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BUSINESS IN BRIEF 10/12
FIEs
win in talent attraction
A
professional working environment and good remuneration policies are key
factors in retaining talent, insiders agreed at the Vietnam HR Awards Forum
in
Foreign-invested
enterprises (FIEs) and multinational corporations (MNCs) attract the most
attention from job seekers. Human resources (HR) management at local
enterprises, meanwhile, still bears many shortcomings, which limits their
competitiveness in the race to attract talent.
According
to a representative from Abbott, to attract a foreigner to work in a local
business it is not simply about wages but also about a variety of other
factors such as sharing the company’s goals, workplace, language, and thinking,
to ensure these foreign employees can integrate and contribute to the
company’s development.
Each
enterprise should have its own HR and business strategies, said Mr. Pham Phu
Ngoc Trai, Chairman of Global Integration Business Consultants Co. (GIBC).
Agreeing
with Mr. Trai, Mr. Ton That Anh Vu, Head of HR at HSBC Vietnam, said that
businesses should understand and define their vision, research HR policies,
and follow and understand their companies’ position and ranking in the
market.
FIEs
usually have HR strategies as soon as they set foot in
Domestic
enterprises have had to face stiff competition from foreign enterprises since
After
the ASEAN Economic Community (AEC) is officially established from 2016 there
will be freedom of movement for workers between countries in the region.
Domestic companies are therefore expected to face greater difficulties
relating to talent recruitment and retention in the future.
Panasonic
commits to protecting environment
Vietnam
Environment Administration (VEA), under the Ministry of Natural Resources and
Environment, and Panasonic Vietnam have signed a partnership agreement on
various environmental activities following the government’s policies to
socialize environmental protection and the National Strategy on Environmental
Protection to 2020 and Vision to 2030.
The
strategic partnership emphasizes mutual commitments from both parties to
contribute to environmental and sustainable development in
It will
further strengthen and enhance the cooperation between the VEA and Panasonic
Panasonic’s
eco learning is within a global environmental education program of then
Panasonic Corporation and has been implemented in
The
strategic partnership with VEA will help to bring such classes to more
students in urban and rural areas. In 2016 over 1,000 students in five cities
and provinces will have the chance to join in the fun classes at their
school.
The
company has also cooperated with the VEA since 2012 on an annual tree
planting program called “Panasonic for a Green Vietnam”, planting over 70,000
trees in Hanoi, Hai Phong, Thai Binh, and Ninh Binh.
In
cooperation with local authorities, Panasonic also plans to launch a battery
exchange program to promote the use of products without harmful substances,
encouraging the practice of replacing environmentally-harmful products with
an eco-friendly substitute.
“With
these programs we hope to raise awareness in the community on environmental
protection, not only in energy saving but also in reducing CO2 emissions,”
said Mr. Masahiro Yamamoto, Director of Panasonic
Panasonic
aims to be the No. 1 green innovation company in the electronics industry by
2018, its 100th anniversary of foundation, with the environment as central to
all its business activities.
Credit
and remittances rising in HCMC
Total
outstanding credit in Ho Chi Minh City in 2015 has been estimated at
VND1,206.7 trillion ($53.69 billion), an increase of 13 per cent against
2014, in a report presented to the 20th session of the VIII Ho Chi Minh City
People’s Council on December 8.
Outstanding
credit in VND remains in the majority and is increasing stably. It continues
to flow to the business sector and accounts for about 80 per cent of the
total outstanding credit to business.
Remittances
in
According
to research by the Central Institute for Economic Management (CIEM),
remittances to
Between
2007 and 2013 overseas remittances were the second largest capital source in
VAMC
buys bad debts of $2 billion in Q3
The
Vietnam Asset Management Company (VAMC) bought VND43.35 trillion ($1.92
billion) worth of bad debts from 39 credit unions, one finance company, and
one finance leasing company in the third quarter.
It also
handled over VND4.88 trillion ($217.16 million) in bad debts via three
different methods: selling VND914.5 billion ($40.69 million), handling
collateral assets under civil law worth VND655.5 billion ($29.16 million),
and VND3.31 trillion ($147.29 million) via other ways of handling collateral
assets.
Mr.
Nguyen Quoc Hung, Chairman of VAMC, told local media recently that as at the
end of September the bad debt ratio at financial institutions had fallen to
2.9 per cent, of which 41.3 per cent of bad debts were being handled via
VAMC. Of the VND226 trillion ($10.05 billion) in bad debts VAMC has bought,
about 70 per cent have collateral assets in real estate, such as houses and
unfinished projects.
Foreign
sector’s export value hits US$105 billion in 11 months
Export
revenues of foreign-invested companies, including oil exporters, reached
US$105 billion in the first 11 months of 2015, up 13.5% compared with the
same period last year.
Data
released by the Foreign Investment Agency (FIA) showed that the foreign
sector’s export value accounted for more than two thirds of the country’s
total.
Imports
of foreign companies also increased by 18% to US$90 billion, making up 59% of
Vietnam’s total imports and resulting in a surplus of US$1.5 billion, which was
in stark contrast with the country’s overall deficit of US$3.7 billion.
In the
first 11 months of the year,
In
regards to imports, major purchases included machinery, computers, phones and
fibre.
In
recent years, the foreign sector has maintained strong export growth and has
been the main driver of
The
policy to encourage export-oriented FDI has granted
Hoa
Sen to build huge steel mill in Binh Dinh
Hoa Sen
Group has got an investment certificate from the Economic Zone Authority of
Binh Dinh to build a steel mill at a cost of VND2 trillion (over US$89
million) in Nhon Hoi Economic Zone.
The authority
said Hoa Sen Group will set up subsidiary Hoa Sen Nhon Hoi – Binh Dinh Ltd.
Co. to undertake the project for producing steel sheets and cold-rolled steel
products on 12.4 hectares.
The
project is scheduled to get off the ground this month and be up and running
in 2017. When in place, the mill can turn out 200,000 tons of products a
year.
Hoa Sen
is one of
The
group obtained revenue of VND17.7 trillion and after-tax profit of VND650
billion in fiscal 2014-2015 ending on September 30, 7.27% and 44.44% higher
than the targets respectively.
A source
from the Dung Quat Economic Zone Authority in
Hoa Sen
and Hoa Phat Group have shown interest in developing steel mills at the Guang
Lian steel mill location after the Taiwanese investor said in mid-2015 that
it had failed to arrange sufficient funding for the multi-billion-dollar
project.
The
government of
The
government noted that incentives would be given to a new investor based on
the revised laws on land, investment and construction as steel rolling is no
longer a specially encouraged field as specified in the new investment law.
According
to
Hoa Phat
proposed building a steel mill with a capacity of four million tons a year
and at a cost of US$2-2.5 billion at the location of the Guang Lian steel
project. The group plans to implement the project in two phases.
BIDV
hard to meet criteria for ACV strategic investors
The Bank
for Investment and Development of Vietnam (BIDV) cannot meet the requirements
for a strategic investor of Airports Corporation of Vietnam (ACV) if it does
not join hands with partners.
BIDV and
Aeroports de Paris (ADP) are seeking to become the strategic investor of the
Vietnamese airport operator. While ADP wants to buy the entire shares on
offer (20%), the Vietnamese bank looks to acquire a 5% stake.
Under
the criteria approved by the Ministry of Transport, the strategic investor
should have minimum annual revenue of US$1.5 billion and operate ten airports
if it is active in the aviation sector like ACV. In addition, its 2014
financial reports had no accumulated losses and profit accounted for at least
10% of revenue, and equity must be no lower than US$2 billion.
A
financial institution is required to have an equity of US$5 billion or higher
as of the end of last year and be cleared of accumulated losses last year
besides 2014 profit making up at least 5% of revenue.
If the
investor does not operate in any of the two aforementioned sectors, it should
join a consortium of at least three enterprises in different sectors and one
of them must be active in operating more than five airports and had posted
2014 revenue of US$1 billion or higher, and equity of at least US$2 billion
by late last year.
Strategic
investors can be domestic and foreign organizations committed to investing in
ACV in the long term and supporting ACV in terms of technology transfer,
human resource development, corporate governance, and market expansion.
The
strategic investor is not allowed to transfer its stake in ACV in at least
ten years after the corporation gets a license to operate as a joint stock
company in line with the Enterprise Law. The strategic investor can transfer
its stake in ACV after the period with priority given to ACV, followed by
other investors approved by the transport ministry.
The
investor must seek approval at a general meeting of ACV if it wants to
transfer ACV shares.
If the
criteria are taken into account, ADP will emerge as the top contender as it
currently operates 37 airports worldwide, including Charles de Gaulle in
Meanwhile,
BIDV’s current equity is only VND34.187 trillion (over US$1.5 billion), far
below the minimum of US$5 billion required by the ministry for a financial
institution.
A source
from the steering committee for equitization of ACV said if BIDV is
determined to become the corporation’s strategic investor, it should partner
with other investors to form a consortium to attend an auction for ACV shares
in case many investors bid or negotiate to buy the stake directly with the corporation
if there is only one investor.
ACV will
launch an initial public offering (IPO) this Thursday.
Interested
investors need to prepare documents of strategic investor registration, make
commitments to long-term investment and support for ACV. They should send all
documents together with financial reports in 2012, 2013 and 2014 to ACV
before December 31 this year.
The
committee will select those qualified and report to the Ministry of Transport
before January 31 next year for approval. The ministry will decide the number
of shares and the starting price for shares to be sold to strategic
investors.
Vinamotor
awaits special mechanism for State stake sale
Vietnam
Motors Industry Corporation (Vinamotor) will not sell a 97% State stake as a
single lot via an auction until the State Securities Commission (SSC) and the
Hanoi Stock Exchange (HNX) announce a special mechanism for this.
Vinamotor
has submitted documents to SSC to sell 85.58 million shares as a single lot
with a starting price estimated at VND14,612 each, or VND1,250 billion
(US$55.6 million) in total.
The
starting price was decided based on analyses for the stock market, the actual
value of the corporation and its operations as of October 2015.
Earlier,
the Ministry of Transport announced conditions for Vinamotor’s investors.
They are domestic and foreign organizations whose operations can support core
business operations of the parent firm of Vinamotor.
Besides,
investors must have minimum capital of VND926 billion and must not have
racked up accumulative losses as per financial reports on June 30, 2015. The
shares are not transferable within five years.
The SSC
and HNX will select qualified investors so that they can join the auction
slated for the beginning of 2016.
The SSC
on November 19 introduced an overall mechanism for share sales by lots at the
HNX so that Vinamotor and other enterprises can apply.
Tra
fish exports decline
Contrary
to the earlier optimistic forecast,
Vo Hung
Dung, vice chairman and general secretary of the Vietnam Pangasius
Association, told the Daily that tra fish exports in February fell by 28%
over the same period last year but slowed to 12% and 9% year-on-year
respectively in April and May.
With
such improvements, Dung said the association forecast in June that turnover
of tra fish shipments for all of 2015 would be the same as last year. But
outbound sales growth in September and October were lower than targeted, so
total exports this year could fall by 5-10% over last year.
“The
reason is that exports to the European Union and the
Figures
of the Vietnam Association of Seafood Exporters and Producers (VASEP) showed
that domestic tra fish exporters are coping with many challenges.
In
particular, tra shipments to the
Although
exports to the Chinese market increased in August, September and October by
29.6%, 55% and 81.7% year-on-year respectively, VASEP said that by the end of
October exports to ASEAN countries,
On the
home market, tra fish farmers in the Mekong Delta said exporters buy a kilo
of unprocessed tra fish at VND19,000-20,500 depending on quality and size.
With this price, fish growers lose VND2,000-3,000 per kilogram after
deducting costs.
Cargo
transport exchange launched
The
Ministry of Transport has inaugurated the country’s first cargo transport
exchange to spur competition and ensure transparency in the market.
General
director of the VinaTrucking transport exchange Ta Cong Thuan told the launch
ceremony last week that the exchange is simple for businesses to participate
as they can transact on smartphone, tablet or computer.
Transport
units, shippers and individuals are required to register for membership of
the trading floor before making any transaction on Vinatrucking.vn. The
registration is done automatically after relevant information including email
or phone number is verified.
Once
having accounts, truck owners and shippers can access the exchange to record
the registered number of vehicles or ships of their choice and send the
required information to vehicle owners or shippers and propose their
transport rates.
If
partners agree, they will respond by email or SMS and the exchange will
notify the parties involved and the proposed transaction forms.
The
Vietnam Road Administration said the exchange will create a channel for
transport firms to search for goods sources and shippers can organize tenders
on the exchange to select partners offering the lowest charges.
Through
the exchange, enterprises can find goods to transport on both directions,
thus helping lower logistics costs.
Minister
of Transport Dinh La Thang requested the operator of the exchange to review
efficiency after six months of operation and seek ways to make improvements.
The Vietnam Road Administration should study and propose necessary rules to
better manage and develop the exchange.
According
to firms, since the transport ministry began strictly enforcing regulations
on truck loads, many transport companies have hiked charges over the serious
lack of vehicles. Therefore, the exchange is expected to help reduce
transport costs for businesses and make transport rates transparent.
ASEAN
- crucial part of global economy: Study
ASEAN is
a fertile ground for innovation driven by entrepreneurship, according to a
study conducted by
The
study, which was done in Vietnam, Indonesia, Malaysia, the Philippines,
Singapore and Thailand, shows that ASEAN is among the most potential areas
for business in the world with 66 percent of their people viewing business as
a positive career choice, 3.54 percent higher than the global average.
The
study said the region is appropriate for business as neighbouring countries
in Asia and in the
GEM
Executive Director Mike Herrington said ASEAN plays an increasingly important
role on the global economic stage.
“An
ASEAN Economic Community (AEC) is no longer an abstract but a reality that
the regional governments are urged to embrace,” he added.
The GEM
report recommended 10 key focus areas to boost entrepreneurship and
innovation across the region, including building the professional ability of
governments to better understand and support entrepreneurs, and meaningful
media communications.
It also
stressed the need to invest in IT infrastructure and create tailored
development programmes for entrepreneurs.
With
their focus on reforms, regional governments create a favourable environment
to foster innovation, facilitate more productive economies, as well as open
up new and better job opportunities for people from every walk of life.
ASEAN’s
established business rate of 14.1 percent is the highest regional average and
is also significant compared to GEM’s average of 8.4 percent, the study
reported.
Local
banks urged to be proactive in economic integration
The
banking sector needs to be more proactive in economic integration in anticipation
of fiercer competition in both domestic and global playgrounds, according to
speakers at a workshop in
Rector
of the
This
means Vietnamese commercial banks must stand ready to join global
integration, since the protection for the domestic market would not be as
high as at present, and fiercer competition from foreign bankers is
unavoidable.
Son
suggested the State Bank of
He also
recommended continually restructuring to build a prestigious and highly
competitive banking system with safe credit activities and effective
mobilisation of social resources for fruitful investment.
The
State Bank of Vietnam (SBV) has spared no effort reinforcing cooperative
relations with international monetary and financial organisations between
2011 and 2015, said Deputy Governor Nguyen Kim Anh.
The effective
management of monetary policy, exchange rates and capital helped promote
foreign currency reserves from 2012 to 2014, which significantly supported
the stabilisation of prices and
He noted
that
In terms
of the foreign trade-to-GDP ratio, or trade openness ratio,
During
the workshop, participants also discussed key issues to develop
socio-economic performances from 2016 to 2020 and with a vision toward 2030.
They proposed measures to stabilise the macro-economy, improve growth quality
and the business environment, enhance national economic competitiveness,
narrow regional development gaps and avoid the middle-income trap.
ASEAN
Economic Community: New impulse for regional investment
When the
ASEAN Economic Community - one of the three major pillars of the ASEAN
Community - is established at the end of this year, the flows of investments
from ASEAN countries into
Boasting
a strategic geographical location, young abundant labour forces and low
labour costs,
According
to the Foreign Investment Agency under the Ministry of Planning and
Investment, by the end of September 2015, eight out of the 10 ASEAN
countries, namely
A report
released by the World Bank Office in
World
Bank’s Senior Economist Sebastian Eckardt told Vietnam News Agency’s reporter
that: “ Deeper integration among ASEAN countries will encourage investment,
trade integration. In addition, I think there are also opportunities for
However,
Eckardt suggested that the Government of Vietnam should continue to improve
the business environment, simplify administrative procedures and ensure fair
competition among domestic and foreign enterprises if the country wants to
draw more investments, especially the flow of capital from the ASEAN nations.
At the
Global Investment Forum held in
The government
leader added that to lure more foreign direct investment, Vietnam is making
efforts to improve its market economy regulations, focusing on improving
legal frameworks and administrative procedures, especially in improving human
resource quality and developing infrastructure.
The Law
on Investment and the Law on
According
to economic experts, Vietnam will attract selectively high value-added and
quality, modern technology and environmentally-friendly projects, as well as
large scale projects with competitive products that participate in global
value chains of trans-national companies. The country will also encourage,
create good conditions for and strengthen connections among foreign-invested
enterprises, as well as between them and domestic ones.
In the
coming time, especially as
A
representative of the army-run telecom group Viettel said ASEAN is an
attractive market, as ASEAN states have close economic ties with
At the
27th ASEAN Summit in
Transport
Ministry has 22 SOEs after 2015
The
Ministry of Transport will reduce the number of state own enterprises (SOEs)
directly under the ministry to 22 including seven corporations and 15
subsidiaries after 2015, according to its business restructuring plan.
The
ministry has equitized 70 businesses including nine corporations, 61 firms
and subsidiaries by the end of this year.
In the
upcoming time, it will continue stepping up equitization at five large
corporations including Vietnam Railways, Vietnam National Shipping Lines,
Vietnam Expressway Corporation and Shipbuilding Industry Corporation and Cuu
Long Corporation for Investment, Development and Project Management of
Transportation Infrastructure.
In
related news, the Government has decided to sell entire state capital of ten
state owned giants namely, Vietnam Dairy Products Joint Stock Company
(Vinamilk) which the government holds 45.1 percent of shares, Bao Minh
Insurance Corporation (BMI) 50.7 percent, Vietnam National Reinsurance
Corporation (VNR) 40.4 percent, Tien Phong Plastic Joint Stock Company (NTP)
37.1 percent, Binh Minh Plastic Joint Stock Company (BMP) 38.4 percent.
Five
others include Vietnam Property and Infrastructure Joint Stock Company 47.6
percent, Ha Giang Mineral Mechinics Joint Stock Company (HGM) 46.6 percent,
Sa Giang Import Export Corporation (SGC) 49.9 percent, FPT Corporation (FPT)
6 percent and FPT Telecom Joint Stock Company 50.2 percent.
Ministry
to promote agriculture investment
The
Ministry of Agriculture and Rural Development ?is drafting policies to
promote the flow of foreign direct investment (FDI) into the agricultural
sector.
Under a
draft decree which ?is now raised for public comments on the ministry's
e-portal, the ministry propose?d incentives and support to be given to
foreign investors who invest in the farming sector.
According
to the ministry, as FDI in agriculture help?s improve productivity, quality
and competitiveness of products and expand exports, great importance should
be attached to FDI inflow to this sector.
However,
the ministry pointeds out that FDI in agriculture remain?s modest compared to
the potential and strength of the sector which currently contribut?s around
20 percent of the country's gross domestic product (GDP).
FDI in
agricultural projects ?is mainly small scale, the ministry said.
Statistics
showed that as of 2014, there were 512 existing FDI projects in the
agricultural sector with total registered capital of 3.34 billion USD, only
accounting for 3.06 percent and 1.35 percent of the total number of FDI projects
and the total FDI registered capital, respectively.
In the
first 10 months of this year, only 303 million USD out of the country's total
19.3 billion USD FDI was invested into agriculture.
Besides
small scale and dispersed production of the agricultural sector, shortage of
human resources and raw materials, the lack of incentives and preferential
policies as well as a strategy to attract FDI ?are major causes for the
modest FDI inflow.
"The
draft decree ?is expected to trigger FDI inflow into the farming
sector," the ministry said.
Under
the draft, investments in four sectors would be provided with preferential
policies, including producing and developing plant varieties and animal
breeds, producing raw materials with high added value, processing agro-forestry
and fisheries products associated with raw material areas and exports, and
producing veterinary medicine and plant protection products.
Investors
would be provided with incentives such as tax exemption and land use fee
cuts.
The
ministry expected that FDI inflow into the farming sector would help promote
the production of quality products with high added value.
The FDI
inflow into the agricultural sector is anticipated to hit 4.5 billion USD by
2020 and 6 billion USD by 2020 with the percentage in the economy's total FDI
attraction to be raised to 4-5 percent after 2020, according to the ministry.
The
ministry also set a goal that the export value of farming products' in the
FDI sector would increase from 10 percent to 15 percent in 2020 against 2015.
Phu
Yen attracts over 4.5 billion USD in FDI
Some 40
foreign direct investment (FDI) projects worth over 4.5 billion USD have
landed in the southern central coastal
The FDI
projects have created jobs for nearly 4,800 local labourers, according to the
provincial report. Demand for human resource is expected to surge in the
coming time when some other projects become operational such as Vung Ro
refinery project and top-end Phu Yen Sunrise tourism complex.
Meanwhile,
several projects funded by official development assistance (ODA) with a
combined nearly 472 billion VND (21 million USD) of investment capital are
being carried out in transport, forestry and coastal resource development
sectors.
Permanent
Vice Chairman of the provincial People’s Committee Le Van Truc asked the
Foreign Ministry to help in advertising the province’s potentials and
attracting foreign investors to the locality.
For his
part, Deputy Foreign Minister Le Hoai Trung pledged to continue assistance in
external relation training for Phu Yen officials while introducing foreign
organisations to the province.
The
deals were signed by Deputy Minister of Finance Truong Chi Trung and Deputy
Chairman cum General Director of the SFD Yousef I Al-Bassam in
Accordingly,
the fund will be used for three projects in
The SFD
has given about 114 million USD for nine projects in Vietnam, focusing on
rural infrastructure improvement, human resources development, health, and
climate change in impoverished provinces such as Bac Kan, Ninh Thuan, Quang
Tri, Phu Yen, Nghe An, Ha Giang, Hoa Binh, Lang Son and Ha Nam.
The
loans from the SFD aim to help the Vietnamese Government and people implement
a national target programme in hunger elimination and poverty reduction, as
well as improve people’s living conditions.
The
signing provides evidence of the fruitful relations and development
cooperation potential between
Central
economic zone lures 1.8 bln USD in investment capital
The Chan
May-Lang Co Economic Zone in the central
According
to the managing board, the economic zone has issued investment certificates
for three projects, and adjusted investment capital for one project in 2015
with a combined registered capital of 8,739 billion VND (397 million USD).
The
managing board has created favorable conditions, such as better
administrative procedures, site clearance and human resource training in
order to keep projects on schedule.
Nguyen
Que, Head of the economic zone’s managing board, said that with its strategic
position as a significant gate of the East-West economic corridor, the zone
will strive to become an economic hub in central of
Large
projects operating in the zone include the Banyan Tree Group of
The
economic zone aims to lure up to eight projects in the fields of industry,
tourism and urban infrastructure with a total investment capital of four
trillion VND (182 million USD) in 2016.-
Power
supply stable, safe: EVN
Electricity
for production purposes in the first 11 months of 2015 reached nearly 61.73
billion kWh, a year-on-year rise of 8.78 per cent, the Electricity of Vietnam
(EVN) said.
The
group said sufficient, stable and safe electricity supply was ensured during
the period to aid national socio-economic development, as well as cultural
and political events, especially the recently concluded 10th session of the
13th National Assembly.
The
power system operated continuously and there was standby power, the EVN said.
The
total commercial electricity output was estimated at 131.33 billion kWh from
January to November, a yearly increase of 11.73 per cent. The electricity
supplied to industry and construction sectors rose by 10.94 per cent, while
that for trade went up by 22.96 per cent, for agriculture by 23.95 per cent,
and for management and consumption by 10.93 per cent.
The EVN
said it would ensure sufficient electricity in December. The power system
will make the maximum use of hydropower reservoirs, as well as thermal power
and gas turbine plants.
The
group will take over the management of the power system in Bach Long Vi
Island in the northern port city of
According
to research by the World Bank's Doing Business programme,
The time
taken for supplying electricity to customers is 59 days, better than that of
Cement
export target misses mark this year
While
the cement industry was struggling with an excess of supply over demand,
exports, which were considered a solution to boost consumption, failed to
meet expectations.
Cement
and clinker exports in 11 months of this year dropped by 27 per cent over the
same period last year to roughly 15 million tonnes, far below the target of
20 million tonnes for the full year.
The
cement industry faced harsh competition from
Luong
Quang Khai, chairman of Viet Nam Cement Industry Corporation (Vicem), which
held a 35 per cent share of the domestic market, said that Vicem's cement
export could only meet 60 per cent of the full year's target. Vicem set goal
of exporting 3.5 million tonnes cement and clinker this year, the same as
last year.
Khai
said that Vicem did not want to lower prices to boost exports as doing this
would affect other procedures and the entire industry.
A
representative of The Vissai, the country's leading cement exporters, said it
would be difficult to achieve the same cement export results as the previous
year.
Previously,
the Ministry of Construction estimated that total cement sales would reach
between 72 million and 74 million tonnes this year, up 4 per cent over 2014,
in which exports would be at around 20 million tonnes.
The
ministry forecast that cement exports would fall to around 16 million to 17
million tonnes next year and the total cement sales would be between 75
million and 77 million tonnes.
To date,
there were 76 cement production lines in the country with a total design
capacity of 81.56 million tonnes per year which would then increase to more
than 98 million tonnes in the next five years. As a result, the industry was
anticipated to continue facing an excess of supply over demand in the domestic
market.
The
ministry urged cement producers to reduce production costs and improve its
distribution network to lower prices.
VN
manufacturing contracts in Nov
After
rebounding in October, the Nikkei Vietnam Manufacturing Purchasing Managers'
Index once again slipped below the 50-point threshold in November, indicating
a moderate reduction in activity, the monthly
The
momentum is unlikely to increase in the near term.
New
export orders, while improving, remained stuck at four-month lows, profit
margins are starting to come under pressure as a result of weak demand while
output prices contracted at a faster pace in November and the fall in input
prices eased somewhat.
Renewed
declines in the employment sub-component suggest that manufacturers are
growing more cautious about adding headcount.
These
developments support the view that export growth, which fell to 8.3 per cent
year-on-year as of November from 8.5 per cent in October and 13.4 per cent in
2014, will likely slow further through the next quarter.
Data
from the General Statistics Office show that the main drag on exports is
coming from lower demand in the eurozone,
Shipments
to the
This is
a reminder not to get overly pessimistic on
The new
investments should boost
As a
result, exports are likely to expand by 13.1 per cent in 2016. Down the road
recent trade liberalisation efforts should allow the country to continue
capturing global market share, adding to the tailwinds for the manufacturing
sector.
Nonetheless,
the recent weakness in exports, especially on a value basis, has resulted in
some investor concerns over the outlook for
Indeed,
the merchandise trade deficit has worsened in 2015, standing at $4.6 billion
as of November. A seasonal widening of the deficit in December is likely to
push the full-year number to over $6 billion, up from $0.6 billion in 2014.
The
widening trade deficit reflects the fact that imports have been outpacing
exports. So imports merit a closer look. The good news is that a significant
portion of the 13.7 per cent year-on-year increase in imports this year is
associated with demand for capital equipment.
Machinery
imports, for example, have remained robust in 2015 and are on track to expand
at close to last year's 25 per cent pace.
The
improved availability of credit, coupled with excitement over changes to Viet
Nam's foreign ownership regulations, has also helped spark a revival in the
property markets, especially in the big cities of Ha Noi, HCM City, Da Nang,
and Hai Phong.
So far,
the pick-up in lending to the real estate sector has been benign, running at
14.6 per cent year-on-year as of September, and far from resembles the
speculative excesses that led to the collapse of the property market in 2008
and again in 2012.
The
government and central bank are working proactively to reflate the property
market since a recovery in real estate prices boosts banks' collateral
values, helping
The
rising domestic demand is likely to stoke inflationary pressures in 2016. But
thanks to lower global commodity prices, the average headline inflation looks
likely to slow to a record low of 0.5 per cent in 2015 from 4.1 per cent last
year.
However,
the November CPI report offers tentative signs that inflation is beginning to
bottom out: after briefly slipping into deflation in the early fall, headline
inflation ticked up to 0.3 per cent y-o-y in November, driven by a smaller
drag from energy prices and pick up in core inflation to 1.6 per cent y-o-y
from 1.4 per cent.
This is
not exactly cause for alarm at this stage. However, with strong growth likely
to continue in the quarters ahead, inflation is expected to rebound to 3.1
per cent y-o-y by the end of H1 next year, partly on the back of base
effects.
The rate
is likely to accelerate to 4.9 per cent for the full year.
It also
calls for the SBV to shift to a tightening mode next year, and deliver the
first 50 basis-points hike in the third quarter, taking the open market
operations (OMO) rate to 5.5 per cent.
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR
|
Thứ Năm, 10 tháng 12, 2015
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