Piaggio Vietnam recalls 10,000 Vespa scooters
Vietnam Register said Piaggio Vietnam is executing a three-month program to recall over 10,000 Vespa Primavera scooters of 125 3V ie-100 model for front brake testing and fixing.
Piaggio Vietnam confirmed the recall when reached by the Daily, saying that with approval from Vietnam Register, it is recalling 10,072 Vespa Primavera scooters made from September 30, 2013 to April 17, 2014 as these motorbikes may have technical front brake problems.
The company launched the Vespa Primavera in the Vietnamese market in November last year as a replacement for its Vespa LX model.
Piaggio Vietnam explained that it had detected the brake fluid pipe of some Vespa Primavera scooters were not installed accurately in accordance with Piaggio standards. Therefore, the brake fluid may leak when the scooter runs on long bumpy roads and this will affect the efficiency of the brake.
Piaggio Vietnam said it would test all the Vespa Primavera scooters already sold in the country and replace a new brake fluid pipe at no charge. It takes 30-45 minutes to test and fix the problem.
Although no incident has been reported regarding this problem, Piaggio Vietnam still decided to recall the bikes to ensure safety for its customers. Apart from an announcement in the media, the company is contacting buyers to have their scooters checked at all dealerships of the company nationwide until August 30 this year as planned.
After the period, Piaggio Vietnam will continue the program for those customers who have not brought their Vespa Primavera to the company’s dealerships for brake fluid pipe testing and replacement.
Customers can call the company’s hotline at 1800555585 or email to email@example.com to learn more about the recall.
Thousands of foreign experts return to work in Binh Duong
More than 2,100 out of 2,650 foreign experts have returned to their work in industrial zones in the southern province of Binh Duong as almost all riot-affected enterprises have resumed operation.
The information was revealed by Tran Van Lieu, head of the provincial management board of industrial zones (IZs) at a press briefing on the province’s socio-economic development situation on June 4.
Lieu also said the board has granted work permits free-of-charge to foreign experts.
At the briefing, Vice Chairman of the provincial People’s Committee informed that Binh Duong maintained a high economic growth in the first five months of the year, with its industrial production reaching over 70 trillion VND (3.3 billion USD), up 12 percent year-on-year, and an export turnover of 5.5 billion USD, up 11 percent.
The same day, the province held a ceremony to hand over investment licences to 41 FDI projects with a combined capital of 146 million USD.
According to Mai Hung Dung, Director of the provincial Department of Planning and Investment, among the projects, there are 10 from Japan, nine from the Republic of Korea, five from China, four from Hong Kong and three from Taiwan. Eight licences were issued after May 15.
This is a positive sign for the province as it is one among the three localities most seriously affected by disturbances which occurred on May 13-14 when some individuals took advantage of workers’ rallies – in protest of China’s illegal placement of its Haiyang Shiyou-981 drilling rig in Vietnam’s waters – to incite others to damage and loot assets of some foreign-invested companies and factories.
Singaporean investors still confident in Vietnam after riots
Singaporean companies still have confidence in Vietnam despite violent protests that occurred in mid-May against China’s placement of an oil rig in the East Sea, said a Singapore Business Group (SBG) executive.
The riots will not have an adverse impact on business ties between our two countries, SBG Ho Chi Minh City Chapter president Norman Lim told reporters during the Vietnam Singapore Business Forum held in the city on June 4-6.
The forum, held at the Duxton Hotel, welcomed 25 participants and panellists from ministries, trade and investment promotion organisations, local provinces, and leading corporations from both countries.
It aims to serve as a platform for Vietnamese and Singaporean businesses to get updates on Vietnam’s economic outlook, investment environment, and the commitment by both governments and local authorities to maintain benefits and stability for Singapore’s investors, as well as explore business opportunities under the two countries’ strategic partnership through a direct dialogue with representatives from Vietnam’s Ministry of Planning and Investment (MPI) and various economic experts.
Vietnam Chamber of Commerce and Industry (VCCI) vice president Dr. Doan Duy Khuong said at the opening session, “This year’s forum is considered an important annual event will deeply contribute to the success of multifaceted co-operation between Vietnam and Singapore. I believe it will continue to connect businesses from the two countries and provide a great platform to explore new opportunities, especially under the new Strategic Partnership, as well as in the context of moving towards the ASEAN Economic Community by 2015.”
The event was hosted by the VCCI and support by International Enterprise Singapore (IE Singapore), the Singapore Embassy in Vietnam, Singapore Business Federation, the MPI, SBG, and Singapore Business Association Vietnam.
Edlyn Khoo, centre director in Ho Chi Minh City, South East Asia Group, IE Singapore, said, “Vietnam is a country with strong economic fundamentals, such as a growing young working population and a rich endowment of resources. Singaporean companies are good potential partners, with services and expertise that can complement Vietnam’s strengths. At the same time, a safe and stable business environment continues to be critical to investment decisions. Closer collaboration on both sides will benefit not just businesses, but will also positively impact the local community through job creation and knowledge transfer.”
On the second day, the event will continue with panel discussions on four main topics: financial services co-operation, tourism and hospitality, agriculture and aquaculture production, and real estate investment. The third day will include site visits to industrial zones and corporations located in neighbouring Binh Duong province.
Mekong Delta city draws investors
The southern city of Can Tho leads the Mekong Delta in attracting both domestic and foreign investment thanks to its effective policies, such as improving infrastructure and facilitating projects that conform to the municipal socio-economic development plan.
Its industrial parks are currently home to 211 valid projects worth nearly1.9 billion USD in total registered capital.
As much as 844 million USD of the money has been disbursed in projects in food processing, agro-forestry and aquatic exports, footwear, fertiliser, chemicals, iron and steel, and automobile assembling.
In the first five months of this year, firms operating there enjoyed sales of 673 million USD, registering a year-on-year increase of 2 percent.
Most recently, local authorities have granted a licence for the Nha Trang Seafood Company to carry out its projects building a seafood processing plant and expanding the Saigon-Can Tho Beer Factory, with a total investment of 21 million USD.
Additionally, the city is developing four industrial parks of 1,150 ha and building a waste treatment factory at Tra Noc industrial park, which is expected to benefit nearly 190 businesses there once completed.
The country’s largest rice producer, the Mekong Delta comprises of 12 provinces and one centrally-run city.
Dak Lak aims to exploit tourism potential
The Central Highlands province of Dak Lak, one of the localities with the greatest potential for developing community-based and cultural tourism, has intensified investment in the field.
Dak Lak is famous for its many attractive sites, such as Lak Lake, Bim Bip Waterfall, Nam Ka Forest, Cu Yang Sin National Park, Buon Tua Sar Hydroelectric dam and Ba Tang military base.
Lak Lake is the largest natural freshwater lake in the province and the second largest in Vietnam after Ba Be Lake. It is surrounded by high mountains covered with primeval forests. Jun, a famous village of the M’nong people, lies by the side of the lake, as do distinct historical architectural works like the palace of King Bao Dai and long houses of the M’nong people.
The lake retains the unique and characteristic cultural values of M’Nong and Ede people. From the Lak Lake tourist site, tourists can reach Jun village and stay at long houses or visit the palace.
During a recent conference discussing tourism development in the locality, participants stressed that Dak Lak must speed up its community-based tourism model, while paying attention to preserving natural landscapes as well as historical and cultural relic sites.
They also urged the local authorities to examine the organisation of cultural events, while diversifying products and services, and forging links between Dak Lak and other regional localities such as Gia Lai and Lam Dong to thoroughly exploit regional cultural values and beauty, thus attracting more holiday-makers to the locality.
In February this year, Dak Lak welcomed 40,000 visitors, an increase of 1.33 percent compared to the same period last year. Of them, 4,000 were foreigners, up 1.14 percent.-
Consumers milk price drops for what they’re worth
The selling price of milk products for children less than 6 years old has been reduced after the Ministry of Finance applied a price ceiling on the products from June 1.
Several milk products saw a strong price drop, fluctuating between 15-20 percent.
At Duc Dung milk store in Hanoi’s Hang Buom street, the Similac GainPlus IQ brand has seen the biggest drop in retail price, with the new price of 725,000 VND per 1.7kg tin, down 130,000 VND from the old rate, while the Grow G-Power vanilla product has reduced by 100,000 VND in cost.
According to Nguyen Thi Huyen, a representative from the Lien Dat milk company in Bach Mai street, the number of customers buying milk increased strongly in recent days due to the drastic decrease in prices.
The ministry’s regulation has been applauded by consumers, who previously had to spend a lot of money to buy milk for their children.
Following a directive by Prime Minister Nguyen Tan Dung, the Ministries of Finance and Industry and Trade investigated the price regulations and taxes at five milk producers and traders from March 10 to April 10. These firms were the Vietnam Dairy Joint Stock Company (Vinamilk), 3A Nutrition (Vietnam) Ltd Company, Nestle Vietnam Ltd Company, Friesland Campina Vietnam Ltd Company and Mead Johnson Nutrition (Vietnam) Ltd Company.
According to the investigation report, last year and during the first three months of this year, these companies increased the prices of milk products for children less than 6 years old by 2.4 percent to 30.66 percent.
Therefore, the Ministry of Finance proposed to apply a price ceiling on the firms’ milk products for children.
In early May, the Prime Minister approved the proposal, which is one way of controlling and stabilising the prices of these products in the coming time.
SBV calms forex fluctuations
Commercial banks pushed the US dollar rate to the ceiling on Monday, spurring the central bank to lower its selling price yesterday in a bid to calm the market.
The foreign exchange fever led to many banks listing the US dollar rate at or near the ceiling price of VND21,246 per USD.
Both Vietinbank and Techcombank lifted their selling price to the highest rate of VND21,246 per USD, while others, including Asia Commercial Bank, Eximbank, BIDV, Maritime Bank and Sacombank, are selling one USD at VND21,245.
Vietcombank sold at the lower price of VND21,240.
During the past two days, banks have raised the exchange rate by VND40-50 per dollar, lifting the rate to its highest-ever level.
In a quick move to calm the market, the State Bank of Viet Nam (SBV) yesterday morning adjusted down its selling price from VND21,246 on Monday to VND21,240.
According to the SBV’s Monetary Policy Department, the central bank is still closely monitoring the situation.
The last time banks pushed up the USD forex to the ceiling was in July last year. At that time, banks even offered dual rates. This meant companies had to buy dollars at higher prices than the listing rates.
The deputy general director of a commercial bank said movements on the forex market reflected changes in demand and supply, but confirmed the rate hike was in line with State Bank regulations.
According to analysts, the situation is not alarming as the distance between the buying and selling rates is modest from VND60-90 per USD at most banks. This shows that dollar demand has not climbed to and intense level.
Two weeks ago, in response to unusual developments on the forex market, the SBV said it would sell foreign currency to stabilise the market. Earlier in April, Governor of the State Bank said the exchange rate would be kept stable until the end of the year and any adjustments would not exceed 1 per cent.
Agriculture sector seeks new markets
The export market for agricultural products must be diversified to avoid the dependence on a single market, said ministers from two different ministries.
The Ministry of Agriculture and Rural Development and the Ministry of Industry and Trade, on Tuesday, jointly held a conference to discuss measures to boost exports of farming and aquatic products, amid the spiralling tensions with China on the East Sea.
Minister of Industry and Trade Vu Huy Hoang said that trade between Viet Nam and China had not been impacted much by the East Sea tensions.
However, if the situation gets worse, agricultural products’ exports would be badly hit as China was a major market for Viet Nam. As a result, millions of farmers would suffer.
“It is time for the agriculture sector in Viet Nam to determinedly restructure and develop traditional markets while expanding new ones,” Hoang said.
Viet Nam earned US$8.92 billion from shipping products abroad in the first five months of this year, up 12.75 per cent against the same period in 2013. The export turnover was expected to hit $21 billion, rising 5.8 per cent over last year.
However, production and exports are facing a number of difficulties, such as diversification of products, markets and standards for exports.
The exports of several agricultural products saw a decline. Rice fell by 7 per cent on export volume and 5.3 per cent on value to $1.2 billion. Rubber exports fell sharply in the first five months by 40 per cent in value to $472 billion, according to Tran Thi Thuy Hoa from the rubber association.
The rubber sector was encountering high stockpiles in the world market, Hoa said, and added that the price tended to fall as a result of supply exceeding demand, which was likely to continue for several years.
According to Minister of Agriculture and Rural Development Cao Duc Phat, expanding markets were indispensable for the development of the agricultural sector, which played an important role in the Viet Nam economy.
However, seeking new markets was not easy as the competition was tough, and many countries had applied trade barriers on several Vietnamese farming and fisheries products.
Quality was also a problem because many agricultural products of Viet Nam were exported in raw form with low added value, said Deputy Minister of Industry and Trade Tran Tuan Anh.
The export strategy from 2011 to 2020, with a vision for 2030, said that the structure of export products would be shifted to processed products with high quality, high added value and strong brand name.
However, the lack of capitals and technology supports were holding back progress.
Anh said standards must be set up to raise the quality of agricultural products, and added that the Ministry of Industry and Trade would negotiate to expand export markets with incentives to remove tax and trade barriers.
A memorandum of understanding to this effect was signed at the conference between the two ministers to promote exports of seafood and farm products.
Singapore businesses attend City exhibition
The Viet Nam-Singapore Business Forum (VSBF) 2014 opened yesterday in HCM City with the featured theme of Strategic Partners – Grabbing Opportunities.
Hosted by the Viet Nam Chamber of Commerce and Industry, the three-day event has attracted more than 250 representatives from ministries, trade and investment promotion organisations, local provinces and leading corporations from Viet Nam and Singapore.
At the event, Vietnamese and Singapore businesses can learn about Viet Nam’s latest economic outlook, investment environment and the commitments of Government and local authorities in maintaining benefits and a stable investment environment.
Participants can also explore business opportunities through dialogue with representatives from the Ministry of Planning and Investment and various economic experts.
Edlyn Khoo, centre director (HCM City), Southeast Asia Group, International Enterprise Singapore, said: “Viet Nam is a country with strong economic fundamentals such as a growing young working population, and rich endowment of resources. Singapore companies are good potential partners, with services and expertise that can complement Viet Nam’s strength.”
“At the same time, a safe and stable business environment continues to be critical to investment decisions. Closer collaboration on both sides will benefit not just businesses but also positively impact the local community through job creation and knowledge transfer.”
At the press conference before the official opening ceremony of the forum, the president of Singapore Business Group in HCM City, Norman Lim, said that the damage that occurred in some industrial zones in the southern region after protest had not damaged relations between Viet Nam and Singapore.
He said that Singapore businesspeople in Viet Nam still feel confident when investing in the country.
At the event today, investment opportunities will be explored during discussions on four main topics, including financial services co-operation, tourism and hospitality, agriculture and aquaculture production, and real estate investment.
Doan Duy Khuong, vice president of VCCI, said that bilateral trade turnover last year was US$13 billion, an increase of 10.7 per cent.
He said he believed the event would continue to connect businesses of the two countries and provide an excellent platform to explore new opportunities, especially under the new Strategic Partnership as well as in the context of moving towards the ASEAN Economic Community by 2015.
Retailers told to revamp domestic market strategy
Domestic retailers should have specific development strategies to compete with foreign investors whose modern retail are channeled with high turnover, announced Vu Vinh Phu, chairman of Ha Noi Supermarkets Association.
Phu stated that the competition between local and foreign retailers have been mentioned for a long time, as Viet Nam has deeply integrated into globalisation. However, the important issue is how to explore the opportunities of an integration process to promote the country’s production.
He reported at the online forum to discuss opportunities and challenges for the country’s retail market held in Ha Noi yesterday that Viet Nam has not built a retail development strategy at the three levels: the state, the sector and the businesses.
“Small-scale capital, low professional and services have been hindrances for domestic retailers to compete with foreign retailers. Especially, a lack of association and cooperation among retailers and between retailers and producers has contributed to the low competitiveness,” he added.
He noted that there were few domestic retailers who possessed outstanding or special characteristics but were slow in renewal.
Domestic retailers have called for support from the government to ensure equality among the local and foreign companies.
He proposed to reduce the current value-added tax from 10 per cent to 5 per cent to promote purchasing power.
Tran Nguyen Nam, deputy director of the Ministry of Industry and Trade’s Domestic Market Department, agreed, adding that foreign retail groups will continue to penetrate into Viet Nam next year as the country was a potential market.
Statistics from the ministry revealed that modern retail channel accounted for less than 20 per cent while the remaining percentage still belonged to traditional markets.
Foreign groups made up only 6-7 per cent of the market.
Dinh Thi My Loan, chairwoman of the Viet Nam Retailers Association, agreed that the retail market has been attractive to enterprises both inside and outside the country, with an average growth rate of 6 per cent.
“Experts revealed that Viet Nam’s retail market has been attractive due to its effective network development. In addition, the country has strictly followed legal framework and commitment to WTO,” Loan noted.
Nguyen Trong Tuan, deputy general director of Ocean Retail and Real Estate Management Company, stated that foreign retailers have taken advantage in opening their shopping chains since 2009.
However, Vietnamese retail companies also have to seize the opportunities to expand investments and enhance training of human resources.
“This will ensure that the expansion of foreign businesses is not a challenge but an opportunity for Vietnamese enterprises,” Tuan added.
Tran Nhat Linh, director of non-traditional selling channel at The Gioi Di Dong Company, stated that the joining of foreign retailers to the market will bring opportunities for local firms to change themselves and gain success.
Linh noted that foreign retailers such as Metro and BigC have built large supermarket models while the companies focused on small shops across the country.
“I think that there will always opportunities for domestic retailers. The issue is how to set up a suitable strategy for development,” he added.
Business forum to be held in Mongolia
The Mongolia-Viet Nam Friendship Association and the Viet Nam-Mongolia Friendship Association have jointly organised a seminar for the two countries’ businesses in Mongolia.
Both the countries agreed that the seminar offered a good chance for businesses to exchange experience and expand connections.
They vowed to continue helping the two countries’ enterprises strengthen their cooperation in order to boost bilateral economic and trade ties and enhance mutual trust and understanding between the two countries.
Bac Lieu aquatic exports reach record high
Aquatic exports of Bac Lieu Province in the first five months of 2014 leapt by 68 per cent from the year before to reach US$170 million, highest ever for the period.
Prices of aquatic exports have increased by $2-3 per kilogram on average, benefiting both farmers and businesses.
In recent years, local exporters have reportedly paid due attention to protecting their trademarks and ensuring the quality of products, while authorities have also facilitated their access to preferential credit sources to renovate production lines.
In the future, managerial agencies plan to help Bac Lieu, in the Cuu Long (Mekong) Delta Region, business circle expand their partnership with foreign enterprises to boost trade. Businesses will also receive more assistance to build their own aquatic farms in order to ensure a stable and quality input..
Long An reports high growth in production
The index of industrial production (IIP) and exports of the southern province of Long An gained high growth in the first 5 months of this year.
The province’s IIP surged 16 per cent on year while exports also jumped more than 11 per cent to US$1 billion in the January-May period.
Long An has now attracted 1,300 businesses operating in its 28 industrial zones, including 500 FDI enterprises, creating 87,000 stable jobs for local workers.
Promoting investment attraction, creating safe, effective and friendly investment environment are factors that help Long An to speed up industrial development, exports. Securities at the industrial parks have been well organised in the past 5 months that also make foreign investors assured to continue their businesses.
Government finds solutions for agro-aqua exports
The Ministry of Industry and Trade and the Ministry of Agriculture and Rural Development on June 3 signed a memorandum of understanding to solve difficulties in agricultural and seafood product exports.
Agro and aqua export turnover reached US$9 billion year to date, a 13 percent year on year increase, according to the two ministries’ estimates.
The number accounts for 15 percent of the country’s total exports and is expected to reach US$21 billion this year, up 5.8 percent over last year.
However, May exports reduced 8.2 percent over April. The most reduction was on tea, rice and cassava.
Farmers nationwide have a good harvest of the winter spring rice crop with output increase by 600,000 tons over last year, said Minister of Agriculture and Rural Development Cao Duc Phat.
Besides breeding and seafood farming have recovered after a long time of good prices.
However export markets have been narrowed which might cause the prices to fall down, he added.
Minister of Industry and Trade Vu Huy Hoang said seeking for consumption markets for agro and aqua products was not easy. Several countries have applied protection measures and trade barriers on farm and seafood products that earn most money in Vietnam.
China’s violation over Vietnam’s territorial waters might affect the exports, he added.
The Government as a result has prompted the two ministries to diversify products and expand export markets in order to deal with increasing trade protection in the world.
Dragon fruit prices tumble in Mekong Delta
The prices of dragon fruits have drastically fallen to fetch only VND3,000-4,000 a kilogram in the Mekong Delta over the last few days.
Early this year, a kilogram of white-flesh dragon fruit was sold at VND20,000-22,000 while the price of red-flesh variety was double, said the fruit grower Truong Van Tan from Cho Gao District, Tien Giang Province.
In addition to the price fall, it is not easy for farmers to sell products and they are suffering heavy losses.
It is peak harvest time of the dragon fruit and other fruits also in the Mekong Detla, said Vo Chi Thien, chairman of the My Tinh An Dragon Fruit Cooperative in Cho Gao.
Besides, 80 percent of the dragon fruit output has been exported to China, where the dragon fruit is amidst peak harvest season at the same time. Adding to the worse, litchi from the northern region has also flooded the neighboring market, causing difficulties in dragon fruit consumption.
Vietnam should expand export markets to the Southeast Asia, the Middle East and the USA to reduce the dependence on Chinese market, Thien said.
Dragon fruit prices usually reduce in the Dragon Boat Festival that falls on the fifth day of the fifth lunar month every year. This year, it has decreased drastically and quickly.
The most concern is that several areas in Tien Giang, Long An, Tra Vinh, and Vinh Long Provinces have widened the fruit farming areas.
First Solar sale sees light at the end of the tunnel
After two years in stasis, US-backed First Solar Vietnam’s billion dollar photovoltaic panel manufacturing facility may soon be back on track.
The project was licensed in January 2011 and started construction two months later.
At that time, the developer said the facility’s $300 million first phase, with a production capacity equivalent to 250 megawatts per year, would start operations in late 2012.
According to their plan, the total investment in the project would eventually reach $1.2 billion. It would be the first solar panel manufacturing facility in Vietnam employing advanced thin-membrane technology.
However, just eight months after construction kicked-off, the developer announced its decision to postpone the project.
A top executive at First Solar said the decision was made based on a supply-demand imbalance in the global market.
In July 2012, the project again aroused public interest when property advisory firm Cushman Wakefield announced they would be representing First Solar in seeking investors to buy the facility, located in Ho Chi Minh City’s Dong Nam industrial park.
The investor said they wanted to finalise a sale within 12 months time.
In light of the existing laws, for sizable projects like that of First Solar’s there are two options for transferring ownership.
The first is a capital transfer to a partner. In this case, the partner would be responsible for maintaining the business field and investment level First Solar registered. The other option is an asset transfer (sale of the facility as is) which would require the developer to have basic legal documents showing, for instance, ownership of the land and the existing assets on that land.
At a press conference in October 2013, a representative from Ho Chi Minh City Export Processing and Industrial Zone Authority (Hepza) said, “The project’s factory has attracted significant investor attention, but a transfer is still impossible due to issues related to land and assets.”
In a talk with VIR late last month, head of the Business Management Department at Hepza Bui Thi Nu said it was nearly impossible to find a suitable investor to continue and finish the First Solar project as due to the scale of the project, the investor is looking to the second aforementioned option – selling its assets.
“The necessary legal procedures for the project will soon be completed. The procedures, including a land-use certificate and a certificate for the assets on that land, are being notarised,” Nu explained.
Nu also said that the developer’s representative, Cushman Wakefield, has worked with Hepza and city authorities to speed up the process.
This means the project’s legal obstacles have been nearly settled, paving the way for the developer to take the next step, which is likely to be a transfer of their assets (production facility) to a suitable partner.
A Hepza report in late 2013 showed that First Solar’s panel project had been suspended due to effects of the global recession that the developer had thus far invested $50 million.
Steel firms in doldrums
Several listed steel firms reported losses in the first quarter of this year.
Currently, there are 15 steel enterprises listed on the stock market. Most of them have seen lower profits or even suffered losses, while only four have seen rising profits, reported Vietstock.
Ton Hoa Sen Group (code HSG) saw weak profits in the first three months of 2014 with only VND68 billion ($3.23 million), less than one-third of its profits in comparison with the same preriod last year.
The company attributed the downtrend to difficulties in the steel market due to weak purchasing power, surplus supply, and fierce competition between domestic steel products and cheaper imported products from China. Additionally, the real estate market has yet to emerge from its long stasis.
Ho Chi Minh Stock Exchange (HoSE)-listed Pomina Steel Corporation (POM), which has 16 per cent market share, reported losses of VND5.6 billion ($266,666) in this year’s first quarter.
Nam Vang Joint Stock Company (code NVC) has reported losses since the fourth quarter of 2011 and by March 31 this year it showed accumulated losses of VND364 billion ($17.3 million).
The Tien Len Corporation (TLH), Vietnam-Italy Steel (VIS), the Nam Kim Group (NKG) and the Dana Y Steel Company (DNY) all also saw declining profits in this year’s first three months.
According to Phan Dung Khanh, investment consultancy director of Maybank Kim Eng Securities, high inventories and low sales are the major problems steel companies face.
“We think Vietnam’s steel sector outlook will remain cloudy in 2014 as recovery seems unlikely due to soaring inventory levels in China, the world’s largest steel producer. Therefore, we think Chinese steel-makers will increase their exports, which could further drag down global steel prices,” said Maybank analyst Nguyen Trung Hoa.
The Ministry of Industry and Trade said the country would see the supply of steel products rise 1.5-1.8 times above the domestic demand next year. Steel firms will have a total manufacturing capacity of 35.3 million tonnes per year within five years, while domestic demand looks to only be around 15 million tonnes.
This year the Vietnam Steel Corporation (VSA) has set the annual production target of nearly 1.5 million tonnes of billets and 2.6 million tonnes of rolled steel, representing year-on-year increases of 24.5 per cent and 8 per cent, respectively.
Binh Duong grants investment licenses to 41 FDI projects
The southern province of Binh Duong on June 4 held a ceremony to hand over investment licenses to 41 FDI projects with a combined capital of $146 million.
According to Mai Hung Dung, Director of the provincial Department of Planning and Investment, among the projects, there are 10 from Japan, nine from the Republic of Korea, five from China, four from Hong Kong and three from Taiwan. Eight licenses were issued after May 15.
This is a positive sign for the province as it is one among the three localities most seriously affected by disturbances which occurred on May 13-14 when some individuals took advantage of workers’ rallies – in protest of China’s illegal placement of its Haiyang Shiyou-981 drilling rig in Viet Nam’s waters – to incite others to damage and loot assets of some foreign-invested companies and factories.
Chairman of the provincial People’s Committee Le Thanh Cung said that after the riots, 98 percent of affected businesses have resumed their operations.
In recent years, Binh Duong has paid attention to projects and services with the application of advanced technologies in order to make high-quality and competitive products for both domestic and international markets, he said. The province pledges to continue facilitating the investment and operation of FDI companies and effectively implementing administrative reform, he added.
In the first five months of 2014, the locality attracted US$978.4 million in foreign direct investment, up 14.9 percent from the same period last year.
HCM City seeks US$1.2-billion ADB loans for key projects
The HCMC government has written to the Ministry of Planning and Investment seeking approval to add some of its major infrastructure developments to the list of projects financed by preferential loans from the Asian Development Bank (ADB) in 2015-2017. The city has put the funding for these projects at more than US$1.2 billion.
According to the document sent to the ministry, the city suggests ADB finance the first phase of Metro Line No.5 from Bay Hien Intersection in Tan Binh District to Saigon Bridge in Binh Thanh District, provide additional funding of US$300 million for construction of Metro Line No.2 from Ben Thanh Market in the downtown area to Tham Luong Station.
The city also seeks ADB’s loans for a sustainable urban and transport development project worth some US$50 million for Metro Line No. 5 and a downtown station at Ben Thanh Market costing around US$200 million.
The HCMC government wants the bank to finance completing Belt Road 2 with a total cost of US$260 million. This road comprises the sections from the Eastern belt road to Binh Thai Intersection in Thu Duc District at US$77 million, from Binh Thai Intersection to Linh Dong Crossroad at US$22 million, from Linh Dong to Go Dua in Thu Duc at US$72 million, from An Lap Intersection to Nguyen Van Linh Boulevard at US$88 million.
The city government also suggests ADB fund a US$107-million project to reduce water leaks in zone 3, consider loans for a US$61-million project to process sludge discharged from water treatment facilities in HCMC and repairing a D2000 water pipeline at US$20 million, and water supply projects along Nguyen Cuu Phu and Au Co streets at US$57 million.
HCMC is now in dire need of loans for infrastructure development as the city needs US$3-4 billion for this field every year while its budget can cover some VND10 trillion (around US$500 million).
Experts calculate a metro line requires total investment of at least US$1.5 billion.
Currently, HCMC is seeking investors to carry out infrastructure projects via build-operate-transfer (BOT), build-transfer (BT) and public-private partnership (PPP) formats. However, the city has found it hard to implement these investment formats as difficulties have arisen over refunding for BOT investors, a lack of available land for BT developers and an unclear legal framework for PPP investment activity.
This is why HCMC still has to count on loans of international credit institutions, including the World Bank and ADB to finance its infrastructure projects.
G-bond sales hit VND15.7 trillion in May
The Hanoi Stock Exchange (HNX) organized 19 government bond auctions in May with VND15.7 trillion raised.
Of the total number, the State Treasury posted VND15.5 trillion while the Vietnam Bank for Social Policies raised VND200 billion, according to a report released by HNX.
HNX said the G-bond volume sold on the primary market last month increased 19% against the previous month. Coupons of the two-year tenor range from 5.58% to 5.7% per annum, three-year tenor at 6.07-6.2% per annum, five-year tenor at 7.1-7.6% per annum and 10-year tenor at 8.7% per annum.
In general, coupons of the three- and five-year tenors dropped against April while those of two-year and 10-year debt papers remained unchanged, the report said.
Notably, the State Treasury raised VND96.7 trillion from G-bond issues in the first five months of this year, equivalent to that mobilized in all of 2013.
On the secondary market, there were 369 million G-bonds traded with a total value of VND39.2 trillion. Most transactions focused on bonds with the remaining tenors of 12 months, two, three and five years.
For the repo method, there were 191 million G-bonds worth over VND19.4 trillion changing hands.
Foreigners bought VND8.1 trillion while selling VND11.6 trillion worth of G-bonds given the normal trading mode. Those of the repo mode were VND633 billion and VND447 billion respectively.
For the secondary Treasury bill market, there were 4.7 million bills worth over VND457 billion traded in normal mode and two million bills worth over VND190 billion traded in repo method last month.
BUSINESS IN BRIEF 7/6