Home » Business » BUSINESS IN BRIEF 5/2

BUSINESS IN BRIEF 5-2HCM City works restrict baked materials

Construction works invested by the State budget in HCMC will have to use 100% unbaked materials, according to a new regulation of the city’s government.

City authorities in Directive 04/2013/CT-UBND issued on Monday regulate that projects having nine floors or higher developed by any capital sources will have to use a minimum 30% of unbaked materials by 2015 and 50% afterwards. These schemes will have to use lightweight unbaked building materials whose volume doesn’t exceed 1,000 kilos for one cubic meter, says the directive.

The Ministry of Construction in November released Circular 09/2012/TT-BXD on the usage of unbaked materials in construction projects.

Under the circular, State-owned projects in urban areas of third-class or higher are now forced to use 100% unbaked building materials. Meanwhile, construction works of other sectors are required to use at least 50% unbaked materials from January 15 and all works will have to be subject to usage of 100% unbaked materials after 2015.

To make the new law effective, the city’s government has asked the construction department to submit a regulation on managing and developing construction materials including unbaked products for approval in the near future.

Using non-baked materials is an inevitable tendency in the context that clay exploitation from agricultural land has scaled down the food crop cultivation area. Moreover, non-baked material usage will help utilize industrial waste, save baked materials, protect the environment and shorten construction time.

However, unbaked building materials are yet to be favored by locals, the local government said, explaining that their prices are higher than those of baked clay bricks while local people are not accustomed to using the new materials.

New tactic employed for tackling unsold apartments

Property enterprises have varied the apartment-for-rent model aiming to slash their apartment inventory, with one of the solutions asking for no monthly rentals from tenants but a deposit.

Nguyen Van Duc, deputy director of Dat Lanh Real Estate Co., said that the firm was sounding out the market’s reactions after launching 22 apartments of the Thai An project in HCMC’s District 12 which has an area of 22 square meters each.

With this model, tenants give the project investor a deposit of VND200 million and then can live in the apartment from six months to two years. Tenants do not have to pay the rentals but the fees for apartment management and parking service.

Tenants can either get VND200 million back if they do not want to live in the apartment anymore or buy it if they want to.

Although it is said that tenants do not have to pay month rentals, that tenants making a VND200-million deposit without enjoying the interest sum is in fact a form of rentals.

Talking about this model, Duc said that amid difficulties, every enterprise had to find ways to survive. The new model is a way to mobilize capital for the firm to continue its operations and sell apartments, he added.

VinatexMart, Co.opMart open new stores

Supermarket chain VinatexMart has opened a new store in HCMC while Saigon Co.op has also put into operation a new supermarket in the northern province of Thanh Hoa.

VinatexMart’s new supermarket is located at 1191-1191A Le Duc Tho Street in Go Vap District, taking the total number of VinatexMart outlets to 82.

Covering nearly 2,000 square meters at a cost of some VND17 billion, VinatexMart Go Vap features fashion products, cosmetics, utensils, foodstuff and hi-tech items. The supermarket offers discounts of up to 40% on numerous essential goods from now to Sunday.

In the meantime, Saigon Co.op, owner of the Co.opMart supermarket chain, inaugurated the Co.opMart Thanh Hoa at the HD Commercial Center in Thanh Hoa on Wednesday.

As the 61st store of Saigon Co.op in the nation, Co.opMart Thanh Hoa costs VND90 billion and covers over 6,000 square meters on Phan Chu Trinh Street in Thanh Hoa City. The store stocks over 3,000 essential products including foodstuff, cosmetics, textile items, toys, utensils, appliances and souvenirs.

TienPhong Bank, FPT Online team up

TienPhong Commercial Bank and FPT Online Service Joint Stock Company have struck a deal to provide services and products related to the banking and online technology sectors.

The two sides agreed on Monday to build up online payment services via Internet and Mobile Banking channels, ATM machines, offices and agents. Customers will also be allowed to use accounts at TienPhong Bank to top-up or withdraw money on the online payment website senpay.vn.

FPT Online will prioritize services of TienPhong bank such as accounts, cash management, online payment and cards. Meanwhile, the lender will provide other products such as credit, payment and preferred accounts for staff, customers and partners of FPT Online.

TienPhong Bank and FPT Online have expanded technical connections and prepared manpower to launch new products soon.

PVI Sun Life licensed for business in Vietnam, Canada

PVI Sun Life Insurance Co. Ltd., shortly known as PVI Sun Life, has received regulatory approval for life insurance business from authorities in both Vietnam and Canada.

The company, a joint-venture between PVI Holdings listed on Hanoi bourse and Sun Life Assurance Company of Canada (Sun Life), received the license from Vietnam’s Ministry of Finance last Thursday. PVI Sun Life will have charter capital of VND1 trillion, or nearly US$49 million, with PVI holding a 51% stake and Sun Life the remaining 49%.

The joint venture further demonstrates Sun Life’s deep commitment to growing its business in Asia, said a senior executive of Sun Life Financial Inc. (SLF) as the parent firm of Sun Life.

“The formation of PVI Sun Life further expands Sun Life Financial’s footprint in Asia and is aligned with our growth strategy for Sun Life overall. PVI Sun Life will deliver a suite of innovative life insurance products to customers in Vietnam through multiple sales channels, and it aims to become a market leader in the sector,” said Kevin Strain, President of SLF Asia.

The local partner also pins high hopes on the new joint venture’s operations.

“The creation of PVI Sun Life is a perfect complement to our already strong general life insurance business in Vietnam,” said Bui Van Thuan, CEO of PVI. “We are confident that this new joint venture business will become a real leader in the life insurance industry in Vietnam.”

PVI is one of the major Vietnamese investment-insurance groups, with subsidiaries focused on various business lines including general insurance, reinsurance, life insurance and other financial services.

In 2012, PVI generated gross premiums of US$220 million, while its total revenue growth was 11% year-on-year, over the target of the year. PVI currently has a 21.8% market share of the non-life insurance market, making it the leading non-life insurer in Vietnam.

Sun Life Assurance Company of Canada is a wholly owned subsidiary of Sun Life Financial Inc. and is a member of the Sun Life Financial group of companies. As of September 30, 2012, the Sun Life Financial group of companies had had total assets under its management amounting to CAD$515 billion.

Software firms to receive help in quality management

The Ministry of Information and Communications this year will help about 11 companies apply the international quality management process CMMi (Capability Maturity Model Integration) in software production and digital content services.

This was informed by Nguyen Thanh Tuyen, deputy director of the management board for industrial and information technology projects under the ministry, at a workshop on application of CMMi and ISO 27001 held in HCMC last week.

CMMi developed by the U.S.-based Software Industry Institute is widely applied in the world and considered one of the criteria for evaluating the quality of software firms.

The cost of implementing CMMi for a company is around US$35,000-50,000. Each firm will receive a support worth US$25,000, including US$15,000 for consultancy and application of a production process meeting CMMi standards and US$10,000 for assessment and certification.

Gas traders’ profits down strongly

Two gas trading firms have announced financial reports for the fourth quarter and all of last year, with their profits declining much from 2011.

According to the report of CNG Vietnam Joint Stock Company, the firm’s after-tax profit was over VND26.7 billion in last year’s fourth quarter and over VND118.3 billion in the entire year, dropping sharply from VND203.4 billion in 2011.

The report also showed that the firm’s financial costs including interest sums for bank loans were cut by over VND5 billion to some VND23.4 billion last year. However, the costs for sale and business management increased by VND1 billion and VND13 billion respectively last year.

Meanwhile, PetroVietnam Low Pressure Gas Joint Stock Company (PGD) reported a profit of over VND14.2 billion in the fourth quarter, equivalent to only one-third of the previous year’s same quarter. The sharp decline resulted from the average gas buying price in the quarter rising by 25.05% compared to a rise of only 21.22% in the selling price.

Like CNG, PGD suffered higher operating costs last year, with business management costs doubling year-on-year to over VND56 billion and sale costs rising by over VND37 billion to VND165 billion.

According PGD’s report, the firm obtained over VND228 billion in after-tax profit last year, dropping by over VND75 billion from 2011.

Other gas trading firms listed on the stock exchange such as PetroVietnam Gas Joint Stock Corporation (GAS), MT Gas Joint Stock Company (MTG), Petrolimex Gas Joint Stock Company (PGC), PetroVietnam Northern Gas Joint Stock Company (PVG) and PetroVietnam Southern Gas Joint Stock Company (PGS) as of January 23 had yet to submit their financial reports for the fourth quarter and all of last year.

Local firm delivers heavyweight ship to British buyer

Ha Long Shipbuilding Company in the northern province of Quang Ninh on Wednesday handed a 53,000-ton cargo ship to Britain’s Muhr Maritime Pte Company.

The newly-built ship ‘Anne Kjersti’ will today leave Halong City for Singapore to carry out its first cargo transport. It is the ninth ship among ten 53,000-ton vessels that Ha Long has built for foreign buyers.

Anne Kjersti has a length of 190 meters, a width of 32.26 meters and a height of 17.5 meters. The modern ship has a cargo basement with a designed capacity of 65,700 cubic meters and runs on a velocity of 14 nautical miles an hour. It is popular worldwide and meets all international-related requirements and regulations.

Ha Long is looking to hand over the last ship of the ten-ship deal to Thailand’s Thoresen Shipping & Logistics Ltd. in the next quarter.

Alstom signed €90 million contract to upgrade Bang Bo gas-fired power plant

Eastern Power and Electric Co. Ltd (EPEC) has signed a 10-year operations and maintenance contract  with Alstom for its Bang Bo power plant, located at Khlong Daan, Bang Bo Samut Prakan province, Thailand.

This contract is an extension to the existing O&M contract which expires at the end of March 2013.

As part of this contract, Alstom will station permanent employees on site to operate the power plant and carry out all planned and unplanned maintenance at the site. The contract is worth approximately €90 million.

Built in 2000 by Alstom, the 350 MW Bang Bo combined cycle power plant is based on Alstom’s GT26 gas turbine.

As part of this new service contract, Alstom will upgrade the existing GT26 gas turbine with its latest service offering for this fleet – the MXL2 turbine blade and components. Bang Bo will be the first GT26 power plant in Thailand to receive this upgrade. It is due to be installed in 2014.

According to Hans-Peter Meer, senior vice president, Alstom Thermal Services, this success further demonstrates Alstom’s competitiveness in the gas turbine after sales market in Thailand.

“This upgrade will not only increase the capacity, efficiency and operational flexibility of the power plant but will also extend intervals between major inspections,” said Meer.

“The renewal of our current operations and maintenance contract with Alstom for a 10-year period is also a reflection of our confidence in Alstom’s ability to operate and provide full plant services to Bang Bo power station and ensure our continued competitiveness in the Thai power market”, said David Michaels, managing director of EPEC.

Thailand boasts East Asia’s largest fleet of Alstom GT26 power plants with seven commercially operational units.

Alstom has been present in Thailand for over 40 years and has supplied over 7,000 MW power through its technology. Apart from Bang Bo, Alstom also constructed the 730 MW Bo Win and the 1600 MW Kaeng Khoi 2 gas-fired power plants in the country.

Infamous Vinalines expects $101 mln loss in 2013

While it is now only the end of the very first month of 2013, loss-ridden shipping firm Vinalines has already posted a gloomy picture for the rest of the year, with its full-year loss expected to reach VND2.1 trillion, or $100.96 million.

Sharing the hardship of the ocean transport sector, Vinalines expects to suffer a VND2,100 billion loss this year, its CEO Nguyen Canh Viet admitted at a meeting on Tuesday.

“There are few transporting contracts amid these crisis times, while several partners refused to clear their payment on time, despite the cheap fares,” Viet said.

Even worse, several seaports such as CICT, SSIT, SP-PSA and CMIT, which are operated by the joint-ventures between Vinalines and international partners, are also suffering losses, he added.

Vinalines’ subsidiaries sold 10 vessels last year in a bid to cut losses, sending the total number of its fleet to 143 vessels with a combined loading capacity of 3 million DWT. DWT, or deadweight tonnage, is a measure of how much weight a ship is carrying or can safely carry.

Viet said Vinalines is seeking to borrow loans of VND3 trillion for its 14 subsidiaries to maintain operation over the tough times.

“It’s forecasted that the ocean transporting market would be revitalized in 2017, so our subsidiaries are capable of repaying debts by that time,” he said.

Vinalines, fully known as Vietnam National Shipping Lines, began falling into trouble last year, with a number of enormous losses and economic wrongdoings unearthed by state inspectors, and its former chairman Duong Chi Dung got wanted for his economic offenses committed during the time he was in charge of the state-run group.

The fugitive Dung was arrested abroad in early September, and is now in custody.

Several police officers meanwhile have recently been detained for assisting Dung flee from Vietnam.

Credit provided to power transmission project

The Vietnam Development Bank (VDB) on January 31 pledged long-term credits worth 662 billion VND ( about 31.5 million USD) to the National Power Transmission Corporation (NPT) to implement the 500kV Quang Ninh – Mong Duong project.

The transmission line plays an important part in the country’s power development strategy in the North East.

Stretching over 25.2 km, the line will connect the Mong Duong 1 and 2 thermal electricity plants to the national grid.

The credit will be used to pay for equipment procurement, compensation for relocation of residents in the project area.-

Purchasing power sees slight gain in January

Consumer purchasing rose by 8.1 percent in January, compared to the same period last year, according to the General Statistics Office (GSO).

However, the increase is far below the 22-percent pace seen during the same month a year ago, the GSO said.

GSO economist Vu Manh Ha attributed the slower pace of growth to Tet falling in February this year, instead of January, with January figures not reflecting holiday bonuses.

He noted that purchasing power in February is set to exceed last year’s figure of 209.5 trillion VND (10 billion USD).

The seasonal rise in retail sales before the nation’s biggest holiday is also expected to help reduce inventories significantly.

The inventory index currently stands at 21.5 percent but such products as beer, tobacco, sugar and processed seafood are expected to see strong decreases in inventories following the holiday shopping season.

Labourers set for constructive Tet

As many as 1,000 workers have decided to stay and work on the Lai Chau Hydropower Project in the northern province of the same name, instead of returning home for Tet holiday.

The Ministry of Construction said that the workers would celebrate the festival at the dam’s construction site. They would have one day off and resume work by afternoon on the first day of the Lunar New Year.
About 4,000 workers are currently working day and night on the project.

Apart from generating electricity, authorities expect the dam to prevent flooding during the rainy season and supply water during the dry season.

The hydropower plant, part of the series of three plants across the Da River alongside the Son La and Hoa Binh plants, has an installed capacity of 1,200 MW and a generation capacity of nearly 4.8 billion kWh per year.

Started in January 2011, the project is said to have made scheduled progress and succeeded in preventing flooding last year.

Electricity of Vietnam (EVN), the national power utility, is chiefly responsible for the project.

The workforce of four major construction groups – Song Da, Truong Son, Lilama and Licogi – have joined the construction and two foreign companies have helped with project supervision and quality management.

Textile industry to earn 20 billion USD early

If the export growth of Vietnam’s textile and garment industry remains between 12 and 15 percent, the sector will reach its target of 20 billion USD in 2014 ahead of the 2015 deadline, according to the Vietnam Textile and Apparel Association (VITAS).

VITAS Vice Chairman Le Tien Truong said that despite a 5-10 percent decrease in export prices in 2012, total exports still rose by 15 percent.

The industry’s trade surplus was 8.4 billion USD last year as imported materials accounted for only 8.8 billion USD of the total export value of 17.2 billion USD, he added.

The textile and garment industry has already achieved its 2015 goal to source 50 percent of raw materials domestically.

It expects to earn 18.8-19.3 billion USD this year.-

Vietnam to develop credit information database

Vietnam aims to develop a national credit information database to assist the State Bank of Vietnam (SBV) to manage and oversee the local banking system.

According to the SBV, the national credit information database is to help credit institution prevent and reduce risks during their operation as well as aid borrowers in accessing bank credit, thus contributing to the socio-economic development of the country.-

Inflation restraint and economic growth remain government’s dual objectives

The Government spokesman emphasized on the importance of lowering inflation while increasing growth during this month’s regular Government press conference on January 29.

Key economic indicators in January

As part of his answer to a press question on January’s consumer price index (CPI), Minister, Chairman of the Office of Government, Vu Duc Dam said: “Inflation control and macroeconomic stability remain the top priority and require closer coordination between ministries and localities.”

According to the General Statistics Office, this month’s CPI increased aggregately 1.25% against last December, which is approximately an average rate in comparison with January’s CPI during 2003-2012.

Meanwhile, the January 2013 index rose 7.07% over the same period of last year, which is in fact among the lowest increase rate in the last six years, with the figure for January 2011 and 2012 being 12.17% and 7.27%, all against the same period of the previous year.

However, the increase of over 1% in CPI is considered a “warning signal” of challenges in achieving the inflation target of 6-6.5% for 2013 set by the Government, requiring the authority “to be very cautious”.

Minister Vu Duc Dam attributed the CPI rise to the increase of healthcare cost, supply shortage and rising demand on the threshold of the Lunar New Year.

Accordingly, due to the recent prolonged severe cold weather that damaged farmers’ harvests, prices of commodities rose by approximately 1.3% on average.

Remarkably, during the first month of the year, healthcare service prices were increased in 10 provinces, rising the index for medicine and health care by 7.4%, of which health care went up sharply by 9.5%, all against December of last year.

Medical costs are also expected to rise in other provinces later in the year, after the price adjustments were postponed in accordance with the Prime Minister’s direction in late 2012, which indicates even higher CPI in the near future.

Acknowledging the inflation control difficulties, the Minister stressed on the operation and cooperation of ministries and localities in implementing the Resolutions No. 01 and 02/NQ-CP, set out by the Government since the beginning of the year.

Minister Vu Duc Dam reclaimed that the Government is consistent with pulling down last year’s inflation of 6.8% and boosting growth to over 2012’s rate of 5.5%.

“In operating [the economy], it is necessary to tiptoe between curbing inflation and keeping growth. Credit tightening may constrain growth, create surplus labor leading to instability; but if [we] chase growth target and excessively extend credit, inflation may return.” said the government spokesman.

Ministry activates fuel price stabilisation fund

The Ministry of Finance on January 28 issued an official regulation letter ordering traders not to raise retail petrol prices.

At the same time, it and the Ministry of Industry and Trade allowed key petrol traders to increase the use of fuel price stabilisation fund in line with the current circumstances, helping to balance the base price and retail price.

Accordingly, as of Monday afternoon, every litter of petrol, diesel oil, kerosene and oil gets the support of VND500 (USD0.24), VND200 (USD0.009), VND400 (USD0.019) and VND400 (USD0.019), respectively from the fuel price stabilisation fund.

Faltering firms should leave the market

Loss-making and debt-laden enterprises are encouraged to exit the stock market as this would improve its efficiency.

This was the message from Tran Dac Sinh, chairman of the HCM City Stock Exchange, who believes strong measures must be take to foster economic growth.

He said: “There are a few tens of companies whose business and financial situations are not good for the stock exchange.

“This should not last forever, so such companies are encouraged to delist shares from the market,” Sinh told the media.

“The market naturally will have both good and bad products but if they are too bad, they won’t negatively affect the image of the market,” Sinh said, noting those companies could voluntarily withdraw from the market or be forced to do.

As many as 22 companies left the stock exchanges last year, while another 14 faced the risk of having listings cancelled and one company was dissolved.

Only six companies voluntarily left the market while the remaining number were forced to cancel their listings due to prolonged losses, serious violations on the information disclosure regulation and other reasons.

According to market insiders, these delistings did not affect the market and in fact, they were necessary removals of bad products while creating pressure on other companies to improve their businesses, thereby gradually raising the quality of goods on the market.

The sources say there are still too many “waste” stocks on both exchanges which incurred big losses and had almost unworthy share prices.

However, while encouraging inefficient businesses to exit the market, Sinh said such decisions should be discussed thoroughly because they were required to follow strict procedures and consider the regulations protecting minor shareholders.

“Normally, major shareholders hold the highest voting percentage. It is difficult for small shareholders to express their opinions and certainly their interests will be affected,” Sinh said.

Saigontourist targets higher profits

Saigontourist Travel Service Co targets an increase of 9.8 per cent in revenue and 8.2 per cent in profits this year over 2012.

The company expects to welcome 1.7 million visitors, a rise of 4 per cent compared to last year.

In addition, the company targets VND14,300 billion in revenue and profits of VND4,160 billion this year.

The figures were released at a meeting held on Wednesday in HCM City.

This year, the company will strengthen its brand name, improve the efficiency of advertisements and marketing, diversify products, raise the quality of its services, and improve human resources development.

Last year, the company achieved good results with its hotel, restaurant and travel services.

VNPT ends 2012 with healthy profit

Viet Nam Posts and Telecommunications Corporation (VNPT) generated a revenue of VND130.3 trillion (US$6.27 billion) by the end of last year, an increase of 7.94 per cent year-on-year.

Its two mobile network operators, MobiFone and Vinaphone contributed a turnover of VND66.3 trillion ($3.2 billion), accounting for more than half of the group’s total amount.

Vinaphone earned a revenue of VND22.579 trillion ($1.09 billion), while Mobifone contributed the rest of 60 per cent.

VNPT’s General Director Vu Tuan Hung said although Vinaphone’s turnover was lower than that of MobiFone, the former still posted an encouraging growth rate of 14 per cent.

SBV offers gold traders leeway

The State Bank of Viet Nam will allow some commercial banks to temporarily export and re-import gold bars this month, the State Bank announced on Wednesday after a meeting with commercial bank representatives.

In accordance with the State Bank’s recent designation of Saigon Jewelry Co (SJC) as the nationally-recognized “brand” for gold bars, commercial banks will be granted licences this month to allow them to temporarily export gold bars bearing different trademarks and then re-import international-standard gold bars that can be quickly converted to SJC-standard gold bars.

The State Bank will oversee the gold trades so as to maintain control over the domestic gold market. Most banks will also continue to be barred from buying or selling gold bars due to their lack of capacity to ensure quality standards.

Since Prime Minister’s Decree No 24/2012/ND-CP took effect in May of last year, using gold bars as a means of payment has been unlawful, substantially curtailing the trade in gold.

The director of one commercial bank in HCM City, who asked to remain anonymous, confirmed that his bank previously accepted gold bars from many individual sellers and depositors but that gold transactions dropped off considerably in 2012.

He suggested, however, that people were likely buying gold and holding onto it rather than selling it to banks

Orient Commercial Bank chairman Trinh Van Tuan also said gold buying and selling has diminished to insignificant levels in recent months, attributed the sluggish market to little fluctuation in prices and a consequent reduction in speculative pressures.

Tuan noted his bank had not targeted any additional profits from gold trading this year.

The deputy director of the State Bank branch in HCM City, Nguyen Hoang Minh, has also affirmed that his branch has received no complaints from commercial banks in the city about problems arising from the ban on payments in gold and said that the gold market in the city was now stabilised.

Latest regulations to curtail Viet Nam’s affinity for cash

A new draft decree being prepared by the State Bank of Viet Nam seeks to limit or stop the use of cash for large transactions like the purchase of motorbikes, cars and property.

The decree aims to weaken the black market economy by making commercial transactions more transparent.

Under the draft decree that is intended to replace the current one in force, Decree 161, people will be banned from using cash when they trade or transfer autos and securities.

Transactions involving motorised vehicles, houses, land and securities not traded at official exchanges will have to be conducted via a bank if the value exceeds the limit set by the central bank.

Organisations will not be allowed to pay in cash as they trade or transfer securities and properties.

Individuals or establishments that pay in cash for autos and properties with amounts exceeding the limit will not be able to apply for transferring ownership of or rights to use the assets being traded, according to Bui Quang Tien, director of the SBV’s payments department.

However, the limit for cash transactions has not yet been set, Tien said.

The new draft aims to encourage the public to use non-cash payment forms because these would reduce risk of robbery and even mistakes in counting the money.

Restrictions on cash payments would also help the country better fight tax evasion, counterfeit money and money laundering.

The current decree, No.161, also has regulations that limit the use of cash in payments, but they apply mainly to agencies and organisations using the state budget. Meanwhile, capital disbursed from the State budget now accounts for a very small fraction of total payments made in the country.

Nguyen Thanh Toai, deputy director of the Asia Commercial Bank (ACB), agreed with the policy of restricting the use of cash payments.

He said high value transactions should be carried out via a bank to ensure transparency.

Since most high value transactions take place in major economic areas like Ha Noi and HCM City where there are many banks, it is easy to make non-cash payments there, Toai told the Tuoi Tre newspaper.

As of April 2012, most loan disbursements by banks were also in cash. Big lenders like Vietcombank and BIDV said 70 per cent of their loans were disbursed in cash, while the corresponding figure at Agribank and MHB was as high as 85 per cent.

The central bank said cash payments for large assets like houses and securities created plenty of opportunities for tax evasion as also concealing of assets.

This is the second time the decree on cash payment has been made public to collect opinions from relevant agencies and the public.

The draft is scheduled to be submitted to the Government for consideration in the second quarter of this year and set for approval in June.

Economy receives mixed bill of health

While no dramatic economic breakthroughs were expected this year, there were signs that the nation’s economy might begin to see a stronger recovery in the second half of this year.

The forecasts were made by experts who attended a workshop here on Wednesday hosted by Ha Noi National University’s Centre for Economics and Policy Research.

The agricultural sector would become the spotlight of the economy, making healthy contributions to the nation’s exports, economist LaViet Ho told the workshop.

But the Viet Nam Academy of Social Sciences forecast the economy was at risk of slowing this year, predicting growth of 5.3 per cent, inflation of 7.3 per cent, and unemployment of 3.85 per cent.

The academy has proposed a stimulus plan that would include cutting the value-added tax, personal income tax and corporate income tax.

Continuing to hold inflation in check would depend upon the effect of unpredictable factors such as electricity rate increases and the recent increase in the minimum wage, as well as the Government’s reluctance to loosen monetary policy until late last year, Centre for Economics and Policy Research director Nguyen Duc Thanh said.

Thanh warned that the Government’s goal to keep inflation this year under 6 per cent would be difficult to achieve and predicted that inflation would ultimately approach 10 per cent. To counter these pressures, he urged policymakers to cap the deposit interest rates being offered by commercial banks.

Thanh expected the Government would continue with a cautious monetary policy aimed at controlling inflation while promoting modest growth.

The centre has forecast economic growth this year of 5.2-5.3 per cent, comparable to last year’s pace, he said.

Thanh also predicted that the process of restructuring State-owned enterprises would continue to stagnate this year due to a lack of detailed administrative oversight and the failure of many State-owned enterprises to resolve their bad debt situation.

Resolving the bad debt crisis in order to ensure the health of the nation’s banking system would remain a focus of policymakers, however.

Thanh said he anticipated few policy initiatives in the coming year that would improve the nation’s business and investment climate.

The balance of trade might also swing back to a slight deficit once domestic production recovered towards year’s end, he said.

New investor approved for wind power plant

Prime Minister Nguyen Tan Dung has agreed for Thuan Binh Wind Power JSC to replace Electricity of Viet Nam (EVN) as the investor of a wind power plant in the central coastal province of Ninh Thuan.

EVN is responsible for helping the Thuan Binh company fulfill investment proceedings.

According to the Ministry of Industry and Trade, 8.6 per cent of the country’s land area offers good conditions for wind power plant development, mainly in the provinces of Binh Dinh, Ninh Thuan, Binh Thuan, Lam Dong, Tra Vinh and Soc Trang.

Products go on show as Da Nang Spring Fair opens

The Da Nang Spring Fair has opened and will run through February 4.

Beer, confectionery products, processed food and clothes will be sold at the fair. More than 130 businesses from around the country and companies from Asian countries are displaying products at 350 stands.

Needy families to enjoy Tet thanks to “Care & Share”

In the days leading up to Tet, employees from Metro Cash & Carry Vietnam are giving out Tet gift packages to 1,000 needy families in five provinces and city.

“We want to brighten up the lives of people who are suffering hard times,” said Philippe Bacac, Managing Director METRO Cash & Carry Vietnam.

“In the days before Tet, it is especially important to help them feel that they are not alone. As a wholesale company operating in Viet Nam, we think it’s only natural to take on local social responsibility.”

The Tet gift packages contain primarily basic foods that are typically consumed during the Tet celebration such as rice, sugar, cooking oil, fish sauce, etc. The “Care & Share” programme begins from Monday to Friday in Hai Phong, Nghe An, Dak Lak, Khanh Hoa provinces and HCM City.

Real estate profitability downplayed by Ministry

The Ministry of Construction has denied rumours that over three-quarters of all companies operating in the real estate and construction industries nationwide managed to post profits last year despite the well-publicised difficulties of the real estate market.

Some local newspapers had quoted ministry statistics saying that 42,197 of these enterprises had reported profits in 2012, compared to 33,362 in 2011, while only 15,296 had reported losses. By this reckoning, the number of profit-making companies in 2012 was nearly three times the number of loss-making firms.

The reports have caused public misunderstanding about the real business performance of real estate and construction companies and cast doubts on the ongoing need for Government Resolution No 12/ND-CP, issued to help resolve difficulties for enterprises in this sector, said the the ministry office chief Do Duc Duy.

Duy noted that another 2,630 companies failed and dissolved last year, bringing to nearly 20,000 the number of real estate and construction companies that saw losses, 30.4 per cent of the total industry and 2,000 higher than in 2011.

These figures suggested the continuing challenges facing enterprises in the real estate and construction industries in the context of the stagnant real estate market, Duy said.

HCM City shoppers support local produce

More than 60 per cent of residents in HCM City have made regular purchases of Vietnamese products in the last three years, according to the deputy head of the steering committee for the Vietnamese People Use Vietnamese Products programme.

Speaking at a meeting this week to review the programme, Duong Quan Ha said many residents were beginning to show a preference for Vietnamese products.

Since the programme began three years ago, more companies are also stocking a larger number of locally made goods. For example, 90 per cent of Co-op Mart’s goods are made in Viet Nam.

Companies and small household businesses that receive some of their funds from the State have spent more on such goods, with a total of nearly VND600 trillion (US$28 billion) in the last three years.

At some companies, the volume of domestic products accounts for 90 per cent of all goods.

Also, the city’s price-stabilisation programme includes only domestically-produced goods.

Over the last three years, the city has launched several programmes to enhance the prestige of Vietnamese goods with the aim of developing the local economy.

All of the programmes, which focus on production, distribution and consumption, will continue to be carried out through 2015.

By that time, the city hopes that 90 per cent of local residents as well as all State-owned companies and small household businesses will be using Vietnamese-made products.

To reach this goal, the city plans to expand programme activities by encouraging the sale of Vietnamese goods in rural areas, industrial zones and traditional markets.

This year, the city will hold more promotions for Vietnamese goods, and will organise a fair selling Vietnamese goods four times a year until 2015 to introduce high-quality Vietnamese goods to consumers.

Trade pact would lead to mixed blessings

Policy-makers and experts have publicly stated that joining the Trans-Pacific Partnership (TPP) Agreement will help accelerate the trade in Vietnamese exports, especially to the US market, for items including textiles, seafood, footwear and wooden products.

The consensus was reached during a seminar on the Trans-Pacific partnership and the potential benefits and opportunities it offers businesses.

It was argued that joining the agreement will help improve Viet Nam’s position in the international arena and enhance its relationships with global partners.

However, it was acknowledged that the agreement also creates pressure on the open market, and increases international competition for Vietnamese companies. Some local industries, including agriculture, industry and services have not yet developed at a fast enough pace to remain competitive, a situation worsened by challenges facing revisions of the legal system and a lack of human resources.

Le Thanh An, US General Consul in HCM City, said that in recent years the opening up of trade had deeply impacted the lives of local people. Vietnamese farm produce in particular is now exported to many countries while many products manufactured locally in export processing zones in industrial parks have been sold on a large scale to the international market.

He said that foreign enterprises bring technology and knowledge to the country, which in combination with the tariff incentives offered by the TPP can enhance productivity and trade. The US has already pledged to support Viet Nam in its TPP negotiations.

Ngo Chung Khanh, Deputy Director of the Multilateral Trade Policy Department at the Ministry of Industry and Trade said the country must overcome a series of challenges in the negotiation process to ensure the interests of the country are met. Currently some businesses face having to adapt their operations to meet the demand of international partners. The US has requested that Viet Nam’s textile and garment products use different fabrics as currently around 80 per cent of these products fail to meet US requirements.

Textile trade is a major issue in the ongoing TPP negotiations, which aim to establish a fee-trade zone across the Pacific.

As of November, 2010, Viet Nam officially joined the negotiations of the TPP Agreement. The number of participants has increased to 11 countries and Viet Nam has discussed negotiations on 15 occasions and is expected to reach a conclusion in 2013.

Ecosystem service scheme shows promise as parties share profits

Viet Nam earned US$58 million from the collection of payments for eco system service (PES) schemes in 2012, the equivalent to the State budget allocation for the forestry sector.

Under the scheme, enterprises can offer the Government money to manage ecological services on its land. In many cases money has been provided for forest land which the Government has then invested in farmers to protect their plants from floods and other dangers.

Vice Minister of Agriculture and Rural Development Ha Cong Tuan praised the news of the income. “This is an encouraging figure given that this scheme was put in place on a wide scale just a year ago. It has been proved that PES is a good scheme to raise funds for forest protection,” he said in a briefing to foreign partners reviewing the sector’s performance at the annual meeting of the Forest Sector Support Partnership held in Ha Noi yesterday.

In 2012, PES was collected from hydro-electric plants and water supply plants. The agriculture ministry is working on other potential sources including eco-tourism.

The ministry predicts that the collection for this year will be $47.6 million.

Some other key figures for the forestry sector have also been revealed. The export revenue of the timber processing industry last year was $4.6 billion, a 17-per-cent increase from 2011’s figure.

Forest coverage increased from 33.2 in 2009 to 39.7 per cent last year, which was close to the 40 per cent target.

Last year also saw a remarkable increase in official development assistance (ODA) funding channeled into the sector. There were eight projects whose total financing was worth $117 million compared to about $29 million in 2011.

Deputy director general of the ministry’s Forestry Department Vo Dai Hai said the sector would have to adjust itself to changes in the international market that may affect Viet Nam’s export-based timber processing industry.

In the meantime, the focus is to ensure Vietnamese timber products meet the requirements of import markets, such as the European Union’s Forest Law Enforcement and Governance regulations and the United States’ Lacey Act, which ban the import of any wood products made from illegally harvested timber.

Hai said Viet Nam would need international assistance to ensure this is achieved.

The meeting was held by the ministry in co-operation with Japan International Co-operation Agency and German Agency for International Co-operation.

Whispers wound maize prices

The price of raw maize has dropped sharply in the Cuu Long (Mekong) Delta in recent days after rumours spread that the products were unsafe, leaving many growers facing losses.

However, the Ministry of Health’s Viet Nam Food Administration (VFA) announced on Tuesday that 100 per cent of maize grown in the delta that they had tested met food safety regulations.

Previously, some newspapers had reported that maize in some provinces in the delta including Dong Thap, Vinh Long and Tien Giang was planted with chemical substances originating from China, thus they were outside of safety and hygiene standards.

The tests were conducted on January 11 by the HCM City Institute of Hygiene and Public Health, following a request from the VFA.

The tests showed that raw maize in the provinces was safe. However, some boiled maize was mixed with nitrite in order to keep it in good condition while on sale. Nitrite was banned from being used in food processing as it is harmful to people’s health.

But the test results came after many farmers had already bemoaned their losses as customers boycotted products.

“Most local farmers earn their living by planting maize, thus their lives are very difficult when maize prices tumble,” Huynh Phuc Dien, a farmer in Dong Thap Province’s Lap Vo District, said.

Nguyen Van Chinh, another farmer in Tra Vinh Province’s Cau Ke District, said he lost VND5 million ($230) this season.

He added that he would have to switch to other crops to make a better living.

Deputy head of the Lap Vo Division of Agriculture and Rural Development Tran Van To said that the district had about 300ha of maize.

“Farmers in the district have planted maize for many years and they have also received modern technology from agricultural experts to ensure productivity and quality,” he said.

Meanwhile, director of the Dong Thap Department of Agriculture and Rural Development Duong Nghia Quoc told Nong thon ngay nay (Countryside Today) newspaper that every year the province harvested 5,000-6,000ha of maize, mostly from Lap Vo District.

When the untrue rumour circulated that eating maize could lead to cancer, about 290ha of maize in the province went unharvested. Even after the rumour was disproved, local farmers suffered losses of about VND10 billion ($476,190).

Quoc added that so far the province did not have any plans to give financial help to farmers.

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

No comments yet... Be the first to leave a reply!