BUSINESS IN BRIEF 9/12
More than VNĐ15 trillion tax arrears
irrecoverable
Irrecoverable tax debts were estimated to total more
than VNĐ15 trillion (US$669.6 million) as of October 31, rising by 1.4 per
cent over the end of last year, the General Department of Taxation said.
The irrecoverable tax debts accounted for more than 20
per cent of total tax arrears.
Tax authorities until October 31 collected a total
VNĐ33.5 trillion worth of tax debts.
A recent report by the General Department of Taxation
showed that tax revenues totaled VNĐ753.4 trillion in the 11 months of this
year (excluding revenue from State stake sales at State-owned enterprises).
The tax collection met 93.1 per cent of the estimate for the full year and
was equivalent to 107 per cent of the same period last year.
Tax revenue from crude oil reached VNĐ35.6 trillion, or
just 63 per cent of the estimate, since oil prices remained at low levels.
The Ministry of Finance said tax reforms were hastened
this year to create favourable conditions for businesses.
The ministry said 92 tax administrative procedures were
removed this year, along with the application of nationwide e-tax declaration
and payment system.
The ministry’s statistics also revealed that budget
collection rose 6.3 per cent in the 11-month period to touch VNĐ911 trillion.
The Government is expected to add VNĐ1.039 quadrillion
to the nation’s coffers this year, with 80 per cent coming from domestic
collection.
Parkson Hanoi to close one more
shopping center
Parkson Hanoi Co Ltd, a unit of Malaysian retailer
Parkson, is to close Parkson Viet Tower in Hanoi on December 15 after eight
years of operation.
Early last year, the company shut down Parkson Keangnam
Landmark on Pham Hung Street in the capital city. Experts said Parkson had
closed its shopping centers in Hanoi due to fierce competition and heavy
losses.
Many shopping centers in Hanoi have operated
inefficiently in the past, as many tenants have left due to big losses. For
example, Grand Plaza on Tran Duy Hung Street ceased its operation owing to a
slump in sales. After three years of closure, the shopping mall Grand Plaza
has been replaced by an interior furniture supermarket called Kasa Grand.
Trang Tien Plaza, one of the first shopping centers in
Hanoi City, is located next to the landmark Hoan Kiem (Sword) Lake. After
years of poor business performance, it has leased its facility to Imex
Pan–Pacific Group (IPP Group).
The group invested VND400 billion in the center’s
innovation, and reopened it in early 2013. At that time, many experts
predicted IPP Group would improve the performance of this center. However,
the business situation has not fared as well as expected.
A report of Savills Vietnam indicated that business at
Hanoi-based shopping centers has been less vibrant. Total retail space supply
has increased with the launch of at least three new projects – T1 Tower of
Thang Long Victory, Thang Long Garden and Victoria Van Phu. However, average
occupancy has been on the decrease.
As reported by market researcher JLL, unoccupied space
at commercial centers in Hanoi had risen from 25% in the first quarter to
nearly 26% in the second quarter, and represented a year-on-year rise of 10
percentage points.
Many commercial centers are located in unfavorable
locations that are inconvenient to local residents, or near existing trade
centers, prompting fierce competition, according to Nguyen Van Dinh, general secretary
of the Vietnam Association of Property Brokers.
Tra fish firms suggested to study
market demand first
Instead of carefully gauging market demand before
turning out products, many domestic tra fish enterprises have ignored that
step and focused on production only, which has made their products less
competitive on global markets, said experts attending a conference in Can Tho
City on December 6.
Le Xuan Thinh, deputy director of Vietnam Cleaner
Production Center (VNCPC), said so far, enterprises have only produced what
they want rather than what the market wants.
“Making enterprises change their way of thinking is the
objective of the Sustainable Pangasius Supply Chain (SUPA) project,” he told
the conference on market demand in the viewpoint of customers and European
retailers.
Axel Hein, an expert of the World Wildlife Fund (WWF)
in Austria, noted how customers are largely unaware of tra fish from Vietnam.
“When asked what tra fish is, a group of young consumers in Austria said it
is a low-cost freshwater fish which has no bone and therefore, can be
processed into different dishes,” he told the conference.
Vietnamese enterprises can use tra fish to make dishes
for children or process it into fish balls or packaged fish rather than
simply exporting tra fish fillets to Europe, Hein suggested.
Aside from creating new products, he said local firms
should promote tra fish farming and processing techniques on YouTube to
appeal to more consumers in the EU.
In addition, the packaging of tra fish products should
be attended to so that such products become more eye-catching to consumers.
Not only that, exporters have to put information on the
origin of tra fish products or guidance on how to cook tra fish on the
packaging and ensure that the information is accurate, he added.
Robert Herman, managing director of Austria-based Yuu’n
Mee, said enterprises have to produce tra fish of high quality to approach
customers with stricter requirements.
In order to do so, Vietnamese tra fish has to meet
criteria set by importing markets, he said.
The goal of the SUPA project is to make at least 50% of
small and medium tra fish processing firms meet the Aquaculture Stewardship
Council (ASC) standards.
Founded in 2010 by WWF and IDH (Dutch Sustainable Trade
Initiative), the Aquaculture Stewardship Council (ASC) is an independent
not-for-profit organization with global influence.
ASC aims to be the world’s leading certification and
labelling program for responsibly farmed seafood.
So far, only 35, or 16.3% of tra fish farms in Vietnam,
have received ASC certificates.
Incoming remittances to HCMC
predicted to drop this year
Incoming remittances to HCMC are expected to edge down
this year due to the recent unfavorable political and economic developments
worldwide, although this source of foreign currency steadily increased around
10% a year previously.
Nguyen Hoang Minh, deputy director of the HCMC branch
of the State Bank of Vietnam (SBV), said incoming remittances to the city are
estimated at US$5 billion in 2016, falling by over US$500 million from a year
earlier. The smaller sum is attributed to a decline in remittances from the
U.S.
Incoming remittances in the fourth quarter alone
usually account for 40-42% of the total, with nearly two-thirds sourced from
the U.S.
Minh said an imminent interest rate hike by the U.S.
Federal Reserve this month has prompted remittances from this country to
fall.
Besides, U.S. President-elect Donald Trump said he
would scrap the Trans-Pacific Partnership (TPP) trade pact when he takes office.
This might have made Vietnamese American investors hesitant over bringing
money to the homeland to tap into opportunities from the trade agreement.
By end-September, 71.9% of remittances to HCMC had been
channeled into the production field, 21.9% into real estate and 6.2% to
families of overseas Vietnamese.
In the 2012-2015 period, remittances to HCMC increased
10% per annum, from US$4.1 billion in 2012 to US$4.85 billion in 2013, US$5
billion in 2014 and US$5.5 billion in 2015. Remittances to the southern
economic hub make up 50% of the country’s total.
SBV deputy governor Dao Minh Tu has been cited by Thanh
Nien newspaper as saying that incoming remittances to Vietnam are expected at
US$9 billion this year, much lower than in 2015.
According to a World Bank report, incoming remittances
to Vietnam stood at an estimated US$12.25 billion last year.
HCM City to tighten fiscal
discipline
HCMC will tighten fiscal spending given revenue
constraints as a result of tariff cuts and a lower level of retained budget
revenue.
With the percentage of budget revenue the city may
retain slashed from 23% to 18%, a series of solutions for revenue management
will be carried out next year, said HCMC Chairman Nguyen Thanh Phong at the
opening session of the municipal People’s Council on December 6.
Specifically, the city will tighten fiscal discipline,
settle problems related to taxation to help businesses boost their activities
and fulfill their tax obligations, said Phong at the third meeting of the
council on December 6.
Notably, capital allocation will be based on how to
balance the budget. Funding will be prioritized for projects within the seven
breakthrough programs.
HCMC will offer incentives to lure investors from all
economic sectors into infrastructure development, with a focus on
public-private partnerships.
As per the plan for public investment in HCMC next
year, the central budget will provide nearly VND7.2 trillion, while the city
will supply itself more than VND25.1 trillion.
The total budget revenue of the city next year is
estimated at over VND347.8 trillion, an increase of nearly 16% from 2016,
whereas the total budget spending is put at some VND70.64 trillion.
A HCMC People’s Council deputy suggested the city focus
on fueling production as a long-term solution for sustaining revenues. Thus,
the municipal government should early specify the incentives for each type of
production to assist businesses to grow.
Initially, the city government said a VND1-trillion
package would be launched to support entrepreneurship and help household
businesses turn into companies.
In addition, the time for business registration will be
shortened. And preferential policies on taxation, credit, land and manpower
combined with attraction of multinational corporations will be implemented in
line with the development of domestic enterprises and supporting industries.
“The city will go ahead with the plan for restructuring
SOEs and divesting State stakes in enterprises, grant public service units
autonomy, call for the private sector’s involvement in public services, let
eligible public service units go public, and cut budget spending,” said
Nguyen Thanh Phong on the economic development plan for next year.
HCMC to spend US$81.4 million
dredging Ba Lon Canal
The HCMC government is seeking approval from the
municipal People’s Council to execute the Ba Lon Canal dredging project at a
cost of VND1,850 billion (US$81.4 million) financed by the enterprise
restructuring assistance fund.
In a document sent to the council on December 6, the
city government said the project aims to dredge the canal with a total length
of nearly 7.5 kilometers running from District 8 to Phong Phu Commune in Binh
Chanh District.
The project is expected to be executed between this
year and 2020, and when completed, it will help upgrade the drainage system
in the south of the city, and connect the system with another project to
improve flood control, which is underway in the area.
In addition, the city government has asked the council
for permission for 55 public investment projects of Group B, costing a total
of VND20 trillion which will be financed by the city’s budget.
Prior to the meeting of the HCMC People’s Council, many
city residents expressed concerns over the rapid urbanization, resulting in
many environmental problems, including the encroachment on drainage canals,
and urban flooding caused by rains and high tides.
Steel industry no longer governed by
master plan, says VSA
The Vietnam Steel Association (VSA) has reminded the
Ministry of Industry and Trade that the State would no longer manage the
steel industry with any master plan if the Planning Law was voted through and
put into force in 2018. Regarding the current practices, a steel project
cannot be approved if it is not named in the master plan for the industry.
As per the draft Planning Law submitted to the National
Assembly (NA), the steel industry and many others will no longer be governed
by planning but by other laws like the Enterprise Law, the Investment Law,
the Law on Quality Standards and the Law on Environmental Protection, VSA
said in a written comment on the draft planning for the steel industry until
2025, with a vision to 2035.
This planning, therefore, will only serve as a
reference before investors make their decisions. Also, the issuance of
investment certificates will be done according to the opinions of the
relevant ministries, not just the Ministry of Industry and Trade.
The draft Planning Law stipulates that only 21
industries need national planning for their use of marine resources and
large-scale infrastructure. For most of the other industries, including
steel, the industry ministry is no longer responsible for doing the planning.
This draft law has been widely discussed by the NA
since September, with most opinions against the planning for the steel
industry, yet the industry ministry has still drafted planning and gathered
opinions.
Foreign investors should not be invited into the
projects to produce normal steel products whose supply is redundant. Instead,
they should be encouraged to invest in the production of alloy and
high-quality steel, says VSA in the written comment signed by Vice Chairman
Nguyen Van Sua.
Currently, domestic investors are capable of developing
large-scale steel complex projects. Foreign investors already account for a
high proportion in the steel industry, so there is no need to call for
others, VSA states. The steel association also notes that it is a major
shortcoming of the industry ministry to adjust the planning without setting
an aim for the development of hot-rolled and high-quality steel, almost 100%
of which Vietnam has to import at the moment. Meanwhile, many projects of
construction steel and steel billets are still conceived.
VSA also pointed out other faults in the ministry’s
draft planning. Remarkably, in this draft planning, a mammoth project for
“expansion of the second phase of Thai Nguyen Steel Factory”, which has made
losses and remained inactive, is listed as “no investor”. This is incorrect
since it is a project of Vietnam Steel Corporation and other shareholders.
VSA proposes this project should be thoroughly handled
and similar projects that have yet to get going should be eliminated,
including several other infeasible projects slated for 2017-2025.
Vietnam aviation sector posts
staggering growth
The total number of air passengers is estimated to
reach 52.2 million this year, up a staggering 29% year-on-year, according to
data of the Civil Aviation Authority of Vietnam.
Low-cost carriers Vietjet Air and Jetstar Pacific have
operated 50 domestic air services connecting Hanoi, HCMC, and Danang with 17
domestic airports. Therefore, the number of domestic passengers has soared to
28 million, up 30% year-on-year.
In addition, the number of passengers using budget air
services on domestic routes is expected to amount to 15 million this year,
accounting for nearly 55% of the total number of domestic flyers.
As of end-November, the total fleet of the local
carriers has amounted to 147 airplanes, and five more planes would be
delivered in the rest of this year.
This year there are 52 foreign airlines of 28 countries
and territories operating 78 air services to and from Vietnam. Local and foreign
carriers also have conducted chartered flights to Hue, Can Tho and Dalat
among others.
Local carriers in the January-November period of this
year operated over 228,000 flights.
However, there were some 36,844 delayed flights,
accounting for 16.1% and up 0.6 percentage point year-on-year, while 1,605
canceled flights were reported, making up 0.7% and rising 0.2 percentage
point year-on-year.
First hotel project licensed into
hi-tech park
Beton 6 Construction & Civil Engineering
Corporation was awarded a license on December 6 to develop a commercial
center and a hotel inside the Saigon Hi-Tech Park in District 9, HCMC, the
first time such facilities are to be developed in the park.
Beton 6 will pour some VND453 billion to develop the
Saigon East Commercial Center, comprising a trade center and a
convention-hotel complex, in the hi-tech park.
The trade center, named Satra Center Mall, will have
total floor space of 32,000 square meters, mainly catering to experts,
workers and students in the park, as well as residents in nearby areas. Le
Thien Giao, director of Beton 6 Construction & Civil Engineering
Corporation, said at a function to receive the business certificate from the
hi-tech park management on December 6 that his company had also inked an agreement
with Saigon Trading Group (Satra), allowing the latter to manage the trade
center over a period of at least 30 years upon the center’s completion in
2018.
Meanwhile, a complex of convention halls and a
five-star hotel will also be developed as the second component of the
project. This 15-floor hotel will also cater to businesspeople in the park as
well as their partners.
Giao said his company would look for a well-known hotel
management company to manage the facilities.
The HCMC Saigon Hi-Tech Park is currently home to some
50 tenants, many of them multinationals like Samsung, Intel and Nidec,
employing over 33,000 laborers.
Hanoi hosts international exhibition
on security
The 2016 Homeland Security Expo, the only international
exhibition on security in Vietnam, opened for the first time in Hanoi on
December 7, marking the start of a series of annual programmes introducing
the latest equipment, information and technologies in the field.
The two-day event features 50 booths set up by 40
companies from the leading nations in the areas of security and defence, such
as Russia, the United States, India, Germany, Denmark, the United Kingdom,
the Republic of Korea, Japan, the Czech Republic, Ukraine, Singapore and
hosts Vietnam.
On display at the exhibition are products from many of
the world’s popular brands in the fields of security, safety and defence,
including KB Radar, Emirates Special Vehicle, Digital Barriers, GDMS,
Convidence Reeco Tech, Tata Motors Limited, Dermilog Indentification, Smiths
Detection, Arvind, IRITECH, Panasonic System Solutions, SKICHEL and CPRO
Vietnam.
With the goal of introducing and exchanging equipment
and technologies serving the security and defence industry, the exhibition
promises to bring the most advanced products and technologies to those
working in the sector in Vietnam, according to the organising committee.
The event is expected to be a platform for Vietnamese
companies to establish new relationships and advertise their products to
potential international customers. It also offers a good opportunity for both
domestic and foreign enterprises to facilitate international cooperation,
experience sharing and technology transfers.
PM signs off on budget allocation
for 2017
Prime Minister Nguyen Xuan Phuc has signed a decision
allocating budgets for government ministries, central-level agencies,
provinces and centrally governed cities for 2017.
The Ministry of Finance and the Ministry of Planning
and Investment have been asked to guide other ministries, the state power
utility EVN, Agribank, provinces and cities to implement the budgets in line
with the Law on the State Budget and the Law on Public Investment.
Meanwhile, they are in turn requested to prod
State-owned enterprises under their jurisdiction to pay their taxes in full
after setting aside the required funds.
Provinces and cities are required to spend all the
funds from lotteries on investment for development, of which more than half
should go to education, vocational training and healthcare.
At least 10% of lottery revenues should be spent on
building new-style rural areas while the rest may be spent on climate change
response projects and other important programmes.
Ministries, provinces and cities are required to make
efforts to increase revenues and reduce unnecessary spending in order to
provide funds for a minimum wage rise from July 1.
The basic wage used to calculate salaries for state
workers, pension payments and other benefits will increase from the current
VND1.21 million to VND1.3 million a month.
In 2017 funds will not be provided to projects that had
a disbursement rate of less than 30% as of September 30, 2016, except for the
cases in which delays are unavoidable.
Funding for workshops, conferences, foreign field
trips, cars and expensive equipment will also be cut.
Total investment capital of BRT
adjusted
The Ho Chi Minh City Department of Transport said
yesterday the city green transport development project - building bus rapid
transit (BRT) on Vo Van Kiet and Mai Chi Tho was adjusted with total
investment capital of US$ 131million, a decrease of over US$ 12.7million
compared to last preriod.
The management board of urban transport investment
& development proposed the solution to build two new lane BRT with total
length of 3.8km on Mai Chi Tho (starting from Dong Van Cong to Cat Lai
intersection), aiming to reduce traffic jams.
It is estimated that around 6,000 passengers per day
will use this route for the first year's operation (2019). Next years, the
number of passengers using the BRT is expected to increase and by 2026 it
will be able to reach 25,360 passengers a day.
However, motor/car parking lots are far away the BTR
therefore it proposed to build motor parking lot at bus stops.
The department suggested the people's Committee to
invest high speed-buses from the city's green transport capital and encourage
the private sectors to join in buying high speed-buses as per its green
transport plan.
State assets must be secured during
SOE equitization
Prime Minister Nguyen Xuan Phuc has called for the
equitization process of Vietnam during the 2016-2020 period to be faster,
clearer, and stricter, with the value of land use rights no longer incurring
a loss for the State.
“The discussion on the determination of land use rights
for enterprises is essential”, Prime Minister Nguyen Xuan Phuc said, when he
chaired the national videoconference implementing the rearrangement and
renovation of SOEs during the 2016-2020 period.
Decree 59 sets a 30-day time limit for local
administrations to give their official opinions on land prices to be applied
to equitized enterprises. Some provinces have stated that the time allowed
was too short, making the valuation of lands inaccurate.
Recently, during the divestment of State capital in two
beer giants- the Hanoi Beer Alcohol and Beverage Corporation (Habeco) and the
Saigon Beer Alcohol and Beverage Corporation (Sabeco), the Vietnamese leader
called for the land use rights to be taken into account during the valuation
process.
“A full and complete discussion over a regulatory
change will be made, as Decree 59 on the conversion of enterprises with 100
per cent State-owned capital into shareholding companies has shown
inadequacies”, the PM told the gathering.
Figures from the Steering Committee for Enterprise
Renewal and Development revealed that the number of SOEs has declined
significantly from some 6,000 in 2001 to 718 as at the end of October 2016,
focusing on 19 sectors. However, the proportion of stakes sold only accounted
for 8 per cent of the total capital that the State is holding.
There is a need to determine the sectors that the State
should entirely divest from. “The classification list of SOEs is in my
hands”, PM Phuc said. One thing holds the Vietnamese leader back, “how much
should the dominant shares be in sectors that the government needs to
control?”
During the next five years, the State will only hold
100 per cent of the capital in key sectors. “Those that the State does not
need to hold controlling stakes in will have to conduct equitization in
accordance to the market mechanism, ensuring transparency and avoiding a loss
of the State’s assets,” said Vice Chairman of the Office of the Government
Mr. Le Manh Ha.
“Those who deliberately slow down the equitization
process, or do not want to be privatized, will be liable for their actions”,
said PM Phuc. The removal of all legal obstacles in the equitization process,
development of evaluation systems for equitized enterprises, and the
application of international corporate governance practices will be set.
During the first 11 months of this year, the
military-run telecom operator Viettel, the Vietnam National Textile and
Garment Group (Vinatex), the State Capital Investment Corporation (SCIC), the
Vietnam Northern Food Corporation (Vinafood1), and eight corporations under
the Ministry of Construction (MoC) and Hanoi, sold the State stakes in other
enterprises worth VND2.8 trillion ($123.2 million), bringing in VND5.08
trillion ($223.6 million).
ACV divests all shares at Hanoi
Ground Services
Airports Corporation of Vietnam (ACV) has announced it
will divest all its shares, equivalent to 20 per cent of charter capital, at
Hanoi Ground Services Joint Stock Company (HGS).
The Ministry of Transport directed ACV to sell the
shares to other founding partners through an auction if over two founding
partners will buy them, or through an agreement if only one founding partner
buys the shares.
ACV is also requested to buy the shares under public
auction for other investors who are not founding partners. “The starting
price will be determined by valuation organizations in accordance with the
law on valuation,” said Deputy Minister of Transport Nguyen Hong Truong.
The aviation giant, on December 3, announced to its
intent to sell nearly 4 million shares of its subsidiary Southern Airports
Services JSC (Sasco), with the stock code SAS, .
From December 6 to January 4, ACV will register to sell
3.95 million SAS shares out of a total of 67 million SAS shares owned by ACV,
equivalent to 51 per cent of the charter capital of Sasco.
SAS shares are now trading at a price of VND26,000
($1.17) per share. At this price, ACV is expected to gross VND100 billion
($4.4 million).
More than 2.17 billion shares of ACV have officially
traded on the Unlisted Public Company Market (UPCoM) since November 21, with
a reference price on the first day of VND25,000 ($1.1) per share. Ten days
later, the price rose to VND41,000 ($1.84) per share, an increase of 64 per
cent.
ACV also divested a part of its capital in Saigon
Ground Services JSC (SAGS) before trading on UPCoM. ACV sold 132 million
shares of SAGS, reducing the ownership percentage from 54.62 per cent to
48.02 per cent, equivalent to 9.6 million shares.
HSG has charter capital of VND150 billion ($6.6
million), providing ground services at Noi Bai International Airport with
approximately 30 per cent of market share.
In the first seven months of 2016, HSG achieved revenue
of VND170 billion ($7.48 million), profit after tax of VND28 billion ($1.2
million), with return on equity reaching 30 per cent.
This year, HGS signed a contract to provide services
for Emirates, Turkish Airlines, Malindo Air, Hainan Airlines and Nok Air.
ACV is a joint stock company operating under the
parent-subsidiary structure, with the state holding majority stake. In
October 2015, the government approved its equitization plan, with state
ownership to fall to 75 per cent.
ACV manages 22 airports throughout Vietnam, seven of
which are international and 15 domestic, with 21 directly managed by the
corporation. It also has a range of joint ventures with other companies.
DAS Capital seeks strategic
partnership with Tan Tao
DAS Capital Fund from the US has recently announced
plans to become the strategic partner of Tan Tao Investment Industry
Corporation (HoSE: ITA) by making an investment capital contribution of $150
million.
Under the plan, DAS Capital will buy ITA shares for $20
million, then raise its investment to $150 million over several phases.
DAS Capital, founded in 2011, has expanded its presence
all over the world and made a strong foothold in Asia. The Los Angles-based
fund’s portfolio currently stood at $5 billion.
This week, a high-level delegation headed by Nebojsa
Micic Micko, executive vice president of DAS Capital in Southeast Asia, paid
a visit to Vietnam to explore the opportunity of becoming ITA’s strategic
partner.
According to Micko, Vietnam is well-known as an
emerging market with significant potential. The country already signed a wide
range of free trade agreements (FTAs), such as the Trans-Pacific Partnership
(TPP) and the EU-Vietnam FTA. This is the right time for investors to study
the market and make an investment decision.
He highlighted that this is the first time DAS Capital
ventures into Vietnam. The fund is looking to cooperate with a prestigious
local company who has strong growth, a matching portfolio, and high potential
yield.
ITA general director Thai Van Men noted that Tan Tao
has a diversified portfolio across many industries, like healthcare,
education, real estate, and infrastructure development. In particular, the
firm is one of the leading industrial park (IP) developers in Vietnam with
many projects nationwide, such as Tan Tao IP in Ho Chi Minh City and Tan Duc
IP in the southern province ofLong An.
“ITA has seen growing interest from investors due its
rapid development in the past few years. The firm welcomes both local and
foreign strategic investors to increase investment capital for its upcoming
projects,” he added.
Viettel’s Burundi arm wins 2 world
communication awards
Viettel’s subsidiary in Burundi, Lumitel, won the “Best
operator in an emerging market” and “Best brand” awards at the 2016 World
Communication Awards (WCA) held in Britain last month.
To win these awards, Lumitel had to overcome a
challenge from international telecom companies like Orange (France), Telstra
(Australia), Airtel (India), Ooredoo (Qatar) and Telkomsel (Indonesia).
Lumitel has invested in laying 3,000km of fibre-optic
cable to cover all of Burundi’s 18 provinces, and the number of its base
transceiver stations equals that of all four of its competitors put together.
One month after starting operations Lumitel became the
second biggest player.
After one year the company was first with a 46 per cent
market share and 1.5 million subscribers out a total population of 10
million.
Last October Lumitel had been recognised as the Most
Successful New Enterprise of the Year, its first international award, by the
International Business Awards – IBA Stevie Awards, after it built complete,
high-quality infrastructure within a short time, used IT in sales, registered
all smart phone users’ private information, and set up a distribution network
covering remote areas.
For Viettel, this was the fifth “Best operator in an
emerging market” award after its subsidiaries in Viet Nam, Cambodia, Laos,
and Timor Leste also won it.
The World Communication Awards were established in 1999
to recognise excellence amongst global telecom operators. They are open to
all fixed and mobile operators and service providers who operate fully or
partly in what is widely recognised as a developing market.
Da Nang Port lists 66 million shares
on UpCoM
Da Nang Port has made its debut on the Ha Noi Stock
Exchange with 66 million shares, under the code CDN.
The Da Nang Port Joint Stock Company said the listing
would contribute towards the company’s future development by driving it to
constantly innovate, enhance business and put in place modern administrative
methods, thus creating favourable conditions to mobilise capital from
investors for business development and expansion.
Da Nang Port began operations under the joint stock
company on July 24, 2014, with a registered capital of VND660 billion (US$29
million). It is one of the 12 businesses under the management of the Viet Nam
Maritime Corporation that is being equitised, in accordance with the
Corporation’s restructuring plan for the 2012-15 period, approved by the prime
minister in 2013.
After equitisation, the port faced many challenges from
the global shipping industry as well as competition from other ports in the
country. With its focus on receiving container shipping, bulk carrier and
passenger shipping, developing the market, strengthening investment in
infrastructure and training, the company has shown positive growth compared
to its performance before equitisation. Its profit in 2015 was 10 times
higher than that of five years earlier.
On July 30, 2016, the company began the second phase of
work on expanding Tien Sa Port, which requires an estimated investment
capital of more than VND1 trillion. Once complete, Da Nang Port will be able
to receive ships with 10 million tonnes of goods and more than 150,000 gross
tonne passenger ships.
Mebipha to invest in vertical
integration
Mebipha Manufacturing & Trading Co. Ltd. will
invest in a hi-tech, closed poultry farm in 2017 as part of its vertical
integration chain, to supply farmers with feeds and breeders.
The company aims to increase its export turnover,
construct a complete vertical supply chain for sustainable growth and become
one of the top three leading veterinary companies in Việt Nam by the end of
2016.
As a manufacturer of veterinary pharmaceutical products,
complete premix and feed additives and preventive and curative medicines for
farming and aquaculture, Mebipha distributes its products across the country
and exports to countries such as Cambodia, Laos and Myanmar.
It has researched, produced and distributed many
products such as antibiotics Ceftri One LA, Josa INJ and Tri Alpha, which are
popular with farmers owing to their effectiveness and reasonable rates
compared to imported antibiotics.
The company’s three antibiotics had been ranked as one
of the ten best national veterinary products by the Animal Husbandry
Association of Viet Nam, the Department of Livestock and the National
Agriculture Extension Centre on November 24, 2016.
Fruit producer Vinamit get US, EU
organic certification
Vinamit Joint Stock Company, a producer and exporter of
vacuum-fried fruit and dried-fruit products, has had its farming and
processing certified as organic separately by the US Department of
Agriculture and EU’s Ecocert.
It received the USDA and EU organic certifications for
around 80 products, its three farms totalling 171ha in Binh Duong Province
and its two processing and packaging plants in the province.
The certification follows its efforts to strictly
conform to US and EU organic farming requirements for the past three years,
Nguyen Lam Vien, the company’s chairman and general director, said.
Organic certification is considered the highest food
hygiene and safety standard globally.
To obtain the certificate, growers must not only ensure
they do not use fertilisers, pesticides, chemicals, stimulants, hormones or
genetically modified seeds, but also have to guarantee that their organic
farming practices meet environment-friendly, bio-diversity and sustainable
development standards, he said.
Achieving the certification would enable the company to
export to fastidious markets like North America, Japan and the EU, he said.
Richard De Boer, managing director of Control Union
Vietnam, said, “consumers are becoming more and more aware of what they eat.”
In the last three to five years organic consumption has
been growing by 5-10 per cent a year.
The global organic market is worth around US$80
billion, with the US being the main consumer, De Boer said.
SCIC and IFC partnered to promote
corporate governance
Viet Nam’s State Capital Investment Corporation (SCIC)
signed a memorandum of understanding with the International Finance
Corporation (IFC) on improving corporate governance practices during
equitisation, on December 7.
“Corporate governance has always been an SCIC priority
to improve the performance of its portfolio. With a portfolio of about 200
companies, we are conducting thorough assessments to strengthen corporate
governance in these companies to improve their value,” said Nguyen Đuc Chi,
Chairman of the SCIC.
By purchasing equity in state-owned companies and
mobilising capital from international buyers, IFC agreed to support SCIC and
its portfolio companies in executing their divestment plan and exploring
financing opportunities in the agribusiness, services, and manufacturing
sectors. The two parties will consider privatisation opportunities on a
case-by-case basis.
Over the next two years, IFC will develop a corporate
governance-improvement plan, using international practices for some SCIC
companies. IFC will also conduct annual training programmes for potential
directors of corporations on various aspects of corporate governance, like
board effectiveness, financial oversight and transparency.
“Co-operation with SCIC is part of our efforts to
support the equitisation of state-owned assets and help further strengthen
the private sector as a key driver for economic growth and employment in Việt
Nam,” said Vivek Pathak, IFC’s Regional Director for East Asia and the
Pacific.
IFC expected to not only increase the performance of
the SCIC portfolio, but also to accelerate growth, and attract more foreign
investment to State-owned firm equitisation.
IFC, a member of the World Bank Group, is the largest
global development institution focused on the private sector in emerging
markets.
Since its first direct investment in Việt Nam in 1994,
IFC has catalysed $5.6 billion of investment to 120 projects in
infrastructure, manufacturing, agribusiness, renewable energy, and finance in
the country.
FTAs useless for local retailers
A recent report of the Viet Nam Chamber of Commerce and
Industry (VCCI) shows free trade agreements will little impact on the
country’s enterprises, however, many disagree with the findings.
The Phap luat Thanh pho Ho Chi Minh (HCM City Law)
quoted Huynh Van Minh, chairman of the HCM City Enterprises Association, as
saying that the study results were not realistic.
Small and medium- sized enterprises account for 90 per
cent of the country’s total enterprises and these enterprises have several
weaknesses, he added. He said the size of these retailers was increasingly
shrinking.
Sharing the same view as Minh, Dao Xuan Khuong, an
expert on distribution and retail, said the largest impact of free trade
agreements are the tariffs, which will gradually reduce to zero per cent.
Foreign retailers already had connections with
suppliers globally; therefore, if price of Vietnamese producers were not
competitive, they would import goods from abroad into Viet Nam.
However, it was not easy for local retailers to do the
same as they did not have similar trade relationships with global suppliers,
he said.
"The fact that some local retail businesses leave
the market shows that they are unable to ultilise the advantages of the
preferential tariff of zero per cent, unlike foreign retailers. Besides this,
they realise their capital is not enough to compete in the long term, so
their decision to withdraw is a wise strategy,” the expert said.
In addition, Nguyen Phi Van, an expert on retail and
franchise, said it was the consequence of the unready and passive Vietnamese
enterprises, which were satisfied with local and regional markets, while
investors in neighbouring countries, especially Thailand and Malaysia, were
keen for international co-operation.
Industrial machinery equipment and
material expo opens in HCM City
The 11th Viet Nam International Exhibition on
Industrial Machinery Equipment, Material and Products (Vinamac Expo 2016)
opened in HCM City on December 7.
The expo features more than 450 booths set up by 250
Vietnamese and foreign exhibitors, including those from Austria, the Czech
Republic, Germany, South Korea, the US, Japan, Singapore and China.
Products on display includes a wide range of machinery,
steel pipes, metallurgy, materials, metal and welding items, chemicals,
paint, coating materials, and textile, printing and advertisement equipment,
among others.
Conferences on the textile industry, fertilisers and
pesticides, welding and metalworking, the chemical industry and others will
be held alongside the expo.
Speaking at the opening ceremony, Nguyen Quang Huy,
deputy head of the Ministry of Industry and Trade’s Southern Affairs, said
the exhibition offered an opportunity for Vietnamese manufacturers and foreign
companies to seek new business opportunities and technology exchange.
Organised by the Viet Nam Advertisement and Fair
Exhibition JSC in collaboration with HCM City Association of Mechanical
Engineering and other local and international organisers, the expo at the
Saigon Exhibition and Convention Centre will run until December 10.
SBV works to prevent credit fraud
The State Bank of Vietnam (SBV) this week instructed
concerned agencies and organisations to keep a strict check on the use of
credit cards to prevent false transactions.
In a move aimed at keeping the credit card market safe
so it develops healthily, the SBV issued Document No9325 / NHNN-TT dated
December 5, directing card issuers, card payment organisations, payment
intermediary organisations and SBV’s branches across the nation to prevent
the use of credit cards in sham transactions, in which card-accepting units
permit card holders to withdraw cash via points of sales (POS) without making
any real transactions related to the sale or purchase of goods and services.
The central bank said it had recently come across some
cases where credit card holders had used the card to simply withdraw cash.
Such kind of transactions are prohibited under
Vietnam’s law as they are a risk and can negatively affect the healthy
development of the country’s credit card market, the SBV noted in the
document posted on its website.
To manage the card market better, the central bank has
asked card issuers and card payment institutions to scrutinise and select
only reliable card-accepting units. Then, they have to closely monitor credit
card transactions to avoid sham transactions, it said.
Before issuing credit cards to customers, these
agencies must conduct a comprehensive assessment and scrutiny to meet the
country’s legal regulations on granting credit.
The central bank has prohibited payment intermediary
organisations from providing services for pretended transactions.
The SBV has also asked card issuers and card payment
institutions to raise awareness among people about false transactions and
other frauds related to card and electronic payments.
Besides raising people’s awareness about pretended
transactions and following a non-cash payment policy, the SBV’s branches must
regularly conduct inspections to uncover violations, the central bank said.
BRG and Sumitomo embark in real
estate and retail
Vietnamese leading private group in finance, banking
and golf resorts BRG Group has established a strategic relationship with
Japan’s Sumitomo Corporation to increase to collaborate in potential business
sectors, especially the real estate and retail.
The co-operation, which was marked by signing a
memorandum of understanding (MoU) on December 1, is considered a foundation
to exploit and develop the two parties’ potential during the co-operation
progress in numerous sectors, including real estate, Nhat Tan-Noi Bai urban
development project, high-tech agriculture and retail sectors.
In addition, it is also an important landmark, which
supports for the two parties’ expansion of business activities,
simultaneously help to confirm the value of the two firms’ brand.
“Sumitomo sees BRG Group as a leading private group in
Vietnam. We believe that BRG Group has characteristics we are looking for in
a local partner. The MoU will lay the foundations of our partnership and
enable us to work closely together on specific business agreements that
produce new synergies and add value to both parties,” said Masao Sekiuchi,
CEO of Sumitomo Corporation Asia & Oceania.
Established in 1993, BRG is an conglomerate, providing
services in many areas, including real estate, hospitality, entertainment,
golf courses, trade, retail, production, and construction.
In real estate, BRG has developed projects in most
major cities in Vietnam, with a focus on commercial buildings with the BRG
Commercial brand, apartments with BRG Homes, apartments for rent with BRG
Suites, and hotels and resorts with the BRG Hospitality brand.
With many projects invested basically, the group has
confirmed its position through expansion of business activities and
increasing to co-operate with domestic and foreign partners.
The group targets to build a sustainable development,
matching regional and international levels.
Meanwhile, Sumitomo is one of the largest trading and
investment companies in Japan engaged in multifaceted business activities
through a network of 132 locations in 67 countries worldwide with total
70,000 employees.
Sumitomo was first established a representative office
in Vietnam in 1995, which became Sumitomo Corporation Vietnam LLC in
2007.
Sumitomo has contributed broadly to Vietnam’s
socio-economic development through diversified business activities, including
import and export, manufacturing and processing, development of industrial
parks, power plants, urban railways, and many other meaningful corporate
social responsibility (CSR) activities.
Danish goliath to pioneer wind
energy in Vietnam
Vestas Wind Systems from Denmark, the world’s leading
wind energy producer, has promised to help Vietnam unlock its vastly
underused wind potential.
“Vestas has been present in Vietnam since the beginning
of the country’s wind journey. The firm has recently taken a new step in
development by setting up Vestas Vietnam in Hanoi. The legal entity aims to
call for new industry partners to implement wind projects in the country,”
Chris Beaufait, president of Vestas Asia Pacific and China, said at Vietnam
Wind Seminar 2016 last week.
In 2016, the company has supplied 12 Vestas V100-2MW
wind turbines for Phu Lac 1 Wind Power Plant in the central province of Binh
Thuan. The project is expected to deliver 24 megawatts (MW) of clean and
reliable power to Vietnam.
Next year, Vestas looks forward to delivering the 30MW
Huong Linh 2 project in the central province of Quang Tri.
Under an order from Vietnamese company Tan Hoan Cau,
Vestas will manufacture 15 V100-2.0MW turbines.
Beaufait stated that the Phu Lac 1 and Huong Linh 2
projects can serve as best practice examples and change the way the
government and stakeholders look at wind power development in Vietnam,
thereby paving the way for the full realisation of Vietnam’s wind potential.
Indeed, while Vietnam is blessed with abundant wind
resources, only 158MW of wind power have been put into operation
to-date.
Investors face many challenges due to a number of
regulatory and market barriers, such as a low feed-in-tariff (FIT), weak grid
and transmission systems, as well as the lack of financing options.
Pham Trong Thuc, head of the New and Renewable Energy
Department under the Ministry of Industry and Trade (MoIT), said that the
current FIT of 7.8 US cent per kWh is not attractive enough for investors,
while the proposed 10.4 US cent per kWh is not feasible at the current stage
of development.
“The MoIT is assessing three large existing wind farms
in Bac Lieu and Binh Thuan provinces to establish the real costs of
electricity production. We expect a number of wind projects will be
implemented when the new FIT is put in place,” he added.
“In addition, the government also plans to increase the
localisation rate in the wind energy sector to lower investment costs. The
MoIT and GE have inked a Memorandum of Understanding to develop 1,000MW wind
energy in Vietnam by 2025. Under the agreement, we aim to achieve 60 per cent
of localisation for the project,” he said.
According to Danish Ambassador Charlotte Laursen,
Vietnam’s power development strategy targets 7% renewable energy in the total
national electricity production in 2020, increasing to 10% in 2030, excluding
hydro-power.
“Wind has an important role to play in achieving these
targets. Denmark is well prepared to help Vietnam meet, and perhaps, even
exceed these targets,” she noted.
Industrial equipment expo opens in
HCM City
The 11th international exhibition on industrial
machinery, equipment, materials and products (VINAMAC EXPO 2016) kicked off
in Ho Chi Minh City on December 7.
As many as 250 groups and companies from Austria, the
Republic of Czech, Germany, the Republic of Korea, the US, Italy, Japan,
Indonesia, the Philippines, Thailand and Singapore, China and Vietnam are
showcasing their products at 450 pavilions.
The event is divided into five thematic exhibitions on
metallurgy, iron and steel; welding and machining technology; metals and
components; chemicals, paints and coatings; textile printing and inkjet
advertising.
Deputy head of the South Agency under the Ministry of
Industry and Trade Nguyen Quang Huy said the VINAMAC EXPO 2016 offers a good
chance for businesses in industry and support industry to popularise their
brand names as well as seek partners and expand domestic and international
markets.
The expo also enables enterprises at home and abroad to
transfer technology and promote trade and investment activities, he added.
A number of workshops on steel prospects in 2017,
textile printing industry, and flora protection will be held as part of the
event.
The annual VINAMAC EXPO is organised by the Fair and
Advertising Joint Stock Company (VIETFAIR) in coordination with ministries,
and domestic and foreign associations.
The fair will last until December 10./.
VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR
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Thứ Sáu, 9 tháng 12, 2016
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