Vietnam’s first exchange-traded fund makes debut
The Vietnam Fund Management Company (VFM) has launched an exchange-traded fund (ETF) which tracks the VN30 index of the southern bourse.
The ETF VFMVN30, the first of its kind in Vietnam, was granted an initial public offering (IPO) certificate by the State Securities Commission (SSC) on July 4. The fund is managed by VFM and supervised by Standard Chartered Bank (SCB).
The IPO of the fund will be made between July 21 and August 14 and it will then be listed on the Ho Chi Minh Stock Exchange (HOSE).
The ETF VFMVN30 will follow developments of the VN30 index consisting of 30 stocks with the highest market capitalisation and liquidity on HOSE, which account for more than 60 percent of the market’s capitalisation value.
The fund will lay a foundation for the development of open funds in the time to come, thus increasing liquidity in the domestic stock market, said SSC Vice Chairman Nguyen Thanh Long.
An exchange-traded fund is an investment fund traded on stock exchanges, much like stocks. ETFs experience price changes throughout the day as they are bought and sold. Most ETFs track an index, such as stock index or bond index.-
VNPT speeds up restructuring process
The Vietnam National Post and Telecommunications Group (VNPT) will propose a plan to the government to set up three corporations in the third quarter of the year, one official said.
VNPT’s general director, Tran Manh Hung, said that before sending the plan to the government, the group would submit it to the Ministry of Information and Communication for appraisal within this month.
Three planned one-member limited corporations would be established, called VNPT-Net, VNPT-Media and VNPT-VinaPhone, which would be under the direct management of VNPT.
The move is part of the effort to realise the group’s restructuring plan for the 2014-2015 period, which was approved by the Prime Minister on June 10.
VNPT-Net would be responsible for managing VNT and VTI infrastructure, VinaPhone and VDC’s core network as well as telecom infrastructure in localities nationwide.
VNPT-VinaPhone will be in charge of operating the businesses of VNPT, VDC, VTN and VTI, while VNPT-Media would ensure the supply of content and communication services via VASC, VDC, and VNPT’s Information and Public Relations Centre (IPC).
In addition, VNPT must compile a regulation on an operational charter, under which its new registered capital would be VND72 trillion (USD3.38 billion). The charter is expected to be issued in August this year.
At a recent meeting on separating MobiFone from VNPT to fall under the management of the ministry, Minister of Information and Communications Nguyen Bac Son requested that VNPT enhance the capacity of these three corporations in order to have a standard operational system, as does Viettel, as well as improve their competitiveness.
VietGAP project bears fruit
Cau Duc pineapples, a brand name protected by the National Office of Intellectual Property, have been cultivated under the Vietnamese Good Agriculture Practice (VietGap) standards in Hau Giang Province for the last three years, bringing high profits to local farmers.
Hau Giang is one of the largest pineapple-producing areas in the Cuu Long (Mekong) Delta.
In 2011, the province’s Department of Science and Technology implemented the VietGap programme and expanded it to 50ha in Vi Thanh City and Long My districts.
As part of the project, the department teaches farmers how to plant disease-free pineapple seedlings and also helps them find outlets for their products.
The VND4.5 billion (US$214,000) programme is funded by the central and local budget as well as participating farmers.
Farmer Vu Sui, chairman of the Thanh Thang Co-operative in Vi Thanh’s Hoa Tien Commune, said the new method had produced high yields with larger fruit.
The head of the project, Nguyen Thi Kieu, said the department had provided farmers with seedlings, organic fertilisers and advanced technologies.
It had also paid for the fees required to apply for VietGap certification.
Kieu said that farmers had used integrated crop and pest management, and applied both organic and chemical fertilisers.
Pineapples cultivated under VietGap standards have yielded about 30 tonnes per ha, three times higher than normal cultivation.
With an average price of VND4,000 a kilo, farmers can earn about VND240 million ($11,400) per hectare, she said.
Hau Giang plans to expand the Queen pineapple cultivation area to 2,000ha by 2020. The province now has 1,546ha of pineapple with an average yield of 10 tonnes per hectare.
In recent years, local authorities have carried out many measures to improve the quality of Cau Duc pineapple seedlings and have encouraged farmers to use VietGap standards.
The Queen pineapple variety, which has been cultivated in Hau Giang for more than 50 years, has a beautiful shape and is larger and less sweet than other varieties.
The trademark “Cau Duc Pineapples of Hau Giang” is registered and protected under the National Office of Intellectual Property.
Customs tax collection reviewed
Viet Nam Customs tax collections have reached VND117.5 trillion (US$5.57 billion) in the first six months of this year, a 24.4 per cent year-on-year increase.
These figures were reported by deputy general director of Viet Nam Customs Nguyen Thai Duong during a conference to review its performance in the first 6 months and implement tasks for the remainder of this year. The conference was held on Saturday in Ha Noi.
He also told those at the conference that import taxes stood at VND38.1 trillion ($1.8 billion), special consumption taxes were VND6.921 trillion ($329 million), value added taxes collected reached VND72.2 trillion ($3.4 billion) and taxes on environmental protection were VND94 billion ($4.4 million).
Duong attributed the increase in collected taxes in the first six months to high revenue exports and high export taxes, over the same period in 2013. For instance, petrol tariffs rose VND6.65 trillion ($316 million), completed knockdown unit (CBU) automobiles up VND3.3 trillion ($157 million), automobile spare-parts increased VND1.1 trillion ($52.3 million) and other equipment was up VND2.44 trillion ($116 million).
Facing many difficulties in production, business performance has not yet significantly bounced back from past highs. However, the Viet Nam General Department of Customs has enacted a variety of solutions to complete set targets for tax collections this year.
Apart from tax collections, Viet Nam Customs has focused on enhancing other activities by strengthening anti-smuggling enforcement to prevent losses of revenues for the state coffer, as well as prosecuting anti-trade fraud and ensuring national security and community safety.
As of June 15, 2015, 8,915 smuggling cases, valued at VND168.9 billion ($8 million), were uncovered, a reduction of 19.9 per cent compared to 2013. Also, the Anti-smuggling and Investigation Agency prevented 43 smuggling cases valued at VND92 billion.
In terms of administrative reforms and customs modernisation, Viet Nam Customs had implemented e-customs procedures, known as the automated customs clearance, named VNACCS/VCIS, at 34 provincial and city departments of customs. The number of enterprises taking part in implementing e-customs procedures reached 49,900 units, increasing 16.6 per cent in comparison with the previous year, and accounted for 96 per cent of all enterprises involved in customs procedures.
Speaking at the conference, Minister of Finance Dinh Tien Dung called upon Viet Nam Customs agencies to act to prevent the flood of poor-quality consumer goods being imported into the country, having a negative impact on the daily lives of the public.
According to the Viet Nam Customs General Department, the high tensions in the East Sea has also had a strong impact on domestic import-export turnover and business performance.
In June alone, Viet Nam’s export turnover to China reached $1.18 billion only, registering a decrease of 2.5 per cent over May. Viet Nam was likely to spend $3.43 billion purchasing goods from China in June or a reduction of 14.6 per cent against May.
Nghe An works to lure investors
So far this year, the central province of Nghe An has attracted 34 new investment projects with a combined capital of nearly VND9.7 trillion (about $455 million).
However, the provincial People’s Committee held that the attraction failed to meet expectation as the land clearance is still slow, the implementation of the projects stagnant, and the completion of dossiers cumbersome.
In order to improve the efficiency and attractiveness, Nghe An is taking bold measures to promote investment and help investors iron out difficulties. Relevant authorities have been maintaining cooperation with representative offices of Japan, Republic of Korea and Taiwan as well as the Ministry of Planning and Investment.
HCM City provides loans to SMEs
The southern economic hub is helping enterprises, especially small-and-medium sized ones (SMEs), gain access to loans worth VND20 trillion (US$952 million) to implement modern technology that can improve business performance.
Business owners have received VND12 trillion ($571 million) in loans so far this year, chairman of the municipal People’s Committee Le Hoang Quan said at a municipal Party Committee executive board meeting on Friday.
Quan predicted that capital flow this year would be primarily directed to hi-tech parks and the support industry, adding that although the agriculture sector recorded slower growth than last year, it was actively embracing technological advances and bio-technology.
PM approves HCM City master plan
Prime Minister Nguyen Tan Dung signed off last week on a decision to create the HCM City Region by 2030 with a vision to 2050.
The master plan will connect the country’s largest city with key economic regions in the South Central Coast and in the context of climate change and rising sea levels.
The planning area includes Ho Chi Minh City and the regional provinces of Binh Duong, Binh Phuoc, Tay Ninh, Long An, Ba Ria -Vung Tau and Tien Giang, a total area of 30, 404 sq km that had a population of just over 18 million in 2013.
The plan will also develop rural areas that suit traditional culture and production conditions and establish hi-tech agriculture zones, urban agriculture zones and specialized agriculture zones.
In order to preserve natural landscapes and ecological features, the plan suggests the establishment of national- and international-level tourism centres.
HCM City mall fills retail spaces
SCVivoCity, a shopping mall that will open in the first half of next year in HCM City’s District 7, has already managed to lease out half its 41,000sq.m. net lettable area.
Vietsin Commercial Complex Development JSC (VCCD), set up by the Saigon Co.op Investment JSC and the Singaporean real estate developer Mapletree to build SCVivoCity, on Thursday signed MoUs with 13 retailers for almost 21,300sq.m.
Saigon Co.op and Singapore supermarket NTUC FairPrice will open a hypermarket called Co.opXtra at the mall.
The Bank for Investment and Development of Vietnam has signed a contract to lend US$40 million for the development of the mall.
Privatisation process of SOEs starts to speed up
Viet Nam aims to privatize all of its State-owned enterprises (SOEs) by the end of next year.
So far this year, 38 companies have been equitised. That is already twice the number of companies that went private in 2013, the Ministry of Finance reported. Another 200 SOEs are slated to go public by the end of the year.
According to the ministry, this is a significant improvement compared to a total of 99 companies equitised between 2011 and 2013.
The Government has restructured a total of 58 businesses this year, including 15 that were merged, and five that have been dissolved or recommended for bankruptcy.
Prime Minister Nguyen Tan Dung has also approved equitisation plans of 12 State-owned groups and corporations, including the proposal of the Vie t Nam National Textile and Garment Group (Vinatex).
Several SOEs have recorded better performance under the new arrangement, especially those under the transport ministry such as the Viet Nam National Shipping Lines company and the Vietnam Railway Corporation.
Meanwhile, the Finance Ministry urged Ha Noi, HCM City, Hai Phong and provinces of Binh Dinh, Nghe An, Quang Ninh, Yen Bai, Kon Tum, as well as the Viet Nam National Coal Mineral Industries Group to speed up restructuring and equitisation.
It pointed out that 135 of 432 SOEs that must be equitised by the end of 2015 have yet to establish steering committees that will guide the privatization process.
Land plots dominate Nha Trang market
Nha Trang’s residential market has more than 6,900 dwellings from 37 land plot, villa, townhouse and apartment projects, Savills Viet Nam has reported.
Land plots dominate the city’s residential market at 51 per cent market share, followed by apartments with 44 per cent and villas and townhouses with five per cent.
To benefit from the ocean aspect and proximity to tourism infrastructure, most projects are located in wards along the coast, just 1km and 2km from the beach, with many on seaside Tran Phu street. Projects developed as holiday homes are spreading to the west.
According to Savills Viet Nam report, the land plot segment includes seven primary projects offering prices from VND3.6 million (US$171) to VND12.3 million ($586) per sq.m.
The villa and townhouse segment has only two active projects, Bac Vinh Hai Residence and Ocean Front. Ocean Front is a holiday home project with prices from VND9.5 billion ($452,380) to VND17 billion ($80,952).
Bac Vinh Hai has bare shell townhouses with prices ranging from VND1.8 billion ($85,714) to VND3 billion ($142,857).
There are four active apartment projects on Tran Phu street offering a wide range in prices from VND32,800,000 ($1,562) to VND70,700,000 ($3,366) per sq.m.
With the exception of Vinh Diem Trung Residence and Bac Vinh Hai Residence, most residential projects are developed with a second home concept that targets buyers from other provinces, particularly from Ha Noi and HCM City.
The report also figured out that there are 33 future residential projects with a total area of more than 860 ha. The majority are landed properties.
Nha Trang will face fierce competition with Cam Ranh and Bai Dai, where many future projects will be four to five-star resort villas and hotels. However, their construction progress is slow. There are currently 14 clearly marked sites and six are vacant; the others are under construction.
Office space grows across major cities
The office market sector was more competitive in the second quarter, with the entry of new supply in Ha Noi and HCM City, particularly for Grade B office buildings, real estate firm Cushman Wakefield Viet Nam has reported.
In Ha Noi, the total grade B office space for the second quarter reached 729,000 sq.m, while grade A buildings stayed the same at 330,000 sq.m.
In addition, about16,000 sq.m of grade B office space was added to the HCM City market, pushing the total to 664,000 sq.m. Total grade A stock in the city remained at 157,000 sq.m.
During the same period, total office building space in HCM City reached 820,700 sq.m, a 2 per cent increase quarter-on-quarter and 6 per cent increase year-on-year.
As for average office rental costs, Ha Noi saw a slight drop of 0.7 per cent for grade A buildings, and a drop of 0.12 per cent for grade B space quarter-on-quarter, while HCM City showed improvements after consecutive periods of decline.
Grade A office rent in HCM City increased by 1 per cent quarter-on-quarter, while grade B rent was stable quarter-on-quarter, but increased by 1 per cent year-on-year.
As for occupancy rate, while Ha Noi’s grade A saw a climb of 1.33 percentage points quarter-on-quarter to 78.2 per cent, grade B continued its downward trend with a 4.4 percentage point decrease over the quarter to reach roughly 72 per cent.
In HCM City, average occupancy rates of both A and B grades stood at around 91 per cent, similar to the previous quarter.
A significant grade A project in Ha Noi’s midtown, called Lotte Center, is expected to enter the market this quarter, adding to the already fierce market competition.
Alex Crane, national head of commercial agents at Cushman Wakefield in Viet Nam said that rents across all grades in HCM City were expected to remain stable until the year-end when the next wave of projects come online.
Sabeco seeks to lower State stake
The Sai Gon Beer-Alcohol-Beverage Joint Stock Corporation (Sabeco) would continue to cut the State holding from 89.59 per cent to 40 per cent of its charter capital.
The Dau Tu (Investment) newspaper quoted sources as saying this. The Ministry of Industry and Trade has sent a proposal to the Government about implementing the sale of stakes in two phases. The State holding would be cut to 65 per cent in the first phase and to 40 per cent in the second phase, sources said.
It is highly probable that the proposal would be approved as the Government has previously said that the beer industry was among the sectors where the State did not want to hold controlling stakes of 51 per cent and above.
Being a giant in the beverage industry, with a 45 per cent market share, Sabeco had attracted the attention of investors amid the hastened privatisation of State-owned enterprises. It missed the deadline for getting listed since 2008 when the initial public offering was implemented.
Sabeco was being traded on the over-the-counter market at about VND65,000 or US$3 per share.
It plans to seek strategic partners to sell 20 per cent of its stakes in the first phase as a step towards being listed on exchanges, the company’s shareholders were told in a meeting held in May.
The company had attracted the attention of several foreign rivals such as Heineken and Asahi.
In its IPO in 2008, Sabeco’s shares were sold at VND70,003 or $3.3 per share.
With a production capacity of 1.8 billion litres of beer per year, Sabeco sold 1.33 billion litres of beer last year, up 10.3 per cent over the previous year.
Viet Nam is among the countries having the highest beer consumption levels, with an estimated 3 billion litres consumed last year.
Over half the securities companies suffer from losses
Fifty-five out of 90 existing securities companies suffered aggregated losses at the end of this year’s first quarter, according to the year’s first half’s report of the State Securities Commission.
Three securities companies were found not complying with regulations about separating investors’ deposits from companies’ accounts.
The State Securities Commission (SSC) will maintain a close watch on securities companies during the rest of the year to ensure the restructuring was on track.
Sai Gon Securities leads by brokerage market share
Sai Gon Securities (SSI) continued to lead the southern bourse by brokerage market share in the second quarter of 2014, up 1.43 per cent in comparison with the previous quarter.
With 13.22 per cent of the total trading value, SSI was closely followed by HCM City Securities with 13.13 per cent.
Other securities companies in the top 10 included ABC Securities, VNDirect Securities, Ban Viet Securities and FPT Securities. The top ten companies accounted for 63.33 per cent of the brokerage market.
HNX raises VND20 trillion in Government bonds
The Ha Noi Stock Exchange held 14 auctions and raised VND20 trillion (US$952.3 million) in Government bonds in June, increasing by 27.3 per cent over the previous month.
The yield of two-year bonds was between 5.64 and 5.75 per cent per year, of three-year bonds between 6.1 and 6.25 per cent and of five-year bonds between 7.15 and 7.23 per cent. The yields of ten-year and 15-year bonds were respectively at 8.7 per cent and 8.88 per cent a year.
In the secondary market, the total trading volume of Government bonds under outright transactions reached 561 million bonds worth VND54.8 trillion ($2.57 billion) in June. More than 213 bonds worth VND22 trillion ($1.04 billion) were traded under the repurchase agreement.
Vingroup to open five-star resort in Phu Quoc
Vingroup plans to launch its Vinpearl Resort Phu Quoc in Long Beach area in the district island of Phu Quoc this November.
This would be the second five-star hotel on the island, after the Salinda Premium Resort and Spa opens in mid-August.
The resort, which is now under construction, is spread over 300 ha and will include a five-star hotel, villas, an entertainment centre and a 27-hole golf course.
According to Vingroup, two blocks of the seven-storey buildings are designed in the shape of an arc that will surround a big swimming pool and 30 villas. Once completed, Vinpearl Phu Quoc will become the largest 5-star hotel on the island, with 750 rooms that can accommodate a maximum of 2,000 people.
The resort also includes a modern conference room with an area of more than 1,500 sq. metres that will be fully equipped with facilities of international standards.
Syrena to invest in Ninh Thuan resort
The Investment and Development Syrena Viet Nam Company has proposed to build a five-to-six star tourism resort in central Ninh Thuan Province’s Ninh Hai District.
According to the proposal, the company would invest US$60million to $80 million on an area of 66.8 hectares.
The project is expected to become operational in the next three years after receiving the investment licence. The company said it would ensure the project’s progress if its proposal is approved.
Over 4,000 housing projects issued licences
More than 4,000 housing projects with a total area of more than 100,000 hectares were granted licences for construction in Viet Nam, said Minister of Construction Trinh Dinh Dung.
He added that the number of projects which had been granted licences in the construction sector was far higher than the real domestic demand. The country would need 15 to 20 years to complete all the projects.
He added that the construction of projects which were far from the central areas and with low sales would not be continued.
He asked localities to review property projects and decide which projects should be cancelled to meet the market demand as well as ensure sustainable development.
MHB earmarks $18m fund for power transmission line
The Mekong Housing Bank (MHB) has agreed to provide a VND376 billion (US$18 million) loan to build a new 220kV power transmission line from the Thuong Kon Tum-Quang Ngai plant.
The 76.5km long line project, with total fund of VND471 billion ($22.4 million), managed by the Management Board of Power Projects in the central region, will supply electricity from the Thuong Kon Tum hydropower plant to the national grid, Quang Ngai Province and the northern part of Binh Dinh Province. It will also set up a power transmission system in the central Highlands region.
The project was approved by the Government as part of the strategic plan proposed by the Electricity Group of Viet Nam.
HDBank to open Myanmar representative office
The HCM City Development Bank, or HDBank, was given approval by the State Bank of Viet Nam, on Wednesday, to open a representative office in Yangon City, Myanmar.
The office is to be opened within two years, and its tenure of operation in the country will be 30 years. It will be subjected to Viet Nam’s laws on overseas investment, as well as Myanmar’s laws on banking.
HDBank also got the nod to open a northern office in Ha Noi’s Hoan Kiem District within a year.—
Hoa Phat Group exports steel to Australia
Steel coils of Hoa Phat Group were exported to the Australian market for the first time on June 26 with, the second delivery being made three days later.
Australia has imported steel coils mostly from countries like Indonesia, Taiwan and Turkey. The Hoa Phat Group has become the first Vietnamese enterprise to export them successfully to Australia.
Pham Thi Bich Ngoc, Director of Hoa Phat Commerce Joint Stock Company, said that although the batches had not brought much profit, this was the group’s first success in expanding its exports, not only in steel mills but also in steel for construction material.
Hoa Phat signed a contract to provide steel to Laos, Thailand and the Philippines, and introduced its products to other regional markets. From the end of 2013 to June 2014, the enterprise exported approximately 72,000 tonnes of steel abroad.
CIENCO 4 wins European business awards
The Civil Engineering Construction Corporation No 4 (CIENCO 4), was awarded two prizes by the European Business Assembly (EBA), on July 2 in Stresa city, Italy.
CIENCO4 won the award for “Best Enterprise” while its Director General Le Ngoc Hoa also got the “Best Manager of the Year” award in a ceremony which was held at EBA’s Summit of Leaders.
According to the Viet Nam News Agency correspondent in Italy, the certification, given every five years, was awarded to CIENCO4 on EBA’s evaluation of their professional services and the quality of management, technology and construction in recent years.
The correspondent also said there were 46 international enterprises and individuals operating in social, cultural, health-care, trade, construction and educational fields who received EBA prizes on this occasion.
Nation pushed to achieve higher growth
Viet Nam is working on a plan to achieve annual growth of 8 – 9 per cent for the next five years, Deputy Prime Minister Vu Duc Dam told a business forum in HCM City on Thursday.
Speaking at Forbes Viet Nam’s first Annual Business Forum, he said Viet Nam can only keep up with other countries in the region if it achieves such growth rates, which are much higher than during the previous five years when average growth was only 5 – 6 percent.
“Viet Nam’s economy has emerged from a difficult period and has been showing signs of recovery. There remain many challenges, but also many new opportunities thanks to the concerted efforts by the Government.”
The Government is implementing drastic measures to restructure the economy, focusing on restructuring public investment, the banking system, and state-run corporations, he said.
The plan also aims to create a socialist-oriented market economy, improve infrastructure, and develop high-quality human resources, he said.
It would also address social and environmental concerns and improve healthcare, education, agriculture, rural development, and, especially, defence, he said
“Since Viet Nam is a country with thousands of years of history it will not accept being a poor and backward country forever.”
In the context of China’s illegal placement of an oil rig in Vietnamese waters, he stressed that a developing economy must protect its independence and sovereignty.
He pledged that administrative procedures would be simplified and favourable conditions created for foreign investors to improve the business climate.
Rich Karlgaard, the publisher of Forbes, spoke about the important role creativity plays in helping companies beat their rivals. The Annual Business Forum, the largest business event in the country this year, brought together top Vietnamese and foreign business leaders and entrepreneurs for discussions on important economic and business issues and investment opportunities as Viet Nam begins a new chapter, Nguyen Bao Hoang, chairman of Interactive Media, said.
“The event is an opportunity for business leaders to discuss and explore investment opportunities and share business development experiences.”
The 400-odd delegates included CEOs of international and local companies.
More than 20 leading speakers from the Government, World Bank, Fulbright Economist School, and major companies like REE, IDG Ventures Viet Nam, Minh Long I, Phu My Hung, ICP, Intel FPT, VNG, Jobstreet, and Thai Binh Shoes participated in the forum.
They spoke about how their companies became more successful and raising funds for expansion and innovation.
TPP agreement good for footwear industry
Viet Nam footwear exporters are racing against time to complete the large number of orders they have received from traditional importers.
The growing orders have shown that the Viet Nam footwear industry has already started enjoying the numerous benefits that could accrue after the signing of the Trans-Pacific Partnership (TPP) agreement.
However, the Viet Nam Leather and Footwear Association (Lefaso) has warned that if footwear exporters want to take full advantage of this opportunity they need to state what are the advantages in terms of the market and products. Not many local footwear makers can provide high-quality products with good designs as per the demands of TPP signatory nations.
Nguyen Quoc Tuan, General Director of HCM City-based Vinh Thong Footwear Company, said his company had received orders until October this year and had been running at full throttle to complete the orders on time.
This year, his company has set a target of manufacturing three million pairs of shoes and sandals to export to Europe. The company has now reached 90 per cent of its yearly plan.
Truong Thuy Lien, Director of Lien Phat footwear company told Dau Tu newspaper that her company had got orders till the year-end. Orders for this winter, from April to August alone, reached 800,000 pair of shoes.
She attributed the growing orders to the active impact of the impending TPP agreement, Viet Nam – EU Free Trade Agreement, Viet Nam and the Customs Union of Belarus, Kazakhstan and Russia.
According to Lien in the future the Vietnamese footwear industry will enjoy numerous benefits from neighbouring countries. It has already led to global producers shifting their production units to Viet Nam from China.
Actually, importers from the EU, Japan and the United States (US) have started moving their orders to Viet Nam and looking for eligible footwear makers who meet with their requirements. When these agreements are officially signed, importers will quickly increase their orders.
Phan Chi Dung, Director of Light Industry Department of Ministry of Industry and Trade, said that Taiwanese and mainland Chinese businesses had poured their capital into Viet Nam to invest in developing raw material production locally. “If domestic producers do not take full advantage of this they will lose the opportunity,” he said.
Since Viet Nam is a member of the WTO, every policy for export will be strictly monitored by importers, according to Dung.
The State can assist them in training human resources, doing ResearchDevelopment, technology referral and addressing environment pollution in industrial zones.
Lefaso Deputy Chairman Diep Thanh Kiet said that to make good use of this opportunity, local exporters must be completely aware of the characteristics of each importer.
For instance, according to Kiet, local exporters have to focus on production capacity of more than 150 million pairs of shoes per year if they want to export to the US. In the EU market exporters have to pay more attention to differences in design between various regions of Europe. Meanwhile, the Japanese require very high-quality products. —
Apartment sector recovery continues
The condominium markets in Ha Noi and HCM City continue to record positive signals on issues ranging from liquidation to selling prices in the second quarter (Q2).
Executive Director of CBRE (Viet Nam) Co., Ltd Richard Leech said that according to the company’s report on Ha Noi’s property market in Q2 this year, the macro economy continued to recover even though the conflicts on the East Sea between Viet Nam and China partly affected the local security, tourism, hotel, trading and investment markets.
In Q2 this year, developers continued to clear their unsold stock with active launches and marketing activities, he said. Ten out of sixteen projects with launches in the quarter promoted their stocks that had been released before, he said. In terms of sales performance, transactions increased steadily with an estimated 2,500 units sold in the quarter, an increase of 60 per cent from Q1.
While the majority of the transactions occurred across the mid- and low-end segments, the high-end segment saw a significant improvement in sales compared to Q1′s performance, as developers launched aggressive promotion campaigns and market sentiment improved among buyers.
A factor for the improving sales performance this quarter was the fact that banks were more bullish in lending. Banks actively cooperated with developers to offer interest subsidy programmes with preferential interest rates being fixed for up to one year for buyers taking mortgages. Higher loan-to-value ratio and longer loan tenures were also offered to attract customers.
With credit being more accessible to buyers, the demand for purchase of homes will continue to pick up in the second half of the year.
Improving sales and the passage of clearer regulations have encouraged developers to continue launching projects of condominium for sale, CBRE said in a report on HCM City property market.
Under the report, the second quarter saw 10 projects launched across all three segments – high-end, mid-end, and affordable – with 2,792 units, representing an increase of 135.8 per cent year-on-year.
In a change with past practice, developers, especially those without a proven track record, now launch projects only after a few floors are completed as opposed to the foundation stage earlier, a practice that assures potential buyers.
Prices too are much more reasonable than they were a year ago, with affordable projects selling at below $700 or VND15 million per square metre, the threshold to qualify for loans from the $1.4 billion (VND30 trillion) credit package.
This partly explains why primary prices in this segment have fallen to $663, representing a decrease of 2.8 per cent quarter-on-quarter and 3.6 per cent year-on-year in the second quarter.
Not only were prices more reasonable but unit sizes were also more affordable.
“The most popular size for a two-bedroom unit in the high-end segment was 100-120sq.m at projects launched before 2012 while now it is only 80-87sq.m,” Duong Thuy Dung, associate director and head of research and consulting services at CBRE Viet Nam’s HCM City branch, noted.
Thanks to sophisticated designs and reasonable prices combined with promotions, sales has consistently improved over the last three quarters.
Preliminary figures show that transactions increased by 9.3 per cent q-o-q and 93.9 per cent y-o-y in the second quarter.
Mekong Delta key economic zone sees strong industrial growth
The Mekong Delta Key Economic Zone saw its combined industrial production value of the January-June period grow by 10.2 percent year on year to 101 trillion VND (4.8 billion USD), according to the Central Steering Committee for the Southwestern Region.
The zone encompasses Can Tho City and three provinces of An Giang, Kien Giang and Ca Mau.
The steering committee attributed the high growth to the localities’ right policy to focus resources on their competitive industries, which are farm and aquatic produce processing, garment, leather and footwear, electronics, pharmaceuticals, mechanical devices, and consumer goods.
In particular, the region has rearranged state enterprises operating in aquatic processing, the region’s top strength, to enhance their operation efficiency, while building more factories of high capacity in major aquaculture areas in Ca Mau and Kien Giang
At the same time, the region has invested in expanding sectors of great potential, such as oil and gas, mechanical manufacturing, chemicals, fertilizer and construction materials.
The building of three major electric power complexes – O Mon, Ca Mau and Kien Luong – with capacities ranging from 9,000-9,400MW has ensured power supply for industrial production in the region.
According to the Government’s plan to 2020, the Mekong Delta Key Economic Zone will serve as an industrial-trade-service hub of the Mekong Delta region as well as a major power centre of the entire country. It will also be a major tourism centre.
The Mekong Delta comprises 12 provinces and one centrally-run city with a total area of 40,000 square kilometres and a population of 18 million.
Brand building strategy plays vital role in real estate business
Vietnamese developers still remain unfamiliar with that concept of a brand personality at a time that creating and strenghthening real estate and retail brands is more important than ever, the Vietnam Investment Review (VIR) quoted managing director of Red Brand Builders, Chris Elkin, as saying.
At the ‘Power Brand Building with Impact’ seminar held in Hanoi last week, which was co-organised by CBRE Vietnam and Red Brand Builders, experts discussed in-depth and focused measures to provide investors, developers and real estate marketers with a realistic assessment of the situation in the real estate market today
Brand personality, Elkin said, requires a clear message about what developers stand for, and they must have the focus and consistency to see the process through.
He added that building a brand needs consistency from the beginning to the end of a project cycle to showcase a developer’s experience and reputation to ensure the success of a project.
Elkin outlined ways to create, re-position, and add impact to brands for greater success in the marketplace. He also pointed out ways to create and document a distinctive brand personality to build long-term trust and an emotional connection with target customers, and how to consistently communicate brand personality to appeal to target customers at ‘touch points’ that drive sales or leasing.
Brand building is becoming essential to real estate developers in Vietnam. Small and medium-sized firms are trying to launch and cement their brands to expand their presence in the market, while multi-nationals are using targeted approaches to reach specific market segments.
Building brands, according to Elkin, was not just spending money on advertising.
“It’s really fundamental that local and national developers in Vietnam are beginning to see brand building as a strategic priority. This is not something that should be done a few months before you launch, but should start from the very beginning and last to the very end of a project,” he explained.
In the retail segment, brand building has been most notably used in prominent shopping centres such as Hanoi’s Vincom Megamall Royal City, Lotte Hanoi Centre and Ho Chi Minh City’s Crescent Mall and SC Vivo City.
All of these projects, in their own ways, have made their presence known through a consistent, quality brand building strategy.
According to William Badger, associate director of the office service division of CBRE Vietnam, firms must adapt to a changing marketplace and fast evolving customer needs, desires and behaviours to succeed as the market improves.
To be successful in their business, developers must be more flexible and have a serious brand building strategy.
Apart from traditional real estate advertising such as print, show homes, banners and events, Badger said developers must pay more attention to more modern channels such as digital and social media.
Elkin said retailers cannot survive just by being “pass through” sellers. “They have to give consumers clear reasons, an experience to choose their stores over other competitors”.-
Pepper development plan approved
Under a newly appoved plan to 2020 with a vision toward 2030, Vietnam’s pepper plantation area will be maintained at 50,000 hectares with an output of 140,000 tonnes in total, the Communist Party of Vietnam (CPV) Online Newspaper reported.
Under the plan, high-quality pepper products will reach 90 percent. For product structure, black pepper will make up 70 percent while the rest will go for white pepper. The plan aims to earn 1.2-1.3 billion USD from pepper exports by 2020.
Major pepper cultivation will include 10,000 hectares in Binh Phuoc, 7,000 hectares in Dong Nai, 7,000 hectares in Ba Ria – Vung Tau, 7,000 hectares in Dak Nong, 5,500 hectares in Gia Lai and 5,000 hectares in Dak Lak. The remaining of 8,500 hectares will be covered in other localities across the country.
Minister of Agriculture and Rural Development Cao Duc Phat urged department of agriculture and rural development in all provinces to map out their pepper development plan in conformity with his newly appoved plan.
Phat also said local authorities need to help their farmers with advanced farm technologies to make their peppers meeting VietGap and Global GAP standards.
Pepper has maintained a high export value for eight consecutive years, especially over the past three years. Accounting for 30 percent in volume and over 50 percent of the global market share, Vietnamese pepper has gained prestigious status around the world, as a matter of fact, many other countries have started looking to Vietnam’s pepper selling price as a reference point.
Vietnam shipped abroad 92,000 tonnes of pepper in the first five months of this year, earning 645 million USD in export revenue. The sector has obtained a fantastic upward growth of 33.6 percent in volume and 42.3 percent in value.
According to the Vietnam Pepper Association (VPA), if these figures remain steady for the rest of the year, Vietnam’s pepper exports in 2014 are likely to reach about 125,000–130,000 tonnes and bring in record revenue of 1 billion USD.
State budget collection up 14.5 percent in H1
State budget collection in the first half of this year was estimated at over 335 trillion VND (15.7 billion USD), up14.5 percent over the same period last year.
The sum represents 53.7 percent of the whole year’s estimate, according to the Ministry of Finance’s General Department of Tax.
The achievement was attributed to the sector’s efforts to facilitate tax declaration by firms.
The department has worked with the Bank for Investment and Development of Vietnam (BIDV) piloted an e-tax collection system in Hanoi, and Vinh Phuc and Bac Ninh provinces in a bid to reduce tax filling duration.
Over 200 businesses have to date contributed 115 billion VND to the State coffer via the system.
Online tax declaration has been boosted in all 63 provinces and cities with the involvement of over 366,900 firms.
In addition, more than 90 trillion VND of tax has been collected through 20 commercial banks across the country.-
Labour exports to Japan, RoK up 180 percent
More than 55,000 Vietnamese workers sent abroad in the first half of 2014, accounting for 63.5 percent of the plan set for the whole year, the Government news portal reported.
According to the Overseas Workers Management Department under the Ministry of Labour, Invalids and Social Affairs (MOLISA), the labour exports to Taiwan (China) increased 187 percent, Japan up 180 percent and the Republic of Korea up 182 percent compared to the same period last year.
However, the total labourers sent to work in Malaysia decreased, equal to 70 percent of the same period last year.
Over the first half of the year, 16 businesses have been licensed to operate in labour exports, raising the total number of businesses in this field to 196 nationwide.
Last year, Vietnam sent more than 88,000 people to work overseas.
The MOLISA said earlier this year that it will accelerate the sending of skilled workers abroad while consolidating such traditional markets as Ta iwan and Japan in 2014.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
BUSINESS IN BRIEF 13/7
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