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BUSINESS IN BRIEF 1-4Sugar firms allowed exporting surplus inventory

The Ministry of Industry and Trade has allowed domestic companies to export sugar with large volumes in an attempt to reduce the record high inventories of 450,000 tonnes.

Since the beginning of the 2012-13 sugar crop, the Sugar and Sugar Cane Association has predicted that there would be a sugar surplus.

Sugar is one of the country’s price-stablised commodities, so its exports are only allowed when there is a surplus, according to Ha Huu Phai, head of the Association’s Hanoi branch.

The country needs about 1.2-1.3 million tonnes of sugar a year.

The association estimates that the sugar output in the 2012-2013 crop will reach 1.4 million tonnes.

In addition, stocked sugar from last year as well as imported and smuggled sugar are available.

About 300,000-400,000 tonnes of sugar are smuggled into Vietnam from the southwest border a year, according to the association.

The country now has 40 sugar mills producing the 2012-13 sugar crop.

The sugar inventories have increased by about 100,000 tonnes a month since the beginning of the crop which normally begins in September.

To reduce inventories, some sugar mills have cut price, but sales continue to be low because of low demand.

Some sugar mills have also exported small quantities of sugar through unofficial channels.

To reduce sugar inventories in the long term, smuggled sugar must be strictly controlled and sales of legal sugar must increase, according to Phai.

The sugar industry needs to improve its competitiveness on price and quality, especially against smuggled sugar, he said.-

VPBank wins seventh Straight Through Process Award

The Vietnam Prosperity Commercial Bank (VPBank) has received the Straight Through Process (STP) Award for 2012 from the Bank of New York Mellon (BNY Mellon) for the seventh consecutive year.

The honour was presented to the VPBank’s representative at a ceremony in Hanoi on March 27, in recognition of its outstanding international payment services.

Last year, the bank made efforts in ensuring all its transactions to be processed automatically at BNY Mellon in an accurate and quick manner.

The annual award proves the operational accuracy by VPBank operators in general and its international payment officers in particular.

With the prestigious award, the quality of VPBank international payment services as well as the institution’s operation has been recognised by the international community, a VPBank executive said.

At the same time, the relationship between VPBank and BNY Mellon will be elevated to a new level as both companies seek to achieve their optimum goals of satisfying customers with the best possible payment services, he noted.

The leader took the occasion to brief on the bank’s plan for 2013 that will focus on improving its service quality, increasing added values and excelling conveniences to reach the international standard level.

Last year, VPBank won a host of awards, including the National Brand Award; the Vietnam Strong Brand, the Most Satisfactory Bank Services Award; the Award for the Best Agency in Outbound Growth, the Award for the Best in Network Growth and the Award for Highest Rate of Service Activation by Western Union, and the Straight Through Process award by Wells Fargo.

As a top world financial institution based in New York, BNY Mellon has a total asset of 25,000 billion USD. The 229-year bank has offices scattering in over 38 countries and 65 cities across the world.-

Latest American biomedical engineering research launched in Vietnam

Ho Chi Minh City is poised to employ the latest American biomedical engineering research to make medical equipment.

American company National Instruments and the Biomedical Engineering Department of Vietnam National University Ho Chi Minh City last week announced a strategic collaboration to raise the standards of biomedical engineering education using the latest research and training tools.

“The announcement is the first step of our joint investment partnership. National Instruments selected the department because we share many similarities in what we want to do,” said Chandran Nair, managing director of National Instruments, Southeast Asia.
The department, set up in 2009, is the first in Vietnam that offers a Biomedical Engineering degree and Master’s degrees.

Under the new partnership, the department, chaired by high profile Vietnamese American professor Vo Van Toi, former executive director of the US-based Vietnam Education Foundation (VEF), will leverage some of the world’s most advanced educational laboratory tools to accelerate studying and innovation.

Vietnam is a key market for National Instruments in Southeast Asia, said Nair. “We’re looking forward to expanding our partnerships here.”

Biomedical Engineering is a new applied science in the world that seeks to close the gap between engineering and medicine by combining the design and problem solving skills of engineering with medical and biological sciences to advance healthcare treatment.

Toi said the partnership would support his department in research and development (R&D) of made-in-Vietnam medical tools.

“The partnership is beneficial to our faculty and students who can now access to advanced educational tools that help facilitate the utilisation of bio-sensors in the research and the design of new medical devices,” he said.

His department has just signed a deal with the Ho Chi Minh City Association of Medical Equipment Makers for R&D for medical devices.

Toi is a respected medical engineer on the global stage and from 2004 to 2007, he was a member of the Board of Directors of VEF, a U.S. federal agency established by Congress to bring the US and Vietnam closer through educational exchanges.

Vietnam, Chile enjoy over $600 mln in trade

Two-way trade between Vietnam and Chile reached a record in 2012 with a value of $606 million  or 24.5 per cent more than 2011, according to the Chile’s Export Promotion Agency (ProChile).

Footwear manufacturing at Hunex company in Da Nang. (Illustrative image, Source: VNA)

Statistics released by the agency showed that last year, Vietnam’s exports to Chile rose 26.9 per cent year-on-year to $189.8 million. Its major exports were footwear, garments and textiles, cement, frozen fish, coffee and rice

Meanwhile, the Southeast Asian country’s import value was $416.2 million, up 23.4 per cent year-on-year.

The two countries expect to witness higher trade revenue after their bilateral Free Trade Agreement (FTA) takes into effect.

In 2011, bilateral trade between Vietnam and Chile reached more than $486 million, a year-on-year increase of 50 per cent.

Vinamilk to operate two new dairy plants

The Vietnam Dairy Products Joint Stock Company (Vinamilk) will put into operation two modern dairy plants in the southern province of Binh Duong late April, Chairwoman cum CEO of the Vinamilk Corporation Mai Kieu Lien has said.

Covering 20ha in the My Phuoc Industrial Zone, the first factory, which is fully automated, will turn out 400 million litres of milk annually in the first phase, equivalent to the capacity of Vinamilk’s nine operating plants. It will then double the output after the second phase.

Located in the Vietnam-Singapore industrial zone, the second, covering six ha, will produce 54,000 tonnes of powdered milk, four times the current figure.

Vinamilk posted export revenues of almost $180 million and contributed more than VND2.9 trillion to the State budget last year. It also sold more than 4 billion products the same year, the highest figure so far, and this figure is expected to reach VND26.5 trillion by the end of this year.

Limited VAT incentives for border gate traders

Value added tax (VAT) incentives for traders in border-gate economic zones (EZs) should be limited to prevent tax fraud and evasions, the Ministry of Finance proposed.

Many cases of taking advantage of the preferential policy for border-gate economic zones to get VAT tax refunds have been discovered. Multiple traders have brought domestic goods from elsewhere into non-tariff zones and then launched them into the local market again under the form of duty-free goods so that they receive a VAT refund.

Therefore, the finance ministry is seeking adjustments to the VAT preferential policy for border-gate EZs.

The ministry suggested goods produced and consumed in non-tariff areas, those imported from abroad into non-tariff zones or exported from such zones to foreign countries should be exempt from VAT.

As for domestic goods produced outside or in other functional areas in border EZs and brought into non-tariff areas, traders must make declarations and pay taxes on such items. However, if such items are brought there for export, they will enjoy zero VAT rate, provided they satisfy the requirements prescribed by the law on VAT, and pass the check before VAT refund.

Meanwhile, goods and services from non-tariff areas launched into other functional areas in border-gate EZs or into the domestic market will be subject to VAT.

This move is aimed at preventing VAT fraud and evasion, said the finance ministry in a draft decision on financial policy for border EZs.

In addition, the ministry proposed investors in border zones should enjoy export and import tax incentives. Raw materials and components imported to serve the production projects in border-gate EZs (except the projects for assembly of cars and motorbikes, air conditioners, refrigerators, and some other electronic items) should be given a five-year import tax exemption.

VietJetAir to fly to Nha Trang, Buon Ma Thuot

VietJetAir will open two new air routes, Hanoi-Nha Trang and HCMC-Buon Ma Thuot, in summer to meet the increasing transport demand.

The carrier will add over 1,600 flights, equivalent to 300,000 seats, from May 20 to August 31 due to the high demand in this summer travel season.

The Hanoi-Danang air service will have an additional three flights per day. Meanwhile, there will be two additional flights per day on each of the HCMC-Phu Quoc, HCMC-Vinh and HCMC-Haiphong air routes.

Besides, with the new routes, the number of flights will be increased by two per day for Hanoi-Nha Trang and by one for HCMC-Buon Ma Thuot. The carrier will also announce soon the number of flights to Dalat, Haiphong and Bangkok.

Desmond Lin, Business Development Manager of VietJetAir, said that in order to increase the flight frequency in the coming time, VietJetAir will expand its fleet and improve utility services.

* Jerstar Pacific on Monday started to operate its new domestic routes, Buon Ma Thuot-Vinh and HCMC-Buon Ma Thuot.

The 50-minute HCMC-Buon Ma Thuot air service is operated with a frequency of five weekly flights on Mondays, Tuesdays, Thursdays, Fridays and Saturdays. Meanwhile, for the 85-minute Buon Ma Thuot-Vinh air service, there are three flights per week on Tuesdays, Thursdays and Saturdays.

Resorts suffering from Ke Ga Port to be compensated

Those resorts whose assets are damaged by the construction of the now-defunct Ke Ga Port will be compensated at 100% of their damages by Vietnam National Coal and Mineral Industries Group (Vinacomin).

Those assets whose utility value is less than 30% left will also receive compensations worth 100% of their value under an agreement between Vinacomin and Binh Thuan’s government.

The provincial government will renew investment certificates for the investors who want to continue or expand their resort projects after Vinacomin halted development of Ke Ga Port, said Nguyen Ngoc, vice chairman of Binh Thuan.

The province is forming a council in charge of evaluating damages of the affected resorts and then it will propose Vinacomin offer the project owners adequate compensations.

Twelve resorts suffered land withdrawals for construction of Ke Ga Port. Two of them were granted land use right by the State and the remaining ten rented land from the State, said Ngoc.

A project owner demands a compensation of VND3.9 billion for loss of investment opportunity since the project was forced to stop in 2008, while another seeks VND25.5-billion compensation for gold price drop when he made investment. Such claims are not provided in any legal document, so Binh Thuan has to report to the central authorities.

In a complaint sent to Binh Thuan’s government in mid-2012, owners of the 12 resorts estimated their total damages at over VND800 billion.

In April 2008, when the province called a halt to these 12 resorts and revoked their lands, one project was operational (Blue World), one was being carried out (Duc Hanh), and the rest had some components under construction.

17 extra HCMC-Nha Trang trains for holidays

To meet the increasing transport demand for Liberation Day (April 30) and May Day (May 1), Saigon Railway Passenger Transport Company is putting on 17 extra trains from HCMC to Nha Trang in the period.

Thai Van Truyen, deputy director of Saigon Railway Station, said in addition to two trains running between HCMC and Nha Trang daily, there will be an additional six trains from HCMC to Nha Trang on April 26 and three others on April 27. Meanwhile, the number of trains departing from Nha Trang for HCMC will increase by five on April 30 and by three on May 1.

With the Hung Kings’ death anniversary (April 19), the number of HCMC-Nha Trang trains will be increased by four, with two more trains departing for Nha Trang on April 18 and two others departing for HCMC on April 21.

All trains will depart from HCMC at night and arrive in Nha Trang in the early morning.

Pay TV assoc. attacks Viettel cable TV plan

Vietnam Pay Television Association (VNPayTV) has submitted a petition to the State President, the Government Office and the National Assembly in an attempt to prevent Viettel from receiving a license to provide cable TV service.

The association has earlier proposed the Ministry of Information and Communications not grant cable TV service licenses to telecom firms. Its latest move is aimed at keeping a strong competitor like Viettel out of the pay TV playground, said an expert who requested anonymity.

Pay TV service providers fear the presence of new rivals will make the competition more intense. Particularly, Viettel has the upper hand in cable infrastructure in comparison with the current industry insiders, he said.

In its petition, VNPayTV said the pay TV market had shown signs of saturation, with 67 service providers at present. In addition, cable TV service is not a core business field of Viettel, while the State currently wants State-owed enterprises to gradually pull out of their non-core operations.

If Viettel was granted a license to provide cable TV service, other pay TV operators would suffer a loss of tens of trillions of dong and there would be serious conflicts among the industry players, said VNPayTV.

However, the information ministry said the pay TV market had not been saturated yet as only 20% of the households nationwide had subscribed to this service.

In a document sent to the Government, the information ministry expressed its support for telecom companies to offer pay TV service. The ministry stated it would license those enterprises that can supply digital TV service on a wide scale.

Pay TV operators apply telecom technology to provide TV service, not telecom service. At present, the services that do not use frequency resources like telecom are not restricted in terms of the number of providers.

Decision 20 of the Prime Minister on management of pay TV specifies that cable TV service providers must have their own telecom infrastructure or use infrastructure of other firms under business agreements. Based on this condition, there are still chances for those currently applying for licenses to provide cable TV service.

In its application for cable TV service license, Viettel aims to attract five million subscribers in the first year of deployment, equal to a half of the total number of subscribers of other pay TV service providers in the last ten years.

Postal savings unit nets depositors after merger

Vietnam Postal Savings Services Company (VPSC) has seen a strong surge in depositors after it merged with LienVietBank to create LienVietPostBank over a year ago.

The network of 10,000 transaction points of VPSC saw capital mobilization grow 48% last year, much higher than the 28% growth rate in 2011.

Cao Thi Hoai Duc, director of VPSC branch of LienVietPostBank, said that the number of customers increased strongly last year, of which 400,000 old customers still maintained accounts at the unit.

The network reports transaction value of over VND150 billion a day with deposits mounting to VND80 billion. As of the end of 2012, the unit reached over VND10.2 trillion in total deposit balance, up VND3.7 trillion against the period before the merger. Earlier, the postal company reached an average deposit balance growth of around VND1 trillion each year.

This growth rate has generated nearly VND156 billion in commissions to Vietnam Post, a big shareholder of LienVietPostBank whose VPSC corporate value and cash contribution is equivalent to nearly 15% in this lender.

Explaining the positive growth, Duc said VPSC benefits from better operation mechanism and competitive interest rates. The merger has enabled the postal savings unit to diversify its products and services, providing customers with credit, financial advisory and payment services, not just a deposit service like before.

Nguyen Duc Huong, vice chairman of LienVietPostBank, said that the management board has focused on improving facilities at transaction points, especially in the IT (information technology) sector.

The board of directors of the bank has approved development strategy in the first five years after merging, expanding its network to 3,000 post offices, providing services to 10 million customers and mobilizing VND60 trillion each year. LienVietPostBank has projected to run over 10,000 transaction points by 2018.

As of the end of 2012, the bank had a charter capital of over VND6.4 trillion and total assets of over VND66.4 trillion. The lender obtained nearly VND7.4 trillion in equity, VND868 billion in after-tax profit and paid dividend for shareholders at 10%.

ANZ leader moves to VIB

Dam Bich Thuy, CEO of ANZ Vietnam Bank, will become general director of Vietnam International Commercial Bank (VIB) after over 18 years at the foreign bank.

Between 1995 and 2005, Thuy worked at ANZ Investment Bank based in Singapore. She then served as CEO of ANZ Vietnam and vice president of the ANZ’s Greater Mekong Region. Thuy is expected to become CEO of VIB in the near future.

The appointment is going through the central bank’s regulatory approval process, which has drawn much attention from the financial market as Thuy is considered a leading CEO in Vietnam and the region.

When Thuy became CEO of ANZ Vietnam in 2005, the bank had just over 100 staff. Now, ANZ Vietnam has over 750 employees and is among the most popular foreign banks in the country.

Speaking to the Daily, Thuy said this is her personal decision.

“I have completed part of my dream, building up a foreign bank that is like a local bank with international standards for Vietnamese customers. Another part of the dream is helping a Vietnamese bank reach regional standards,” Thuy said.

Maruzen Foods pours US$100 mil. in Binh Duong

Japan-based food and beverage producer Maruzen Foods Corporation obtained a license on Monday to invest over US$100 million to develop a plant in Binh Duong Province.

The plant will be located in an area of nearly 13 hectares in My Phuoc 3 Industrial Park in Ben Cat District and expected to be operational early next year, the company said at a function held by the provincial government on Monday to award the license.

The plant operated by Maruzen Foods Vietnam will produce and outsource food materials, bottled fruit juices and other beverages.

According to the license, every year the plant will produce 150 tons of materials for beverages, 2.5 million cartons of bottled drinks and 100 tons of processed food products.

Thu Thiem Tunnel to have speed control devices

The Saigon River Tunnel Management Center is installing speed measurement devices and cameras in the Thu Thiem Tunnel to take sanctions against traffic rule violators.

Tran Quang Lam, director of the center, told the Daily that these equipments will help record violators such as those running at the speed of under 30 kilometers or over 60 kilometers an hour. Images and information of violated vehicles will be sent to traffic police officers.

Installation of these devices is expected to complete in early May, Lam said.

For car drivers, violations in use of headlamp, making a U-turn or stopping in the tunnel will be imposed with a fine of VND1.7 million compared to regular fines on roads from VND800,000 to VND1.2 million. The drivers will also see their licenses deprived in 30 days.

Meanwhile, violated bikers will be subject to fines as much as VND750,000 and their licenses will be detained for one month.

Doan Van Tan, head of traffic management unit of the Saigon River Tunnel, said that many violations have been uncovered recently but violators have ignored warnings of traffic police officers.

Farm produce exports decline in Q1

Vietnam has exported US$3.26 billion worth of major agricultural items in the first quarter, down 5.4% year-on-year, due to a drop in export volumes of most items, says a report of the Ministry of Agriculture and Rural Development.

Cashew records a sharp decline of 50% in export volume, with only 42,000 tons, while export value falls 8.7%, standing at US$239 million.

The largest buyers of Vietnamese cashew are China, the U.S., the Netherlands and Australia, holding a respective share of 25.6%, 22.3%, 11.1% and 6.24%.

Some 200,000 tons of rubber has been exported in the first quarter, bringing in US$526 million, down 36.9% and 15.9% respectively over the same period last year. However, the average export value in the first two months rose a significant 60.8% year-on-year.

China and Malaysia are the two biggest consumers of Vietnamese rubber, buying 47.7% and 17.8% of the country’s rubber exports respectively.

The country has exported around 447,000 tons of coffee worth US$909 million, a drop of 21.2% in volume and 18% in value. However, the average coffee export price in the first two months was US$2,108 per ton, up 13% year-on-year.

The largest coffee importer is Germany, taking up a 12.5% portion of Vietnam’s total coffee exports, followed by the U.S. with 11.3%.

Tea export is quite optimistic in the first three months. Pakistan remains the largest tea buyer, accounting for 17.6% of the total exports, but the United Arab Emirates (UAE) also records strong growths in both tea import volume and value, 4.76 times and 4.42 times higher than the year-ago figures.

Despite a 14.1% decline in volume, tea export value has increased 2.5%, with an average export price of US$1,523 per ton, up 23.6% year-on-year.

Pepper achieves an impressive growth in export value, with export prices in the first two months averaging out at US$6,622 a ton, surging 21.3% over the same period last year. So far, about 39,000 tons of pepper worth US$242 million has been exported, down 15.4% in volume but up 11.8% in value.

The biggest pepper consumers are the U.S., Germany, UAE and Singapore.

Unlike other farm items, rice records an increase of 34.3% in export volume, but export value dwindles 5.7%. Some 1.38 million tons has been shipped abroad in the first quarter, fetching US$616 million.

The average export price in the first two months was US$450 per ton, a drastic drop of 14% year-on-year. China remains the largest buyer of Vietnamese rice, occupying a share of 40.2%, followed by Singapore, the Philippines and Hong Kong.

Thailand spares Vietnam steelmakers of punitive tariffs

Vietnam’s hot-rolled alloy steel exported to Thailand will not be imposed with the self-defense tariff under an initial decision of Thailand’s Ministry of Commerce made last month.

According to Vietnam’s Ministry of Industry and Trade, Thailand started to inspect imported hot-rolled alloy steel on November 27, 2012 and will impose a tariff rate of 33.11% in 200 days, starting from February 27. However, Vietnam and some other countries will not be imposed with this punitive tariff as the market share of each country is still lower than 3% and thus has not damaged Thai steel production, as per regulations of the World Trade Organization.

However, Thailand will introduce the high tariff against Vietnamese steel if the Thai ministry’s final decision determines that the market share exceeds 3%.

Thailand imports hot-rolled steel mainly from China, with a market share of 42.39% last year, Japan with 25.26% and South Korea with 20.13%.

Last year, Vietnam exported nearly 188,000 tons of steel products worth US$177.5 million to Thailand, making up 10% of Vietnam’s total steel export volume, according to the Vietnam Department of Customs.

In the past few years, several countries have initiated investigations into Vietnamese steel products following accusations of steel being dumped in such countries, which include the United States, Brazil, and India.

In December, Indonesia even slapped antidumping tariffs of 13.5%-36.6% against cold-rolled steel products from Vietnam.

Russian businesses keen to invest in Vietnam

Russian businesses invested US$924 million in 83 projects in Vietnam last year. Most of them were from major groups such as Zarubezhneft and Gazprom, Rosatom and KamAZ.

Victor Lavrenko, director of Nigma Technologies Company emphasized the need for a regular survey into the Vietnamese market to ensure further success in doing business in Vietnam.

Vladimir Yurlov, a Russian entrepreneur who has worked in Vietnam for 30 years, said feedback from the Russian people who have stayed long in Vietnam is very important as they are familiar with business investment in the country.

There is plenty of opportunity for Russian businesses to invest in real estate, tourism, interior decoration, agricultural and aquaculture processing, said Victor Lavrenko.

In fact, many Russian companies like Ashmanov or Softline have been operating successfully in the country.

Half of FDI firms claim losses to avoid taxes

As much as 50% of foreign-invested enterprises in Vietnam have reported losses, with many claiming to have made losses for three consecutive years, the Ministry of Finance said.

According to the ministry, tax payments by FDI firms are much lower than government expectations as numerous enterprises have tried to appear unprofitable.

Binh Duong Province is a typical example for such issue with 754 out of 1,490 FDI enterprises claiming they failed to be profitable in 2010. Up to 200 enterprises reported that their losses were higher than their equity.

The ministry assessed that over the past recent five years, transfer pricing has been widely developed in Vietnam under various forms such as the transfers of tangible and intangible assets, services and interest rates between partners.

“Transfer pricing by enterprises includes profit allocation from a firm with high tax rates to another firm with lower tax rates and so on,” the ministry emphasised.

Most common transfer pricing forms include overvaluing machinery, equipment and technology; dumping products and materials; transferring technology to firms in Vietnam; overvaluing trademark copyrights; holding companies signing business and service contracts with foreign partners at high prices but handing over the contracts to subsidiaries in Vietnam at lower rates.

In order to curb this situation, the ministry has issued several regulations to intensify supervision over tax declaration and payment by FDI firms, along with increased inspection.

In 2011, the ministry inspected 921 firms suspected to have transferred pricing. They found wrongdoings worth VND6.6 trillion (USD314.88 million) and retrieved VND1.7 trillion worth of taxes.

Low-income families wary of preferential real estate loans

A draft regulation by the State Bank of Vietnam (SBV) that allows low-income households an annual preferential loan rate of 6% has not gained much traction among the public.

Nguyen Thi Minh, from District 1 in HCM City, said that her family was happy with the regulation but worried about interest rates after the initial three-year period.

“It would be great if the 6% interest rate was extended ten years instead of just three. We may not be able to pay off the debt if the interest rates increase after the first three years,” Minh said.

Truong Xuan Tam, attorney and Vice Chairman of the Ba Ria – Vung Tau provincial Lawyers’ Association, said even though the 6% interest rate is much lower than the current market interest rates, the three-year term is too short for borrowers to adequately plan to pay off their debts.

Le Hoang Chau, Chairman of HCM City Real Estate Association, said, “People are still hesitant apply for the preferential rates because they feel insecure about what their rates will be in the future.”

Several members of the public have proposed that preferential rates be extended to 20 years.

Nguyen Viet Manh, Director of the SBV’s Credit Department, said that after the first three years the SBV would announce new interest rates that are suitable for low-income borrowers while taking into account changing economic circumstances.

“If the macroeconomic outlook stabilises, interest rates may fall as low as 4% or 5%,” Manh added.

Economists have said the draft regulation banning people from using preferential loans for the purchase of social housing is unfair, as most of these families are low-income in the first place.

The SBV’s Credit Department said there isn’t sufficient legal framework in place to guide the market for social housing.

However, Le Hoang Chau said the department’s explanation is unsatisfactory as the Law on Housing stipulates that social housing can be bought, rented or leased. The use of such preferential loans to buy social housing is in accordance with the Ministry of Construction’s regulations on turning commercial housing into social housing for low-income families.

Deputy Minister of Construction, Nguyen Tran Nam, said the ministry has proposed that the prime minister add this content to the SBV’s draft regulation so as to allow using such loans in buying social housing. This is expected to help stimulate demand and ease oversupply in the market.

Truong Thanh Duc, an attorney and finance expert, said the current slump in the real estate market is mainly the result of speculation. Many people who have real housing demand have been pushed out of the market by the high prices.

“Despite lower interest rates, many people still find it difficult to pay their debts due to unstable incomes. While real estate firms are calling for support from the government to save the market, they don’t bother lowering prices, making government policy in the matter unfeasible,” Duc said.

Over 450 businesses to attend Vietbuild 2013

An international exhibition on construction, building materials, real estate and decoration will open in Ha Noi tomorrow.

The four-day Vietbuild event attracts more than 450 businesses from 18 nations in the world, which join local counterparts to introduce new products and sign contracts with partners.

It will also showcase a wide range of construction materials, interior designs, electrical equipment and sanitation and glass products, as well as new production technologies.

It is co-organised by the Information Centre under the Ministry of Construction, Vietbuild Construction International Exhibition Organisation Corporation and AFC International Exhibition Fair Corp.

HSBC Vietnam kicks off annual Grand Sale

HSBC Vietnam is launching its annual Grand Sale with a wealth of credit card promotions and reduced interest rates on loans, as well as a lucky draw for all new and existing HSBC cardholders.

“This is like our annual festival of banking promotions—and there’s something great for everyone,” said Godfrey Swain, Head of RBWM at HSBC Vietnam.

“We have an incredible number of opportunities for both our existing customers and also new customers. If you have been considering whether to apply for a credit card or a loan with us, now is the perfect time to do it.”

VietjetAir adds flights for upcoming summer holiday

Budget carrier VietjetAir has decided to add 1,600 flights – equivalent to 300,000 seats – to its schedule from mid-May until the end of August.

The Ha Noi – Da Nang route will see one new round trip per day, while flights from HCM City to Nha Trang, Phu Quoc, Vinh and Hai Phong will double (from one to two round trips) from May 20 to August 31.

Cable operators join hands to launch pay TV

Viet Nam Cable TV and HCM City Cable TV Centre yesterday signed an agreement to share infrastructure for pay TV.

The former is owned by Viet Nam TV (VTV) and the latter by HCM City TV.

HTVC, established in 2003, said it has over 1 million subscribers in HCM City and another 1.2 million in other places.

VCTV has 1.2 million cable TV subscribers.

The country’s two other cable TV operators – SCTV, a joint venture between VTV and Saigontourist, and K+, a joint venture between VTV and France’s Canal Plus – respectively have 1.5 million and 40,000 subscribers.

Directly and through its JVs, VTV accounts for 3 million out of the 4.5 million subscribers in Viet Nam.

Financial statements plagued with errors

The difference between the pre and post-audit 2012 financial statements of listed companies have thrown up alarming discrepancies.

While in previous years the margins were relatively small, the most recent findings have uncovered a host of anomalies, with companies offering a variety of reasons for the inaccuracies.

Quang Ninh-based Vang Danh Coal (TVD) reported a net profit of VND57.4 billion (US$2.7 million) after audit, while its previous statement had only claimed gains of VND11.6 billion ($552,300).

Other firms also showed increased profits of up to VND100 billion ($4.7 million) such as Drilling Mud Corporation (PVC) and Petrovietnam Technical Services (PVS).

In contrast to these companies, Vietnam National Reinsurance (VNR) saw a decline of VND75 billion ($3.5 million) in net profit after audit, falling to VND255.8 billion ($12.1 million).

But the largest difference belonged to Pha Lai Thermal Power Corporation (PPC), with almost all of the major terms in its financial statements having errors. Combining these outliers, net profit dropped by VND112.2 billion ($5.3 million).

TVD chairman Nguyen Van Trinh explained his company had to disclose quarterly statements within 25 days after the end of the quarters, reports Dau Tu Chung Khoan (Securities Investment)

Therefore, TVD made its report for the fourth quarter of last year on January 19. However, as TVD was a subsidiary of the National Coal – Mineral Industries Group, it had to work with the parent company to settle costs, Trinh said. “We could not do that when making the statement.”

According to PVC general director Ton Anh Thi, the difference in his company’s statements was due to additional profit from subsidiaries.

In addition, VNR alleged that using accounting standard VAS10 to record the exchange rate was unfavourable for the company. Therefore, it used the guidance in Circular 179/2012/TT-BTC advising accounting treatment of foreign exchange differences.

Paper industry lacks cutting-edge

The paper industry currently faces a domestic production surplus, made worse by fierce competition with imported products.

Last year’s paper exports to 18 countries, mostly to the US, Taiwan and Japan, were estimated at US$425 million, one-third of the value of paper imports for domestic use, according to Viet Nam Pulp and Paper Association (VPPA) Secretary General Vu Ngoc Bao.

Although domestic production of pulp jumped remarkably from 345,000 tonnes in 2010 to 484,300 tonnes in 2012, this satisfied only half of the local demand.

Nguyen Ton Quyen, general secretary of the Viet Nam Timber and Forest Products Association (Vietfores) said that wood chip exports have also increased sharply over the last decade.

In 2001, the country exported 400,000 tonnes of wood chips; the figure had soared to 5.4 million tonnes one decade later. Viet Nam is currently the largest wood chip exporter in the world.

But this fact has caused worry rather than joy. Increasing exports put more pressure on the paper industry, which has been crying about material shortages for years.

While raw material imports remained necessary for pulp production purposes, the industry continued exporting large amounts of domestic material at low prices. For example, China purchased wood chips at the low price of $110-120 per tonne and used them to produce and resell pulp for around $900-1,000 per tonne.

To deal with the shortage of materials, Viet Nam has concentrated on recycling used paper. The country is collecting 70 per cent of waste paper for recycling.

Nearly 100 per cent of packaging paper, 90 per cent of tissues and 60 per cent of newspapers in Viet Nam are now made from recycled paper.

In 2013, the paper industry may well find it difficult to locate outlets for its products as the economic recession has led to stockpiles of paper. According to statistics from the Ministry of Industry and Trade, the amount of paper in stock increased by 33.7 per cent in the first two months of this year compared to the same period two years ago.

General director of the Viet Nam Paper Corporation Vu Thanh Binh said most member companies have seen production, sales and profits plunge.

Due to the decline in paper consumption, some domestic producers have had to reduce or even stop their operations to minimise their stock holdings, according to VPPA Secretary General Bao.

The Ministry predicted that total paper output will reach 2.18 million tonnes in 2013, 17.7 per cent more than last year.

Insurers to face fines for investing in securities

Insurance companies are likely to face fines of VND200 million (US$9,500) if they try to borrow to invest in other sectors, including securities, according to a draft Government decree.

The draft decree, to replace Decree 41/2009/ND-CP on sanctioning insurance violations, contains many new rulings apart from fines.

The Ministry of Finance is gathering opinions on the draft before submitting it to the Government for approval.

Real estate firm teams up with Indonesian bank

Property developer Hoa Binh (HBC) and PT Nikko Securities Indonesia, a member of the Sumitomo Mitsui Banking Group, agreed on Tuesday that the Vietnamese real estate company would issued 10 million shares at VND20,681 (nearly US$1) to the Jakarta-based investment banking firm.

The issuance is expected to be finished by Sunday.

HBC shares lost 1.1 per cent to VND17,400 ($0.8) yesterday.

Developer intends to increase charter capital

Property developer Hoang Anh Gia Lai Co (HAG) announced its public offering of nearly 107.5 million shares at par value to increase its charter capital to VND6.45 trillion (US$307 million).

The remaining proceeds from the offering are expected to be allocated to overseas projects. HAG shares closed yesterday’s session 1.4 per cent lower at VND27,700 ($1.3).

Six firms and a fund delist in first quarter

Five companies and one fund delisted during the first quarter of this year due to successive losses and low value of shares and fund certificates, the nation’s two stock exchanges reported. They were Dien Hong Printing (DHI), steelmaker Phuc Tien (PHT), Sacombank Securities (SBS), Viglacera Thanglong Tiles (TLT), logistic firm Vinafco (VFC) and Vietnam Active Investment Fund.

In addition, 12 other companies face the prospect of delisting their shares.

Cuba offers vaccine technology to VN

Viet Nam and Cuba seek to expand co-operation in biotechnology and the pharmaceutical industry, said Doan Duy Khuong, the Viet Nam Chamber of Commerce and Industry deputy chairman, yesterday at a conference in Ha Noi.

There was much potential for growth, as two-way trade remained limited at only US$485 million in 2012, according to Khuong.

Exports from Cuba to Viet Nam totaled US$6 million, about 50 per cent of which came from pharmaceutical products.

Cuba Ambassador to Viet Nam Fredesman Turro Gonzalez said that the healthcare sector was among the most promising areas for renewed co-operation efforts.

He said his country’s medical science and biotechnology fields had created many unique vaccines and hoped some would be manufactured in Viet Nam under technology transfer.

An expert from the Centre for Genetic Engineering and Biotechnology said 80 per cent of vaccines used in Cuba for the Immunization Programme were produced by the country. Cuba has so far eradicated polio, malaria, tetanus, measles and rubella, as well as many other diseases.

Do Tuan Dat, director of the Viet Nam Company for Vaccine and Biological Production 1, said the company was willing to receive vaccine technology transfer from Cuba to lower costs, reduce possible risks during transport and ensure the adequacy of vaccines for the domestic market. He called for support from the two governments for research and production of vaccines, saying that many Cuban vaccines were not competitively priced in Viet Nam.

Banks to support investment seminars

The State Bank of Viet Nam and four other commercial banks will join hands with the Northwest and Central Highlands to promote investment in the regions.

It was announced at a press briefing in Ha Noi on Tuesday that the investment promotion conference for the Northwest will take place in Tuyen Quang province on April 3 and a similar conference for the Central Highlands in Gia Lai province on April 12.

At the briefing, Deputy Governor of the State Bank of Viet Nam (SBV) Dao Minh Tu reported that BIDV, VietinBank, Vietcombank and Agribank will participate in calling for investment for these regions.

Around VND20 trillion (US$952 million) and $35 million are expected to be poured into the Northwest which comprises of 14 provinces, Tu added.

At this year’s conference for the Northwest, the third of its kind, specific co-operation models are expected to be set up in each sector and each area to fully utilise the entire region’s potential, said Deputy Head of the Northwest Steering Committee Le Kha Dau.

The Bank for Investment and Development of Viet Nam (BIDV) plans to sign six credit agreements worth VND3.4 trillion to sponsor the region’s paper, textile and apparel, farm produce, mineral exploitation and hydropower sectors.

In 2013-15, BIDV pledged to provide VND15 trillion on credits to promote economic development and around VND90 billion for social welfare activities in the region.

In 2013 alone, VietinBank will pour VND205 billion in the Northwest’s social welfare activities.

At the briefing, Deputy Head of the Central Highlands Steering Committee Tran Viet Hung said the conference will offer a chance for each locality in the Central Highlands to call for investment in its coffee, rubber and other key projects.

BIDV plans to sign contracts worth VND7.3 trillion ($347.6 million) with businesses in the region while Agribank and coffee associations and businesses are expected to ink financing contracts at an estimated value of round VND6 trillion ($285.7 million).

VietinBank has committed to providing almost VND40 billion ($1.9 million) for social welfare programmes in the region, whose position in terms of socio-economics, defence and security is important to the country.

The Central Highlands is home to five provinces, namely Kon Tum, Gia Lai, Dak Lak, Dak Nong and Lam Dong.

Tour price to Hue rises due to airport closure

Some travel firms have started to take foreign tourists to Danang Airport instead of Thua Thien-Hue Province’s Phu Bai Airport and increase the tour price as the latter is closed in eight months for runway repair.

Speaking to the Daily, representatives of travel firms said that with tours booked early by customers, travel firms had to bear the costs of transporting tourists from Danang to Hue. However, those buying tours after Phu Bai Airport is closed will pay the transport costs which are included in the tour price.

According to Bui Viet Thuy Tien, managing director of Asian Trails Co. Ltd., the new tour price is increased by VND60,000 per customer for a group of 20 people while those who do not travel in groups have to pay a higher amount. A trip from Danang to Hue for a group costs around VND1.2 million, she added.

The low travel season in central Vietnam has begun, and thus some hotels have offered vehicles to transport customers when the airport is closed. For instance, Huong Giang Hotel Resort & Spa transports its customers from Danang to Hue free of charge. Besides, some hotels accept customers’ check-ins before 12 p.m. and late check-outs at 4 p.m. to fit the takeoff and landing time of flights at Danang Airport.

The Civil Aviation Authority of Vietnam has announced Phu Bai Airport was temporarily closed from March 20 to November 20, serving the repair of its runway.

The authority has also asked air carriers in Vietnam to adjust the flight operating plans to ensure their benefits and meet the highest transport demand to Hue.

Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR

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