Home » Business » BUSINESS IN BRIEF 17/11

Japan invests US$1.2 bil in Binh Duong’s urban project

Japan’s Tokyo Corporation has decided to invest US$1.2 billion in an urban development project in the southern province of Binh Duong.

The General Director of Becamex Tokyu, Toshiyuki Hoshino November 14 pledged support for the project in 15 years for the back of real estate recovery to keep pace with population growth and rapid progress of urbanization.

He said that the project will start on November 21 and the project to be completed by 2014. He added that he will invite other Japanese partners to get involved in developing the US$1.2 billion.

Covering on an area of 714,524 square metre, Tokyu Binh Duong Garden City will have a total of 7,500 apartments and houses, a trade centre and a large space for creation and entertainment.

Ha Long Week aims at European market

The Ha Long Week 2012 will take place in the northern province of Quang Ninh from November 27-30, with a focus on European market.

The event, co-organised by the provincial People’s Committee and the national flag carrier Vietnam Airlines, expects to attract the participation of 140 international representatives from leading tourism companies and travel agencies from France, Belgium, Holland, Germany and the United Kingdom.

During the week, a wide range of activities will be available for participants, including Ha Long Bay tours, Gala dinner, business meetings, a seminar on promoting potential of Ha Long tourism and cultural programs.

Vietnam, Hungary boost traditional ties

Prime Minister Nguyen Tan Dung has called on Hungary to support Vietnam in expanding cooperation with European Union (EU) countries and Free Trade Area negotiations with the EU.

Dung made the request at a meeting with visiting Hungarian Deputy Prime Minister cum Minister of Public Administration and Justice, Tibor Navracsics, in Hanoi on November 15.

Recalling the fine traditional friendship between the two countries and Hungarian support of the host’s national struggle in the past and its current socio-economic development, the PM stressed that Vietnam highly values the multilateral cooperation with Hungary on a win-win basis, for the development of each country.

Dung suggested that the two sides should accelerate exchanges of delegations at all levels, support each other at regional and international forums, and increase cooperation in economics, trade, investment, education-training, culture and tourism.

Dung added that he hopes Hungary will continue to provide Official Development Assistance to Vietnam.

Navracsics said that his visit aims to boost multidimensional cooperation with Vietnam, especially in judicial and legal areas, which will serve as a spring-board for other cooperative fields of mutual interest.

The Hungarian leader affirmed that his country is willing to share its 20-year experience in judicial reform with Vietnam.

The guest also expressed wishes to increase cooperation in the fields of health, education, environment and food processing.

Ukraine seeks closer trade ties with Vietnam

Despite the geographical divide, the desire to accelerate bilateral relations had brought Vietnam and Ukraine closer, Ukrainian Prime Minister Mykola Azarov said at a business conference in Hanoi on November 15.

During the event with the participation of 40 Ukrainian companies, Azarov said he believes that two-way trade is yet to the match the two countries’ potential and is likely to increase significantly in the future.

Besides trade, he also outlined industry, aircraft manufacturing, energy, shipbuilding, pharmaceutical and machinery as other promising sectors for bilateral cooperation.

” This is the right time for Ukrainian enterprises to make further investments in Vietnam as the country is on the way to restructuring its economy which will result in many new opportunities with Vietnamese counterparts,” said Vietnam’s Chamber of Commerce and Industry chairman, Vu Tien Loc.

Loc suggested the two governments should consider negotiating a Free Trade Agreement (FTA) between Vietnam and Ukraine while encouraging airlines to open direct flights connecting the two countries.

More favourable conditions should also be created in the near further in order to facilitate the exports of Vietnamese agricultural products to the Ukrainian market, he said.

Bilateral ties have developed significantly due to frequent trips made by high-level leaders and increasing efforts to speed up trade and investment promotion activities in each country, said Vietnam’s Minister of Industry and Trade, Vu Huy Hoang.

“However, there is room for us to further promote our relations,” Hoang said, calling on enterprises to foster trade and investment promotion and pay more attention to marketing their products.

Ukrainian enterprises expressed their wishes to cooperate with their Vietnamese partners in the machinery, pharmaceutical, textile and garment, IT, finance and tourism sectors.

Two-way trade reached approximately US$300 million in 2011, up 17 percent year-on-year. Trade hit US$198 million in the first nine months of 2012, surging 15 percent against the same period last year. Of the sum, US$153 million came from Vietnamese exports, mainly seafood, agricultural products, handicrafts, furniture, garments and footwear.

Ukrainian businesses have to date pumped US$30 million into Vietnam while Vietnamese firms have invested US$27 million in Ukraine.

Vietnam, US strengthen trade cooperation

US President Barack Obama and his government have recognised the importance of relations with Vietnam, a relationship that has been built on mutual respect and common interests, said a US trade official.

Meeting with the press in Hanoi on November 15, visiting US Under Secretary of International Trade, Francisco Sanchez said that this is his third visit to the country in the last 20 months.

The November 13-16 visit reveals the commitment of President Obama and the US Government to strengthening bilateral relations between the two countries, especially in trade, he said.

The official said that his tour of Indonesia and Vietnam marks the development of trade ties between the US and ASEAN countries.

It is also to promote long-lasting relationships and trade commitments by creating a forum to discuss economic cooperation prospects and a foundation for cooperation.

Representatives of some US groups and companies said the visit aims to seek trade opportunities and boost investment in infrastructure projects, including civil nuclear energy, aviation, environmental technology, architecture, construction and engineering.

International agriculture fair opens in Can Tho

About 250 domestic and foreign businesses are showcasing products at an international agriculture fair, which opened in the Mekong Delta city of Can Tho on November 15.

The 2012 Vietnam International Agriculture Fair (VIAF) has attracted a large number of foreign businesses, including those from  Cuba, Chile, Denmark, Japan, India, Thailand, the US, France and the Netherlands.

Machinery, agricultural equipment, production lines, processed products, fertilisers, animal feed, agro and forestry products, seafood, seeds, and fruits from the Mekong River Delta are all on display at the event.

The seven-day trade fair is a key opportunity for local enterprises to promote their products, attract investment and seek overseas partners.

A series of seminars, educational programs for farmers and an awards ceremony for high-quality products will also be held during the event.

VIAF was co-organised by the Ministry of Industry and Trade and the Can Tho Municipal People’s Committee.

HCM City to build Danish active house

Local architecture, design and construction firms will introduce energy-saving building materials via the Danish active house which is set to be developed at Quang Trung Software City next year.

The information was announced at a workshop on building active houses co-organized by the Danish Embassy in Vietnam and the HCMC Energy Conservation Center (ECC) in HCMC last Friday.

The first Danish active house will start construction this month and will be completed in one year. At the workshop, ECC along with Denmark’s Kaersgaard & Andersen A/S Co. and the University of Northern Denmark clinched an agreement to jointly build the house.

Speaking with the Daily at the seminar, Walter Jerry Jackson, director of the technical design program of the University of Northern Denmark, said the 600-square-meter-work will use Danish materials and will produce energy itself by solar panels.

The house will introduce and display energy-saving construction materials of Denmark, Walter said. It will also be where the University of Northern Denmark organizes training courses on architecture and construction of green houses based on Danish technology for Vietnamese students, he noted.

HCMC vice chairman Le Manh Ha said that with the energy consumption accounting for one fifth of the country’s total volumes, the city now is deploying a green energy program.

Under the program, designing green architecture in construction is an important part of the program, Ha said, adding reasonable designs and construction will help save energy consumption of buildings by 15-20%.

Over VND40 trillion stuck in real estate

Unsold property products are valued at some VND40.75 trillion, or around US$2 billion, said Minister of Construction Trinh Dinh Dung, adding that relevant agencies are seeking solutions for the problems in this sector.

Dung informed this figure at the question and answer session of the National Assembly (NA) on Monday. The figure is calculated on the data collected from 44 cities and provinces nationwide, regarding the completed projects, the projects eligible to go on sale or the finished land plot projects that remain unsold.

The volume of unsold products would be much higher if incomplete projects were taken into account.

Dung said his ministry had suggested reviewing all property projects to cancel or delay the projects that have not finished site clearance. In addition, realty project owners should restructure their products to meet the demand of homebuyers, such as turning commercial houses to low-cost ones.

Land use fee support for project owners and preferential value-added tax (VAT) for homebuyers are considered a short-term solution for unsold real estate products. In the long term, the State should perfect the regulations and tighten control on urban projects developed under planning.

Development of urban areas is now asynchronous, not ensuring the living conditions for homebuyers, while project owners just want to develop their projects quickly to put them up for sale, said the construction minister.

As the property market is related to many other sectors, overall solutions are necessary. Dung stated the problems of the realty market could not be solved immediately, but they would be cured step by step.

In response to the questions about project quality, he said if the Government approved, project quality control would be stricter in the coming time. Specifically, the State management agencies will get involved in the projects right from the beginning instead of letting the project owners hire consultants and supervisors on their own.

NA deputies also expressed concern over Song Da Corporation, wondering whether the construction ministry is responsible for the wrongdoings of the corporation that have caused a damage of over VND10.6 trillion.

Representative of the Government Inspectorate said Song Da had addressed some VND5 trillion of damage. The persons responsible for the wrongdoings of the corporation have not been judged.

Trung Nguyen to take over 400 ha of coffee

Vietnam National Coffee Corporation (Vinacafe) will transfer Eatul Coffee Co. to the Central Highlands province of Dak Lak and then to Trung Nguyen Coffee Corporation with a coffee farming area of some 400 hectares.

The transfer of this coffee acreage aims to pilot the agro-industrial model of coffee farming in Eatul Commune, Cu M’Gar District.

Nguyen Nam Hai, general director of Vinacafe, said the transfer from a 100% State-owned enterprise to a private one was unprecedented.  “Vinacafe only transfers Eatul Coffee Co. to Dak Lak Province, and Eatul will then be under the management of Trung Nguyen.”

Eatul is a wholly-owned firm of Vinacafe but has racked up huge losses over the past years. Therefore, Vinacafe only agrees to hand over the status quo of Eatul, consisting of 400 hectares of coffee, debt, and the entire workforce who are all ethnic minority people.

The coffee price has stayed high over the past two years, bringing in profits for both farmers and coffee firms. However, despite owning 400 hectares of coffee, Eatul has still suffered losses, which results from poor financial management, Hai admitted.

Roundtable on rice export payments to Africa

A meeting between enterprises and banks from Vietnam, Laos, Cambodia and a number of African countries will take place in Hanoi next month with an aim to remove payment problems between Vietnamese rice exporters and African partners.

The meeting will be held by the Ministry of Industry and Trade and the Vietnam Chamber of Commerce and Industry in coordination with the International Organization of the Francophonie (OIF) and the International Trade Center (ITC).

According to the South West Asia and Africa Market Department under the trade ministry, many enterprises have encountered difficulties in payments for rice export contracts signed with partners from the African market.

Because of their limited financial capability, African importers often ask for deferred payments over 30-90 days, CIF mode and no letter of credit. Additionally, businesses from Vietnam and African countries lack the necessary information on each other.

Therefore, to avoid financial risks, Vietnamese firms often export via international intermediary companies. This has pushed up export prices and affected the competitiveness of Vietnamese rice.

Vietnamese rice faces tough competition from cheap Indian rice in the African market.

A source from the Africa Market Department told the Daily that the upcoming meeting between lenders and Vietnamese rice exporters would discuss ways to resolve the payment problems.

Earlier, the trade ministry wrote to African countries with a demand for Vietnamese rice, suggesting signing an agreement on rice trade in a bid to boost rice exports to Africa.

The ministry has signed a memorandum of understanding on rice supply for Sierra Leone and is in talks with other nations over similar agreements.

In the first nine months of 2012, Vietnam exported rice to 29 African nations, down two year-on-year, bringing in a turnover of US$680.14 million – a 5% fall. The top ten buyers of Vietnamese rice from Africa are Ivory Coast, Ghana, Senegal, Angola, Cameroon, Algeria, Kenya, Mozambique, Tanzania and Guinea.

Chinese shrimp ban has little effect on VN

China’s temporary halt on importing Vietnamese shrimp following the discovery of an infectious virus in some batches will not significantly affect exports, an official from the Vietnam Association of Seafood Exporters and Producers (VASEP) has said.

Truong Dinh Hoe, the general secretary of VASEP, said that the items banned were fresh shrimp, and the trade of processed shrimp is unaffected. The banned type has been exported in small volumes, so China’s pause in imports will not have much affect on Viet Nam’s total processing volume for exports.

However, Hoe urged domestic shrimp exporters to follow the developments in this case in order to avoid long-term difficulties trading with China.

Nguyen Nhu Tiep, the Ministry of Agriculture and Rural Development’s National Agro Forestry Fisheries Quality Assurance Department (NAFIQAD) director, said China stopped importing Vietnamese shrimp after an infectious hypodermal and hematopoietic necrosis virus (IHHNV) was uncovered in some of the shrimp imported into the country.

Tiep said this virus has not been known to cause harm to humans, but China were taking the precaution to avoid the virus spreading to other shrimp and killing them.

To re-export shrimp to China, Viet Nam must register with Chinese authorities by providing a list of processing and packaging facilities for seafood products, and also the names of seafood rearing facilities.

The NAFIQAD will collect samples from these facilities to test for IHHNV and other diseases. They will also undertake checks on food hygiene and safety, Tiep said.

According to Viet Nam’s General Office of Customs, the export value of shrimp to China in the first 10 months of this year has reached US$143 million, accounting for 8 per cent of the national total export value of shrimp.

Hoe said that VASEP expected Viet Nam to reach its target of making $2.2 billion from shrimp exports, despite the setback in the trade with China.

HCM City well stocked with commodities for Tet Lunar New Year

The Economic-Budget Committee of the Ho Chi Minh City People’s Council on November 13 examined the preparations being made for stocking of commodities for the coming Tet Lunar New Year holidays at the warehouse run by Saigon Union of Trading Cooperatives (Saigon Co.op).

Bui Hanh Thu, deputy director general of Saigon Co.op, said that they have prepared about 38,000 tons of goods for the coming Tet holidays in February with an investment of VND3,462 billion, 25 percent more than in the same period last year.

The stocks will serve for demands for three months before and after Tet Lunar New Year holidays.

Stocks include 11,000 tons of rice, 3,800 tons of sugar, 4,400 tons of cooking oil, 7,470 tons of meat, 2,250 tons of processed food, 490 tons of seafood and 8,500 tons of vegetables and fruits.

Besides subsidized items, Saigon Co.op will offer 10-15 percent discount on essential commodities during the Tet season. At least 150 mobile outlets will be organized to sell subsidized goods to workers at industrial and export processing zones.

Vietnamese investors rank third in Lao stock market    

Vietnamese investors now stand third among foreign investors in the Lao stock market, said General Secretary of Securities of the Lao Securities and Exchange Commission, Vathana Dalaloy.

The Lao Securities and Exchange Commission paid a working visit to the State Securities Commission of Vietnam between November 12-14.

Ms. Vathana Dalaloy said the Lao stock market is now in its initial stages of development, adding that Laos would focus on market development in the coming time to meet international standards, including information transparency.

The Lao Securities and Exchange Commission will continue state-owned enterprise privatisation to ensure its WTO commitments and complete the legal framework for the stock market.

Laos has drafted a law on the stock market with the consultancy from the Vietnamese side and is seeking opinions from agencies and ministries on the draft law.

Earlier, the two commissions signed a memorandum of understanding on boosting co-operation on information exchange.

Sacombank, JCB launch card for car owners

Saigon Thuong Tin Commercial Bank, or Sacombank, and JCB International Co. Ltd. last Saturday announced the launch of Sacombank-JCB Car Card focusing on car owners as customers.

The product is designed for customers with minimum income of VND5 million a month and their automobiles are worth from VND300 million and not over five years old at registration.

Sacombank-JCB Car Card holders can enjoy promotions and discounts when purchasing car-related services such as repair, maintenance and replacement of spare-parts, car accessories, navigation equipment, car washing and insurance.

They will also enjoy discounts of up to 50% at many shopping spots, dining venues and service points with the icon of Sacombank Plus, purchase in installments at 0% interest rate and earn points to redeem for gifts while shopping.

In addition, customers can use the card at any JCB accepting locations in 190 countries.

US keen on infrastructure development in Vietnam

US businesses pay attention to investment opportunities in Vietnam, particularly in infrastructure development, US Under Secretary for International Trade, Francisco Sanchez, told Prime Minister Nguyen Tan Dung at a meeting in Hanoi on November 14.

Sanchez said representatives from US leading infrastructure businesses are accompanying him on the visit in the hope of seeking cooperation opportunities in Vietnam.

PM Dung affirmed that the Vietnamese Government welcomes and creates favourable conditions for US business to operate in Vietnam.

Dung expressed his delight with the positive bilateral cooperation between Vietnam and the US that has developed in various fields, especially economy, trade, education and training, science and technology and climate change mitigation.

He stressed that Vietnam hopes to work with the US to lift bilateral ties and make their cooperation deeper, broader and more effective to benefit people from both countries.

Dung thanked the US for its support of Vietnam to Trans-Pacific Partnership (TPP) negotiations, and asked the country to recognise Vietnam as a market economy, which he said will contribute to boosting practical economic and investment cooperation between the two countries.

Sanchez affirmed that the US Department of Commerce will continue to coordinate closely with relevant sectors and branches of both countries to effectively implement economic cooperation agreements signed by leaders of the two countries.

 Seafood breeders accessing loans at high interest rates

Although the State Bank has instructed five commercial banks to provide loans to pig and seafood breeders at a low interest rate of 11 percent a year, several breeders are still borrowing at 15 percent, according to the Ministry of Agriculture and Rural Development.

The ministry has sent a report to the Deputy Prime Minister Hoang Trung Hai, after coordinating with relevant organs, to inspect localities and instruct on ways to implement the loan policy in accordance with instructions of the Prime Minister.

An inspection was carried out in An Giang, Dong Thap and Vinh Long Provinces and Can Tho City, which supplies 65 percent of Pangasius in the Mekong Delta.

According to the ministry, commercial banks are too slow in guiding their branches to implement the State Bank’s policy, which was originally aimed to ease difficulties of seafood and pig breeders who have suffered constant losses due to fall in prices and spread of diseases.

The slow implementation has led several farmers to borrow at a higher rate of 15 percent per annum.

On the other hand, commercial banks have not changed lending conditions and have slowly extended deadlines for farmers for debt repayment, some of whom have mortgaged their properties for loans and are now unable to access new loans.

US$69.9 million to upgrade urban areas in Can Tho by WB

The World Bank has funded US$69.9 million to help upgrade urban areas in Can Tho, a major city of Viet Nam, with interest of 2.5 per cent per year, according to the city’s Urban Upgrading Management Commitee.

Viet Nam’s government contributed $20.4 million.

The project includes upgrading roads, water supply and drainage, electricity and light systems in low-income areas of Ninh Kieu, Binh Thuy, Cai Rang and O Mon districts.

The funds will also go towards building a 5.5 ha resettlement area in Binh Thuy District with infrastructure including a school, healthcare centre and market.

The project is scheduled to finish by 2017. More than 45,000 people are expected to directly benefit from the project, while 479,000 will enjoy indirect benefits.

The Can Tho project is part of a master upgrading plan for six urban areas in Cuu Long Mekong Delta. The other cities are My Tho City in Tien Giang Province, Ca Mau City in Ca Mau Province, Cao Lanh City in Dong Thap Province, Rach Gia City in Kien Giang Province and Tra Vinh City in the province of the same name. The project aims to reduce poverty by improving living conditions in struggling communities.

As many as 140,000 people in the Delta are expected to directly benefit from the project, 12,000 of whom will receive loans to renovate their houses

Ministry to cut fees for second hand cars

The Ministry of Finance plans to lower ownership registration fees for second-hand automobiles, said finance minister Vuong Dinh Hue.

At 10-15 per cent of the vehicle’s purchase price, the current rate for second-hand automobiles was nearly the same as the rate for new automobiles, Hue said.

Experts also recommended cutting the fee, even to the lowest level of 1 per cent, to encourage people with second-hand cars to register their vehicles.

Up to 40 per cent of second-hand vehicles have not been registered anew by their new owners, according to the Ministry of Public Security’s Department for Administrative Management of Social Order.

The department said that high fees were a major deterrent to proper second-hand vehicle registration.

It is important for second-hand vehicle owners to register so that when accidents occur, the offending party can be held liable.

As for second-hand motorbikes, the finance ministry would keep their registration fee of 1 per cent unchanged as it was low and reasonable, Hue said.

HSBC: Vietnam weathers global downturn positively

In contrast to most of its neighbours in emerging Asia, Vietnam maintained double-digit export growth in the first nine months of this year, weathering the global downturn extremely well, the HSBC said in its latest Global Connections Report Vietnam.

The report, released on November 14, said the US was Vietnam’s largest trading partner last year. With the signing of a bilateral trade agreement with the US in 2000 and admission to the World Trade Organisation in 2007, Vietnam has become the second largest supplier of clothing and footwear to the US behind China.

By 2013, the World Bank expects mobile phones and related accessories will overtake garments as Vietnam’s largest source of export revenue, it added.

According to HSBC, Vietnam’s exports are expected to grow at a pace of more than 10 percent till 2030. By 2020, China will overtake the US as Vietnam’s largest export partner but the US, Japan and the Republic of Korea will remain key sources of demand for Vietnam.

Plans to expand the ASEAN Free Trade Agreement to zero tariffs on all goods by 2015 will be an additional factor supporting Vietnam’s trade with other economies in the region over the medium term.

HSBC also reported that the Vietnamese traders are moving away from relying on their banks for trade finance (32 percent) with 37 percent indicating they want to fund their own financial obligations. Foreign exchange concerns appear to have abated somewhat as 58 percent of traders say they either anticipate exchange rates to work in their favour or do not expect them to hinder growth.

With China, Southeast Asia and the rest of Asia as their top three trading partners and each growing their share in Vietnam, intra-regional trade continues to be the core of the country’s importers and exporters.

Cacao farming training center opened in Daklak

A cacao development center was opened on Tuesday in Eakar District in the Central Highlands province of Daklak, aiming to help farmers plant cacao in a sustainable way.

The center as part of the public-private partnership project on cacao between Vietnam and the Netherlands will offer techniques for farming and processing cacao as well as introduce new high-yield varieties of cacao that are resistant to pests and diseases.

The U.S.-based Mars and local firm Green Highland Co. will set up three other centers in the coming time, with one in Daklak Province’s Krong Ana District, one in Binh Phuoc Province and one in Lam Dong Province.

According to Le Quoc Doanh, director of the Plant Cultivation Department, Vietnam currently has around 20,000 hectares of cacao, with Daklak accounting for 25%. The cacao farming area in Eakar District is 1,000 hectares.

Nguyen Tan Loc, chairman of the district, said that the district would plant 2,000-3,000 more hectares of cacao in the next three years.

Vietnam will have around 50,000 hectares of cacao and a volume of fermented cocoa beans of some 100,000 tons in 2020. Currently, a kilogram of fermented cocoa beans is priced at VND45,000, according to the department.

Second oil refinery project to get off ground in December

The Nghi Son oil refinery project will sign an engineering, procurement and contruction (EPC) contract in early December, said PetroVietnam General Director Do Van Hau at a conference for European investors in Hanoi on November 14.

Hau said that a feasibility study has been completed and concerned parties have finalised necessary preparations for the construction of Vietnam’s second oil refinery project to begin.

Last year PetroVietnam estimated that the Nghi Son EPC contract would be valued at   over US$7 billion out of the total investment of US$7 billion for the project.

The refinery is located in the Nghi Son Economic Zone in the north-central province of Thanh Hoa. The project is a joint venture between PetroVietnam, Kuwait Petroleum International Company, Idemitsu Kosan Co. and Mitsui Chemicals Company.

In the first phase of the project, the refinery will churn out 10 million tonnes of products per year, 1.5 times greater than the current Dung Quat oil refinery, the first in Vietnam.

By the time operations commence in 2014, both Nghi Son and Dung Quat oil refineries will meet 50 percent of national oil and gas demand.

Vietnamese investors receive Lao order

Leaders of the Vietnamese-invested Long Thanh-Vientiane Special Economic Zone (SEZ) have been awarded the Lao Order for National Development for their contributions to socio-economic development of Laos’ Sekong province.

Phonphet Phiulavong, Vice Secretary of the Party Committee and Deputy Governor of southern Sekong province, presented the Order to Chairman of the Board of Directors Le Van Kiem and Deputy General Director Le Huy Hoang of the Long Thanh-Vientiane SEZ on November 13.

Phiulavong spoke of the Long Thanh-Vientiane SEZ’s grant of US$270,000 to assist Sekong province in economic development and people in flood-hit areas.

The SEZ has also provided technical equipment to the provincial television station to enable wider television connection of Sekong and other southern provinces.

The Lao official affirmed that people of Laos, especially those from Sekong province, are always grateful to Vietnamese people and businesses for supporting them in building a new life.

On behalf of the SEZ’s executives, Kiem promised to do his utmost to make investments in Laos most effective to aid social security in the host country and strengthen the special solidarity between the two countries.

All commercial complexes to donate land for social housing

The People’s Committee of Ho Chi Minh City has proposed to the Prime Minister and related ministries to issue regulations that compel all commercial housing projects, irrespective of their size, to use 20 percent of their land area for social housing projects.

Accordingly, ministries should issue regulations that compel all developers of commercial housing complexes and urban areas to use at least 20 percent of their land area for social housing projects.

At present, the Housing Law requires only those projects with an area of 10 hectares or more to use 20 percent of their area for social housing projects.

The People’s Committee of HCMC has proposed that ministries and departments should also issue norms to assess the financial stability of investors before handing over or leasing land to them. This will prevent bogus investors with limited capital to undertake projects far beyond their means.

The City asked the Government not change regulations on administrative procedures in land, investment and construction at irregular intervals.

They should promulgate policies on land pricing, land withdrawal, land lease, compensation and resettlement to ensure rights of residents and speed up projects.

HCMC to prioritize ongoing traffic projects

According to the Department of Investment and Planning in Ho Chi Minh City, priority will be given to ongoing traffic projects so as to allow them to complete as per schedule and prevent any increase in investment costs.

The Department made this announcement at a meeting on November 13 with the Economics-Budget Committee of the City People’s Council and other related departments, to discuss capital resources for traffic projects in the City.

The ongoing traffic projects include Roads 10 and 10B, Hanoi Highway, Urban Railway Route No.2, HCMC-Long Thanh-Dau Giay Highway and Tan Son Nhat-Binh Loi Outer Belt Road.

At present the City has too many toll stations, making it difficult to invite investors to adopt the BOT (Build-Operate-Transfer) method. The BT (Build-Transfer) method also meets with some difficulties as the remainder of the available land fund is insufficient.

The Department of Finance has proposed to the Department of Transport to closely monitor contractors and the progress on projects, to ensure they complete as per schedule so as to stay within the investment capital budget.

Pham Van Dong, head of the Economics-Budget Committee, said that localities must move faster in handing over land for construction of the projects.

According to the committee, the City has already released VND2,239 billion (US$107.47 million) for traffic projects in the last ten months, which covers 75 percent of the existing projects.

The Department of Transport has asked for another VND1 trillion (US$48 million) for the next installment.

Ministry claims public debts remain at safe levels

The Ministry of Finance (MoF) has announced that Vietnam’s public debts account for nearly 55% of GDP, which remain at an acceptable level.

The country targets to curb public debts at 65% of GDP and government debt at 55% of GDP for the 2011-2020 period.

By the end of 2011, public debts represented 54.9% of GDP, while government debts accounted for 43.2% of GDP.

Public debts are forecast to reach 55.4% of GDP and government debts 43.1% of GDP by the end of this year, the ministry said.

In order to safely and sustainably manage its public debts, the MoF has co-ordinated with the Ministry of Planning and Investment to propose the government issue an instruction on intensifying state investment and government bonds funded projects.

They have also recommended that the government issue a decision on attracting, management and using ODA and foreign soft loans more efficiently.

As part of efforts to lower interest rates for government debts and state-owned enterprises, the MoF has set up a working group for national credit rating and has signed co-operation agreements with UK firms on credit rating consultancy and assistance.

The ministry has also submitted a project to the prime minister to enhance the country’s national credit rating and issue a decree to guide the setting up and operation of credit rating agencies.

The ministry will submit a draft decision on rules to establish the national credit rating system in the final quarter of this year.

In the first half of this year, the MoF’s inspection agency conducted inspections of 17 cement projects using capital guaranteed by the government and the results have been sent to the prime minister.

The ministry received approval from the prime minister for a plan to restructure some debts from international bond.

According to the MoF, Vietnam will not consider guaranteeing the issuance of international bonds for the 2012-2014 period. As a result, any enterprise or bank should be proactive in issuing such bonds without relying on government guarantee.

Debts related to infrastructure investment projects nationwide have reached around VND93 trillion (USD4.4 billion) so far.

The ministry has requested localities across the country to report on such debts to submit to the prime minister.

Dutch firms offered huge tax incentives

The central city has promised a raft of attractive incentives to entice foreign businesses to finance forward-thinking projects at its hi-tech park.

Speaking to business representatives from the Netherlands on Tuesday, Da Nang’s vice chairman offered 100 per cent land-tax and 100 per cent land-use tax exemptions for investment projects in infrastructure, hi-tech research and accomodation for on-site workers.

He also called for further investment from Dutch businesses in the city’s 1,010ha Hi-Tech Park.

The event, held by Da Nang City’s People’s Committee and the Netherlands general consul in HCM City, aimed to boost co-operation and investment between the Netherlands and the city.

Dutch business people asked questions regarding projects covering sea ports, energy, elect-ronics, health care and chemicals.

Phillips Electronics also raised concerns about the city’s energy-saving wind power and solar energy, as well as medical care equipment in city hospitals.

Vice chairman of the city People’s Committee Phung Tan Viet said the city attracts between $1.2 billion and $1.5 billion from domestic and foreign projects a year.

“We have developed infrastructure projects and transport to create the most favourable conditions for investors to reduce production costs,” Viet told the session.

He said investment from the Netherlands was a modest four Foreign Direct Investment (FDI) projects worth a total of US$9.5 million. this accounted for just 7.8 per cent of total investment from the Netherlands in Viet Nam.

Two-way trade between the city and the Netherlands in the first six months this year reached $8.3 million, a 16.4 per cent increase on the same period last year.

According to the city’s trade and investment promotion centre, the city has drawn 234 foreign-invested projects with a total committed capital of $3.03 billion so far thanks to improved transparency, one-stop shop policies and e-government applications.

However, businesses from the Netherlands still complained that there are few direct flights to the city from international airports.

Dutch businesses asked the city administration to create a ring-road transport system linking sea ports to the national highways.

General director of Da Nang port Nguyen Thu said the port system has been upgraded to meet increasing demand from the East-West Economic Corridor linking Myanmar, Thailand, Laos, and Viet Nam via Da Nang port.

Export firms face sales crackdown

Export processing enterprises might only be allowed to sell 10 per cent of their annual turnover in the domestic market, if a Government decree aimed to tighten up the sector comes into force.

Currently, export processing enterprises enjoyed import tax incentives on parts, equipment and value added tax, together with preferential customs procedures and no restrictions on their domestic sales.

The regulation is one of the draft amendments of the Decree 29/2008/ND-CP regulating the operation of industrial and export processing zones.

If firms’ domestic sales exceeded the margin, they would be forced to transfer into other enterprise models, said director of the Ministry of Planning and Investment’s Department of Economic Zone Management Vu Dai Thang.

He said a regulation whereby enterprises must export 100 per cent of their products is inflexible, however, a restriction on their domestic sales is needed.

The ministry and the General Department of Customs are currently burdened with a rafts of paperwork whenever export processing enterprises sell their products on the domestic market.

Meanwhile, director of Ha Noi Industrial Zones’ Management Board Nguyen Xuan Chinh said the restriction should not be set, especially when Vietnamese support industries remain underdeveloped.

In fact, few export processing enterprises exported all of their products, he pointed out. Recently, their products were also used for production by domestic enterprises.

Another aspect of draft states new industrial zones should only be allowed to open when the occupancy rate of industrial zones in the province is more than 60 per cent, in order to prevent dispersed investments and land waste.

CitiBank finances Vinacomin for Highlands Bauxite project

Citibank Viet Nam yesterday announced that they are providing a term-loan of US$300 million to the Viet Nam National Coal and Mineral Industries Holding Corporation (Vinacomin) to finance the construction of bauxite mining and alumina refinery project in the Tay Nguyen (Central Highlands) Province of Lam Dong .

The 13-year loan has been guaranteed by the Vietnamese Ministry of Finance and insured by the Japanese agency Nippon Export and Investment Insurance (NEXI). Under the terms of the agreement, Citi is the sole NEXI co-ordinator and the Joint Lead Arranger together with Mizuho Corporate Bank, Ltd, Sumitomo Mitsui Trust Bank Limited, and the Bank of Tokyo-Mitsubishi UFJ, Ltd.

This is the first bauxite and alumina project ever undertaken in Viet Nam, and it is critical to the development of these resources in the country for sales to domestic and export markets, and for the socio-economic development of the Central Highland region. The financing deal marks the first time that NEXI has provided untied loan insurance for a bauxite and alumina project.

Le Minh Chuan, President and CEO of Vinacomin said: “The $300 million loan agreement is the largest agreement ever for Vinacomin. This financing is particularly meaningful as it will be used to finance Vinacomin’s Lam Dong Bauxite – Alumina Complex Project, an important national development with direction and support from the Government. The loan will have a significant impact on the success and effectiveness of the project.”

(Vietnam Net)

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