Home » Business » BUSINESS IN BRIEF 19/11

AFD will finance water supply projects in rural areas

Many rural areas in Vietnam will have clean water as the French Development Agency (AFD) plans to provide 90-110 million euros, or US$114-139 million, each year for building and expanding the clean water supply systems

This was informed by Jean-Marc Gravellini, director of AFD in Vietnam, at an event held by AFD and the French Center for Culture and Cooperation in HCMC on Tuesday to introduce the film “The Thirst of the World.”

In the period 2013-2015, AFD will expand the water supply networks in a number of provinces in the Mekong Delta. In particular, four water treatment plants will be built in An Giang and Vinh Long, said Gravellini.

Specifically, two plants will be developed in An Giang with a daily capacity of 5,000 and 9,600 cubic meters respectively. When these plants are completed, an additional 9,000 people will have clean water for their daily activities.

Meanwhile, two new water treatment plants will go up in Vinh Long with a total capacity of 11,500 cubic meters per day, supplying clean water for 5,000 people. The project will be finished by June 2015.

AFD will grant the Government an aid of 30 million euros, around US$38 million, and then the Government will give this sum to Vietnam Development Bank (VDB) to carry out water supply system expansion projects in some Mekong Delta provinces.

Since 1997, via various financial cooperation tools, AFD and the French treasury have assisted Vietnam in implementation of 30 clean water and sanitation projects with total pledged capital of 340 million euros, or some US$432 million, said Gravellini.

Particularly, AFD has supported 13 projects with capital commitment of more than 270 million euros. Meanwhile, the French Treasury has provided a financial aid of nearly 75 million euros.

In addition to water supply projects in the Mekong Delta, AFD has also financed water distribution projects in the Red River Delta and the projects on technical assistance for industrial and household wastewater treatment in Vietnam.

Bad debt tackling program to be announced soon

The project for tackling bad debt in the banking system will be submitted to the highest authorities today while first missions to deploy the program are expected to begin from early next year.

Speaking at a seminar updating the economic situation and banking networking restructuring in HCMC on Wednesday, Vo Tri Thanh, vice president of the Central Institute for Economic Management (CIEM), said that the Government has listened to the central bank’s report on bad debt tackling and the report will be submitted to the highest authorities today.

A series of programs will be set up and other conditions will be prepared from now to the end of this year. If every thing goes smoothly, first tasks will be implemented early next year, Thanh said.

Concerning establishment of a national company in charge of handling bad debts, Thanh said the company should belong to the Government and include representatives from all ministries and agencies.

The central bank should hold the managing role in this firm as the agency understands bad debt problems thoroughly. The enterprise will be supervised and equipped with tools to control the debt trading market.

The nation’s bad debt stands at around US$12 billion but only 70%, or US$8 billion, needs to be handled. Risk provisions at banks total around VND75 trillion, meaning lenders can handle US$3.7 billion worth of bad debts with these funds. The State has to tackle around US$4 billion, which can be handled in stages, Thanh explained, suggesting that the capital amount required for the first stages would not be too big.

This is why Thanh believes bad debt handling would not be as difficult as people are concerned.

Thanh said there has been a slowness and lack of determination in tackling bad debts over the past time. However, when there is a change in awareness and the Government’s intervention with transparent measures, there will be significant change in supervision system.

Besides, it is necessary to consider the order of priority in handling bad debts. State-owned enterprises and real estate firms are the two groups with more bad debts. Issues such as the settlement process related to bad debts and who will be prioritized must be clarified and explained.

Thanh said bad debt tackling solutions will go along with low-cost housing development. He did not elaborate on the point.

He also affirmed that Vietnam has no need to borrow from the International Monetary Fund (IMF) in tackling bad debts. Capital source is not the biggest problem in solving bad debts. The problem is good explanation on group interest to the society.

The central bank in the coming time will intervene in ailing banks if they fail to handle their problems. Tacking bad debts and solving problems of some State-owned giants and banks will help win back the market confidence quickly, Thanh added.

Becamex Tokyu picks CBRE as condo distributor

Becamex Tokyu on Wednesday clinched an agreement with CB Richard Ellis Vietnam (CBRE) to distribute the first condos of the Tokyu Binh Duong Garden City project in Binh Duong New City next year.

Becamex Tokyu is the joint venture between Japan’s Tokyu Corporation and Vietnam’s Becamex IDC Corporation.

Under the agreement, CBRE will study the market and provide consulting services for the project and distribute the first 413 apartments of the scheme. However, the developer has yet to announce the selling price of the condos.

The apartment building is part of the Tokyu Binh Duong Garden City project with a total area of some 110 hectares costing VND25 trillion, or around US$1 billion. The project when in place is expected to provide the market with over 7,500 condos, a commercial center and office areas.

According to Toshiyuki Hoshino, general director of Becamex Tokyu, this is the first project of his group in the local real estate market. Via the project, the group will transfer its technology and experiences of urban development to the local market, he said.

The Vietnamese property market now is in difficulties but it is still a young market with high development potential, Hoshino said, adding his firm is deploying its long-term business strategy in Vietnam.

Binh Duong in the future will have a fast-growing population, especially when State agencies of the province relocate their offices to the center of Binh Duong New City, he cited.

The 1,000-hectare new city project is still being developed after two years of construction. It is set to be an economic, political and social center of Binh Duong with a system of services and facilities serving about 125,000 residents and 400,000 workers.

Tokyu Corporation is one of Japan’s leading groups active in electric railway, urban development, transport, retail and hotels and others. Its local partner, Becamex IDC Corporation, is operating in infrastructure investment and development of industrial parks, urban areas, information technology, education, securities, banking and construction sectors.

Danang sets up IT research center

The Department of Information and Communications in Danang City has picked IBM as provider of cloud computing solutions for the information technology (IT) training and research center.

The center will offer basic and advanced trainings on IT and communications for civil servants in Danang City and will be a base for the city’s e-government in the future.

Under the cooperation between the department and IBM, IBM will supply IT infrastructure solutions to develop the training and research center.

Besides, IBM will provide consultation and transfer specialized solutions for the government and the smarter city program to the Department of Information and Communications.

According to Pham Kim Son, director of the Department, the cooperation with an IT giant like IBM plays an important role in making Danang a smarter city.

VietJetAir launches HCM City-Vinh route

The new generation low-cost carrier VietJetAir officially launched a domestic route linking Ho Chi Minh City and the central city of Vinh on November 15.

There will be one flight everyday using Airbus A320 which seats 180 passengers.

This is the carrier’s sixth destination in the domestic air network apart from Hanoi, HCM City, Hai Phong, Da Nang and Nha Trang.

VietJetAir Deputy General Director Pritam Singh said the service is launched to meet the increasing demands of local and foreign visitors.

The airline is expanding its network throughout the country by increasing the flight frequency on existing routes and launching new services to Da Lat, Hue and Phu Quoc, he said.

On this occasion, VietJetAir started a promotion campaign, offering one-way ticket from Vinh to HCM City at only 499,000 VND until December 10.-

Japanese locality eyes investment in Vietnam

The Governor of Japan’s Hyogo prefecture is leading a business delegation on a visit to study conditions in industrial zones in Vietnam’s southern provinces.

At a Nov 15 meeting with Ho Chi Minh City People’s Committee Chairman Le Hoang Quan, Governor Toshizo Ido said m any Japanese small- and medium-sized enterprises have shifted attention to investment in Vietnam.

The governor went on to say that his visit aims at updating information on the investment environment in Vietnam for such potential investors.

He expressed his belief that more small and medium-sized Japanese firms will pour their capital in Vietnam in the time to come, especially in the available industrial areas.

Chairman Quan affirmed his support and promised to offer the best possible conditions to Hyogo ’s businesses in particular and Japanese ones in general when coming to invest in Vietnam.

He said Japanese investors have made great contributions to socio-economic development in Vietnam and in Ho Chi Minh City in the past years.

At the meeting, the two officials also shared the same views that the two sides should not only maintain the economic ties but also expand cooperation to other fields such as education, culture and arts, in order to tighten the bilateral ties between the two countries.

Vietnam’s exports to grow by 10 percent: HSBC

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.

In its latest Global Connection Report, the Hong Kong-Shanghai Banking Corporation (HSBC) said Vietnam has become the second largest supplier of clothing and footwear to the US behind China. The country signed a bilateral trade agreement with the US in 2000 and joined the WTO in 2007.

In recent years, mobile phones and related accessories have become Vietnam’s second largest export eaner (after garments), accounting for more than 10 percent of its total earnings. The World Bank expects this item will have overtaken next year.

According to HSBC, demand for clothing and footwear is less sensitive to global market turmoil than other goods and this, combined with the rapid pace at which Vietnam is securing its telecoms market share, has helped protect Vietnam from the recent weakening in global demand.

HSBC forecasts that Vietnam’s exports will achieve a growth rate of over 10 percent in the coming years with exports to the rest of emerging Asia, the Middle East and Africa growing by double-digits from now until 2030.

By then, China will have overtaken 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.

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

Export growth to Europe (excluding Russia) and to Australia, New Zealand and Oceania is expected to average around 9 percent a year in the decade to 2030.

Vietnam’s ability to attract and retain foreign firms in high-value manufacturing products such as electronics, computers and phones is an advantage for Vietnam, the report says.

In June 2012, Standard and Poor’s upgraded Vietnam’s outlook from negative to stable, acknowledging the authorities’ recent success in bringing inflation under control, reducing the fiscal deficit and improving the trade and current account balances. This will help local businesses maintain their competitive advantages.

According to a recent HSBC Trade Confidence Index, confidence among Vietnamese traders has fallen off slightly in the last six months, dropping from a score of 115 to 110. Only 73 percent of businesses surveyed expect to see trade volumes grow or remain at current levels, lower than the 80 percent recorded in the last report.

Although Vietnamese import-export businesses have expressed no increased concern over payment defaults or an inability to fulfil orders, Vietnamese sellers are following others in the region by looking to establish more stringent payment terms (32 percent). In addition, traders have a less positive outlook as it relates to the global economy than they did six months ago with only 34 percent anticipating any type of growth compared to 51 percent in the first half of this year.

Like those in Indonesia, HSBC says, Vietnamese entrepreneurs 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.

Concerns over foreign exchange appear to decline as 58 of traders say they either anticipate exchange rates to work in their favour or don’t expect them to hinder growth. Intra-regional trade continues to be the core for the country’s import and export activities with China, Southeast Asia and the rest of Asia, which are Vietnam’s top three trading partners and each growing their share in the country.

Restructuring SOEs and banking sectors

Despite Vietnam’s remarkable achievements in improving the macroeconomy, the country is facing challenges due to the rising bad debt ratio and ineffective operation of several State-owned enterprises (SOEs).

Addressing a recent seminar on economic updates, Dr. Vo Tri Thanh, Deputy Director of the Central Institute for Economic Management (CIEM), stressed the need to speed up the restructuring of the SOEs and banking sectors.

He said that a long-term development strategy is essential for the nation’s sustainable growth, with a focus on re-organising SOEs, settling bad debts, and reducing exposure to external factors.

Dr. Thanh revealed that the final report on a bad debt settlement programme will be released by the end of this year along with a solution to restructure some of the State-owned giants.

According to the economist, Vietnam’s debt in the infrastructure sector alone is estimated at VND90 trillion (roughly US$4.45 billion), while the implementation of public investment projects remains sluggish.

Since Vietnam was admitted to the World Trade Organization (WTO) in 2007, it has made impressive progress in removing trade barriers and gaining a leg up on international cooperation, making the country one of the world’s leading exporters of several key agricultural products such as rice, coffee and rubber.

However, he said deeper integration into the global market has brought more pressure to bear upon the national economy, especially when SOEs and banking sectors are facing crunch time.

Dr Thanh pointed out that Vietnam is much weaker than other regional countries at sustaining growth, expanding development and recovering from both external and domestic shocks. Its budget deficit and inflation rate remain high, with saving and investment rates estimated at 30 percent and 40 percent of GDP, more or less respectively.

He proposed further stabilising the macroeconomy, maintaining reasonable growth to ensure social security, reducing public spending and speeding up the restructuring of the SOEs and banking sectors.

One of his concerns is about the credit growth of 3.3 percent in the first 10 months of 2012 on account of decreasing demand and issues inherent in the banking system such as poor liquidity and bad debts.

Dr. Thanh also noted that Vietnam’s economic forecasts for 2013 differ from those of international organisations.

He warned domestic businesses that they should learn how to move along with market trends and regulatory shocks in a world of high uncertainties by mobilising funding from different sources, mitigate financial risks, and strengthen competitiveness through linkages to the value chain of goods, services, capital, and labour.

German firms keen on Vietnam’s southern market

A delegation of German businesses visited the southern province of Binh Duong on November 15 to explore the market and investment opportunities.

Most of them operate in the fields of high technology, energy, manufacturing, medical equipment, and waste treatment and recycling.

Thomas Richter, head of the delegation, said that German firms are interested in doing business in Vietnam, especailly in Binh Duong, which is known as a huge industrial hub of the country.

Located near airports and seaports, Binh Duong is very convenient for German investors, he said.

While working with provincial leaders and managers of industrial parks, German businesses showed keen interest in investing in the high-tech industry.

Tran Thanh Liem, Vice Chairman of the Binh Duong provincial People’s Committee, said that his province needs more foreign investors and always creates the best conditions for them to operate in the locality.

Currently, Binh Duong has more than 2,000 FDI projects with a total registered capitalization of US$17.3 billion. Over the past ten months, it has earned more than US$8 billion in export revenue.

Furniture company punished for polluting

The Binh Duong People’s Committee yesterday ordered Wooden furniture producer Rochdales Spears to temporarily close a branch in the Dong An Industrial Zone, due to heavy pollution being committed by the company.

The decision was made following an investigation into reports that the company had been scattering large amounts of sawdust into the environment for several months, affecting neighbouring companies in area and negatively affecting the health of hundreds of workers.

Three fibre producers went as far as to send a petition to local authorities, saying that the dumped sawdust was damaging to their products and was affecting exports.

The Chairman of the People’s Committee chose to fine Rochdales Spears VND250 million (US$12,000) and postpone their operations for one month so they can clean up their act.

The company was also asked to make an environmental protection plan for the branch and send it to the province’s environment and natural resources department for approval.

If they fail to improve by the end of the month, the punishment will be increased and they will be forbidden from resuming production until they have fulfilled all necessary requirements, the committee confirmed.

No US anti-dumping tax on Vietnamese steel pipes

The US International Trade Commission (US ITC) has announced that the US will not impose anti-dumping duties (AD) on welded carbon-quality steel pipes imported from Vietnam.

The US ITC confirmed that Vietnam’s welded carbon-quality steel pipes present no harm to the US steel industry.

The latest decision officially ends the US’s year-long anti-dumping lawsuit against steel pipes imported from Vietnam.

Earlier, the US Department of Commerce (DOC) admitted SeAH Steel Vina Corporation and Vietnam Haiphong Hongyuan Machinery Manufactory Co. Ltd. did not receive any government subsidies as the US had previously accused. The US’s anti-dumping lawsuit against steel pipes imported from Vietnam was subsequently officially withdrawn.

The two firms named above make up 70 percent of Vietnam’s steel pipe export turnover in the US market.

The DOC’s investigation started on October 26 2011 and ended on October 17 2012.

In 2011, Vietnam was among the five leading exporters of welded carbon-quality steel pipes to the US.

EU recognises Vietnam’s progress on timber legality

Vietnam and the EU have completed the third round of negotiations on a Voluntary Partnership Agreement (VPA) to implement the Forest Law Enforcement, Governance, and Trade (FLEGT) program.

Speaking at the site of the negotiations in Belgium on November 15 and 16, Hugo Maria Schally, Head of the International Agreements and Trade Unit at the European Commission’s Directorate-General for Environment, stressed the need to develop the Timber Legality Assurance System (TLAS).

Participants discussed measures to assist the timely exchange of information, increase the frequency of inspections, and complete the legislative framework on timber legality.

The EU recognised Vietnam’s ongoing progress in enforcing the criteria for legal timber products, inspired by the six basic principles of exploration and export.

Vietnam is completing its TLAS for both domestic consumption and export markets.

Vietnamese and EU representatives agreed on a draft roadmap to be discussed in more detail at the negotiation’s fourth round in April 2013.

Vietnam is expected to finalise all the rounds of negotiation with the EU in September 2013.

According to the EU’s regulations, the FLEGT program will be in effect from March 3 2013 and establishes a mechanism aimed at guaranteeing that the wood exported to the EU market is sourced legally.

So far, the EU has signed FLEGT VPAs with several countries, including Ghana, Cameroon and Indonesia. Negotiations with Vietnam and some other nations are in progress.

Vietnam-China trade and economic forum opens

Nearly 300 Vietnamese and Chinese businesses attended the Vietnam-China Economics and Trade Forum as part of the 2012 Vietnam-China People’s Friendship Festival, in Liuzhou City in the Chinese province of Guangxi on November 18.

Addressing the opening ceremony, Deputy Mayor Jiao Yaoguang of Liuzhou City briefed participants on the socio-economic development situation as well as the province’s investment policies.

Emphasizing the importance of “Two corridors, one economic belt” cooperation between Vietnam and China, he expressed hope that businesses of both countries will boost cooperation in such fields as infrastructure, science and technology, food, education and training and tourism.

Vietnamese ambassador to China Nguyen Van Tho said the forum was of great significance as it offered an opportunity for businesses of both countries to strengthen cooperation and contribute to developing cooperative relations for the benefit of both sides.

He said both countries have great potential for trade and investment cooperation, especially in the fields of agriculture, transportation, manufacturing industry and support services for the development of the economic belt.

Pham Gia Tuc, vice president of the Vietnam Chamber of Commerce and Industry (VCCI) delivered a report on Vietnam’s investment and trade promotion activities in recent times.

To establish an information channel for the business community of both countries, the VCCI has set up a business forum and a Vietnam-China Business Council. The cooperative mechanism has attracted more than 2,000 Vietnamese and Chinese businesses, becoming an effective tool for the business communities between the two countries to promote trade exchange, he said.

Tuc affirmed that Vietnamese businesses are keen to cooperate with Chinese partners but also with other foreign businesses operating in China.

With its increasing role within ASEAN, APEC, and ASEM, Vietnam has become a gateway for businesses of other nations to penetrate other important markets in the region.

Japanese enterprises promote investment in Vung Tau

More than 20 leading enterprises from Hyogo prefecture in Japan, led by Governor Ido Toshizo, has paid a working visit to Ba Ria-Vung Tau Province to seek partners and promote investment.

During the working session on November 16, provincial authorities  introduced the province’s potential, its investment attraction policy, and some of its recent achievements.

They also asked Japanese enterprises to help their province manage and  upgrade seaport systems in the area.

Ido Toshizo described Vietnam, particularly Ba Ria-Vung Tau, as an ideal destination for investment promotion and cooperation.

The governor added that Ba Ria-Vung Tau Province’s convenient location along sea, land, and air routes increases the potential for collaboration.

The delegation embarked on a fact-finding tour to the international Tan Cang-Cai Mep Terminal and the VinaKyoei steel company in Tan Thanh district.

The Hyogo prefecture is internationally renowned for its trademarks and major facilities like Kobe, one of the most busiest ports in the world.

Effective ways to invest in Russia and CIS markets discussed

Russia’s representative trade offices in Vietnam are willing to provide consultative assistance to Vietnamese businesses and entrepreneurs seeking effective methods of cooperation and the chance to pitch potential projects.

Maxin Golikov, a Russian trade counselor in Vietnam, affirmed the offer of assistance on November 16 during a seminar in Hanoi on introducing Vietnamese businesses to the market opportunities of Russia and the Commonwealth of Independent States (CIS).

Le Hoang Oanh, deputy head of the Trade Promotion Department, said that the CIS’s members encompass 11 countries with a population of more than 3 million people and Russia remains the gateway for Vietnamese enterprises to penetrate the market.

Despite the global economic downturn, two-way trade turnover between Vietnam and Russia has risen continuously to a value of US$2 billion in 2011 and it is estimated at US$3.7 billion in 2012, a fivefold increase compared to 10 years ago.

Russia’s membership in the World Trade Organisation (WTO) has also offered Vietnamese businesses opportunities to expand their markets.

Mr Golikov said that relations between Russia and Vietnam have been upgraded to new levels and both countries will continue to develop deeper bilateral ties in future.

According to Russian experts, bilateral trade turnover between Russia and Vietnam is likely to reach US$12 billion by 2018. After joining the WTO, Russia will lower the import tax imposed on Vietnam’s agricultural products by 30-50 percent, decreasing the average tax from 13.2 percent to 10.8 percent.

Mr Golikov warned, however, that Vietnamese businesses intent on penetrating the Russian market should grasp Russia’s existing laws dictating the procedures for opening representative offices and branches and registering for tax.

They should consult with Vietnam’s Ministry of Industry and Trade, the Ministry of Foreign Affairs, and representative offices in Russia to extend their knowledge of the market.

Vietnam, Germany promote trade and investment exchange

HCM City hosted an exchange on November 16 to promote trade and investment between Vietnam and Germany.

The delegation from Germany’s Sachen state featured companies operating in the field of new and renewable energy component production, mechanical engineering, software development and information technology services, health equipment, security, and consumer products and services.

Sachen state wants to collaborate with and invest in Vietnamese across a variety of sectors including mechanical engineering, energy, garments and textiles, environmentally friendly products, the information technology industry, and construction materials.

Local German authorities have promised favourable conditions for Vietnamese businesses who decide to expand their operations into Sachen state.

Attracting more foreign visitors to Vietnam

The increase in the number of foreign tourists to Vietnam impacts many areas of the economy.

Tourists are inherently accompanied by large volumes of foreign currencies (over US$5.6 billion in 2011 or 63.3 percent of Vietnam’s total service exports), which contribute to improving the balance of international payments, increasing foreign currency reserves, and stabilising exchange rates.

Tourism is also an effective and direct way to introduce the country’s history, landscape, and people, as well as its socio-economic development, open mechanisms and simplified administrative procedures, to international friends.

The Vietnam Administration of Tourism’s (VNAT) statistics reveal that in the past ten months, the number of tourists visiting Vietnam who travel by air accounted for 83.5 percent of total arrivals, followed distantly by those passing across land borders (15.3 percent).

The Republic of Korea saw the sharpest increase in the number of visitors to Vietnam (35 percent), followed by Malaysia (24.6 percent), Japan (23 percent), Thailand (22.9 percent), and Taiwan (18.1 percent).

The number of tourists from China, Cambodia, and Australia conversely fell slightly compared to the same period last year.

The ever-increasing average spending rates of foreign visitors mean their custom is likely to contribute over US$6.5billion to Vietnam’s total tourism earnings.

However, the ratio of foreign tourists to the local Vietnamese population is estimated at only 7 percent, much lower than in other countries in the region and the world.

Vietnam has recently made efforts to upgrade tourist infrastructure, improve the quality of tourism services, and bolster the sector’s human resources. But the country must focus on enhancing its competitive edge through programs and strategies like the National Tourism Development Strategy until 2020, with a vision to 2030, which was approved by the Prime Minister in 2011.

Vietnam should also pursue policies that could mobilise investment resources from both domestic and foreign businesses and the community in general.

Ensuring transparency, ease of use, and favourable conditions for visa issuance,  as well as opening of air routes linking Vietnam and promising emerging markets, are two other effective methods of attracting more foreign tourists to the country.

In addition to boosting the scope of the tourism marketing campaigns, improving the natural and social environments is also necessary for the sector to develop.

Ha Noi’s Yen So park rezoned as residential area

The People’s Committee of Ha Noi approved a plan to rezone 50,000 square metres of land in Yen So Park as a residential area.

The new residential area would include housing and public buildings. The committee required the city’s Planning and Architecture Department and the People’s Committee of Hoang Mai District to implement the plan.

Savills Viet Nam offers land price index for HCM City

Savills Viet Nam has set up the Savills Property Price Index (SPPI) for different property markets in HCM City.

The company said the index, to be updated every quarter, offers market participants a quantitative way to determine market trends, helps to increase market transparency and provides more decision-making tools for investors. It also tracks sub-indices which are measured on a quarterly basis.

For the residential sector, the index is determined based on a sample of more than 200 primary and secondary projects in HCM City. The base period of the SPPI is set at the first quarter in 2009.-

Work starts on industrial zone in Quang Ninh

The Viglacera company began construction of the Dong Mai Industrial Zone in northeastern Quang Ninh Province with total investment of VND1.2 trillion (US$57.15 million).

This zone aims to attract investors in the sectors of farming, forestry, fisheries and food processing, as well as light industry and electronics. The zone is one of 11 industrial zones under the plan on developing industrial zones in Quang Ninh Province by 2015.

Discovery project appoints VN firm as consultant

Savills Viet Nam was officially appointed as the exclusive consultant and sales representative for the Discovery Complex project developed by the Cau Giay Investment, Trading and Services Joint Stock Company.

Located in Cau Giay District, Ha Noi, the 10,000-sq.m Discovery Complex includes luxury apartments and offices and features modern amenities. Apartments will go on sale at the end of this year.-

CBRE to sell apartments for Becamex Tokyu

CBRE Vietnam signed a contract on Wednesday with real estate developer Becamex Tokyu to provide market research and consultancy for the first phase of a Becamex project in Binh Duong Province. CBRE will also sell 413 apartments in Tokyu Binh Duong Garden City. Ground breaking for the apartments is scheduled on November 21, sales will begin next year, and construction will wrap up in early 2014.

New rules on risk management in securities companies

Brokerage companies must set up a risk management system to manage at least four types of major risks (in the areas of the market, settlement, liquidity and operational risk), according to new draft guidelines from the State Securities Commission (SSC).

The new draft guiding on risk management at securities companies required them to report on their business results, including information on new products along with major potential risks and their impacts on the company’s overall risk situation. They must ensure in principle that all businesses have pre-defined risk limits.

Securities companies must report to the SSC prior to January 31 and July 30 every year on their business operations and risk management.-

Kinh Bac City Development reports heavy loss after nine months

Real estate company Kinh Bac City Development Share Holding Corp (KBC) reported a heavy loss of more than VND233 billion (US$11.1 million) in the first nine months of this year.

The figure is significantly higher than the firm’s loss of just VND15 billion ($717,700) during the same period of last year.

Losses during the third quarter alone accounted for almost 60 per cent, reaching VND132.2 billion ($6.3 million), of the total figure for the first nine months. The losses were mainly blamed on soaring financial costs that rose to VND83.7 billion ($4 million), mainly caused by high borrowing costs. The company’s earnings per share (EPS) were negative VND805 during the period.

KBC’s associate companies also reported a combined loss of VND46.6 billion ($2.2 million) ending September. The company also reported that it had sold its entire holdings of 26.55 million shares in Western Bank.

HCM City Securities Co on track for profits

The HCM City Securities Co (HSC) forecasts that it will earn a total pre-tax profit of VND278 billion (US$13.3 million) ending October, completing 98 per cent of its profit target set for the whole year, according to HSC deputy general director Trinh Hoai Giang.

Giang said its profits would likely exceed the target, despite the prolonged market downtrend negatively affecting the company’s profits, especially in brokerage services, one of its major activities. He said the company would continue to focus on self trading, venture capital and bonds.

Land-use check on builders

The Ministry of Natural Resources and Environment has requested relevant bodies to report land use within their jurisdictions by December 15.

Results would be submitted to the Prime Minister before being made public, the ministry said.

Accordingly, the ministry has asked People’s Committees in cities and provinces nationwide to look into delayed projects and work with the projects’ investors to ensure that they are implemented.

The ministry will also require the committees to take back land allocated to projects that have been delayed too long or were given to investors without land auctions.

“The land should be re-allocated to State land development organisations so it can be auctioned off,” said the ministry, adding that the organisations would repay investors after these auctions.

The ministry has also required localities to strengthen supervision of allocated land to ensure it is used effectively.

The committees have been also instructed not to create new industrial zones and complexes or enlarge existing ones if they do not fit in with the Government-approved master plan on industrial development. The new industrial zones and complexes are also required to meet the country’s regulations on technical infrastructure, environment and occupancy rates.

Da Nang ignores ‘affordable’ homes

The city faces a shortage of affordable housing, yet investors remain focused on developing luxury apartment projects, said Vu Xuan Thien, deputy director of the Ministry of Construction’s Housing and Real Estate Market Management Department.

There are now 36 luxury apartments and new urban projects in the city, most of which have struggled to attract buyers, according to the municipal People’s Committee.

Le Tung Lam, deputy director of the city’s Construction Department, blamed the slow implementation of these projects for investors’ lack of funds.

In order to better address these difficulties, Thien suggested the municipal People’s Committee consider revoking the licences of real estate projects which could not be implemented as scheduled because they lacked capital or were unfeasible.

Several localities including HCM City and Ha Noi reported that they had withdrawn licences from hundreds of idle real estate projects, while the southern provinces of Dong Nai and Binh Duong each revoked licences from 20-30 projects.

But Da Nang failed to report a single revocation, Thien said.

Meanwhile, Da Nang People’s Committee vice chairman Nguyen Ngoc Tuan petitioned the Government to direct the State Bank of Viet Nam and commercial banks to create more favourable conditions for real estate developers to access low interest loans.

That could help firms complete their projects faster, he said.

US seeks investment openings in nation

Leading US firms are studying the Viet Nam market for investment opportunities in major infrastructure development projects, USTDA (US Trade Development Agency) director Leocadia Zak said yesterday.

Zak is leading a delegation of eight leading US firms in infrastructure development on a working visit to Viet Nam.

She said the goal of the US Infrastructure Trade Mission was to find opportunities to meet Viet Nam’s demand for infrastructure development in several sectors including energy, environment, and public transportation.

The eight companies are: General Electric; Honeywell International Inc.; Black and Veatch; Cisco Systems; Oshkosh Corporation; Westinghouse Electric Company; WorleyParson LLC.; and The Shaw Group.

The delegation held a working session with provincial and city authorities of HCM City, Can Tho, Dong Nai, Khanh Hoa, Long An and Tra Vinh in HCM City.

Zak said US companies understood the infrastructure needs in these localities and were looking forward to helping meet them through co-operation pacts in the near future.

Le Thanh An, US consul general in HCM City, said the dynamic economic development and strong population growth in Viet Nam made it a “truly emerging market” for US companies.

Among the eight companies in the mission, General Electric has already invested in a wind power project in northern Hai Phong City, while Honeywell is working with national flag carrier Vietnam Airlines for its development plan.

VN consumers lose fight against counterfeit goods

Vietnamese consumers are presented with an abundance of goods, but it is difficult for them to distinguish between genuine and fake products, experts said at a conference in Can Tho City on Thursday.

This is because the production of and trade in counterfeit goods have become “increasingly complicated,” in recent years, they said.

Nguyen Manh Hung, deputy chairman of the Viet Nam Standard and Consumer Association (VINASTAS), said counterfeit goods were everywhere and in many sectors, including those with direct impact on citizens’ health.

Many fake oriental and western medicines were available in the market, he said, adding that false claims made in advertisements for food supplements could also have dangerous consequences.

VINASTAS recently received a complaint from a patient about the “Tam Nao Khang” food supplement that advertisements said contains a substance that can help patients paralysed by cerebrovascular diseases to stand up. However, the patient’s health deteriorated and became more serious after using the product, the conference heard.

Previously, the Can Tho Department of Information and Communication had fined Kim Thuan Bao, a trading firm, for issuing leaflets with false information on the product’s usefulness.

However, even after it was fined, the enterprise continued to advertise its product on the mass media and issue leaflets with the same content as before.

While relevant agencies have strengthened inspections and punishment of those producing and trading in fake goods, these measures have to be made much more effective, conference delegates agreed.

Many provincial authorities said a lack of resources, including personnel, made their task more difficult.

Bui Van Ho, chairman of the Standards and Consumer Association of southern Kien Giang Province, said consumers must protect themselves by raising their awareness of counterfeit goods.

In addition, when discovering violations, authorities should publicise them in the mass media so that consumers know and can avoid buying fake goods, he said.

“Businesses themselves have a role to play by improving their public communications and helping people identify fake and substandard goods,” conference delegates noted.

FPT Software enters German market

Viet Nam’s leading information technology company FPT Software recently opened software outsourcing operations in Germany, aiming to develop it into one of its three key markets besides the US and Japan.

The company now has a presence in 12 countries.

Company general director Nguyen Thanh Lam said that the launch of the German branch was in line with the company’s strategy to develop services and new markets to achieve growth.

Germany, with around 3 million small and medium enterprises, was considered one of the largest markets with great potential, and the opening was a strategic move for the FPT’s business in Europe, he said.

FPT in Germany would operate in the fields of consulting; managing and developing information systems; producing and distributing packaged software; developing application software; and training software engineers.

Truong Gia Binh, chairman and CEO of FPT Corporation, said that 50 per cent of FPT’s software outsourcing business currently came from Japan and they hoped to replicate the same model in Germany.

As of this year’s third quarter, the European market contributed 12 per cent of the corporation’s turnover. Last year’s figure was more than 10 per cent.

(Vietnam Net)

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