Home » Business » BUSINESS IN BRIEF 30/10

No source for import-export tax refund

The State Budget has been unable to collect sufficient revenues this year, thus causing difficulties for the Government to balance the budget and to seek financial sources to refund import and export taxes to local enterprises in 2011 and 2012, said a committee of the National Assembly.

It is likely that the national budget revenue might barely reach this year’s target, the National Assembly (NA) Financial and Budgetary Committee said at the ongoing NA sitting on the State Budget’s situation. State Budget revenues in January-September stayed at an estimated VND498 trillion, 67.3% of the year’s plan.

The 2012 State Budget has faced shortfalls in revenues from numerous localities and areas, especially in localities with high revenues such as HCMC and Hanoi. This has adversely affected the budget balance and the Government has yet to find suitable ways to mobilize funds to refund import-export tariffs for local companies.

Declining to elaborate on the specific amount of tax refunds, the committee said the 2011 and 2012 figures are very high. The committee, however, urged the Government to strictly control tax refunds in line with regulations while seeking ways to tackle the capital shortfall.

Total revenues of the State Budget from local sources reportedly dipped about VND17.6 trillion, due largely to falling collections from production and business activities and tax exemptions, reductions and payment extensions for multiple entities for a long time.

FDI selective over investment options

Foreign direct investment in the first 10 months hit US$10.5 billion, a 25 per cent reduction compared to the same period last year, said the Foreign Investment Agency under the Ministry of Planning and Investment.

However, despite the decline in total, FDI in some main economic sectors was still growing strongly, the agency said.

The processing industry and manufacturing had attracted the most FDI, recording over $6.9 billion, which accounted for about 66 per cent of the total registered capital so far.

Real estate saw a total registered capital of $1.84 billion, accounting for 17 per cent of the total registered capital.

Other areas, including wholesale, retail and repairs and maintenance, attracted over $456 million, twice as much as last year, accounting for 4.3 per cent of the total registered capital.

The 10 months also saw an increase in FDI disbursements of up to $9 billion, which was similar to last year’s period.

The agency reported that Japan had registered by far the highest FDI at $4.9 billion, accounting for nearly half of the total registered, followed by South Korea and Samoa with $937 million and $900 million respectively.

The southern province of Binh Duong has attracted the most FDI with $2.17 billion, closely followed by HCM City and Hai Phong with $1.12 billion and 1.08 billion respectively.

IIP surges, inventory declines

The Index of Industrial Production (IIP) saw a month-on-month increase of 5.8% and a year-on-year surge of 5.7% while inventory level was on the decline, according to the General Statistics Office (GSO).

In the first ten months, IIP jumped 4.5% against the same period last year, of which the mining industry expanded 3.9%; the processing and manufacture industry, 3.8%; and the electricity and fuel production, 12.8%.

IIP constantly increased over the last three months. Specifically, August’s IPP surged by 4.1% against the previous month and September IPP, 4.6%.

Inventory of the processing industry fell from 29.4% in May to only 20.4% in September.

However, some industries still face with high inventory levels like the aquatic processing and preservation (23.9%); anumal feed production (55.1%); and cement making (53.1%).

According to experts, the data shows that industrial production is making a sustainable recovery./.

Power production costs to be made public

Every year, after the Electricity of Viet Nam reports audited power production costs, the Ministry of Industry and Trade shall coordinate with the Ministry of Finance to check and make public the real costs.

It is part of the draft Decree on detailed implementation of some of articles of the Law on Electricity.

Under the draft Decree, the Prime Minister shall decide the retail power price ranges as the costs of input materials fluctuate beyond 5%.

The Electricity of Viet Nam shall be allowed to adjust the retail prices within the approved ranges and after it gets approval from the Ministry of Industry and Trade.

The draft Decree also proposes the establishment of a fund to stabilize the power prices.

It is now open for comment.

RoK investors keen on Van Don Airport project

Investors from the Republic of Korea (RoK) have told leaders of the northern province of Quang Ninh of their interest in the Van Don International Airport project.

During a meeting on October 24, Chairman of the provincial People’s Committee Nguyen Van Doc noted that the Van Don Economic Zone, including the Van Don International Airport , is a priority in Viet Nam’s development plan.

He said this is a key project of the country, which will spur socio-economic development in the entire Northern region. He also promised that the province will create favorable conditions for investors to implement the project on schedule.

Dolien Han, President of Jionus Company affirmed the commitment implement the project in the most effective way, making Van Don Airport one of the best airports in Viet Nam .

Representatives of Jionus Company also presented the investors’ plan to carry out the projects.

In October, Jionus, RoK Airports Corporation and Posco E&C have signed a contract to establish a joint-venture in Viet Nam for the project, with each side’s minimum capital contribution of US$80 million.

The investors are expected to complete all project documents to submit to relevant provincial and central agencies in November.

VN, Japan set up joint steel company

Bac Viet Steel Company will set up a steel-pipe venture with four Japanese companies. To be known as the Nippon Steel & Sumikin Metal Products Viet Nam (NSMV), it will operate in northern Bac Ninh Province.

The factory with a total investment of $12.78 million will be able to produce 48,000 tonnes of products per year.

Bac Viet Company owns 24 per cent of the holdings and Nippon Steel & Sumikin Metal Products Company Ltd, 48 per cent.

The establishment is in line with the restructuring of Bac Viet Company to become one of the biggest steel producers in Viet Nam.

Hanoi Sales Promotion Month in November

Hanoi Sales Promotion Month 2012 will take place in November, offering discounts on a wide range of goods such as food, beverages, garments, electronic appliances.

The event creates an opportunity for nearly 500 businesses in the city to stimulate market consumption amid difficulties of the national economy.

Saturdays and Sundays will be observed as Golden Promotion Days in 25 locations across the city where discounts of 20-50 percent will be applied to the major groups including electronics and machinery, food and beverages.

The highlight of the Promotion Month will be an Online Sales Week starting on October 31. Around 100 businesses will offer online shopping services with product prices to be cut by half.

Nguyen Van Dong, Deputy Director of Hanoi Department of Industry and Trade said that during the month, consumers can log onto the website www.nhungtrangvang.com.vn to purchase goods.

Trying to secure firm foothold in EU market

There are some hopeful signs that the European Union market will open up for high-quality Vietnamese goods in the near future.

Vietnamese commodities, especially farm products and foodstuffs such as instant noodles, and spring rolls have become quite popular in the EU market.

The EU is now home to many Vietnamese people who like to eat traditional foods.

At the International Food Products and Beverage Exhibition (SIAL 2012) currently taking place in France, Vietnamese ambassador Duong Chi Dung said consumers in developed nations, especially in Europe prefer organic food grown without the use of chemicals. With its potential for natural agricultural production, Vietnam is trying to secure a firm foothold in the EU market. In the first place, its domestic businesses will have to improve product quality, step up sales and marketing campaigns and build brand names.

Participation in SIAL over the years is part of Vietnam’s long-term strategies and orientations to achieve deeper EU market penetration.

Prominent Vietnamese businesses involved in such events are financially supported in covering pavilion costs under the Ministry of Industry and Trade’s national trade promotion programme. Some often win contracts on the opening day of the fair, showing that Vietnamese foods and foodstuffs are much appreciated in the EU market.

The EU’s decision to recognize the origin of Phu Quoc fish sauce and the start of negotiations on a free trade agreement between Vietnam and the EU are hopeful signs for Vietnamese enterprises which plan to do business in this market.

Nguyen Thi Nguyet Ha, director of Thanh Ha-Phu Quoc Fish Sauce Company, said that the EU’s recognition of Phu Quoc fish sauce is good news for Vietnam. Anyway, local fish sauce producers should adhere to strict procedures, ensure the best quality of their products for export, especially to the EU market.

Some businesses complained that Vietnamese goods in general are still subject to higher tariffs imposed by the EU. There is high hope that the future free trade agreement will create better conditions for Vietnamese businesses.

In the long-run, they should give priority to building consumer trust within the legal framework of Vietnam-EU trade exchange.

Vu Thai Son, director of Long Son Company, which specializes in processing cashew nuts, told a VOV reporter in France that to hold sway over the EU market, Vietnamese enterprises must grasp the virtue of consumer culture and meet strict requirements for goods delivery on schedule.

There is still a long way to go before a free trade agreement between Vietnam and the EU is reached. However, they are all keen to improve their product quality and achieve deeper EU market penetration sooner or later.

Tuna exports on the rise

Tuna exports reached more than US$436 million in the first nine months of this year, a 53 percent increase against the same period last year, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

VASEP also predicted that tuna exports will continue to see positive signs in the future.

The US is currently one of the largest importers of tuna from Vietnam, accounting for more than 44 percent of the total export value, followed by the EU, Japan, Israel, Canada and Tunisia.

Economists forecast that the global demand for tuna will continue to rise in the coming time because of measures to limit tuna catches in some fishing areas in the world, which is considered a big opportunity for Vietnamese tuna exporters.

However, experts also say that Vietnamese tuna products should develop strong trademarks in the next few months in order to take advantage of this opportunity to promote further growth.

Promoting Vietnam-Argentina trade

A programme to promote trade and investment between Vietnam and Argentina was held in HCM City on October 29.

The event, co-organized by the Vietnam Chamber of Commerce and Industry and Argentina’s Ministry of Foreign Affairs, aims to strengthen trade ties and offer opportunities for the business communities of both countries.

The event attracted around 200 leading Argentine companies and 300 Vietnamese businesses.

The business representatives discussed opportunities for cooperation in various fields such as food and beverages, garments, leather and footwear accessories and products, chemicals, pharmaceuticals, and cosmetics, as well as equipment and machinery, construction materials, household appliances, services and other consumer products.

The Argentine trade delegation’s working visit in HCM City is part of the South American country’s plan to promote its exports in foreign markets to boost economic development. It hopes that introducing its services and products to such a dynamic developing nation like Vietnam will contribute to strengthening bilateral relations.

At the gathering, director of HCM City’s Department of Planning and Investment Thai Van Re noted that this is a significant event for HCM City to further strengthen economic and trade ties with Argentina. It also reflects the deep interest the leadership of both countries has in trade, investment and tourism.

He said HCM city hopes to cooperate with Argentina in developing value-added services, finance, credit, banking, insurance, trade, distribution networks, and information and communication technology (ICT).

Opportunity to penetrate Hungarian market

Two-way trade between Vietnam and Hungary reached more than US$80 million in the first half of this year and will most likely continue to increase in the future.

Deputy Minister of Industry and Trade Tran Tuan Anh unveiled the figure at a Vietnam-Hungary Business Forum in Hanoi on October 29, which is being held within the framework of the fourth meeting of the Vietnam-Hungary Joint Committee.

Anh said the figure is yet to match both nations’ potential so Vietnamese businesses should grasp any available opportunities to penetrate the Hungarian market.

A representative from the Hungarian Department of Trade and Investment said Hungary is a small country with just over 10 million people but it has a favourable political environment compared to some of its neighbouring countries. In addition, it is the main entrepôt for transferring European goods to Eastern Europe.

Hungary has more than 1.6 million businesses, most of them small and medium-sized. The Government has also created the best possible conditions for foreign businesses to operate in the country, such as reducing the amount of required  investment capital in half.

Hungary’s strengths are in pharmaceuticals, light industry, telecommunications, and infrastructure construction.

At the forum, Hungarian businesses expressed their hopes that local authorities in Vietnam will help them seek cooperative opportunities for mutual development.

 Japan tops foreign investors in Vietnam

Japan has become the leader among the 52 nations and territories investing in Vietnam since the beginning of the year, according to the Ministry of Planning and Investment (MPI).

Over the past ten months, Japanese businesses have poured US$4.92 billion into their projects in Vietnam, including both newly registered and increased capital.

The Republic of Korea (RoK) is in second place with US$936.7 million, and Samoa is third with US$899.8 million, followed by Singapore (US$675.4 million) and the British Virgin Islands (US$623.38 million).

During the reviewed period, Japanese investment capital made up 46.9 percent of the total foreign direct investment (FDI) in Vietnam,

In the past ten months, almost all major projects in Vietnam have come from Japanese investors such as the US$1.2 billion Tokyu Binh Duong Urban Area and the US$574 million Bridgestone Tyre Manufacturing project in Haiphong.

Vietnam has also attracted smaller Japanese investors to develop support industries. Most notably, the Vietnamese N&G Development and Investment Corporation signed a strategic agreement with Japan’s Forval Corp to develop the Hanoi South Supporting Industrial Park (HANSSHIP).

The Samsung Group from the RoK also plans to invest a total of US$830 million for manufacturing mobile phones and other electronic products in Bac Ninh province.

Techcombank receives IFC award

The Vietnam Technological and Commercial Joint Stock Bank (Techcombank) has received the “Most Active GTFP-Issuing Bank in Asia 2012” award from the International Financial Corporation (IFC)’s Global Trade Finance Programme (GTFP).

Techcombank was the only Vietnamese bank nominated by IFC for the award, which acknowledges its contributions to trade finance and supply chain of IFC.

Simon Morris, Techcombank General Director said the bank’s participation in the programme aims to further strengthen its resources and capacity, towards increasing support to trade finance activities of clients.

GTFP is now witnessing the participation of more than 250 banks across the world, including ten Vietnamese banks.

Techcombank was given the titles “Vietnam’s Best Bank in 2011”, “Best Cash Management Bank in Vietnam in 2011” and “Best Trade Finance Bank in Vietnam in 2011”, “Elite Quality Recognition Award for Outstanding Achievement in 2012” and became the first Vietnamese bank to receive the three international awards of FinanceAsia.

Vietnam’s top 10 corporate tax payers

Vietnam Report has made public a list of 1,000 corporate tax payers in 2012, with their total amount reaching up to VND54 billion of which state-owned enterprises accounted for 58.44 percent.

The top 10 include eight state-owned enterprises (SOEs), one foreign-invested enterprise (FIE) and one private enterprise.

They are Military Telecommunication Group (Viettel), Vietnam Mobile Telecom Services Company (VMS), Joint Stock Commercial Bank for Foreign Trade of Viet Nam (Vietcombank), Vietnam National Coal-Mineral Industries Group (Vinacomin), Viet Nam Oil and Gas Group (PetroVietnam), Bank for Investment and Development of Vietnam (BIDV), Vietnam Bank for Agriculture and Rural Development (AGRIBANK), Asia Commercial Bank (ACB),   Viet Nam Posts and Telecommunications Group (VNPT), and Vietnam Brewery Limited (VBL).

The place of order is based on independent data surveys processed by Vietnam Report.

Quang Ninh receives nearly 6 million visitors

Northern Quang Ninh province has welcomed nearly six million holiday-makers over the past ten months, up 10 percent over the same period last year.

This is a good sign demonstrating that the province’s efforts to promote tourism are paying off.

The increasing number of visitors is attributed to the recent voting of Ha Long Bay as one of the New Seven Natural Wonders of the World, the success of the Culture, Sports and Tourism Week – Carnival Ha Long 2012, and the Investment Promotion Conference.

Nearly two million foreigners came to Quang Ninh during the reviewed period, an increase of 7 percent compared to the previous year. The tourism sector earned VND3,665 billion, up 18 percent over the same period in 2011.

Ha Quang Long, Director of the provincial Department of Culture, Sports and Tourism, said in the remaining months of this year, Quang Ninh will accelerate inspections of tourism activities and deal strictly with violations, strengthen tourism promotion, and develop new products and services to attract more visitors.

Vietnamese business forum opens in Europe

More than 200 overseas Vietnamese businesses from 12 countries gathered at a forum in Prague, the Czech Republic, on October 27.

The event, the sixth of its kind held in Europe, focused on developing retail networks, bars and restaurants, and services to help the overseas Vietnamese community stabilize their lives and achieve sustainable development in their resident countries.

Delegates at the forum highlighted business opportunities available in the face of the global financial crisis.

Former State Vice President Truong My Hoa stressed the need to create close links among businesses, especially during the current economic difficulties. Enterprises should propose measures to help the State adjust mechanisms and policies to facilitate business operations, she said.

Most participants agreed that Vietnamese businesses have not yet developed effective retail networks in overseas markets. Though many Vietnamese businesses have secured a firm foothold in Eastern Europe, they have been strongly impacted by the Euro zone crisis because many of them are wholesale enterprises. Vietnamese retail shops operate separately in Western Europe.

Hoang Manh Hue, Chairman of the Union of Vietnamese Businesses Associations in Europe, said that many trade centres are being built in Europe, but the main focus is not on promoting retail networks, which can diversify their business operations. Vietnamese enterprises need to cooperate with foreign partners in their resident countries to overcome difficulties and increase their effectiveness, he added.

Some delegates suggested that Vietnamese businesses set up retail shops in remote areas where large European firms usually do not have a presence.

Tran Dang Chung, a representative from the Russian Business Association, said retail venues in overseas markets will help expand the distribution networks of local businesses and limit unhealthy competition.

On this occasion, former Vice State President Truong My Hoa, who is also Chairwoman of the Vu A Dinh Scholarship Fund, introduced a new scholarship program called “For Truong Sa Students” and called for support from overseas Vietnamese businesses.

Vietnam Int’l Jewelry Fair kicks off in HCMC

The 21st Vietnam International Jewelry Fair (VIJF), the largest Gem and Jewelry show of its kind in Vietnam since 1992, will be held from November 1-5 in Phu Tho Stadium on 221 Ly Thuong Kiet Street in District 11,  the Saigon Jewelry Company (SJC) has announced.

The main aim and purpose of VIJF is to enable a productive interaction between buyers and jewelry manufacturers.

VIJF has expanded over the years since its inception in 1982. The annual event has flourished from a homegrown exhibition to a jewelry show of international standards.

VIJF is a platform for both domestic and international companies to interact and establish business contact and build lucrative relationships.  It is also a chance to honor the achievements of gold and jewelry enterprises across the globe.

The show will have 140 booths, divided into two sections. One will be for local and international jewelry display and the other for display of machinery and material.

In addition, event organizers will give away awards for Golden Craftsmanship and 3D Designs to artists. On November 2, there will be a seminar on ‘Knowledge and Understanding of Natural Diamonds and other Semi-precious Stones’.

VIJF 2012 is expected to attract more than 80 exhibitors from China, Italy, Singapore, Malaysia, Hong Kong (China) , Israel, Japan, Thailand and the US as well as thousands of trade and public visitors.

The domestic market will be represented by major brands such as SJC, Zela, Goodman, Unique, Golden Dew, PNJ, Cao, Doji, Sacombank, Phuong Nam, Compa, to name a few, who will showcase their collections of fine jewelry and gemstones.

The vibrancy and glitter of the showpieces will be complemented by an exciting line-up of event highlights.

The event fulfills the City People’s Committee’s objective of creating an active environment for business enterprises in the jewelry trade.

Vinamilk exports touch US$138 million

Vietnam Dairy Company (Vinamilk) has reported its export turnover in the first ten months of the year at US$138 million, up by nearly 46 percent compared to the same period last year.

This year the company’s export turnover is expected to be around $180 million. The company’s average export growth has been at 45 percent for the past three years.

Vinamilk exported powdered milk, baby food, condensed milk, fresh milk, soya milk, and fruit juices to 23 countries and territories, including the US, Australia, Canada, Russia, Japan, Thailand, South Korea, Turkey, Sri Lanka, Philippines, and countries in the Middle East. These countries are the main importers of Vinamilk products.

The company has been a high quality dairy producer and has established itself as a well-known brand.

Hi-Tech Agriculture Park in Cu Chi District highly productive

Although the Hi-Tech Agriculture Park in Cu Chi District of Ho Chi Minh City has only been in operation for a few years, it has contributed a great deal to the local market.

According to Tu Minh Thien, deputy head of the Management Board of the Park, the Hi-Tech Agriculture Park has supplied the market 54 tons of seeds of gourd, pumpkin, pepper, cucumber, bitter melon, winter melon, luffa, and greens, more than 1,500 liters of biological produce, 720 tons of mushrooms, 4,000 pots of ornamental Ganoderma mushrooms and 30,000 bags of edible mushroom molds.

The Park has supported individuals to grow vegetables and given instructions for producing vegetable seeds, and bought back 4.7 tons of vegetable seeds, and 107 tons of vegetables, such as eggplant, honeydew melon, and water morning glory, mainly for export. It also transferred technology to 18 organizations and individuals, and received 383 students from various universities for internship programs.

Vietnam’s shrimping industry threatened by Bloomberg article   

The Vietnam Association of Seafood Exporters and Producers (VASEP) expressed a differing opinion on an article posted by Bloomberg Businessweek, which gave bad image to shrimp produced in Vietnam.

The article, entitled, “Asian Seafood Raised on Pig Feces Approved for U.S.Consumers” published on October 11 concluded that quality of shrimp produced in Vietnam was low.

After receiving the information, VASEP immediately sent letter to ask the author to make corrections.

Shrimp, the highest-grossing export product coming from Vietnam, has reached a total of USD2 billion per year, and the industry exports to nearly 90 countries.

The US is the second biggest market for Vietnam, second only to Japan, with total export value of USD500 million per year, making up a quarter of the entire country’s shrimp export. All imports to the US are regularly checked by the US Food and Drug Administration.

However, according to VASEP, “One company with bad quality standards that no longer operates has tainted the reputation of the entire shrimping industry for Vietnam.”

VASEP made their disagreement with the article, saying that it was not in the true spirit of free trade and accusing the author of having a protectionist agenda. They added that the article could have severe and long-term effects on the industry in Vietnam.

On the same day, the well-known website focusing on aqua-products called ubcomtell.com released a video clip which said, “Bloomberg blew it big-time.”

John Sackton, President and publisher of Seafood.com News, said the article lacks an overall understanding of the seafood industry in Vietnam, which has improved quality greatly in recent years.

According to statistics from the US Food and Drug Administration, in the third quarter of 2012 there was 57% drop in rejections of imports from China and Vietnam compared to last year.

Gov’t shouldn’t rescue weak banks: expert

A well-known economic expert last week suggested that the Government should not try to rescue weak banks, but just let them go bankrupt.

Jonathan Pincus, Academic Dean of the Fulbright Economics Teaching Program in Vietnam, told a luncheon held by the Eurocham last Friday in HCMC that those banks that fail the “stress test” should not be rescued.

Pincus said the Government should divide banks into two groups that can and cannot pass the difficult situation, and just need to support healthy banks.

He said at the luncheon that if the Government helped banks to solve their bad debts, it would mean moving the bad debts from the balance sheets of banks to the national balance sheet while the Government now also had debts to solve.

“Who will pay at the end?” he pondered, adding that with the economic downturn the Government might have to increase taxes later.

Instead of finding ways to rescue banks, Pincus suggested that the Government should support successful areas of Vietnam like agriculture and manufacturing like garments and shoes.

“The Government should support them to continue what they are doing successfully now,” he added.

Asked to predict when a new foreign capital wave will come to Vietnam like in 2007, Pincus said the problem in Vietnam now did not rest with the lack of money, but rather how to use money sufficiently.

He gave an example that Vietnam every year received billions of dollars of remittances.

“The country doesn’t lack money; the problem is how the money has been used,” he said and added that much money was channeled into real estate and the stock market but not into real economic activities that would help Vietnam increase their competitiveness.

“I think the question shouldn’t about the volume of capital but how to use it sufficiently,” Pincus said.

At the luncheon, Nguyen Quang A as another speaker said that the Government shouldn’t rescue the property market either, because even if they want, they don’t have enough resource to do so.

In an encounter with local media last week, Nguyen Huu Nghia, chief inspector of the central bank of Vietnam, estimated the banking system’s non-performing loans at 8.6% of the total outstanding loans.

Given the total outstanding loans at around VND2,500-2,800 trillion, the amount of bad debts is estimated at VND215-240 trillion.

Ways sought to make condos affordable to buyers

Knowing that the property market is facing troubles now, the Ministry of Construction has allowed property project owners to change use purposes of their projects. Of the measures to support the market, adjusting down the apartment sizes was discussed at a meeting among the construction ministry, the Hanoi City government, relevant agencies and property firms in Hanoi last Thursday.

Minister of Construction Trinh Dinh Dung said the projects that had not carried out site clearance or those yet to start work on infrastructure, if not essential, would be cancelled or suspended.

As for completed projects and those under development, owners can raise the percentage of low-cost houses. They are even allowed to turn high-grade condos into low-cost ones, said Dung.

He explained owners of commercial housing projects must pay land use fees, but they would not have to do so if developing low-cost housing projects.

To deal with unsold apartments, the minister suggested enterprises revise down apartment sizes to offer customers affordable products.

However, this suggestion aroused concerns among management agencies and enterprises.

Nguyen Van Hai, director of the Hanoi Department of Planning and Architecture, said changing use purposes or decreasing apartment sizes would breach regulations on fire prevention, safety and construction density.

For example, one elevator can only serve people living in 4-6 apartments, but when the sizes are reduced, the number of apartments could reach 10-12, making the elevator overloaded. Moreover, adjusting down apartment sizes would go against the planning for technical and social infrastructure, Hai said.

Nguyen Ngoc Thanh, general director of Haiphong Construction and Development Investment Joint Stock Corporation, said there had been no regulation concerning temporary change of project use purposes. Therefore, adjustments should be transparent.

In the current tough times, many enterprises have been taking many measures to improve the market liquidity, including offering discounts. However, several project owners suggested there should be sanctions against apartment dumping.

In the northern region, the Dai Thanh apartment project has slashed price from VND14 million to VND10 million per square meter, catching the market’s attention with the project owner’s statement that the new price is still profitable.

Following this move of Dai Thanh, many other investors have cut prices or offered more promotions to lure homebuyers. However, several businesses described such a move as “not fair.”

In a discussion on the property market outlook for 2013, Nguyen Quoc Hiep, chairman cum CEO of Global Petroleum Investment Corporation (GP Invest), said the average investment cost of an apartment was some 8-8.5 million per square meter. With land use fees and unofficial costs included, the price of each square meter should be VND13-14 million, he said.

“I’m really discontent with the statement the price of VND10 million per square meter is still profitable,” he stressed.

Doan Chau Phong, deputy general director of Vinaconex, said apartment dumping in a bid to quickly withdraw from the playground made the market remain dull, affecting other project owners. Moreover, reducing prices of commercial condos to below prices of low-cost houses will hinder investment in the low-cost segment.

Credit support offered to villa buyers

Vina Dai Phuoc, a joint venture between VinaCapital Group and D.I.C Company, last Friday joined hands with ANZ Bank to introduce a credit support program for buyers of Sen Phuong Nam villas of the Dai Phuoc Lotus project.

Under this program, priority clients of ANZ Bank when buying Sen Phuong Nam villas can take out loans worth up to 40% of the home values with terms of 20 years. In addition, Vina Dai Phuoc will provide homebuyers with a 3% lending rate support in the first two years since disbursement.

Mike Gammel, director of Vina Dai Phuoc, said these financial incentives would be a great support, ensuring financial capacities of the future homebuyers. The company is continuing project development and finalizing the utilities such as swimming pool, park, tennis court and pier.

Kicked off in 2010, Dai Phuoc Lotus is an urban complex project with a total investment capital of some US$400 million. The project is located on Dai Phuoc Island in Dong Nai’s Nhon Trach District.

The Sen Phuong Nam villa area is around 22 hectares wide, consisting of 332 villas with 2-5 bedrooms each.

The project owner said 180 villas had been completed on schedule. Among those, 170 villas have been bought and the first 100 will be handed over to buyers in this quarter.

Retail sales up in October

Retail sales of goods and services exceeded VND200.93 trillion (US$9.6 billion) nationwide in October, an increase of 1.3 per cent over the previous month, the General Statistics Office (GSO) announced yesterday.

The gains represented slowdown in growth from September’s month-on-month increase of 2.3 per cent, noted GSO economic specialist Vu Manh Ha, but Ha attributed September’s jump in retail sales totals to an abrupt rise in the costs of healthcare services and rising demand for textbooks and school supplies as the new school year began.

Ten-month retail sales reached VND1,917 trillion ($91.3 billion) – an increase, when adjusted for inflation, of around 6.8 per cent over the same period last year. The average annualised growth in retail sale has remained below 6 per cent since April, still a long way from figures in early 2011, when sales were expanding at rates of 7.7-17 per cent, Ha said.

“It’s likely that the average sales growth of around 6 per cent will continue through the remainder of this year, if there is no jump in the consumer price index,” he added.

Power prices stay the same

Electricity prices did not rise in October and will not rise in November as planned, Dang Huy Cuong, head of the Electricity Regulating Department said yesterday.

Cuong said this was decided after the department found out that production expenses during the past three months were lower than calculated.

Power production in October was about 9.9 billion kWh, an increase of 11.8 per cent compared with last year.

In the 10 months of the year to date, productivity was about 95.6 billion kWh, an increase of 13.8 per cent compared with the same period last year.

Demand for power next year is forecast to be 13 per cent higher than this year. To meet the demand, Electricity Vietnam plans to open six more turbines.

The Prime Minister Nguyen Tan Dung will decide whether to go ahead with hydro power projects 6 and 6A, which were criticised for changing the natural water flow in the southern Dong Nai River.

Nguyen Khac Tho, Deputy Head of the ministry of Trade’s Power Department, said the postponement of the projects was to assess their effects on the environment. He said hydro-power plants were necessary because supplies of fossil fuel were shrinking.

“Nevertheless, we are determined to eradicate plants that are ineffective and harmful to the environment,” Tho said.

The ministry is now assessing hydro power plants across the country to consider the benefits and side effects on forests, use of land, residential relocation and safety.

Asked why retail prices of petrol did not fall in line with world prices, Nguyen Xuan Chien, deputy head of the ministry’s Domestic Market Department, said the current price was subsidised.

And the world price did not fell constantly, but fluctuated daily, Chien said.

 FDI exports swamp domestic businesses

The foreign direct investment (FDI) sector has drastically outperformed the domestic sector over the last 10 months, raising concern over the competitiveness of the nation’s businesses.

Total trade value in the first 10 months of the year reached $187.25 billion, of which exports accounted for nearly$93.5 billion, an increase of 18.4 per cent over the same period last year. Imports totalled $93.8 billion, a year-on-year increase of 6.8 per cent.

While FDI enterprises’ export turnover reached $58.5 billion in the first 10 months, a rise of 32.2 per cent year on year that accounted for 62.6 per cent of the total export turnover, export turnover from the domestic sector only posted a modest increase of 1 per cent.

“If the domestic sector does not take action soon, it will be dominated by the FDI sector,” said Nguyen Duc Thuan, chairman of the Viet Nam Leather and Footwear Association.

Thuan said that while the FDI sector has strong financial capabilities due to the support it receives from its parent companies abroad, the domestic sector is suffering under an interest rate 3-4 times higher.

Deputy head of Ministry of Industry and Trade’s department of Import and Export Phan Thi Dieu Ha agreed, saying that the Government should help local businesses by offering more preferential loans.

Industry and Trade Minister Vu Huy Hoang said the Ministry will invest VND13.7 billion (over US$650,000) to help domestic businesses promote their products in both local and international markets.

With a trade deficit of nearly US$500 million in October alone, the nation swung to an overall deficit of $357 million in the first ten months of this year – erasing a trade surplus of $143 million as of late September.

In October, the nation’s total trade value reached $20.3 billion. Exports of textiles and garments reached $1.4 billion, closely followed by mobile phones and components at $1.3 billion.

The nation now has 22 categories of goods with export values in excess of $1 billion so far in 2012, including textiles and garments, with a value of $12.53 billion; mobile phones and components, with a value of nearly $10 billion; crude oil at over $7 billion; and computer and electronic products and components at over $6 billion.

Food exporters must have contact in U.S.

Besides the required registration with the U.S. Food and Drug Administration (FDA) again, local foodstuff exporters targeting the U.S. market are also required to maintain contact stateside on a 24/7 basis to be allowed to export products to the foreign nation from early next year, an official said.

Do Tuan Phong, director of the Vietnam Trade Office branch in Houston, told the Daily the aforesaid information on the sidelines of a seminar on business and investment chances in Houston held in HCMC last Thursday. The new regulation will take effect from January 1, 2013.

The Food Safety Modernization Act (FSMA) of the U.S. requests Vietnamese companies exporting foodstuff to the foreign nation to re-register with FDA. Besides, local foodstuff enterprises need to ensure a constant contact, meaning they have to set up presence in the U.S.

According to Phong, local exporters can select different ways of presence in U.S. depending on their business situation to ensure the contact at any time.

For instance, they can either hire service firms which will be active as their representatives or open their own representative offices or subsidiaries in the U.S.

Hiring service firms is considered the most cost-effective solution but those companies with big sales in the U.S. are advised to open subsidiaries there to bring about more benefits rather than representative offices, Phong said. It is because with the same operational cost, enterprises are able to do business while representative offices are not allowed to do so, he reasoned.

Moreover, local enterprises should open their entities in the U.S. to win more confidence from customers, Phong noted, adding such a solution is still subject to abilities of domestic exporters.

At the moment, there are representative offices and subsidiaries of some ten Vietnamese firms in Houston like FPT, Minh Phu and Vinh Hoan as reported in the seminar arranged by the Vietnam Chamber of Commerce and Industry (VCCI) and the U.S. Greater Houston Partnership. Houston is the fourth largest city in the U.S. after Chicago, New York and Los Angeles.

Auditors target 26 SOEs

The State Audit of Viet Nam (SAV) will audit 26 State-owned enterprises and banks next year, the agency announced in a report to the National Assembly Finance and Budget Committee last week.

SAV chief auditor Dinh Tien Dung said that the major State-run groups Vinacomin, Vinatex, PetroVietnam, Electricity of Viet Nam, Viet Nam Rubber Group, VNPT, and the Airport Corporation of Viet Nam were all slated to be audited next year. Banks facing visits from auditors included Vietinbank, Vietcombank, Agribank and the Bank for Investment and Development of Viet Nam (BIDV).

Dung said that the State Audit was focusing on large companies next year in order to measure the results of their efforts to divest from non-core lines of business, as well as their overall financial effectiveness and governance.

Based on the audit results, the State Audit would recommend measures to the Government to restructure these companies to operate more effectively, Dung said.

Dung said that the number of companies to be audited next year would decline by three from this year due to the larger size and complexity of the firms targeted in the coming year. This year, only two large-scale State-owned groups were audited.

In evaluating the State Audit’s plan, the National Assembly Finance and Budget Committee asked the State Audit to focus on State-run groups that are operating with losses or on the verge of collapsing, as well as those with declining business effectiveness over the last few years – including some which have been previously audited.

The committee also reminded the agency to add State-run petrol distributor Petrolimex to its audit plan next year to help guide relevant agencies in devising effective policies on the petrol market.

The committee also urged the State Audit, in auditing banks, to focus on monetary and credit policies, gold and foreign currency trading, and the use of financial support from the State Bank of Viet Nam.

The committee also asked the State Audit to review the management and use of the Value-Added Tax Fund as well as State tax revenues from temporary import and re-export of goods.

(Vietnam Net)

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