BT projects sidetracked by slump
Scores of build-transfer and build-operate-transfer transport infrastructure projects in Hanoi have been delayed because of property market doldrums that reduce the value of the projects for developers.
According to Hanoi Department of Planning and Investment deputy director Nguyen Gia Phuong, in most of the projects under the build-transfer (BT) form, developers are given land space in exchange. Given the current economic hardships, particularly property market doldrums, investors have turned out to be reluctant with such projects.
Building north-south arterial route in former Ha Tay province, now belonging to Hanoi, is one of the projects going underway under BT form by developer Nam Cuong Group.
Nam Cuong stepped into the project in 2007 when the property market was vibrant. The project involves building a 63.3 kilometre long, 42-metre wide road at an estimated cost of VND7,694 billion ($370 million). In exchange, Nam Cuong was given 10,000 hectares along the route by the former Ha Tay provincial People’s Committee to develop four urban areas.
Nam Cuong reportedly has pumped over VND1 trillion ($48 million) into site clearance, compensation and builing an overpass crossing Thang Long Avenue. The project then incurred delays as it had to wait for results from authorities’ reviewing planned construction projects in Hanoi areas and for the approval of Hanoi’s expanded master planning.
In mid 2012, Nam Cuong Group returned one of the urban projects to Hanoi authorities, while how the route will be built further remains unclear.
Following Nam Cuong, recently Song Da Corporation, formerly known as Song Da Group, asked to return a project on overhauling former National Highway 3, section from Hanoi to Thai Nguyen province stretching over 33.3km.
Its proposal has won approval of Deputy Prime Minister Hoang Trung Hai and the project was handed over to Thai Nguyen province and Hanoi people’s committees to source investment capital.
The project was proposed by Song Da Group in 2010 under build-operate-transfer (BOT) combined with BT forms. In exchange, the group was given nearly 400ha land space in Hanoi’s Dong Anh district for building an urban area.
Song Da Corporation’s retreat from the project came as hardships still prevail in the property market.
Besides these two large-scale projects, developers of many BT projects took the same move and most of these BT projects were in the areas considered as ‘hard nuts to crack’ such as improving lake environment, dealing with jetty soil erosion or reinforcing channels.
Scores of big infrastructure projects backed by state groups and corporations have also been put on hold, like that on building an approach road from North Thang Long-Noi Bai expressway to Duc Tu T-junction in Dong Anh district with developer TASCO; an arterial route connecting Vinh Ngoc-Co Loa-Viet Hung-Nguyen Khe in Hanoi’s Dong Anh district with developer Post and Telecommunication JSC; and installing a sewer system in Ha Dong district with developer Cienco 5.
A recent report of Hanoi People’s Committee shows that of more than 100 projects under BT and BOT form in the past five years, 24 projects faced changing investment form or incurred a halt. Of the 65 projects allowed to go ahead, 12 projects are in the development pipeline, 20 projects have found investors and 25 others, albeit getting the prime minister approval, have yet to find investors.
Russian firm approved for a car and bus plant
Russia’s Buscenter Met Company has won approval to build a $1 billion factory to produce busses, cars and agricultural equipment in central Binh Dinh province.
Duong Ngoc Oanh, head of investment promotion agency under Binh Dinh’s Management Board, confirmed to VIR that Russia’s Buscenter Met had received a licence for a factory to make busses and cars with total registered capital of $1 billion covering nearly 50 hectares in Nhon Hoi Economic Zone.
It was expected to start construction after 45 days since receiving the licence. However, “it could take about 7-8 months for investors to carry out because the construction process could lengthen,” said Oanh.
“After three years of construction, the factory would churn out agricultural tools, auto parts, buses and cars. It would export 70 per cent of its products worldwide and is expected to lure 3,000 to 5,000 workers,” said Man Ngoc Ly, director of Binh Dinh Economic Zone Management Authority.
Ly said that this would be one of the big projects supporting the socio-economic development of Binh Dinh and the central region as a whole. He predicted the project would lure other vendors to the central region for manufacturing automotive spare parts as well as encourage automakers to expand investment in this country.
Recently, Binh Dinh has seen an upsurge in investment projects. According to the Binh Dinh Planning and Investment Department, the province has lured 40 foreign investment projects with a total registered capital of $410 million from the US, Japan, China, Korea, the UK, Russia, Singapore, Malaysia, Germany, Thailand and Australia.
Ly stressed the provincial committee committed to strongly support investors because provincial leaders were aware that the success of investors would reflect investment climate in Binh Dinh province.
Talks on FTA with EU hit snags
A series of challenges are facing Vietnam during the Vietnam-EU Free Trade Agreement’s third negotiation round.
Jeans-Jacques Bouflet, Minister Counsellor and head of the EU Delegation to Vietnam’s trade and economic section, said this negotiation round would kick off on Monday this week in Ho Chi Minh City, focusing on tariffs, technical issues, intellectual property rights (IPR), goods origins and World Trade Organization commitments. “IPR and goods origins are among the biggest obstructions for the negotiations because Vietnam is weak in solving these problems,” he said. IPR concerns, for example, are complicating business plans of Swiss-backed Syngenta Vietnam Company.
Pham Huy Thang, Syngenta Vietnam’s mananger of research & development, said Syngenta was building a $1.5 million rice variety research centre in northern Ninh Binh province, and the firm also wanted to implement some other projects in Vietnam.
“But Vietnam’s IPR implementation remains weak and this will prevent foreign firms from transferring high technologies to Vietnam,” he said.
According to the US-based Business Software Alliance, the leading global advocate for the software industry, Vietnam recorded a personal computer software pirate rate of 81 per cent in 2011, with the commercial value of this piracy estimated at $395 million. Vietnam in 2011 ranked 22th out of 116 national and regional economies in terms of software piracy.
“Foreign firms simply will not transfer or licence their proprietary rights or advanced technology and know-how to Vietnam, or engage in research and development activities here, unless they are confident these rights will be protected,” said Preben Hjortlund, chairman of EuroCham in Vietnam.
Regarding goods origins which is a condition for tax preferences, Tran Thanh Hai, vice head of the Ministry of Industry and Trade’s export-import department, said: “A pair of made-in-Vietnam shoes, for instance, can contain many types of materials imported from different markets with different goods origins. Thus, it is difficult to determine origins of products and a big hurdle for negotiations of this free trade agreement (FTA).”
Hai said Vietnam-based firms currently had to import over 70 per cent of needed materials from foreign markets for their production.
“Besides, exporters will have to obey stringent regulations on labeling, environmental protection and corporate social responsibility when they export products to the EU,” he added.
Under this FTA, Vietnam will have to reduce tariff rates of 90 per cent of imported goods to zero per cent within seven years. This will help Vietnam lure more foreign direct investment. “But the problem is foreign investors may use import tariff incentives for importing materials into Vietnam for assembling or processing, instead of expanding direct production in Vietnam. This will not create much added value for Vietnam’s production chain,” Bouflet said.
Bouflet said after the FTA was clinched by late 2014, it would be ratified by each of the 27 European nations and this process would take three or five years.
The EU is Vietnam’s second largest trading partner, with the two-way trade turnover of $29.1 billion last year. The EU is also Vietnam’s biggest foreign investor, with 1,781 projects by late October, 2012 representing total registered capital of over $33.4 billion.
Highway to project completion
The Danang-Quang Ngai expressway, the biggest central area expressway project, has found the first two contractors.
[Kéo thả ảnh vào nội dung biên tập] Two contractors are Civil Engineering Construction Corporation No.4 and Thang Long Construction Corporation.
Last week, Vietnam Expressway Corporation signed a 3A bidding package worth VND1.416 trillion ($67.4 million) and the deadline construction within 34 months. The 3A bidding package includes building the 1,220m Ky Lam bridge across Thu Bon River.
This bidding package is one of Danang-Quang Ngai expressway project’s 13 bidding packages.
According to the Ministry of Transport, No.4 Transport Construction Company and Thang Long Construction Company contractors will have to kick-off the 3A bidding package on May 20, 2013.
With a total investment of nearly VND28 trillion ($1.427 billion) partly loaned by the WB and the Japan International Cooperation Agency, the 131km Danang-Quang Ngai expressway has a total width of 26 metres, six lanes, 126 bridges and one tunnel. The construction is scheduled to finish in 2017.
Once completed, the work will help easy traffic on National Highway 1A and link political and socio-economic centres in the central localities of Danang, Quang Nam and Quang Ngai and create an international transport axle between Thailand, Laos, Cambodia and Vietnam through the East-West Economic Corridor.
Supporting industry needs to muscle up
The hi-tech industry supporting industries’ lack of development is coming into focus.
“The current poor performance of hi-tech industries’ supporting industries were chiefly due to lack of hi-tech industries’ lucid development orientations,” Ho Chi Minh City People’s Committee deputy chairman Le Manh Ha acknowledged.
Ho Chi Minh City allegedly takes the lead countrywide in supporting industry development.
In reality, hi-tech industries’ supporting industries cover three main areas of parts and accessories, specialised materials and supporting facilities, software and services.
These industries, however, remain less-developed at present, according to Ministry of Industry and Trade’s Department of Heavy Industry deputy head Pham Anh Tuan.
For instance, in the materials area the chemical and metallurgical industries still lag behind actual development needs.
Ha said Ho Chi Minh City had envisaged bolstering supporting industry development in three hi-tech areas as mechanical engineering, information technology and chemical pharmaceutical industries but at present each area still needed a development focus.
According to District 9 Hi-tech Park Management Unit deputy head Le Bich Loan, in 2012 the hi-tech park generated export value of $3.2 billion, tantamount to 10 per cent of the city’s total export value. However, added value only fetched 16-17 per cent due to poor supporting industries.
In the near term, to uphold hi-tech supporting industries development, the city’s Hi-tech Park Management Authority has set aside 14 hectares for supporting industries with connectivity to industrial parks in Ho Chi Minh City, Dong Nai and Vung Tau city.
Hi-tech parks also offer policy incentives to investors in diverse fields of biotechnology, electronic chipsets, precise engineering, automation and new material technologies.
Particularly, businesses producing items in hi-tech industries’ supporting industries will be given preferential corporate income tax in the first 15 years. Of which, the first four years will be tax free, hiking to 5 per cent in the next nine years and 10 per cent in two remaining years before reaching 25 per cent.
$7bn power plan faces short circuiting
Snail’s paced progress could see the $7 billion Kien Luong thermoelectricity centre taken out of the hands of domestic private firm Tan Tao Group.
Minister of Industry and Trade Vu Huy Hoang issued the threat during a working visit to Kien Giang province last week.
In 2008, ITACO, a key subsidiary of Tan Tao Group, was approved to be the investor of Kien Luong thermoelectricity centre project, one of the largest power generation projects in Vietnam with a planned capacity of up to 4,400-5,200 megawatts. The project includes developing Nam Du deep seaport.
Huynh Van Ganh, director of Kien Giang’s Department of Industry and Trade, told VIR that the province had sent documents to ITACO requesting explanations for the slow progress of its project, but there had been no feedback since last year.
“We supported ITACO to build the plant and Nam Du deep seaport, despite the project being delayed for two years. But the delay has affected the province’s economic development, while Vietnam is facing severe electricity shortages,” Ganh said.
Under the government’s electricity master plan to 2020, the Kien Luong centre was to start commercial operations by 2018.
In a meeting with Minister Hoang, Ganh asked the Ministry of Industry and Trade and the government to decide on the fate of this project soon and opening the opportunities for other investors.
Previously, ITACO director Thai Van Men said the investor had disbursed $250 million into this project, but admitted the project’s development had been delayed due to financing trouble. He said the firm was stalling the construction because it had not received the government guarantee and undertaking agreement (GGU). According to ITACO, without GGU, the project would come to a deadlock as the investor could not arrange funding from financial institutions.
ITACO’s equity capital at this project had to equal to 20 per cent of the project’s total investment capital, or $1.4 billion.
Ganh noted that providing GGU to a private company so as the firm could acquire foreign loans was unprecedented.
Capital thirsty firms need answers
Industry insides are chewing over the interest rate situation and suggesting ways to increase firms’ access to loans.
The lending rate most banks offer to small- and medium-sized enterprises fetches around 14-15 per cent, per year at present, while that of personal loans is from 16-16.5 per cent, per year.
With some credit packages, firms may enjoy preferential interest rates in the initial period but in fact, lending rates are almost double the current ceiling mobilising rate of 7.5 per cent, per year.
Senior financial expert Dr. Nguyen Dai Lai attributed the wide interest margin gap to banks’ low credit growth.
Though the lending rate to priority areas is now capped at 11 per cent, per year, most firms operating in these areas said they still had to borrow at higher levels.
For instance, the director at a Central Highlands coffee firm said the firm had to borrow at 15.6 per cent, per year albeit coffee was a priority area. Similarly, firms in another priority area – tra fish farming – have to take loans with minimal lending rate reaching 13 per cent, per year.
The executive at a joint stock commercial bank argued actual mobilising rates at many banks ranged from 10-12 per cent, per year against current ceiling mobilising rate at 7.5 per cent, per year which was why they still could not relax the lending rate.
In reality, the interest margin at scores of banks ranged from 3.5-4.5 per cent, depending on borrowers’ health. Besides, interest margin levels are usually set based on banks’ average capital costs, but not on the current ceiling mobilising rate.
In this context, former State Bank governor Dr. Cao Sy Kiem suggested abolishing the ceiling deposit rate, paving the way for the lending rate to slide while stimulating a healthy competition among banks.
National Financial Supervisory Commission chairman Vu Viet Ngoan assumed since the inflation has trended downward, the mobilising rate should further go down to 6-7 per cent and the maximum lending rate to priority areas fetch at most 10 per cent, per year.
From the part of banks, BIDV deputy director Can Van Luc assumed setting lending cap would not be wise since by principle good customers could enjoy softer lending rates while risky ones must accept higher rates.
The State Bank’s general approach is reportedly not applying lending cap to all areas to avert the capital sources from flowing into non-priority areas.
Japan’s Tokyu sells first Binh Duong residences
Japanese town developer Tokyu Corp. saw lots of people join the opening of the sales gallery for the first residences in the $1.2 billion township it is building in southern Binh Duong province.
About 60 people showed an interest to buy the first houses in the Sora Gardens I segment of the project, Sora sales manager Oh Dongkun said at the opening ceremony in Binh Duong on April 19. Becamex Tokyu Co., the venture between Vietnam’s Becamex IDC and Tokyu, started selling at the ceremony the first 400 flats among 1,500 residences of Sora Gardens, which would also house commercial facilities, said Becamex Tokyu CEO Toshiyuki Hoshino. The prices start at almost VND1.3 billion ($62.400)
He added the Tokyu Binh Duong Garden City would cover 1,000 hectares in Binh Duong New City that would become the province’s new administration hub. The township will include three quarters — Gate City, Core City and Gardens City. Sora Gardens I is part of Gardens City, the largest of the three quarters.
The development of Binh Duong New City, about 30 kilometres north of Ho Chi Minh City, is set for completion by 2020. Hoshino added by that year, Binh Duong New City would become a city under the central government’s management, like Ho Chi Minh City now.
Both Japanese and Vietnamese came to see the model houses. Akihito Nakayasu, director of Ho Chi Minh City-based Oryza Vietnam Corp., told VIR that he came to cover the event for his firm’s Japanese-language publications such as Sketch, Heritage and At.
Vietcombank, Vietinbank and Eximbank of Vietnam are financing the buyers of Sora Gardens residences. Hoshino said all the Vietnamese three banks had Japanese major banks as their strategic partners, and Tokyu Corp. had close relations with the Japanese banks.
Becamex Tokyu expected to make Sora Gardens residences available in 2014 and planned to sell villas and low-rise houses after selling the residences. It hopes to make an operating profit after the third quarter of 2014, according to Hoshino. The joint venture hopes both Japanese and Vietnamese from Ho Chi Minh City and Binh Duong province to come to buy houses and residences in the new township.
For the Sora Gardens project, the concept design architect is Tokyu Architects & Engineers Inc., and the architect is Australian firm PTW. French company Apave is the tender consultant and third party, while CBRE is the leading sales agency.
The $1.2 billion township was the biggest foreign-invested project licenced Binh Duong in 2012. Becamex Tokyu is 65 per cent owned by Tokyu and 35 per cent by Becamex.
VN supports APEC’s efforts for trade liberalisation
Minister of Industry and Trade Vu Huy Hoang has affirmed Vietnam’s consistent policy towards regional and international economic integration at the APEC Ministerial Meeting in Surabaya , East Java, Indonesia on April 20-21.
Hoang, who led the Vietnamese delegation to the event, voiced Vietnam’s support for the World Trade Organisation and the resolve to soon conclude the Doha talks.
The minister emphasised the need for all APEC members to achieve the Bogor goals by 2020 through specific initiatives and the settlement of trade and investment barriers.
He said Vietnam gives priority to the contents of APEC cooperation regarding the connection of supply chains, support for small and medium-sized enterprises and infrastructure development.
Vietnam has made several proposals at the event such as creating favourable conditions for support industries, sharing experience in capital allocation for the development of renewable energies, which have received support of many APEC members.
The initiatives are part of the country’s efforts to boost trade and investment cooperation in the region and make the full use of APEC’s capacity enhancement programme for developing members.
On the sidelines of the event, the Vietnamese delegation attended a ministerial-level meeting of Trans-Pacific Partnership (TPP) economies, during which a roadmap was reached for negotiations in the coming time, including several ministerial-level rounds.
They also agreed to back Japan ’s joining the TPP, raising the total number of TPP economies to 12, which together make up 40 percent of the world GDP.
Hoang also held bilateral talks with ministers and heads of delegations of several economies, including Russia , the Customs Union of Russia, Belarus and Kazakhstan , the US , China , the Republic of Korea , Canada , New Zealand and Hong Kong .
The meetings aim to strengthen bilateral cooperation and handle economic, trade and industrial issues between Vietnam and the partners, as well as accelerating negotiations and implementation of FTAs among them.
The APEC Ministerial Meeting wrapped up with pledges to continue their back of the multilateral trade system within the framework of the World Trade Organisation (WTO), stepping up regional connectivity, pursuing Bogor goals and promoting sustainable and equal growth.
They adopted a joint statement, affirming their consensus on collective solutions to cope with challenges that may harm the regional economy.
A joint statement on enhancing the multilateral trade system through the ninth WTO Ministerial Conference in Bali was also issued at the event.
In closing the event, Indonesian Minister of Industry and Trade Gita Wirjiwan said APEC is being seen as a new momentum for global economic growth and an important forum that supports the trade system on the basis of openness, freedom and equality.
When the global economic growth contracted from 3.9 percent in 2011 to 3.2 percent in 2012, APEC’s GDP grew by 4.1 percent during the same period, he said.
The flow of foreign direct investment (FDI) into APEC member economies has increased, he said, noting that trade within APEC increased by 3.9 percent compared with a shrink of 1.9 percent for the rest of the world.
Last year, APEC exports raised by 2.6 percent to 8,700 billion USD at a time when many powers such as the US and the EU suffered serious impacts of the global financial and public debt crises, he said.
The APEC members include the current 11 TPP members — Australia , Brunei , Canada , Chile , Malaysia , Mexico , New Zealand , Peru , Singapore , the United States and Vietnam .
The others are Russia, China, the Republic of Korea, Japan, Taiwan, Hong Kong, Papua New Guinea, Indonesia, the Philippines and Thailand.-
4.5 trillion VND mobilised from Gov’t bonds
As much as 4.5 trillion VND worth of Government bonds were mobilised at a tender organised by the Hanoi Stock Exchange (HNX) on April 22.
The HNX put forward a total Government bonds worth 6 trillion VND for tender on the day.
The won bonds have an annual interest rate of 7.4 percent for a two-year term and an annual interest rate of 7.68 percent a three-year term.
The State Treasury has so far this year mobilised over 61.4 trillion VND worth of Government bonds via tenders.
Diplomats vow to lure investment in Central Highlands
The Heads of Vietnamese representative agencies overseas have pledged to bridge the Central-Central Highlands provinces with foreign investors in a bid to spur socio-economic development in the region and the country as well.
The diplomats worked with leaders of Phu Yen, Binh Dinh, Khanh Hoa, Ninh Thuan, Binh Thuan, Dak Lak and Lam Dong provinces on April 22 in Phu Yen province to seek effective measures to lure more investment into the region.
They said the Central-Central Highlands provinces need to increase communication campaigns, drastically reform administrative procedures, and map out detail master development plans so as to become attractive to investors both in and outside the country.
They advised these localities to build English portals, which should be connected with the Foreign Ministry’s website, to popularise their potentials and strengths, thus making it easier for them to call for investment overseas.
Human resources for Mekong Delta tourism discussed
A seminar was held in the Mekong Delta province of An Giang on April 22 to discuss measures to develop human resource for the tourism sector in the Mekong Delta region.
The event drew the participation of 180 scientists, leaders of the Southwestern Region Steering Committee and representatives from 13 localities and tourism businesses in the region.
Participants at the seminar agreed that human resources for the region’s tourism sector remain weak in both quality and quantity. The 23,500 people employed by the sector have yet to meet the requirements of serving Mekong Delta’s 20 million visitors every year.
According to the Institute for Tourism Development Research under the Vietnam National Administration of Tourism, the region will need 208,000 competent tourism workers by 2020.
Many attendees emphasised the need to enhance on-the-spot training, while encouraging the engagement of local residents in the tourism sector.
Besides, it is crucial to strengthen links between businesses and tourism training centres to rapidly overcome the shortfall in qualified personnel, they said.
Lying between Tien and Hau Rivers, the 18 million-strong Mekong Delta sees abundant potential for tourism development.
It is defined in the Vietnam’s master plan on tourism development by 2020 as one of seven tourism regions in the country, in connection with Greater Mekong Subregion (GMS) tourism.
In 2012, the region attracted more than 19.4 million visitors and earned about 4.3 trillion VND from tourism-related activities, an increase of 23.2 percent from the year before.
The famous travel website Lonely Planet listed the Mekong Delta as one of the best value destinations in the world last year.
Resort named as the best new hotels
The InterContinental Danang Sun Peninsula Resort has been chosen by the Conde Nast Traveller as one of 154 best new hotels in the world.
The resort is located 600m above sea level on the Son Tra Peninsula It is among 16 hotels and resorts in Asia to be included in the list of more than 1,000 new properties to open around the world last year.
The 197-bedroom luxury resort was designed by architect Bill Bensley from Bensley Design Studios Bangkok.
Gold price gap leads to surge in illegal imports
Illegal gold imports increased for the past week as the price gap between the domestic and global markets grew larger, a gold trading management official in HCM City told Nguoi Lao Dong (Labourer) newspaper.
The official, who declined to be named, said that with the current local gold premium of more than VND5 million (US$238) per tael, smugglers easily earned a few million dong per tael. (One tael is equivalent to 1.2 ounces)
As the gold price in the global market dropped by nearly $200 per ounce, the disparity grew between domestic and global prices. Nguyen Thanh Truc, chairman of the Agribank Gold Co executive board, recommended that the central bank sell gold at prices lower than the market price at its auctions to decrease this gap, while traders expressed concern that smugglers would imitate the SJC gold brand to sell in the domestic market.
Smuggled gold was easy to trade in the domestic market, they said, as the market watch authorities strictly monitored the purchase, sale and production of gold bullions – but not gold jewellery.
Nguyen Van Dung, chairman of the HCM City Jewellry Association, said that according to the International Monetary Fund (IMF), Viet Nam consumed about 77 tonnes of gold in 2012 even though the country had not licensed imports of the precious metal.
“The central bank had not granted licences for importing material gold to produce gold bars, but a large jeweller can produce millions of jewellery products a year. So where did all that gold come from?” Dung said.
Wood firms get help on quality standards
Service provider TUV SUD PSB Viet Nam has pledged to assist members of the Handicraft and Wood Industry Association of HCM City (HAWA) in assessing factories and managing product quality after the two parties signed an agreement yesterday.
General director Sathish Kumar Somuraj of the company, a subsidiary of Germany’s technical service provider TUV SUD, said the local partners would be provided with technical training courses which help the domestic timber industry expand and penetrate further into the world market.
HAWA chairman Nguyen Chien Thang said that the association’s members were mostly small- and medium-sized enterprises with limited capital and a low capacity for market expansion.
In the face of economic difficulties and declining export market shares, Europe and the US – two vital markets for Vietnamese firms – have set stricter technical and commercial standards for wooden products.
The new agreement would help local companies adapt to these conditions and improve their export results, Thang said.
HAWA has over 300 members specialising in wood processing, interior products, fine arts and timber trading.
Loans for firms on price-stabilisation list
Commercial banks are considering granting loans to businesses that take part in HCM City’s price-stabilisation programme, according to the city’s Department of Industry and Trade.
Five banks, Agribank, Eximbank, Sacombank, the BIDV and Vietinbank, are the first commercial banks to participate in the programme which runs from April 1 to March 31 next year.
In previous years, the businesses taking part in the programme received interest-free loans from the city.
In the next 10 days, Agribank plans to disburse VND151.87 billion (US$7.25 million) in short- and medium-term loans to three enterprises.
Sacombank is currently appraising loan applications from a number of companies. They have applied for total loans of VND258.6 billion ($12.3 million).
Similarly, Eximbank and Vietinbank are reviewing loan applications.
As of April 15, companies have applied to borrow a total of VND600 billion ($28.6 million) from the five commercial banks.
The five lenders have earmarked VND860 billion ($41 million) for short-term loans at an interest rate of 6 per cent and VND1.1 trillion ($52.4 million) for long-term loans at an interest rate of 10 per cent.
In addition, the city will subsidise the participating companies’ investments in technology and expansion of breeding farms.
The city will also provide the companies with free advertising and subsidies to improve distribution networks.
HCM City hosts mobile marketing seminar
Vietnamese businesses will get an opportunity to understand the potential of mobile marketing from experts, well-known advertising companies, and market research firms at a seminar to be held in HCM City tomorrow.
According to organisers Goldsun Focus Media, Viet Nam had around 35.4 million internet users as of 2012, of which 19 million used their mobile devices to access the net.
The rapid growth has opened up opportunities for companies to capitalise on mobile marketing.
Last year many famous brands did just that. Coca Cola’s mobile advertising campaigns, for instance, attracted 76,000 click views and 34,300 clicks for download.
Starbucks’ mobile marketing campaign has on average 2.1 million clicks per day.
Goldsun Focus Media introduced the SoSmart mobile marketing solution last year with many applications.
SoSmart owns a mobile marketing network with more than 14 million mobile internet users.
Local trademarks need safeguarding
Viet Nam has been developing a geographical indication system to safeguard the patent rights of the country’s famous traditional products with a hope that the new system will help boost production and trade of the country’s unique produce.
Speaking at an EU seminar yesterday on Geographical Indications (GI), the vice-director general of the National Office of Intellectual Property, Tran Huu Nam, said that the country had certified 35 unique GIs.
A GI is a name or symbol on the packaging of a product certifying that it possesses a certain guaranteed quality due to its geographical origin and the traditional methods used in its creation. Products bearing a GI prove particularly attractive to buyers.
Nam estimated that the country has around 1,000 traditional agricultural products and produce with a fine reputation for quality and an association with a particular region, and declared that in the near future they should be assigned GIs.
“GIs help consumers find authentic products, thus boosting the production and trade of traditional goods,” he said. “They also play an important role in the development of agriculture, rural areas and the quality of local products.”
Famous certified GIs include Phu Quoc fishauce, Shan Tuyet Moc Chau tea, Buon Ma Thuat Coffee, Doan Hung grapefruit and Binh Thuan green dragon fruit.
The Ambassador-head of the EU delegation, Franz Jessen, said that GIs would guarantee the quality of Vietnamese agricultural products in the EU.
He noted that Viet Nam was among only a few countries to achieve export growth to the EU in the last few years, and this growth would help push the negotiation process for a bilateral trade agreement between Viet Nam and the EU.
Consultant Audrey Aubard said that GIs were good for all parties. “A GI is an instrument to fight against fraud and counterfeit products,” she said, noting that they benefited producers, consumers, society and the environment.
For example, to producers, GI protect valuable trademarks and products can be sold at higher prices than non-GI ones, ensuring fair competition.
The social impacts can be found in the link between valuable products and rural areas, reconnecting consumers and producers, and protecting traditional agricultural techniques.
Deputy head of the Institute of Policy and Strategy for Agriculture and Rural Development Vu Trong Binh said that GI development in Viet Nam faced many difficulties because consumers knew too little about them and co-operation among sectors was still poor.
He said that the indicators had been mostly used to protect intellectual property, but they should also be seen as an instrument to boost agriculture production.
VietJetAir signs deal to lease high-tech aircraft
VietJetAir yesterday signed an agreement with AWAS, one of the world’s leading aircraft leasing companies, to lease three brand-new Sharklet-equipped A320 aircraft, making it the first airline in the country to have a new fuel-saving wing-tip device.
The new Sharklet-equipped A320 aircraft will assist VietJetAir with its plans to expand into ASEAN and northern Asia to regional destinations such as Kuala Lumpur, Busan, Seoul, Singapore and Taipei.
The budget airline also said last Friday that it was offering discounted tickets for its forthcoming route from HCM City to Buon Ma Thuot for just VND100,000 (US$4.5).
Passengers can book fares on www.vietjetair.com from 9pm till 11:59pm tomorrow to travel between May 20 and December 20. The route will open on May 20 with one round trip per day.
Hai Phong to host first-ever forum on sea economy
The first-ever forum and exhibition showcasing technologies for the development of Viet Nam’s sea economy will take place in the northern port city of Hai Phong on May 7.
Co-organised by the municipal People’s Committee and the Ministry of Natural Resources and Environment, the two-day event would provide a good chance for participants to assess the status and development opportunities for the country’s sea economy.-
Capital city’s trade deficit at $4b in first four months
The capital city recorded an estimated trade deficit of US$1.22 billion in April, bringing the city’s total deficit during the first four months of the year to over $4 billion, according to the municipal Statistics Office.
During the period, the city earned approximately $3.4 billion from exports, which mainly included electronic components and agricultural products, down by only 2 per cent against the same time last year. Meanwhile, its imports rose by 2 per cent to $7.38 billion.-
PVF plans merger with Western Bank
Western Bank issued documents on its long-anticipated merger with PetroVietnam Finance (PVF) late last week, expected to be approved during the bank’s annual meeting on Friday.
The PVF confirmed to the Vietnam Economic Times that the merger contract and draft charter of the new bank had been completed.
According to these documents, the new entity will have a charter capital of VND9 trillion (US$428.5 million), corresponding to 900 million shares each worth VND10,000 ($0.47).
Former shareholders of both parties will become shareholders of the new bank, with all the benefits and obligations of a normal shareholder.
In addition, during the time between the contract signing date and the date the merger begins, the two sides will continue normal operations.
After incorporation, the new bank will inherit all the rights and obligations of both sides, including debts.
Western Bank will authorise the PVF to perform necessary procedures with State agencies to implement the merger.
The PVF, a non-banking financial corporation and a blue chip listed on the HCM City Stock Exchange, has planned to become a banking institution for two years. Merging with Western Bank is the easiest way for it to do so. And for Western Bank, which has been facing liquidity troubles, and merging with the PVF offers a means to save itself from bankruptcy.
Recently, the PVF has been restructuring its operations and upgrading its networks of information technology and human resources.
Logistics sector delivers strong growth
The logistics sector is expected to grow by 10-15 per cent this year despite the many challenges thrown up by the economic downturn, according to the Viet Nam Freight Forwarders Association.
Do Xuan Quang, its chairman, told a conference held at the Viet Nam-Singapore Business Forum in HCM City last week: “2013 is predicted to be another tough year for the whole economy, so the logistics sector will suffer too.”
But he remained optimistic that the sector could sustain the 10-15 per cent growth of recent years thanks to the growth in trade-related activities.
“Exports are expected to increase by 10 per cent this year to US$125 billion, so the demand for transportation and logistics will also rise,” he said.
But the industry laboured under many shortcomings, which have for years prevented it from keeping pace with counterparts in neighbouring countries, he said.
The infrastructure for logistics was insufficient and not well located due to poor planning.
For instance, in some places there were many ports but they were not near logistics centres, meaning goods have to be transported long distances to them, he said.
Vo Hung Dung, director of the Viet Nam Chamber of Commerce and Industry Can Tho, elaborated on this, saying the Cuu Long (Mekong) Delta had many ports but goods from there were transported by road to HCM City and then shipped abroad because of a shortage of logistics facilities.
This made Vietnamese exports less competitive due to higher costs, he added.
The conference heard that logistics costs accounted for 25 per cent of gross domestic product in Viet Nam, much higher than in regional countries.
Backward technologies and poor human resources were other weaknesses, delegates said.
To solve the problem, experts suggested closer co-operation between exporters and logistic companies, saying this would help cut costs, reduce risks and save time.