French businesses satisfied with HCM City investment climate
French businesses that are currently operating in Ho Chi Minh City are satisfied with the investment environment in the locality, said a senior French official.
Fleur Pellerin, Secretary of State for Foreign Trade, Tourism Promotion and French Nationals Abroad of the French Ministry of Foreign Affairs and International Development, hailed the city’s dynamic development during a July 21 reception given by Le Hoang Quan, Chairman of the municipal People’s Committee.
She said she will ask the French Development Agency (AFD) to closely work with the city to draw up cooperation programmes, especially between the two business communities.
She welcomed effective cooperation between Lyon city of the Rhône-Alpes region and HCM City, noting both localities have many things in common that support their future ties.
Briefing the guest on the city’s key infrastructure projects, Quan expressed his hope that the French government and businesses will assist the city in providing financial and technical assistance for these projects.
He said HCM City and France have great potential for increasing cooperation in the areas of French strength such as transport infrastructure, education, health care, urban management, culture and arts.
The city will do its utmost to create favourable conditions for the two sides’ businesses to promote investment cooperation for mutual benefit, he affirmed.
Pellerin is leading a delegation of French companies to HCM City to explore the local investment environment.
Property sector FDI rises in 2014
Vietnam will welcome a wave of foreign direct investment (FDI) capital in the real estate tourism sector.
Bui Ngoc Suong, acting chairman of the Vietnam Tourism Property Association (VnTPA), told online newspaper bizlive.vn that real estate tourism has been a special sector. Developers have to invest in both property and high-quality services.
Statistics from the Ministry of Planning and Investment showed that the country attracted 6.85 billion USD in FDI in the first half of the year.
The FDI poured into the property sector was 692.3 million USD, a 65 percent increase year over year, and accounting for 10 percent of the total.
Suong said FDI in the sector was mainly from international tourism groups and tour operators, such as from Russia, Japan and the Republic of Korea.
For example, the central Khanh Hoa province received two FDI tourism projects, namely the 300 million USD Alma and 89 million USD Flowers.
Sharing his opinion, Robert McIntosh, Executive Director, CBRE Hotels, Asia Pacific, said Vietnam had received big investment projects in the hotel and tourism sector since the middle of last year.
He said this meant that foreign investors were attracted by the investment opportunities in Vietnam.
However, the country’s tourism industry had relied on the potential of its long and beautiful coastline, but had not done enough to help its development, he said.
He added that the sector needed synchronised investment while ensuring transparency on information, policies and the business environment.
Vietnamese enterprises should promote joint-venture models in the sector to learn from the management and operational experiences of foreign investors. This could help Vietnam’s tourism sector to join the industry’s global network.
CBRE’s survey based on views and prospects of private investment in Vietnam showed that the property, tourism and hotel sector comes second in attracting investors, after the retail, food and beverage sector.
Footwear giants transfer orders into Vietnam
Footwear giants like Nike, Adidas and Puma have been moving their orders from China and Bangladesh into Vietnam since early this year, according to the Vietnam Leather, Footwear and Handbag Association (LEFASO).
The moving rate is 25 percent higher than the same period last year.
Besides, Target Sourcing Services who is among the world ten largest distributors and Dansu Group are planning investment in Vietnam.
Companies that used to order in China only like high-class handbag groups Lancaster and Sequoia Paris have also moved investment into Vietnam to disperse risks.
Timberland and Puma want to expand production in Vietnam to meet the increasing demand of orders transferred from China.
Japanese investors keen on coal power projects
Many big Japanese companies are interested in BOT coal-fired power projects in Vietnam, reported Hiroshi Watanabe, governor of the Japan Bank for International Cooperation (JBIC).
Watanabe made the statement at the second Vietnamese-Japanese high-level dialogue on boosting public-private partnership projects on July 16, which was co-chaired by him and Deputy Minister of Planning and Investment Dao Quang Thu.
Japanese firms are negotiating with Vietnamese partners to invest in projects such as the Nghi Son 2, Vung Ang 2 and Van Phong 1. “These projects are feasible and meet Vietnam’s demand for energy, as well as the Japanese firms’ business plans,” Watanabe said.
According to the National Master Plan for Power Development for the 2011-2020 period, Vietnam’s electricity demand is forecasted to grow by 8.1-8.7 per cent per year, with 2020 demand at 330-362 billion kWh and 2030 demand at 695-834 billion kWh.
The Vietnam National Coal-Mineral Industries Holding Corporation Limited (Vinacomin) has forecasted that Vietnam may have to start importing coal before 2020 because domestic output will not be able to meet plants’ demands.
NA members call for better use of state capital
Many National Assembly members have suggested that the law on management and usage of state capital invested into enterprises’ production and business specify a concrete new model for state capital ownership in enterprises.
The National Assembly’s Economic Committee’s chairman Nguyen Van Giau told a National Assembly Standing Committee meeting last week that the draft of this law, currently under discussion, should allow the establishment of an independent agency under the government’s control to manage and supervise all state capital in enterprises.
“This solution will help create a breakthrough in managing state-owned enterprises (SOEs), thereby separating state bodies’ management function from their function as enterprise owners,” Giau said. “Such bodies should focus on making mechanisms and policies for enterprises, rather than doing business. They also should transparently access the effectiveness of enterprises’ usage of state capital.”
However, the law’s drafters proposed that the existing model for state capital ownership in enterprises be maintained as currently prescribed in the draft law’s Article 5 on representatives of state capital ownership.
Under this, the prime minister, ministries, ministerial-level agencies, government agencies and people’s committees would continue exercising some rights to and responsibilities for representing state capital ownership in enterprises that they establish.
“The removal of the current model will mean a set-back in state capital management, because it will create a new administrative apparatus,” said Nguyen Hanh Phuc, Chairman of the National Assembly Office.
But Giau argued that “The maintenance of this model will not help remove chronic weaknesses in SOE management.”
For example, when the Vinashin scandal was uncovered several years ago, the Ministry of Transport, which manages Vinashin, was not held responsible.
Many other National Assembly members have echoed the committee’s view, saying that the existing model must be removed as soon as possible.
Deputy Minister of Finance Nguyen Van Hieu said that the ministries of Planning and Investment and Finance were weighing the pros and cons of three scenarios for a new model.
“We are considering whether we should establish a ministerial-level body or a department in charge of SOEs’ capital and assets. We also wonder if we should maintain the existing model or not,” Hieu said.
“If we maintain the existing model, society will not be able to advance, because state capital largely comes from people, while it is being used wastefully by SOEs. At present, all ministries have their own enterprises which compete with one another. This will reduce the economy’s competitiveness globally,” said the National Assembly’s Council of Ethnic Affairs’ Chairman Ksor Phuoc.
“I totally with the Economic Committee’s proposal that there must be an independent body in charge of representing state capital in enterprises,” he said.
National Assembly vice chairwomen Tong Thi Phong and Nguyen Thi Kim Ngan also gave the thumbs-up to the proposal.
“There should be an independent body that can help overcome the weaknesses of SOEs. However, what model should be used will need further discussion,” Ngan said.
A good example of rural finance model
Viet Nam sets a good example of rural finance model, said foreign donors at the workshop held in Ha Noi on Monday.
The country has completed three rural finance projects with total capital of US$548 million. The World Bank provided US$200 million for the 3rd one.
The objective of the 3rd project is to raise economic benefits to rural private enterprises and households by enhancing their access to finance.
The expected outcomes include: improved access to financial services for rural entrepreneurs, increased capital investment made by the rural entrepreneurs as well as increased employment, and increased lending, particularly term lending to the rural private sector for capital investment by all participating financial institutions on market-based terms.
Between 2009 and 2013, this project has effectively contributed to increasing medium and long-term finance for rural economic development, poverty reduction and job creation.
Specifically, over 135,000 rural households and enterprises, including 70,000 poor households could access to the World Bank-funded capital. More than 140,000 new jobs were created within the reviewed period.
World Bank Country Director Victoria Kwakwa noted that Viet Nam has successfully realized the rural finance model. That was why the international institution decided to offer funding for the 3rdproject after the country completed the 2nd one. It was unprecedented.
The 1st project, deployed in 1996, provided 600,000 loans for low-income and poor households, and created 410,000 new jobs for rural residents.
Speaking at the workshop, Deputy PM Hoang Trung Hai highly valued the importance of the capital granted to Viet Nam by the World Bank and other international institutions. As a result, the country has made great achievements in improving living standard and reducing poverty rate in rural areas.
Ministry tightens regulations for second-hand machinery imports
The import of second-hand machinery will be allowed if its quality is 80 per cent as good as a new one, according to the Ministry of Science and Technology.
The remaining quality is based on technical parameters of used machinery in comparison with that of a new one.
The circular 20/2014/TT-BKHCN, issued last week, also regulates that the machinery, equipment and technology, if imported, must be in use for less than five years.
The rule for machinery and equipment less than three years old is applied to those used for agricultural production, beverage manufacturing and post services.
Minister of Science and Technology Nguyen Quan said Viet Nam encouraged the import of modern and high-technology machinery. However, used machinery must meet requirements of quality, safety and energy savings along with environmental protection standards.
Accordingly, documents showing the machinery’s technical standards and quality-control certificates must be submitted to the customs for clearance.
The regulation will come into effect on September 1.
This move was aimed at preventing the inflow of obsolete machinery and equipment which would turn the country into a landfill for the world’s discarded technologies.
In 2012, the Government temporarily put a halt to the import of outdated second-hand machinery, equipment and production lines in response to information about the closure of 2,250 companies in China that used inefficient and outdated technology.
Beer plant left unfinished
A beer plant under construction in the centre of Ha Tinh City has become a pasture for local residents to graze oxen.
Hoang Van Son, deputy director of the central city’s Department of Planning and Investment, said that construction on the Toan Cau Beer Plant started in 2004 and was essentially finished in 2006.
However, after construction began, local residents worried about pollution proposed moving the plant from the city centre, according to chairman of the city People’s Committee Tran The Dung.
“Sooner or later the beer plant will be moved from the city, as the city’s plan does not allow a beer plant to be built in the city centre,” said Son, explaining that when provincial authorities first instructed the company to move the beer plant, they received no response.
Dung said that the Viet Trung Investment and Co-operation Corporation had not moved the plant because of economic difficulties and because “the city and province’s guidance was not strong enough”.
Lao dong (Labour) newspaper reported that the plant’s basic infrastructure was complete and equipment for beer manufacturing was present, although it had rusted due to rain and sun.
The Viet Trung Investment and Co-operation Corporation invested more than VND262 billion (US$12.4 million) to build the plant, which was expected to have a capacity of 50 million litres per year and create jobs for 250 workers.
Vietnamese businesses urged to boost exports to S Korea
Vietnamese enterprises should make greater efforts to accelerate trade promotion, improve production capacities and sharpen their competitive skills to further tap into the lucrative South Korean market.
According to the Vietnamese Trade Office in Korea, the Korea Rural Economic Institute recently quoted a survey conducted by Hankook Research Co, which said that besides going to small and medium-sized supermarkets, Korean consumers also bought food at hypermarkets as well as traditional markets.
They also preferred environment-friendly foods and were paying increasing attention to the country of origin of foods, with top priority being given to Korean-made goods.
Thus, in order to successfully penetrate into Korean markets, Vietnamese exporters should ensure the quality of their products with a focus on food safety and hygiene as well as make their goods different from those already available in the market, the office said.
According to the office, Korea is currently one of the world’s leading importers. Last year, the country spent US$515.57 billion to import mainly crude oil, natural gas and coal along with machines, electronics and components. Steel and iron, as well as chemicals, were also imported.
Meanwhile, Vietnamese exports to Korea have also experienced significant growth in the past few years – from $12.9 billion in 2009 to $20 billion in 2012 and $27.3 billion in 2013, according to the General Department of Customs.
In the first half of this year, Viet Nam exported over $3 billion worth of goods to the country. During the period, apparel took the lead in terms of turnover with $746 million, followed by seafood with $282 million and wood and wooden products ($230 million). Computers and peripherals ($156 million), mobile phones and components ($164 million) and footwear ($149 million) made up the rest of the exports.
The department noted that exports of Vietnamese agricultural goods and foodstuff to different markets were also increasing.
Trade experts attributed the encouraging results to efforts by domestic enterprises in exploiting the market and the positive influence of the ASEAN-Korea Free Trade Agreement, through which Korea offered tax incentives to goods imported from countries that are part of the pact.
Credit growth rises in two largest cities
Total outstanding loans this month of Ha Noi-based credit institutions are estimated to inch up 0.5 per cent to nearly VND927 trillion (US$43.52 billion), according to the Ha Noi Statistics Office.
The July credit growth of the capital was lower than the 2 per cent rise last month.
In detail, short-term outstanding loans of credit institutions in the capital are estimated to drop 1.3 per cent over the previous month and 8.3 per cent from December 2013, while medium and long-term loans are estimated to rise by 4.1 per cent over the previous month and 12.1 per cent against December 2013.
In July, Ha Noi-based credit institutions are also estimated to have mobilised nearly VND1,140 trillion ($53.52 billion), up 2.7 per cent over the previous month and 8.9 per cent from December 2013. Meanwhile, the HCM City Statistics Office reported that the city’s credit is estimated to rise 2.2 per cent from the previous month to VND979.9 trillion ($46 billion).
Medium and long-term outstanding loans accounted for 46.5 per cent, surging 14.5 per cent year-on-year, while the short-term outstanding loans accounted for 53.5 per cent, rising 5.6 per cent year-on-year.
The city’s credit institutions are also estimated to mobilise a total VND1,205.6 billion ($56.6 billion), up 2.8 per cent as compared to June, and up 14.4 per cent year-on-year.
According to the latest survey on business trends of credit institutions, released last week by the State Bank of Viet Nam (SBV), 90 per cent of credit institutions expect deposits and loans of the whole banking system to grow 3.6 per cent in Q3 and 14.2 per cent in 2014.
Officials have so far shown optimism despite the slow credit growth of 3.52 per cent over the past six months, which had raised concerns over the banking system’s ability to reach the credit growth target of 12 to 14 per cent this year.
SBV Deputy Governor Nguyen Dong Tien said that credit growth will possibly meet the target as it is usually slow in H1 and accelerates in H2.
Besides, Tien said, domestic production and businesses have shown signs of recovery. Some key sectors saw a high rate of growth, including exports, supporting industries and the hi-tech sector. Social and agriculture programmes also reacted positively.
The central bank will continue to closely monitor credit institutions, make appropriate adjustments and quickly deal with any problems, Tien said, adding that it will also ask the Government to revise credit policies in rural areas and the agricultural sector.
CPI increases in Ha Noi, HCM City
The consumer price indices (CPI) in the country’s two biggest cities in July continued to rise, according to the statistics departments of Ha Noi and HCM City.
The Ha Noi Statistics Department reported that the capital’s CPI in July rose up by 0.18 per cent over June.
The department said the two surges in petroleum retail selling prices at the end of June and the beginning of July, pushed transport costs higher, thus contributing to the rise in the CPI.
Ten out of the 11 baskets of goods, which contribute to the calculation of the capital’s CPI data, saw an increase in prices this month. Among these, beverages and cigarette groups rose by 0.55 per cent, housing, electricity, water and building material saw a 0.53 per cent increase and transport rose by 0.51 per cent.
The department added that tightening of truck loading capacity raised costs on transportation of building material.
In addition, the surge of people attending the university entrance examinations also made demands on accommodation, food, room rentals and other services.
Gold prices rose 1.97 per cent in comparison with the previous month and reduced 2.51 per cent over the same period last year. The US dollar saw 0.56 per cent month-on-month rise and 0.76 per cent against the corresponding period last year.
HCM City Statistics Department also reported an increase of 0.12 per cent in the city CPI for July against the previous month and represented a 7.89 per cent year-on-year increase.
However, this has been the lowest CPI rise in months which increased so far this year. Of the 11 baskets of goods that saw a rise were food (0.25 per cent), garments and textiles (0.05 per cent) and warehouses (0.03 per cent). Others that rose were transport (0.4 per cent), posts and telecommunication (0.01 per cent), and goods and other services (0.29 per cent).
Beverage and tobacco saw a 0.06 per cent decrease while that of housing, water and electricity was 0.07 per cent, education 0.12 per cent and entertainment 0.34 per cent.
Pharmaceutical and healthcare services remained unchanged.
The department said the factors that caused the CPI increase in July was a rise in prices of meat, egg and vegetables, and especially the recent rise of petroleum products selling at a record level of VND25,640 (US$1.22) per litre.
Retailers offer special deals on school supplies
As the new school year approaches, producers and distributors of school supplies participating in the city’s price stabilisation programme have increased supply and launched promotions to boost sales.
The Huong Mi Handbags Co Ltd, for instance, said it was assigned to offer stablised prices on 600,000 backpacks and schoolbags, up 30 per cent over last year.
Besides providing products under the city’s price stabilisation programme, the company has also supplied products to other provinces and cities nationwide, said Nguyen Ba Dung, the company’s deputy director.
The company’s employees have been working under high pressure to guarantee supplies, he said, adding that sales had been good.
Many shops under Minh Tien Bag Manufacturing Company, which takes part in the programme, have received many customers, especially at night.
Sales of school bags and backpacks are expected to increase strongly until the middle of next month, according to sellers at these shops. They are offering discounts of 20 per cent for all products until August 15.
In addition, Tuan Viet Shoes Co Ltd has introduced many kinds of shoes, priced 15 per cent lower than market prices.
Many supermarkets and bookstores have launched promotions on stationery and other items.
The Co.opmart supermarket chain is offering discounts of up to 50 per cent on more than 1,500 items, including student uniforms, school bags, notebooks, pens and other school supplies, until August 3.
French supermarket chain Big C is also running a discount programme called “Vui mua sam, don tuu truong” (Happy shopping, welcome back to school) until July 28. The programme offers special discounts of 5-50 per cent on more than 500 items including notebooks, pens, uniforms and school bags.
Many bookstores in HCM City, including Thang Long, Nguyen Van Cu, Van Lang, Phuong Nam and Gia Dinh, are offering 5-10 per cent discounts on textbooks, notebooks and other items.
The city’s price stabilisation programme for school supplies this year has the participation of 15 enterprises with about 500 items at stabilised prices, meeting 35-40 per cent of demand, according to the city Department of Industry and Trade.
Ministry issues provisions on apartment building
The Ministry of Construction issued Circular No 03/2014/TT-BXD (February 20, 2014) and Circular No 05/2014/TT-BXD (May 9, 2014) on calculation of the area of an apartment and contributions to the fund for operational management of the commonly owned area of an apartment building based on the area of the apartment.
Calculation of use area of an apartment
The use area of an apartment is calculated based on net measurements and must be recorded in the certificate issued to apartment purchasers. The use area of an apartment includes the area of walls partitioning rooms within the apartment, and the area of balcony and loggia attached to the apartment, but does not include the boundary walls of the apartment building, the walls dividing the various apartments, the areas of the floor column and the technical box inside the apartment.
The area of balcony is calculated in the entire floor area. If the balcony contains an area of common wall, the calculation is made from the inner edge of the common wall. Once handing over an apartment, the parties must specifically record the use area of the apartment that is actually handed over and the area recorded in the signed apartment sale and purchase contract (“Contract”) in the minutes of apartment handover or in the Contract appendix. The minute of apartment handover or the Contract appendix is an integral part of the Contract.
Calculation of fund for operational management of an apartment building:
Provincial People’s Committees regulate a framework of general expenses for the operational management of apartment buildings within their locality. The framework of general expenses is the basis for calculating and formulating funding for operational management. If the apartment building does not yet have a management committee, the investors in the apartment building can calculate and collect the same from the owner and users. If the apartment building has the management committee already, the apartment building operational management enterprise calculates applicable fees and they are reported by the management committee to the Apartment Building General Meeting for passing.
The contribution to the fund for operational management of an apartment building is calculated on a monthly basis, and allocated according to the net area of the apartment and other parts of the building not the apartment (including the garage) under private ownership of each apartment owner.
Who funds the operational management of an apartment building?
If the apartment building is owned by a single person, he or she must pay the fund for operational management of the apartment building, unless the owner and users have a different agreement.
If the apartment building is owned by multiple owners, the owners and the users must pay the fund on the principle of ensuring a sufficient budget for the operational management of the apartment building.
Apartment sale and purchase contract before April 8, 2014
Regarding the Contract signed before the effective date of MOC Circular No 03/2014/TT-BXD (April 8, 2014), in which the parties agreed to calculate the use area of apartment based on measurements made from the centre of the thickness of walls, the contribution to the fund for the operational management of the apartment building is allocated based on the net area of the apartment beginning the effective date of Circular No 05/2014/TT-BXD (June 25, 2014).
Water transport potential untapped
The Cuu Long (Mekong) Delta’s great waterway transport potential is being frittered away because of the failure to invest properly in developing it, experts told a seminar in Can Tho on Monday (July 21).
The region has more than 26,500km of rivers and canals and 13,000km of them are used for waterway transport.
Pham Minh Nghia, chairman of the Viet Nam Inland Waterway Transportation Association, said the delta is considered to have among the highest density of rivers and canals in the world, but this advantage has not been exploited well enough for transportation.
Zoning plans and prioritised projects for developing waterway transport were created long ago, but investment in them has been very low, he said.
Le Hoang Linh, director of the Tan Cang Waterway Transport Joint Stock Company, said 80 per cent of the delta’s containers meant for export have to be transported to HCM City or Ba Ria – Vung Tau Province by road.
The cost of carrying them by road transport is 10 -60 per cent higher than by waterway, he pointed out.
More investment is needed in waterway transportation and connecting it with other transport modes to ensure economic effectiveness, he said.
The delta is the country’s largest seafood and agricultural producer.
It has many old bridges that only allow narrow boat navigation lanes and low clearance, according to the Viet Nam Inland Waterway Administration.
It also has more than 2,500 ports and boat stations each with a capacity of handling 50,000 tonnes to two million tonnes of goods a year, but loading and unloading facilities there are not modern.
Roads leading to these ports and boat stations are not in good condition.
Tran Thanh Man, secretary of the Can Tho Party Committee, said the problem was that investment was not simultaneously made in all related aspects of waterway transport, citing the example of ports that lack channels for large vessels to pass through.
For instance, Can Tho’s Cai Cui Port, the delta’s largest with a capacity to handle vessels weighing up to 200,000 tonnes, operates at 10-20 per cent of capacity because large ships cannot reach the port since they cannot pass through the silted Dinh An estuary.
Minister of Transport Dinh La Thang said to resolve the delta’s waterway problems and capitalise on its potential, awareness needs to be raised among authorities and businesses about the effectiveness of waterway transport and link up various transport modes.
He instructed Deputy Minister of Transport Nguyen Van The to work with the Southwest Region Steering Committee and authorities in the region to review strategies and zoning plans for developing waterway transportation.
He ordered the Viet Nam Register and the Viet Nam Inland Waterway Administration to publicise waterway transport routes by this quarter.
The Ministry of Transport is set to create a marine route from HCM City to Long An, Tien Giang, Dong Thap, An Giang, and Kien Giang Provinces in the delta.
When it is completed, vessels weighing 500-1,000 tonnes can ply directly to and from HCM City.
Work to expand the Cho Gao Canal, which links the region with HCM City, will be finished by the end of the first quarter of next year.
The Quan Chanh Bo Canal, which is being dredged, will allow large vessels to reach the Hau River from the sea by the end of next year.
These projects would improve waterway transportation in the delta, Thang added.
Shrimp exports to Germany soars
Viet Nam’s shrimp exports to Germany saw robust growth in the first five months of 2014 with turnover of nearly US$51 million, up 92.7 percent from the previous year.
Nearly 62 per cent came from white-leg shrimp and 30 per cent from black tiger prawns, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).
With a population of over 80 million, the largest European economy is forecast to see increasing demand for imported shrimp and other aquatic products in the future.
Viet Nam is now the second-largest supplier of frozen shrimp for Germany after Thailand. Germany’s 2013 shrimp imports from Viet Nam rose by nearly 4 per cent compared to those of previous years, while those from Thailand went down 11 per cent, according to the International Trade Centre.
Central EZs, IPs draw $310m in H1
Industrial parks, export processing zones and economic zones in central coastal provinces and cities attracted 23 domestic and foreign investment projects with total capital of US$310 million in the first six months of this year.
Binh Thuan and Ninh Thuan, two provinces that recently joined the Co-operation and Development Coastal Centre Region Group, were set to build tourism centres as well as wind and solar power plants. Ninh Thuan also plans to construct a nuclear power plant.
Regional industrial parks attracted 943 projects with total capital of over US$1.3 billion, of which 775 involved foreign direct investment.
Buon Ma Thuot coffee registers in EU
The Central Highlands province of Dak Lak plans to register for geographical indication (GI) recognition in the European Union for Buon Ma Thuot coffee.
The move aims to protect the brand in this large, lucrative market. The price of coffee products with GI certification is about 15 per cent higher than that of their non-certified counterparts.
Early this year, the Chinese Ministry of Commerce revoked the patent of a company in Guangzhou falsely using the Buon Ma Thuot coffee label. Following that incident, the Buon Ma Thuot Coffee Association applied for trademark protection in 17 countries and territories around the world. Currently, Dak Lak coffee is exported to 60 countries and territories.
EU experts have organised seminars and training courses to help Dak Lak complete the complex process in three years. The Buon Ma Thuot Coffee Association is currently putting the final touches to a dossier to be submitted to the EU.
Vinamilk cattle farm certified by GAP
Viet Nam Dairy Joint Stock Company (Vinamilk) received a certificate from the Global GAP Control Union last week for meeting international Global Good Agriculture Practices (Global GAP) standards.
Vinamilk’s cattle farm in central Nghe An Province was the first in ASEAN to be certified by Global GAP and one of three Asian farms to meet these international standards.
The five Vinamilk farms previously received a certificate from the French Certification Organisation of Bureau Veritas.
Global GAP standards were introduced to meet the demands of domestic and international markets to produce high-quality and safe products, enrich farmers, develop rural areas and preserve the environment.
Vinamilk plans $470m share issuance
Dairy giant Vinamilk (VNM) will issue a maximum of 167 million shares to raise charter capital from VND8.34 trillion (US$395.3 million) to VND10 trillion ($474 million).
The rate is 20 per cent, or each holding of five shares will be given one additional share. The deadline for shareholders to register to participate in this issue is August 15.
Last year, the company paid shareholders a high cash dividend rate of 48 per cent. It has set an ambitious target of cash dividends of no lower than 50 per cent this year.
Hoa Sen forecasts Q2 profits over $5m
Steelmaker Hoa Sen Group (HSG) estimated revenue would be more than VND4.32 trillion (US$204.8 million) and net profits VND111 billion ($5.3 million) in the second quarter of this year.
The group sold 237,000 tonnes of finished products, 36 per cent of which was for export and lower than the average of 46 per cent in the first six months of the fiscal year.
VinGroup to create building, fashion companies
Construction giant VinGroup (VIC) will contribute VND94 billion (US$4 million) to establish Vincom 2 Construction Company with a total charter capital of VND100 billion ($4.7 million).
Recently, the group decided to release their treasury share (re-acquired stocks) to make additional capital contribution to Vinpearl, an affiliates focusing on travel and hospitality services. The contribution mounted up to VND2.443 trillion ($115.8 million).
It also plans to contribute VND14 billion to set up a fashion company with a charter capital of VND20 billion ($948,000).
Steel pipe maker to sell 10m shares
Son Ha International Coporation (SHI), a manufacture of stainless steel welded pipe, registered to sell 10 million shares at a price of just VND5,000 (US$0.24) per share, below the par value of VND10,000 a share.
Vietnam, Singapore enjoy surge in H1 bilateral trade
Two-way trade between Vietnam and Singapore rose 23.9 percent to nearly 10.1 billion SGD (8.1 billion USD) in the first half of this year, according to the Singapore Department of Statistics.
Vietnam’s export to the island country reached over 1.9 billion SGD (1.57 billion USD), up 34.2 percent year-on-year, with mobile phones, spare parts, oil and gas, coffee and tea as staples.
Meanwhile, the country spent over 8.1 billion SGD (6.5 billion USD) purchasing mobile phones, accessories, plastic, oil and gas, among others from the market.
During the period, Singaporean firms poured about 732 million USD, both newly-registered and additional investment, into Vietnam .
As of June, Singapore had 1,284 valid investment projects worth over 30.54 billion USD, becoming the third biggest investor among 101 nations and territories investing in Vietnam.
LaoVietBank buys US$30 million worth of Laos Government bonds
The Lao Viet Joint Venture Bank (LaoVietBank) will buy US$30 million worth of Laos Government bonds in 2014.
An agreement to this effect was signed between Laos Ministry of Finance and LaoVietBank in Hanoi on July 22. The registered bonds will have three-year and five-year terms.
Laos Finance Minister Lien Thikeo said that through the buying of Laos Government bonds, the Bank for Investment and Development of Vietnam (BIDV), parent bank of LaoVietBank, continues to contribute to both the stability of Laos financial markets and the cultivation of the special relationship between Vietnam and Laos.
LaoVietBank was established as a joint venture between BIDV and Banque Pour Le Commerce Exterieur Lao (BCEL) with 65% of its equity capital owned by BIDV. It is now one of the most modern banks in Laos.
LaoVietBank began to invest in Laos Government bonds in 2012 and its total investment so far has reached nearly US$60 million.
Vinalines’ joint-venture ports restructuring debt
The joint-venture ports of Vietnam National Shipping Lines (Vinalines) are struggling to restructure debt while the State-owned giant has yet to find an effective way out for its massive debt.
Since 2013, Vinalines has been pursuing an ultimate goal of restructuring debt and revitalizing business operations. While its 100% State-owned and joint stock ports have made modest profits, joint-stock ports have continued racking up losses.
In the first six months of this year, Vinalines boosted debt restructuring at its joint-venture ports. Representatives of Vinalines’ holdings at the joint venture companies tried to negotiate with creditors to extend debt payment deadlines, according to a report of Vinalines.
SSIT Port, a joint venture between Saigon Port and the U.S.’s SSA Port, has clinched an agreement with the creditor to reschedule bank loans and write off the additional interest until 2016.
At SP-PSA, a joint venture of Vinalines, Saigon Port and Singapore’s PSA Group, the operators have reached agreement to help the port restructure bank loans until the end of 2015.
CMIT, a joint venture between Vinalines and Denmark’s APM Terminals, is still in talks with creditors to ease some debt obligations and cut interest rates. CICT, a joint venture between Vinalines’ subsidiary Cai Lan Port Investment Joint Stock Company and Hong Kong’s SSA Holdings, has decided to borrow from foreign shareholders to restructure overdue debt.
The report did not mention specific debt and losses at the joint venture ports.
In the January-June period, Vinalines estimated its revenues at over VND9.7 trillion, meeting 44% of its whole-year target and dropping 1% from the same period last year. The firm has incurred losses for the fifth straight year, with this year’s losses put at VND775 billion.
For Vinalines’ core business operations, ports remained the most stable with throughput up 4% year-on-year. The still-good business results were reported at Vinalines’ non-joint venture ports and those Vinalines were trying to reduce State holdings and undergo equitization.
In general, port operators are facing difficulties as the Transport Ministry’s tight controls on overloaded trucks since April has led cargo backlogs to pile up at ports. Operations have also increased while shipping firms have forced ports to cut service charges and extend payment times, triggering tough competition in the industry.
In the second half of the year, Vinalines looks to raise its throughput to 67 million tons. It will work out more equitization plans to launch the initial public offerings (IPO) of Cam Ranh, Nghe Tinh, Can Tho and Nam Can ports.
Yamaha Motor Vietnam launches luxury scooter
Yamaha Motor Vietnam (YMV) has unveiled its new scooter model called Nozza Grande 125cc in HCMC and plans to introduce more scooters to this market in the future.
Hoang Ha, YMV director of sales and marketing in the north, said the company would launch more models of luxury scooter equipped with the Blue Core engine later this year at competitive prices.
Compared to the old Nozza scooter model, the new one has some differences, including a higher saddle, a wider trunk container and the fuel-saving engine Blue Core 125cc.
Last month, YMV introduced the motorbike engine Blue Core for a new scooter model the company intended to launch on the domestic market this month. The company boasted the Blue Core engine could save up to 50% of fuel consumption compared to normal engines.
The Nozza Grande scooter is designed for women and has many functions to meet their needs. It comes up with seven colors and retails for VND40 million and VND42 million a unit.
French businesses keen on infrastructure projects in city
French enterprises are looking forward to getting involved in large-scale infrastructure projects of HCMC, said a French official.
At a meeting with HCMC chairman Le Hoang Quan on July 21, Fleur Pellerin, French Minister of State for Foreign Trade and the Promotion of Tourism and French Nationals Abroad, said French enterprises operating in HCMC were satisfied with the investment environment here. France will propose its agencies like the French Development Agency further cooperate with HCMC.
Introducing major infrastructure projects such as metro, sanitation and airport developments, Quan said that HCMC is urgently implementing those projects and expected to receive financial and technical assistance from the French government and enterprises.
According to Quan, France and HCMC have huge potential to enhance cooperation in the fields where France has advantages like transport infrastructure development, education, health, urban management and culture.
PVN’s after-tax profit drops slightly
Vietnam National Oil and Gas Group (PVN) has reported around VND192.4 trillion in consolidated revenues in the January-June period, equivalent to the same period last year, but its after-tax profit declined slightly.
PVN said in a statement released on July 21 that its consolidated revenues reached VND192.4 trillion in the first six months. Its after-tax profit was VND23.6 trillion, or 19% higher than the January-June target but lower than the group’s VND27.5 trillion over the year-ago period.
As of this month, PVN’s capital adequacy ratio reached 1.07 times and the debt to total asset ratio was 0.25.
In the first half, PVN paid VND85.5 trillion in taxes to the State budget, which was 27.2% higher than the target set by the Government and down 3.3% from the same period last year. However, the VND85.5 trillion included VND5 trillion belonging to last year’s tax payments.
In the current situation, PVN has taken steps to closely monitor the implementation of oil and gas projects in the East Sea and has urged contractors to ensure the schedules of exploration and exploitation operations in the second half.
The group has also asked enterprises to thoroughly inspect and safely operate the systems transmitting gas to Ca Mau 1, Ca Mau 2, Nhon Trach 1 and Nhon Trach 2 power plants.
According to the Ministry of Finance’s report on operations of State groups and corporations submitted to the National Assembly last December, PVN’s overdue debt amounted to over VND2.17 trillion as business activities depend much on loans. Besides, its debt to equity ratio was around 60%.
SJC opens largest jewelry center in south
Saigon Jewelry Company (SJC) on July 21 inaugurated a building in HCMC’s District 3 that incorporates its new headquarters and biggest jewelry wholesale and retail center in the south.
Covering 4,000 square meters with two basements and 10 stories, the center offers customers a safe place for gold and jewelry trading and a wide selection of quality products and services, Vietnamplus reports.
SJC general director Do Cong Chinh said the opening of the new building is a new stage of SJC’s development.
The goal of SJC in the coming years is to focus on making and trading jewelry items and applying advanced technologies to improve product designs to meet high demands of customers.
Southern hydropower firm debuts on HOSE
Southern Hydropower Joint Stock Company (SHP) floated 93.7 million shares on the Hochiminh Stock Exchange (HOSE) on July 21 at a reference price of VND12,000 each.
Closing on July 21’s session, SHP rose to VND13,800 per share with a volume of over 507,000 shares.
Earlier, SHP was listed on the UPCoM, a market for unlisted public companies. The firm is considered one of the attractive tickers on the southern exchange.
Last year, SHP obtained nearly VND104 billion in after-tax profit, up 14% against the previous year. Its revenue mainly sourced from Dasiat and Da Dang 2 hydropower plants.
Ending the first quarter of 2014, the company obtained VND60.7 billion in revenue and VND7.3 billion in after-tax profit.
The firm’s total assets last year inched up 15.5% against a year earlier, Nguyen Van Thinh, general director of the company, told reporters on July 21.
Currently, the firm is running Dasiat, Da Dang 2 and Dambri plants with a respective generation capacity of 13.5 MW, 34 MW and 75 MW.
Securities experts appreciated SHP as institutional investors hold a 71.4% stake in the firm versus a private stake of 28.54%. Saigon Beer-Alcohol-Beverage Joint Stock Corporation (Sabeco) now owns a 20.2% stake, or nearly 19 million shares.
Organizations and foreign investors are interested in Sabeco’s stake at SHP as Sabeco will have to divest from non-core business operations in the coming time.
Source: VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VIR
BUSINESS IN BRIEF 27/7
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