Viglacera construction materials firm to go public

The State-owned Viglacera glass and construction pottery corporation will launch 307 million shares worth 10,000 VND (4.7 USD) each to its initial public offering (IPO), as part of its equitisation plan to become the top Vietnamese construction materials producer.

Viglacera said on January 8 that it will sell over 76.9 million shares, or 25.07 percent of its chartered capital by auction, with an asking price of 10,300 VND (4.9 USD) each.

It contributes over 23 million USD in annual exports to the construction sector with products available in 40 countries and territories worldwide.

The group also focuses on the construction of industrial parks, urban and commercial areas and housing.

Along with equitisation, it will also reshuffle its operation by divesting its capital from unpromising projects.-

Leading cement corp. targets 30 trillion VND in revenue

The Vietnam Cement Industry Corporation (VICEM) hopes to earn more than 30 trillion VND (1.41 billion USD) from selling nearly 21,000 tones of cement products in 2014.

To meet the target, the corporation will work to minimize production, management and selling expenditure, while diversifying production and stepping up mechanism restructuring.

It will also improve business management and renew production methods, successfully undertaking the role to lead Vietnam’s cement industry, especially in export.

In defiance of the economic downturn, in 2013 VICEM still witnessed a significant growth, with clinker and cement output increasing 8.8 percent against the previous year.

The firm also accounted for over 16 million tons out of the almost 46 million tonnes of cement the country produced in 2013.

It raked in 30.5 trillion VND (1.43 billion USD), with pretax income of 528 billion VND (24.8 million USD) and contributed over 1 trillion VND (47 million USD) to the State budget.

Buyers more confident in made-in-Vietnam goods

A remarkable 71 percent of people surveyed are now satisfied with high-quality made-in-Vietnam goods that make up almost 90 percent of the market share at supermarkets, an official from the Ministry of Industry and Trade has announced.

Deputy Minister Ho Thi Kim Thoa revealed the information with some fanfare on January 8 during a meeting between her ministry and the National Steering Committee for the campaign “Vietnamese prioritize using Vietnamese goods”

She said after four years of the campaign, a number of positive outcomes have been seen, creating a foundation to work on in the following years.

According to a recent survey by the agency, the ratio of using domestic input materials as well as machines in production has seen an increase of 25 percent. People at rural areas are getting used and beginning to favor commodities produced at home.

However, the ministry pointed out several limitations facing the work, including the unsustainable distribution of goods in rural areas and some enterprises making use of promotions to consume inventories and out-of-date goods as well as lack of sanctions.

Addressing the meeting, President of the Vietnam Fatherland Front’s Central Committee Nguyen Thien Nhan, who led the Steering Committee to the event, asked the ministry in collaboration with the Ministry of Science and Technology to support businesses in building trademarks, provide regular supply to disadvantaged areas and honor organizations and individuals who have shown good performance in the campaign.

The nationwide initiative has been benefiting domestic enterprises and manufacturers, said a representative from the National Textile and Garment Group.

Nevertheless, the firms involved are burdened with the huge costs of transport, sale and management. To address the issue, the formation of distribution centers at major economic hubs and cities are required.

Binh Dinh targets 8,500 ha of forests

The central province of Binh Dinh is striving to replant 8,500 hectares of forests of all kinds in 2014 to increase the ratio of forest coverage to 49 percent.

According to Director of the provincial Department of Agriculture and Rural Development Phan Trong Ho, the area includes 7,600 ha of forests serving economic purposes and 900 ha of protective forests.

About 800 hectares of forest will be planted under a project funded by the Japan International Cooperation Agency, he said.

Last year, the province reforested over 9,500 hectares, up nearly 1,080 from 2012, bringing the local forest coverage to 48.7 percent.

The provincial forestry sector’s production value reached over 310 billion VND (14.6 million USD) in 2013, a year-on-year increase of 10.5 percent.

Hanoi expands flower-growing land

Hanoi authorities will continue their support for the capital’s floral industry by approving the 170 hectare expansion of land used for planting flowers that are of high economic value.

The sector has helped residents in rural areas with high income, from 260-300 million VND (12,220-14,100 USD) per hectare per year, according to the municipal Department of Agriculture and Rural Development.

High-quality flowers such as roses and orchids bring in much higher income for local cultivators than other types – as much as 1.2 billion VND (56,400 USD) per hectare on an annual basis.

Agriculture experts said the city has many advantages to develop the industry, including the abundance of experienced flower manufacturers and support from flower research agencies.

Exchanges between domestic and foreign businesses in the field also help create new varieties of flowers that fetch high economic value on the market, they said.

Hanoi is a big flower consumption market with many renowned flower villages such as Tay Ho, Quang Ba, Ngoc Ha, Nhat Tan and Tay Tuu.-

Contract signed to broaden highway in HCM City

The State-owned Ho Chi Minh City Financial and Investment JSC and the Hanoi Highway Construction and Investment JSC on January 8 signed a credit contract for the second phase of a project to broaden the Hanoi Highway in Ho Chi Minh City.

The project has a total investment of 518.2 billion VND (24.355 million USD), over half of which comes in the form of a 14-year loan from the Vietnam-Local Infrastructure Development Fund of the World Bank.

It aims to widen main segments of the Hanoi Highway from Thu Duc intersection to the North station No. 2 with a length of about 3 kilometers.

The road will be broadened to 113.5 meters with 10 meter-wide pavements, allowing vehicles to travel at a maximum 80 kilometers per hour.

The project, expected to finish by 2015, will also construct parallel roads on both sides of the highway from Sai Gon Bridge to Nam Rach Chiec and a road under the Rach Chiec Bridge with a length of 3.3 kilometers.

Addressing the signing ceremony, Vice Chairman of the Ho Chi Minh City People’s Committee Nguyen Thi Hong said the project is important as the city is facing transport infrastructure problems from population pressure.

The highway, linking Ho Chi Minh City and the southern economic region and central coastal provinces, is expected to boost the development of the city and the southeastern region as well, she said.

Domestic and international experts shared solutions on reducing the adverse impacts that Vietnam’s production of electronic products is having on workers’ health and surroundings at a symposium held in Hanoi on January 7.

Vietnam now has more than 500 electronics manufacturing factories, mainly receiving investment from giant multinational corporations such as Intel, Samsung, Canon and Sharp, delegates noted at the event.

The industry contributes greatly to generating jobs for rural laborers, speeding up national economic growth, and reducing poverty, striving for 40 billion USD in export turnover by 2017.

Thousands of types of chemicals used in electronics manufacturing have resulted in hazardous influence on labourers’ health and environment, as warned by the US, Scotland and the Republic of Korea, said Executive Director of the Asia Monitor Resource Centre ( AMRC ) Sanjiv Pandita .

Ngo Van Hoai, leader of the Centre for Development and Integration ( CDI ) research team , said her centre and the Oxfam Solidarity Belgium ( OSB ) jointly carried out research activities to initially evaluate how working condition impacts on workers at electronics assembling and producing factories, in a bid to conduct an overall research on the industry’s labor safety and hygiene.

The research’s outcomes showed 200,000 workers of the industry, mainly women, are suffering from hazardous working conditions.

By December 31, 2012, around 28,000 laborers caught occupational diseases while the chemical-related illness accounted for 10 percent of the total, according to the Ministry of Health.

Up to 90,000 tones of electronic waste, harmful to public health and the environment, are skipped annually in Vietnam.

In order to develop a safe and sustainable electronics industry, it is vital to check and perfect legal frameworks related to labor safety standards and electronic waste management, participants suggested.

Firms operating in the field must announce types of chemicals used in their production, with the aim of enabling their workers to access information on the chemicals, they added.

Together with attaching importance to warnings released by the Ministry of Labor, Invalids and Social Affairs, an (International Labor Organization) ILO-OSH-2001 occupational safety and health management system should be established, said experts.-

Residences for sale in HCM City increase

The number of residences for sale in Ho Chi Minh City in 2013 stood at 6,114 units, surging 83.5 percent from 2012, a survey on the southern hub’s property market released on January 7 showed.

The survey was conducted by CBRE Vietnam, an affiliate of US-based real estate service and consulting firm CBRE Group.

In the fourth quarter alone, there were 2,702 residential units for sale, surging 70.5 percent quarter on quarter and 203.6 percent year on year.

The increase indicates that investors have gained their confidence in the market recovery, yet it will also mount up the unsold inventory (17,214 units at present) as supply has surpassed demand, the survey read.

Meanwhile, the amount of transactions in the primary market rose 40.4 percent from Q3 to over 2,000 units, and up to 49 percent of successful deals were of the affordable segment.

The economic improvement, attractive sale programmes and reasonable prices are reported to have fuelled the growth.

Property prices in Q4 almost stayed still, ranging from 630 to 2,800 USD per square metre. Notably, prices of the affordable segment declined to 630 USD per square metre, down 1.4 percent from the previous quarter.

Duong Thuy Dung, Associate Director of the Research and Consulting Department of CBRE Vietnam, said this was the first time the affordable segment witnessed a considerable decrease since several residential projects benefited from the Government’s 30 trillion VND (1.4 billion USD) aid package.

Additionally, some investors wanted to have quick consumption at lower prices rather than poor consumption at high prices, she added.-

VN, Cambodia localities seek further cooperation

The Central Highlands province of Dak Lak and the Mondulkiri province of Cambodia will foster their cooperation in the plantation of rubber, coffee and crops as well as the exploitation and processing of agricultural and forestry products for domestic consumption and export.

An agreement to this effect was inked in Buon Ma Thuot City, Dak Lak province, on January 8, under which the two sides will also join hands in a broad range of areas such as economics, investment, education and healthcare.

They agreed to work together in protecting forests, collecting forest resources suitably and effectively combating diseases among cattle and humans.

The two sides will conduct border demarcation work, encourage residents to protect border markers and manage the shared borderline in accordance with reached agreements, responding prompltly to any arising issues.

They will also make greater efforts in searching and repatriating Vietnamese volunteer soldiers who laid down their lives in Cambodia during the war.

Dak Lak and Mondulkiri have signed 11 agreements in the past, mostly focusing on building border gates and economic development.

Mondulkiri has created many conditions allowing for Dak Lak businesses to invest in agricultural production, hydroelectric projects and tourism in the locality.

As part of a 10 million USD project, the Dak Lak Rubber Limited Company has planted more than 1,600 hectares of rubber trees in the Cambodian province, generating jobs for over 160 local people.

Fruitful cooperation between the two localities has also been seen in industry, healthcare, education and social security.

Vietnam welcomes US investor in silk industry

Deputy Prime Minister Vu Van Ninh has welcomed US-based Kraig Biocraft Laboratories (KBL)’s intention to develop a new technology-used silk production project in Vietnam.

Receiving KBL’s Chairman Kim Thompson in Hanoi on January 8, Ninh said sericulture is one of Vietnam’s traditional trades, which were aimed to help people increase incomes, but it failed to meet expectations.

He expressed his hope that the KBL’s application of high technology in the sector will help it further develop.

Ninh assured that the Vietnamese government will study the project carefully and create favourable conditions for it once operational.

The deputy PM expressed his pleasure at the developments of Vietnam-US relations, noting that the US is Vietnam’s leading trade partner and the seventh largest foreign direct investor in the country.

KBL’s Chairman Kim Thompson informed his host that after making fact-finding tours in Vietnam, his group has selected the Central Highlands province of Lam Dong for its project.

He said he believes that the project will help intensify Vietnam-US cooperation as well as the two countries’ comprehensive partnership in the coming time.-

Vietnam, UK’s two-way trade hit 4.3 bln USD in 2013

Two-way trade turnover between Vietnam and the United Kingdom reached 4.3 billion USD in 2013, 7.5 percent higher than the set target.

The figure was announced at the Vietnam-UK Joint Economic and Trade Commission (JETCO)’s seventh session in Hanoi on January 7.

At the session, Vietnam pledged to strengthen bilateral ties with the UK at all areas mentioned in the Strategic Partnership Agreement signed in 2010 and within JETCO framework.

Meanwhile, the UK side said they are willing to share experience with Vietnam in developing a civil nuclear programme as well as urban planning in Hanoi and Ho Chi Minh City.

They also voiced their support to Vietnam’s negotiation for a free trade agreement with the European Union.

The UK Minister without Portfolio Grant Shapps and Vietnamese Deputy Minister of Culture, Sport and Tourism Ho Tuan Anh also signed a memorandum of understanding on the preparations for the 2019 Asian Games to be held in Vietnam on the same day.-

Firms eye budding green tech deals

Vietnam’s fight against environmental pollution and climate change is attracting interest from foreign investors.

Water-absorbing sandbag maker Sansei, is among several Japanese enterprises keen to bring environmental protection and climate change responses to Vietnam.

The company’s director Kazumi Sato told VIR that Sansei would open a representative office in Vietnam in early 2014. The company is currently searching for local partners to both distribute and produce its products in Vietnam with the intention to construct a $3-5 million factory.

“Vietnam has floods every year. Our sandbags are useful for people to prevent sudden flooding and disaster. These products are widely used in Japan,” she said.

Sansei representatives intend to visit Vietnam in February and March to conduct market research.

“We’ve selected Vietnam for our products because of the country’s low labour costs and skilled workers,” Sato said.

Japanese firm HBC International’s president and CEO Masami Nakashima also told VIR that lower labour costs were one of the main reasons, combined with strong local demand for environmental protection, prompting the company to bring its international standard water treatment products into Vietnam.

“Vietnam will apply a new environmental law with strict regulations forcing enterprises to apply environmental protection solutions. And this will give our products opportunities,” Nakashima said.

The company has already found some local enterprises to produce the products. “We’ll do more research before thinking about the possibility of establishing a factory in Vietnam,” he said.

Hitachi Asia Vietnam’s general director Nobuyuki Nakamura said that his company would engage in Vietnam in power generation, railway, water, urban development and healthcare services. According to Hitachi’s studies, Vietnam’s water treatment technology remains poor in quality. The company is currently conducting a prefeasibility study for a water treatment facility in Binh Duong and another in Danang. “We also want more projects like these in Vietnam,” Nakamura said.

According to Pham Vu Hai, director of Northern Investment Promotion Centre under the Ministry of Planning and Investment’s Foreign Investment Agency, Vietnam’s increasing demand for environmental protection technology had attracted investors and enterprises from around the world in search of investment opportunities.

He said foreign investors paid special attention to local legal documents and regulations that could directly affect their performance in Vietnam. For example, environmental investors were waiting to see how the enforcement of the new environmental protection law would be ensured, and what incentives they would be given in Vietnam for their projects.

“We want to work with the government, state-owned and private companies in Vietnam on investment opportunities in distributing our technologies like static mobile  

incinerators, static or mobile medical waste disposal and energy recovery systems,” said Mark Comerford, international business development manager of the UK’s Spectrum Environmental Group.

The group’s technologies can provide environmentally secure incineration systems with smoke, gas and odour emissions virtually eliminated.

“It is costly to produce environmental protection technology, so investors would need special incentives from the government,” he stressed.

Recently, France’s APB Environment, Ecodas, Eau Pure, ISEA and the Pasteur Institute of Paris all worked with the Ministry of Health and hospitals in Vietnam to introduce modern technology for healthcare waste treatment directly on site, helping to reduce greenhouse gas emissions.

Commercial banks to find forex profit routes

Despite commercial banks having faced difficulties in profiteering from forex trading activities in recent years due to the State Bank of Vietnam’s commitment to maintain a stable exchange rate, experts claim options are still available for investment in the market.

According to State Bank Governor Nguyen Van Binh the country will manage the foreign exchange rate within a 2 per cent trading bracket.

This has reiterated the State Bank of Vietnam’s (SBV) commitment to preserve the value of the domestic currency and restrict the dollarisation of the economy in the long term.

Commercial banks may feel disappointed by the decision which will mean there will be narrow opportunity to play the forex markets as an investment channel. Last year the  

SBV adjusted the exchange rate by some 1 per cent, causing difficulties for banks in earning from forex speculation.

According to Dinh Duc Quang, head of currency trading at HSBC Vietnam, the economy was not experiencing a shortage of foreign currency and the balance of trade was stable. While other sources including foreign investment and remittances also contributed to the surplus of foreign currency. In addition, the SBV had used forex reserves to intervene in the market.

Quang pleaded for greater flexibility in SBV management, “the State Bank shouldn’t close all the doors for banks to profit from forex trading. The SBV itself also understands that banks must prosper, so that we have capital to lend,” said Quang

But VIB deputy general director Le Quang Trung said that bank profits from forex trading were still good, although smaller than previous years and that to make profits in this context, banks needed specific strategies.

He claimed a route to profitable foreign currency trading relied on providing new products or investment options and that demand still existed for such investment options. But he added that the issue was whether banks were aware of these opportunities.

Looking at Vietnam’s steep yield curve; observers said that Vietnam was still an attractive destination among the emerging markets in the Asia-Pacific region. The gap between different kinds of interest rate was considerable. Current overnight lending rates stood at 3 per cent while government bond yields varied from 7.5 to 8.5 per cent per year.

Quang said that commercial banks were not facing liquidity shortages. Based on the State Bank’s requirement to maintain the gap on foreign currency positions at 20 per cent, banks would still make big profits from the exchange rate adjustment band of 2 per cent. Specifically, when they had a surplus of foreign currency, they could convert it to VND and invest in bonds, then they could earn from the interest rate gap.

“This is a very good business opportunity, but of course it requires banks to have effective tools to control potential risks, which always exist in the business based on the difference between the interest rates, between maturities”, Quang said.

According to experts, the opportunity for banks to gain profit from monetary trading remains viable, and is not simply based on speculation on foreign exchange rate fluctuations, currency devaluations set by the central bank or the ambiguity of dubious transactions.

Foreign-backed projects in Hanoi power ahead

Despite the global crisis and domestic downturn, a range of foreign-backed real estate projects moved ahead last year.

Limitless, a Dubai government company, recently agreed a contract to co-develop its Halong Star complex in Quang Ninh province with domestic Sovico Holdings.

The participation of Sovico in this project could provide a brighter future for the ill-fated project which has been delayed for more than five years.

According to Ali Rashid Lootah, chairman of Nakheel and Limitless, work will restart on the $550 million five star hotel, villa, townhouse, apartment and shopping centre complex in the first quarter of this year.

Malaysian-backed ParkCity Hanoi also showed positive signs in 2013 when Perdana ParkCity bought out local partner Vinaconex-Hoang Thanh’s stake in the joint venture.

Perdana ParkCity’s subsidiary, Vietnam International Township Development JSC (VIDC), has been speeding up construction to deliver their first homes by mid-2014.

VIDC CEO Lawrence Peh said that the company had decided to make adjustments to the master plan to accommodate a new 20-ha mixed-use component, diversifying the project’s housing focus.

Also in Hanoi, Korean-backed Tay Ho Tay Development Company officially received a $200 million from the Korean Development Bank (KDB) to develop its StarLake urban development project.

This allocation will be used to develop the first phase of StarLake, which is 100 per cent invested in by Daewoo E&C.

According to the developer, the KDB loan would enable Daewoo E&C to continue its project for the next two years and implement infrastructure systems as soon as it receives cleared land from the Hanoi People’s Committee.

This allocation will also help to start the first villa and housing complex at the start of this year.

Long-term developers are also more upbeat.

CapitaLand, a Singaporean housing developer which has more than 20 years of experience in Vietnam, is finishing its Mulberry Lane project in Hanoi. Customer handovers in the second phase are scheduled for the middle of this year. The company is also preparing to handover its first apartments at the Parcspring residential area in Ho Chi Minh City’s District 2 within this year.

Meanwhile Keppel Land, another Singaporean developer also is expanding its activities to the north, with plans to develop a major residential project in Hanoi.

Debt owed to contractors in state-funded projects declines

Debt owed to contractors participating in state-funded basic construction projects has plummeted drastically, said Minister of Planning and Investment Bui Quang Vinh.

Vinh told the Daily that such debt had tumbled to VND28 trillion from over VND40 trillion in October last year, VND85 trillion in late 2012 and VND100 trillion in mid-2012.  

However, this is the debt owed by the central Government only.

Explaining the debt fall, Vinh said the Government had asked local authorities to use the central state budget to pay for the unpaid projects, half-done projects and others in that order of priority.

“I’m going to sign the 2014 budget in that spirit,” Vinh said. The Government has stopped funding some ministries and local authorities as their capital allocations failed to meet the requirement.

The Prime Minister issued Directive 1792/CT-TTg in October 2011 has resulted in an improvement in the settlement of debt in basic construction projects. The directive requires ministries and local authorities to bear responsibility for any public investment projects that are approved without proper prior funding arrangements.

By 2015, public spending can be basically put under control, Vinh added.

However, he said his ministry has yet to control debt owed by local governments as it is not involved in the decision-making process in cities and provinces.

A local leader told the Daily that there had emerged complicated lawsuits over debt involving contractors and local governments.

Last year, the ministry refused to settle around VND80 billion of the VND223.5 trillion of investment capital as investors requested higher payments than the winning bids or those expenses not included in the signed contracts.

State Audit of Vietnam (SAV) in a recent report said that local authorities still made non-core investments in public projects, resulting in a shortage of capital. As of the end  

of 2011, local authorities had given the green light to over 7,300 projects with combined capital of over VND273 trillion but had not been able to arrange finances for these projects.

Some localities might spend many years finishing their public investment projects as the state budget and government bonds are targeted as main funding sources. For instance, Hung Yen Province may spend nearly 24 years, Lam Dong Province 19 years and Nghe An Province nine years having their planned projects completed if they rely on state money allocation plans.

Agriculture competitiveness is still low

Despite a number of positive results in 2013, local agriculture has yet to improve many weak points from the past few years, with poor cooperation and the low yield and quality eroding the industry’s competitiveness.

At an online conference on reviewing the agricultural industry’s performance in 2013 and deploying its development plan in 2014 on Tuesday, Minister of Agriculture and  

Rural Development Cao Duc Phat reported the industry’s growth at 2.67% in 2013, equivalent to that in 2012.

The husbandry industry has experienced the biggest difficulties as the selling prices of products have constantly fallen while the feed prices have risen sharply, which has driven many companies and farmers to huge losses.

Regarding farm produce sale, the minister said that 2013 was not favorable for the consumption of local farm produce inside and outside the country.

Regardless of the aforesaid difficulties, the industry brought home an estimated US$27.5 billion from exports, a slight rise of 0.7% year-on-year. The good performance is attributed to the strong growth of seafood items holding an export growth rate of more than 10% year-on-year to US$6.7 billion.

Low producer price index reveals hardship

The slowing producer price index (PPI) in 2013 reveals great hardships for both domestic industrial manufacturers and farmers, according to the General Statistics Office (GSO).

Ngo Thi Anh Duong, deputy head of the Pricing Statistics Department under GSO, said that the low PPI in 2013 delivered hard blows to local producers, especially farmers.  

The PPI for agriculture, forestry and fishery sector inched up a mere 0.57% compared to the inflation rate of 6.04% last year, meaning farmers’ income has shrunk considerably.

While lower prices may benefit many consumers, such a situation is a dilemma for farmers as most input costs increased, she said.

“It causes adverse impacts on over 60% of the population living on farming in rural areas as their income tumble,” she stated in a study.

According to the study, the PPI for industrial manufacturers rose 5.25% year on year in 2013.

However, it is major State-owned manufacturers that benefited the most, as their prices increased according to roadmaps approved by the State, while private enterprises suffered losses.

The mining products, for instance, rose 6.68% in PPI last year, while electricity generation and distribution enjoyed a PPI of 9.2%, and water supply and waste treatment had a PPI of 7.23%.

Private manufacturers as a whole, meanwhile, saw a PPI of 3.4% only.

By the year’s end, the industrial inventory index was 10.2% compared to 20.1% in the year-earlier period, but that did not indicate better sales, according to the study.  

Rather, the low index resulted from most manufacturers scaling down production.

The U.S.-dollar-based export price index for 2013, equivalent to 99.59% of the 2012 figure, also translated difficulties for domestic production, especially farm produce.

The average rubber price, for example, crashed by 18.96% compared to 2012, while the cashew nut price tumbled by 10%, and coffee, rice and fishery fell by some 5%, placing further pressure on farmers.

Meanwhile, prices of certain services stayed put or increased last year, making life harder for local producers. The transport freight and warehousing charges as whole, for example, rose by 6.48% against 2012.

Expert: Be ready for TPP

Enterprises should be ready to grasp opportunities and overcome challenges brought by the Trans-Pacific Partnership (TPP) agreement, said Vo Tri Thanh, deputy director of the Central Institute for Economic Management (CIEM).

Local enterprises have gained experiences after Vietnam had signed bilateral trade agreement with the U.S. and taken part in the World Trade Organization (WTO). However, preparations for integration on the part of enterprises remain weak, Thanh said.

For TPP, enterprises need to prepare a lot of things such as knowledge about policies, laws and commitments so as they can cope with lawsuits and disputes when the agreement is signed, he added.

There have been 19 TPP negotiation rounds with 12 member countries trying to settle disagreements to sign the agreement in 2014.

Unlike WTO, under which Vietnam just lowered tariffs at a certain level, TPP member countries will pledge to remove 100% of tariffs, of which 90% must be lifted right after the agreement takes effect, according to Tran Quoc Khanh, head of Vietnam’s TPP negotiation delegation.

After TPP signing, both sides will have from 10 to 12 months to adjust policies to suit TPP regulations, Khanh said at a TPP conference in HCMC recently.

At present, many issues such as export taxes, used goods import taxes and TPP enterprises’ lawsuit rights are still under discussion.

TPP includes not only international issues but also internal reforms and policy improvements of the Government. Therefore, enterprises must be knowledgeable of commitments and policy adjustments of the Government to deal with possible problems, Thanh said.

According to export and import data, up to 60-70% of Vietnamese goods is exported to East Asian nations. Joining the TPP and free trade agreements with the European  

Union (UN) and the Customs Union of Belarus, Kazakhstan, and Russia is a way for Vietnam to balance export markets and minimize risks during periods of crisis, Thanh said.

In addition, Khanh said that TPP will bring about opportunities for Vietnamese firms to join regional and international production chains, facilitating Vietnam’s economic restructuring and mechanism reform processes

Vietnam has many chances to boost seafood export

This year’s seafood export is US$200 million higher than that of last year with an estimate of US$6.7 billion, but there are still many chances for the sector to grow, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

Truong Dinh Hoe, general secretary of VASEP, told the Daily that Vietnam still had many chances to boost seafood exports next year as well as in the coming years by focusing on producing products with high added values for big exporting markets like Japan, the U.S. and Europe.

In addition, seafood processing and exporting enterprises still can increase their market share in markets with high growth rates such as China, ASEAN countries and countries in Latin America.

According to Hoe, if enterprises have good and long-term strategies, they can achieve significant growth in the Chinese and ASEAN markets.

Vietnam has seen export turnover increases of over 39% in China and 12.4% in ASEAN this year. Vietnam’s combined export value to these two markets has amounted to nearly US$1 billion this year, equivalent the export values recorded in major markets such as the EU and the U.S.

Besides, consumers in these countries tend to prefer fish and shrimp to meat. For instance, many seafood products that China exported before are now imported to meet its domestic demand, Hoe explained.

This is an opportunity for Vietnam with strengths in shrimp and tra fish production that currently account for around 70% of the total seafood volume. Besides, the transport costs to China and ASEAN countries are smaller compared to Latin American countries.

Reasonable prices will attract more consumers. Hoe said that Vietnam could achieve an export turnover of US$1 billion each year in the Chinese and ASEAN markets if having sound strategies.

However, the major difficulty enterprises encounter when exporting to China is the high number of transactions made through unofficial channels.

In addition, exports via unofficial channels always carry high risks of payment. Meanwhile, regarding the ASEAN market, Vietnam will have to compete with Thailand and  

Indonesia as they supply seafood products similar to Vietnam’s, according to Hoe.

Developers offer special plan for homebuyers

A number of commercial-housing developers that want to be eligible for the Government’s VND30-trillion low-cost home loan program have introduced a special plan in which buyers will pay for 70 square meters of floor space even though their apartments are a dozen meters larger.

To join the incentive loan program, developers of apartment projects must design their units no bigger than 70 square meters each. In reality, there are some finished projects where the area of apartments is bigger than the prescribed size.

To prop up apartment sales, certain project developers are weighing allowing homebuyers to pay for 70 square meters and get the surplus space for free.

Le Hoang Chau, chairman of the HCMC Real Estate Association (HoREA), said Tan Hung Real Estate Joint Stock Company has floated this idea.

The company has completed the Tan Kien apartment project in HCMC’s outlying district of Binh Chanh with 653 units measuring 84 square meters each and selling for VND14 million per square meter.

To meet the requirement for access to preferential home loans, the developer is willing to give 14 square meters of floor space to homebuyers.

For the apartments measuring over 70 square meters a unit, Chau said, the city has approved a tolerance of plus 5%, which means an apartment subject to the preferential lending program might be 73.5 square meters.

At a meeting between the city’s government, the central bank governor, Nguyen Van Binh, and related agencies last Friday, the proposal was considered as this is a special case that benefits homebuyers, according to Chau.

This is one of 13 issues petitioned by HoREA in order to carry out more effectively the Government’s Resolution 02 on handling inventories, removing difficulties for businesses, boosting business and production and tackling bad debt.

To simplify the case, HoREA suggested the city issue a list of areas that are disallowed to convert commercial housing projects into low-cost homes or divide apartments into smaller units such as the central city area. Projects out of these areas might be converted into low-cost homes or divided into smaller condos and companies will have their own orientation to adjust the development of housing schemes in a suitable way, HoREA explained.

The association urged the city to soon consider dealing with commercial housing schemes seeking approval for being converted into budget homes and those for restructuring their small- and medium-sized condos to support enterprises in the context of current tough business conditions.

The meeting in principle agreed to lower the balance capital ratio to 10% instead of the current level of 20% to make it more suitable with the financial capability of homebuyers, meaning homebuyers applying for loans from the VND30-trillion dong package can take loans worth up to 90% of the apartment’s value, Chau added.

FOL increase left undecided

The Government is now considering increase of foreign limit ownership (FLO) in listed enterprises, so the draft will not be released within the next few days as expected, said a leader of the State Securities Commission (SSC).

On Tuesday, Reuters reported that Prime Minister Nguyen Tan Dung would give approval for foreigners to own up to 60% in some listed enterprises in the following days.

SSC said that the draft was submitted to the Government a few months ago but recently, SSC was told to adjust some points in the draft. Therefore, the draft has just been submitted to the Government again.

In addition, the Government may have to field suggestions from other ministries as well. The draft will be approved later than expected, the leader said.

According to Reuters, FOL and foreign voting rights will be increased from 49% to 60% but only in some certain sectors and enterprises. Foreigners’ voting rights will also increase to 49%, going in line with the current FOL of 49%.

Commenting on the stock market in 2014, director of a foreign investment fund said that foreign capital will keep flowing into the market. However, the capital will not expand without the FOL increase draft.

There are around 700 enterprises listed on the local market but large investment funds just focus on stocks in the VN30 and HNX30 baskets that group tickers with highest capitalization and liquidity on both bourses, and some leading stocks in pharmaceutical, healthcare and consumer goods sectors. Of which, many stocks have seen their foreign room filled up.

Foreign investors cannot decide which stocks to invest in. Small stocks usually report low liquidity while the investors cannot raise ownership in large-caps. Therefore, capital mobilization will heavily depend on the FOL draft, the director said.

HCM City’s banks miss 2013 profit targets

Fourteen banks based in HCMC were estimated to realize just 50-70% of profit targets set for 2013, according to a report of the central bank’s HCMC branch.

As of December 25, local credit institutions estimated to obtain over VND5.4 trillion in profits, a strong decline compared to over VND6.6 trillion in 2012. Last year, 80 out of 378 bank branches in the city reported losses.

Among the 14 local banks, 10 had a healthy financial situation and two weak banks needed to be restructured. The central bank’s governor approved restructuring plans of eight banks aside from similar plans for two banks approved before 2013.

The results were in line with the overview picture of the local banking industry.

Speaking at the summarizing conference in Hanoi City in the middle of last month, the central bank’s chief inspector Nguyen Huu Nghia said that 17% of credit institutions incurred losses as of November 30.

Banks posted up total profits of VND29.5 trillion in the Jan-Nov period in 2013, up 3.2% against late 2012 but falling sharply compared to 2010 and 2011. Among 100 credit institutions posting gains, over 50% saw profits plunging by half compared to 2012.

More credit institutions reported losses given impacts of bad debts in 2013. The problem would influence financial capability, competitiveness and development of banks in the coming time, said the report.

Speaking at the conference setting out targets for banks in HCMC last Friday, the central bank’s governor Nguyen Van Binh said that banks did not gain high profits or offer big dividends last year.

“This year, some banks may even fail to pay dividends for shareholders as they have to deduct profits to set up provisions for risks. The central bank has also encouraged this plan as banks only expect strong profits given safe operations,” Binh said.

Banks are an intermediary business channel, so they cannot gain high profits, especially when the gap between mobilization and lending rates has narrowed down, he added.

At year-end 2013, banks in the city estimated to see mobilization capital increase by 11% against the previous year. Credit growth rate stood at 9% and bad debt ratio was 5.49%.

In 2013, local banks handled nearly VND115 trillion worth of bad debts, of which they transferred nearly VND5.2 trillion to Vietnam Asset Management Company.

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