launched its third animal feed company in a bid to diversify its operations.
The company in question, Hoa Phat Animal Feed Dong Nai, has the chartered capital of VND200 billion ($9.2 million) and is located at the Long Khanh Industrial Park in the southern province of Dong Nai.
Tran Dinh Long, chairman of Hoa Phat Group, said that the new company would produce and process food for domestic animals, poultry and fish, and would have the designed capacity of 200,000 tonnes per year.
Long added that for the near future the group would focus its investment across two sectors, namely steel and animal feed.
In this March, Hoa Phat set up its second animal feed company with the charter capital of VND300 billion ($13.7 million) in the Pho Noi A Industrial Park in the northern province of Hung Yen.
The facility is scheduled to start operations in early 2016 with the annual capacity of 300,000 tonnes. The company has set a revenue target of VND3 trillion ($140.7 million) over the next three years, during which time more factories within the chain will be inaugurated.
According to Hoa Phat, the turnover from the animal feed sector is expected to reach VND800 billion ($36.7 million) for this year alone.
Late this April, Masan Group, one of Vietnam’s largest private sector companies has acquired 52 per cent in Vietnam French Cattle Feed JSC and 70 per cent in Agro Nutrition Company JSC by purchasing Sam Kim Co. Ltd and renaming the company Masan Nutri-Science.
The acquisition and establishment of Masan Nutri-Science instantly places the group on a leading platform to serve the growing $6 billion animal feed sector. Proconco and Anco, as a combined business, is the number one external pig feed and overall second animal feed player in Vietnam. In 2014, it supplied farmers with over 1.7 million metric tonnes of animal feed products, and is on track to deliver its revenue target of $1 billion in 2015.
Danny Le, CEO of Masan Nutri-Science, said that Masan saw a market gap in the food and beverage sector some years ago and now the company is focusing on the similar demand in Vietnam’s animal protein sector. “I am confident that we can fulfil this unmet demand just as we did in the food and beverage sector.”
Proconco is the first joint venture between France and Vietnam in the feed manufacturing sector. Known commonly as “Con Co”, it is Vietnam’s oldest feed brand and has a premium status in this market. Proconco’s total capacity in 2014 was 1.4 million tonnes. Meanwhile, Anco is a Malaysian-Vietnamese joint venture with its first feed factory commissioned in Dong Nai. Anco’s total capacity in 2014 was 750,000 tonnes.
According to the Vietnam Animal Feed Association, the compound feed industry in Vietnam has grown at a rate of 13-15 per cent per annum.
In total, out of the 200 animal feed producers in Vietnam, 70 per cent of the market share belongs to a small number of FDI companies including CP Group (Thailand), Cargill (USA), De Heus (The Netherlands), Proconco (France), and New Hope (China). Many of them are planning to expand their businesses in Vietnam, as the current production only meets a third of the domestic demand.
PNJ booming through a falling market
Investors may lose their confidence in the gold bar as its price has tumbled to a record low in the last five years, yet the business of gold jewelry is somewhat thriving here in the local market.  
One of the country’s largest gold jewelry retailers, the Ho Chi Minh City-based Phu Nhuan Jewelry JSC (PNJ), does not seem to take the plunge in the precious metal price badly, as its core business line in gold jewelry is reportedly flourishing.
According to PNJ, the company has achieved a promising half-year financial result thanks to its budding gold jewelry retail, coupled with the expansion in its retail network and fresh focus on the customer experience, as well as the superior customer service at all of PNJ stores nationwide.
PNJ’s half-year financial report revealed its revenue at VND3.846 trillion ($176 million), an up of 6 per cent compared to the same time last year, while its gross profit and pre-tax profit were recorded at VND546 billion ($25 million) and VND228 billion ($10.44 million), an increase of 43 per cent and 46 per cent, respectively, compared to the same period last year. PNJ’s revenue from gold jewelry retail, as of 30 June, notably grew 45 per cent over the same period.
This stout performance was mainly driven by the strong same-store-sale growth of 27 per cent during the period, as a constant outcome of applying best practice in organising around customer satisfaction at store level.
“In order to achieve such results, we have put significant investments to enhance senior management staff in our design, supply and retail chain,” said Cao Thi Ngoc Dung, PNJ chairman and general director.
“Given such efforts, we have been able to make sophisticated jewelry products with distinct differences that can lead the trend.”
According to the Gold Demands Trends report for the first quarter, from the London-based World Gold Council (WGC), the global demand for jewelry was still the most significant component of the overall gold demand, with a record of 601 tonnes, and the appetite for gold jewelry spread across a number of Southeast Asian countries including Vietnam.
WGC data showed Vietnam’s jewelry demand in the first three months totaling up 4.1 tonnes, an up of 10 per cent compared to the 3.7 tonnes of jewelry gold attained in the same quarter a year earlier.
As at the end of July, PNJ has opened up an additional 24 jewelry stores across the nation, confirming its position as the leading jewelry retailer in terms of the distribution network of 180 retail stores. The jeweler has achieved 68 per cent of its plan to launch a total of 35 new stores on a national scale in 2015.
“Along with the advanced training to enhance our goldsmiths’ skill and major investments for new technology, PNJ has a clear target to expand our retail network, concentrating in the period of 2015-2016,” said Dung.
According to Dung, at the start of the year, PNJ signed a contract worth of VND40 billion ($1.83 million) to import a brand-new line of machinery, and also finalised a consultant contract with Italian experts to enhance the company’s technology system and goldsmiths’ expertise. These efforts are to fulfill the long-term strategy of PNJ for self-manufacturing the finest jewelry products, which have for long been imported from overseas to serve the domestic market.
No one can predict exactly how the gold market will be fluctuated in the future. As for PNJ, the gold jewelry business is definitely keep on growing, backing up by a network expansion, superior customer service, warming-up economy and consumer confidence.
Tips and tricks to maximise M&A prospects
With M&As on the rise, many investors and experts have shared their insights and perceptions on successful M&A deals at the Vietnam M&A Forum 2015.
Banking expert Can Van Luc stressed that correct evaluation is vital to deal success, which helps provide better documentation for decision making. Before merging with MHB, BIDV had hired an   audit firm to carefully evaluate its partner and sought appropriate legal advice. The management boards of the acquired and acquiring company should reach a clear understanding and cooperate fully during the period of transition.
Echoing this view, director and general manager of overseas business at Credit Saison Katsumi Mizuno shared his best practices on acquiring HDBank, “We spent one and a half year learning about each other before closing the deal. We discussed the business plan, drew up product development strategies and found ways to rearrange human resources.  This period is crucial to successful integration, which helps ensure the firm’s growth in the future.”
Stephane Gripon, CEO of Mondelez Kinh Do said that, “the success or failure of an acquisition deal lies in the nuts and bolts of common values. Like Kinh Do, Mondelez is a leader on the snack market with fantastic iconic brands. Therefore, both sides believed that the combination of the local with the international brand would bring the company to further success.”
 “With King Do’s partnership, Mondelez is getting access to the fantastic portfolio of the local brand with a strong distribution system and two manufacturing sites. From our side, we bring not only the international portfolio, but also the global capabilities and R&D in quality. The deal really mixes the best local and international enterprises together,” he added.
Meanwhile, Nam Long Investment Corporation has successfully raised funds from many reputable international investors, such as Kepple Land, Hankyu Nissin Realty and Nishi Nippon Railroad in their business expansion. Working with international investors since 2008, Nam Long CEO Chu Chee Kwang generally summarised what foreign investors would expect from their domestic counterparts.
“M&A activities in the real estate sector are just an alternative business strategy for international investors to be involved in business in Vietnam. To make the right decisions, foreign investors will look at the long term growth potential of a company, its marketability and viability, its reputation, historical success record and future plans. They also consider the chairman and its shareholders’ background, attitude, culture, management style and openness to improvement and changes,” he added.
He also noted that previously international investors preferred to set up local companies and buy land for development purposes, but soon discovered that it was too difficult, time-consuming and that they lacked knowledge about Vietnamese business practices and the regulatory environment to be successful. Therefore, M&A strategies can help investors to have a firmer control of the company while retaining essential local know-how and to accelerate the property development process.
Green light for Quang Tri wind power plant
The Quang Tri Provincial People’s Committee has recently approved the building of the Huong Linh 2 Wind Power Plant in Huong Hoa district in the central province, with total investment of VND1.4 trillion ($65.7 million) and a 50-year operating lifespan.
The plant will cover an area of about 12 ha will have 15 wind turbines with a capacity of 2MW each, for a total capacity of 30MW. The project is expected to be completed by the end of 2016.
This is Vietnam’s fifth wind power plant, following three others in Binh Thuan and another in the Mekong Delta’s Bac Lieu province.
A clean energy source, wind power is expected to replace traditional forms of energy in the future.
Upon completion the project will address electricity shortages, promote local economic development, and create jobs for local workers.
The Binh Thuan Wind Power Joint Stock Company held a breaking ground ceremony on July 21 for the first phase of its Phu Lac Wind Power Plant in Tuy Phong district, south-central Binh Thuan province.
The plant has a total area of 400 ha and investment of VND1 trillion ($46.5 million). The first phase will be completed and put into operation in September 2016.
Kenya Airways running on empty
In recent correspondence sent to the Ministry of Transport and the Civil Aviation Administration of Vietnam, Kenya Airways said that the results of its direct flights between Hanoi and the Kenyan capital of Nairobi have been very disappointing. “We have taken several measures to build a successful route, but the results are far from satisfactory and the carrier is incurring serious losses,” according to Mr. Marco van Vliet, Head of Network Planning at Kenya Airways.
Kenya Airways also said that it is currently paying high costs for operating in Hanoi. It has therefore requested the Ministry of Transport give it Fifth Freedom rights on the route between Hanoi and Guangzhou, which it says is necessary for it to maintain the only direct flights from Vietnam to Africa.
Fifth Freedom rights allow an airline to carry passengers between foreign countries and the airline’s home country, flying to a second country and from that country to a third country, and so on.
In the letter regarding Fifth Freedom rights, Kenya Airways said it will cooperate with its partner, Vietnam Airlines, to create a schedule for the route.
However, a representative from Kenya Airways in Hanoi was unaware of any issue. “We are still operating the route as usual,” the representative said, with no additional information revealed.
The current ticket price for Hanoi to Nairobi is around VND15.054 million ($690) for economy class and VND50.943 million ($2,335) for business class. This is not expensive but with the limited travel demand between Vietnam and Africa it has been difficult for Kenya Airways to fill all of the 250 seats on its Boeing 787.
Credit institutions asked to support flood victims
The Governor of the State Bank of Vietnam (SBV) Nguyen Van Binh has asked credit institutions to take action to mitigate the difficulties being experienced in severely flooded areas in the country, with such measures being dependent upon their financial capacity.
He asked that they review agricultural loans to farmers and enterprises who have suffered damage from the heavy flooding in northern areas such as Quang Ninh, Dien Binh, Lang Son, and Lai Chau provinces.
He mentioned certain solutions, such as extending payment deadlines and cutting interest rates for flood victims with loans, together with providing additional loans to help people overcome the difficulties, in accordance Decree No. 55 and Circular No. 10 from the SBV.
Credit institutions must guide their subsidiaries and branches in flooded areas to cooperate with local authorities and SBV branches to evaluate and clarify the level of difficulties being experienced in the agricultural sector.
The evaluation is to be submitted to the provincial people’s committee, who will then report to the Prime Minister. After that a decision will then be made on the provision of credit for the recovery and development of agriculture and rural areas.
Credit contract signed for Nhan Hac hydroelectric power project
The VietinBank's branch in West Hanoi and Zahung JSC on August 11 signed a credit contract worth VND1.38 trillion (US$63.48 million) for the construction of the Nhan Hac hydroelectric power plant in Que Phong district, Nghe An province.
As outlined in the contract, the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) will fund VND1.38 trillion to the power project.
The Nhan Hac hydroelectric power project includes two plants with a total capacity of 59MW, requiring a total investment of over VND1.8 trillion (US$82.8 million).
The project will be carried out in November this year and is scheduled for completion by the third quarter of 2018.
Upon its completion, the plant will contribute around 206.1 million KWh of electricity each year to the national grid, meeting the increasing demand for power and contributing to national socio-economic development.
Zahung General Director Le Xuan Long said the Nhan Hac power project is a large-scale project with significant meaning to the economic development of the locality and the nation. With previous experience in implementing hydroelectric power projects, Zahung will make every effort to complete the project as scheduled, Long noted.
Vietnam seen as key market for NZ
Vietnam has emerged as an important market for New Zealand to boost exports and its enterprises to step up cooperation with local firms, according to New Zealand Minister of Economic Development Steven Joyce.
In an interview with the Daily during his Vietnam visit last week, Joyce said New Zealand’s exports to Vietnam have grown remarkably in recent years and cooperation between companies of the two countries has borne good fruit.
Joyce said New Zealand enterprises considered Vietnam a potential market due to its young and big population and growing economy. The country has seen more opportunities to boost processed foods, beverages and timber.
Joyce, who is also New Zealand’s Minister of Tertiary Education, Skills and Employment, said there is huge potential for further cooperation between the two countries in education, service and tourism.
In reply to the Daily’s question about Vietnam-New Zealand bilateral trade of just nearly US$800 million last year though the two countries established diplomatic ties 40 years ago, Joyce said two-way trade actually neared US$1 billion if services were taken into account.
New Zealand has focused more on the Vietnamese market in the past few years, but New Zealand is a small country and its enterprises have not fully tapped business opportunities.
ASEAN, including Vietnam, will continue to be a major market for New Zealand in the coming time.
Joyce said the New Zealand Prime Minister is expected to visit Vietnam this November.
According to the New Zealand Embassy in Hanoi, Vietnam is New Zealand’s trade partner with the highest trade growth in the ASEAN region in recent years and 20th biggest trade partner. Two-way trade between Vietnam and New Zealand is put at US$875 million this year, a 10% rise versus 2014.
Foods and beverages are among New Zealand’s major exports to Vietnam, with apple shipments growing 38% annually. Meanwhile, Vietnam mainly exports cellphones, apparel, footwear, household appliances, coffee, pepper and cashew nuts to that market.
Last year Vietnam started to ship dragon fruit and mango to New Zealand.
According to data of the General Department of Customs, Vietnam exported more than US$316 million worth of products to New Zealand, mostly cellphones, last year and imported US$478 million worth of goods, mainly dairy products, from New Zealand.
According to the minister, to spur exports to New Zealand, Vietnamese enterprises should well understand the market and network with New Zealand partners via New Zealand Trade and Enterprises (NZTE). It is crucial for both sides to understand each other and there must be a campaign aimed at promoting this.
VAT refunds for exporters tightened
The Ministry of Finance has told local tax authorities to further scrutinize requests of exporters and firms in other sectors for value added tax (VAT) refunds to prevent fraud.
In its Document 10492/BTC-TCT sent to local tax agencies, the ministry wants thorough checks of export firms whose revenue is at least three times higher than their chartered capital or equity and do not have warehouses, vehicles and facilities equivalent to their revenue.
Stricter VAT refund checks will apply to enterprises which do not export goods via international or major border gates, have close buying and selling relationships or are affiliates of the same groups, trade products outside the localities where their head offices are not located and with signs of abnormality, and claim for VAT refunds up 20% year-on-year.
The list of enterprises subject to VAT refund scrunity comprises startups formed to carry out new investment projects or firms which have approved investment projects but have not been granted land use rights or construction licenses. The list also includes investment projects which do not have goods and services subject to VAT and commercial-office-apartment projects.
Leaders of local tax agencies must be responsible for VAT refund decisions and tax authorities should request explanations from firms suspected of tax fraud.
In the first six months of 2015, the tax agencies in Hanoi and HCMC detected and handled a number of enterprises found to use new tricks for VAT refund claims. But many local tax authorities did not have effective measures to better manage VAT refunds.
Meanwhile, enterprises bemoaned that VAT refunding has long been a troublesome issue. Though tax refund requests are always thoroughly examined, the refunding process is time consuming.
Ministry backs Tran De port plan
Minister of Transport Dinh La Thang has thrown support behind a research group’s plan to develop Tran De fishing port in Soc Trang Province into a major seaport to meet growing demand for goods transport in the Mekong Delta.
Thang last week met representatives of the research group, which is led by Doan Manh Dung, general secretary of the HCMC Maritime Science and Technology Association.
After the meeting, Thang told the ministry’s investment and planning department to ask the Ministry of
Planning and Investment to add Tran De port to the list of projects to be funded by official development assistance (ODA) or executed in build-operate-transfer (BOT) and public-private partnership (PPP) formats.
The port is located downstream the Hau River stretch in the Mekong Delta province of Soc Trang and near a new road connecting Can Tho, Hau Giang and Bac Lieu.
As the leader of the research group, Dung underscored the importance of developing a major seaport able to handle vessels of 25,000-30,000 DWTs to transport goods, especially coal for power plants in the Mekong Delta region. The reason is that the existing ports along the Hau River cannot meet increasing demand for cargo transport, not to mention the huge volume of alluvial soil buildup in the passage through Dinh An estuary and Quan Chanh Bo Canal in the region.
Dung told the Daily that his research group has found that Tran De can become a major seaport in the Mekong Delta as it has favorable conditions like seaports in central Vietnam and other parts of Vietnam. Alluvial soil around Tran De port area is much less than in Dinh An estuary.
Dung said local authorities will not have to spend big funds dredging alluvial soil in the area of Tran De port, which is expected to handle 30,000-DWT vessels and ships moving from river ports in the region.
Therefore, Dung proposed the Government add the Tran De port to the master zoning plan for national-level port projects and call for foreign funding for the pre-feasibility study for Tran De port project.
Meanwhile, Deputy Minister of Transport Nguyen Van Cong was requested to work with the Ministry of Science and Technology and the research group to translate the idea of developing Tran De port into reality.
HCM City details VND3 trillion bond sale plan
The HCMC government has sent the Ministry of Finance a detailed plan for issuing VND3 trillion (US$137.4 million) worth of municipal bonds between August and October to raise funds for key projects this year.
According to the plan, the city will issue debt in two phases, including around VND2 trillion in the middle of this month and VND1 trillion in early October. The bonds have a face value of VND100,000 each and tenors of three, five, 10 and 15 years.
Dao Thi Huong Lan, director of the HCMC Department of Finance, told the Daily that the city government mobilized VND3 trillion from municipal bonds last year.
Lan said the city had so far issued over VND10 trillion worth of bonds to raise funds for public investment projects.
The city government said the HCMC People’s Council had approved this year’s development investment plan using VND15.9 trillion from the local budget. The amount excludes official development assistance (ODA) loans.
Between 2011 and 2015, the city is expected to obtain nearly VND1,154 trillion in budget collection and keep VND244 trillion of it as approved by the Government.
The city spends an average of VND12.3 trillion on development investment each year, including nearly VND3.2 trillion for debt and interest payments. Therefore, the city’s budget is able to cover bond principle and interest payments.
By the end of this year, the city’s total outstanding loan is estimated at VND12.4 trillion.
Speaking at a review meeting on the city’s socio-economic performance from January to July last month, Lan said the August-October period is a good time for municipal bond sale.
According to HCMC chairman Le Hoang Quan, the city’s budget collections neared VND160.4 trillion in January-July, meeting more than 60% of this year’s target and rising by 3.8% year-on-year. Tax and fee revenue from domestic sources and from exports and imports went up but shed nearly 23% from oil against the same period last year.
In the remaining months of 2015, the city will strive to realize this year’s budget collection target of around VND265 trillion. Quan said budget collection pressure would pile next year when the city targets VND295 trillion.
The city posted exports of around US$17.6 billion in the year to July, down 4.6% year-on-year. The slide was attributable to a 47.4% slump in crude oil price on global markets.
HoREA: Property market recovery fragile
The real estate market has shown clearer signs of recovery this year but an imbalance between supply and demand in some segments makes the recovery fragile, according to the latest report of the HCMC Real Estate Association (HoREA).
The association said in the review report on the property market in the first half of this year that the high-end segment enjoyed robust growth in the period but there was a lack of affordable housing for low-income people.  
Districts in the east of the city and on the west bank of the Saigon River like 1, 2, 4, 9 and Binh Thanh saw many luxury housing projects developed by Dai Quang Minh, Novaland, ThuducHouse, Nam Long, Hung Thinh, Him Lam, Vingroup, Phu My Hung, SSG Group, Van Thinh Phat, Khang Dien, Keppel Land and CapitaLand. They will offer for sale thousands of premium products in the next few years.
HoREA said the luxury segment grew strongly but it was still under control.
The association said housing demand rose but was not huge in the period. Property transactions were normal and there was no sign of speculation on the market.
Regarding concerns over a possible real estate bubble, HoREA said it would happen if there were too high economic growth, monetary loosening and subprime mortgages.
HoREA said none of these factors were found at the moment, a real estate bubble burst could not happen this year or next.
However, some experts have warned of market imbalances. There is a serve shortage of low-cost homes as the completed projects have been sold out and the number of cheap homes available for purchase on the secondary market is small.
The current supply of low-priced apartments in HCMC is meager and it is difficult to buy apartments valued at under VND1 billion (nearly US$46,000) directly from the investors. Customers must pay an additional VND100-200 million to buy these houses on the secondary market.  
Meanwhile, the Vinhomes Central Park project in Binh Thanh District and the Masteri Thao Dien and Sala projects in District 2 could offer nearly 20,000 luxury apartments to the market in the coming time.
An expert told the Daily that if these premium products cannot be sold to people in need of housing but to individual investors and speculators, the property market may crash some time in the future.
One more overpass at Thu Duc Intersection proposed
Urban Traffic Management Unit No. 2 under the HCMC Department of Transport has proposed building one more overpass at Thu Duc Intersection to meet surging demand in the district of the same name.
The new overpass will also help ease vehicular traffic, especially on the existing overpass in the outlying district, the unit said in a document sent to the city government.
The unit said high temperatures in the dry season and traffic density have deformed asphalt on the existing overpass. In addition, trucks are allowed to use only one lane of the overpass, causing the road surface to sink by one to three centimeters even though the top asphalt layer was replaced.
The unit plans to fix the overpass surface first and then coordinate with relevant agencies to work out long-term measures to cope with the sinking situation by October.
In the long run, the agency proposed the city Department of Transport consider building a new flyover in parallel with the existing one to double the number of lanes to eight.
The VND277-billion Thu Duc steel overpass was opened to traffic in early 2013 after five months of construction. After being put into use, the 570-meter-long bridge helped ease traffic jams at Thu Duc Intersection but its surface subsidence has since been reported many times.
U.S., Germany appealing to Vietnam investors
Vietnamese investors registered more than US$155.4 million for projects in overseas markets in the first half, with the United States and Germany emerging to the second and third most attractive places respectively, according to the Foreign Investment Agency (FIA).
FIA under the Ministry of Planning and Investment ranked Vietnamese investments in the U.S. and Germany in the period after Laos, which is a traditional market and neighbor of Vietnam.
Data of FIA showed the ministry allowed Vietnamese firms to invest in 47 new projects in 22 countries and territories and revise up funding for 19 operational projects worth US$155.4 million in the period.
Laos continued attracting much more capital of Vietnamese enterprises with four new and two adjusted projects approved with combined capital of US$53.9 million, accounting for 35% of total registered capital in the period.
The first six months saw Vietnamese enterprises registering US$50.8 million (32.7% of the total figure) for seven new and one operational project in the U.S. Fresh capital pledges for only one new project and one adjusted project in Germany totaled US$26.5 million (17%).
According to FIA, Vietnamese investors have shifted to new and far markets, instead of focusing on neighboring countries like Laos and Cambodia. In the emerging market of Myanmar, Vietnamese enterprises invested in eight new projects in the January-June period but total pledged capital was not high.
According to FIA, only one investment project in the mining sector was approved in the period but its registered capital amounted to US$42.5 million, making up 27.4% of the total. There were 18 new and three adjusted wholesale, retail and vehicle repair projects overseas with a total registered investment of US$39.3 million (25.3%).
Finance, banking and insurance took the third place with US$29.5 million (19%).
In all, Vietnamese enterprises have pledged more than US$20 billion for offshore investments with a majority of it going to Laos, Cambodia, Russia, Algeria, Malaysia, Myanmar and the U.S.
In terms of sector, mining has attracted 112 projects worth more than US$5.1 billion, followed by agro-forestry-aquaculture with around 130 projects and over US$2.7 billion. These sectors are Vietnamese enterprises’ strong advantages but local investors have expanded to other sectors in recent years like communications, power generation, real estate, finance, banking and insurance, according to FIA.
Vietnam expedites eco-friendly industrial park initiative
An initiative aimed at converting existing industrial parks into eco-friendly production facilities was introduced at a conference held in the Mekong Delta city of Can Tho on August 12.
The 4.5 million USD eco-industrial park project was approved in August last year using non-refundable aid from the Global Environment Facility (GEF), the Swiss State Secretariat for Economic Affairs (SECO) and the United Nations Industrial Development Organisation (UNIDO).
It will be carried out on a trial basis at Khanh Phu IP in the northern province of Ninh Binh, Hoa Khanh IP in the central city of Da Nang and Tra Noc 1 and Tra Noc 2 IPs in the Mekong Delta city of Can Tho.
Tran Duy Dong, Director General of the Department for Economic Zones Management under the Ministry of Planning and Investment, said that although industrial parks have made great contributions to the national economy and created jobs for over 2.4 million labourers, their operations are posing threat to the environment. He reported that 16 industrial zones operating without sewage treatment plants while many others fail to pay adequate attention to the collection and treatment of their solid waste as well as to the control of greenhouse gas emissions.
According to the Ministry of Planning and Investment, eco-industrial parks are a new model in Vietnam, which will be built through the application of advanced technologies and clean production methods to minimise greenhouse gases, hazardous wastes and water pollutants.
Heiz Leuneberger, Technical Chief Consultant of the project, underscored that the project’s implementation is crucial for industrial zones’ sustainable and comprehensive development, creating momentum for Vietnam’s national green growth strategies.
Meanwhile, Deputy Director of the Institute of Regional Sustainable Development Nguyen Dinh Chuc affirmed that investments in clean and energy-saving technologies will help enterprises improve their competitive capacities while catching up with their competitors in seizing control of the domestic market.
Mekong Delta firms seek to enter Russian market
Businesses in the Mekong Delta received updated information on the Russian market during a conference held in Can Tho city on August 12, which was organised to arrange for a regional business delegation to attend a Vietnamese high-quality goods fair in Russia in 2015.
According to former Vietnamese Counsellor in Russia Nguyen Chi Tam, Russia is a market with high purchase power, where there is great demand for such products as footwear, textiles, farm products, processed foods, wooden products and handicrafts, making it a potential export for Vietnam.
Once the free trade agreement signed between Vietnam and the Eurasian Economic Union (EAEU) takes effect at the beginning of 2016, up to 90 percent of Vietnamese exports into Russia will enjoy tax cut or tax exemption, Tam said, adding that Vietnam is the only country entitled to these incentives from the EAEU.
There are large numbers of Vietnamese people living across Russia and Vietnamese enterprises should make use of this advantage to make inroads into and expand their market share in the country, Tam noted.
At the conference, businesses from Can Tho and other regional localities were provided information on the fair which is scheduled to take place in Moscow from November 12-December 12 this year.
Organised by the Ministry of Industry and Trade, the fair aims to promote Vietnam’s trademarks and companies towards boosting exports to Russia and other EAEU markets.
The fair will exhibit commodities such as textiles, footwear, agricultural products, electronics, household goods, cosmetics and tourism and financial services.
Programmes to promote trade and investment cooperation between Vietnamese and Russian firms will also be arranged in the framework of the fair.
Enterprises in Can Tho and the Mekong Delta are hoping the fair will offer a good opportunity to connect with Russian partners and seek distributors in the potential market.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR

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