Amata calls for hi-tech incentives

Thai property developer Amata Corporation is asking for special incentives from the Vietnamese government for its proposed $2 billion hi-tech park and urban township in the northern province of Quang Ninh.

A source at Quang Ninh Provincial Investment Promotion Agency said Amata and its Vietnamese partner, Tuan Chau Au Lac Limited, are looking to the prime minister for approval of the incentives. However, he declined to give further details as they were still in discussions, adding that the incentives would make the mega-project more feasible, and the investors were ready to start the project in October once the prime minister approved the proposal.

“At present the incentive proposal is still in the early stages of consideration,” he said.

Last month, Quang Ninh Provincial People’s Committee allowed Amata to conduct a feasibility study of the proposed 1,000 hectare site in Quang Yen district.

According to Amata’s proposal, the hi-tech park and urban township comprises a green industrial park, residential suburb, sports facilities, convention centre, schools, a university and entertainment facilities.

Having entered Vietnam in 1994, Amata has already developed a 700ha industrial park in Bien Hoa City in the southern province of Dong Nai. The project was extremely popular, having attracted more than 120 multinational companies.

The Thai developer last year announced it would develop the giant Amata Express City project in Dong Nai, which is nearly two times the size of Amata City. The project comprises a 760ha township next to the river, a 420ha hi-tech industrial area and another 105ha urban area. Earlier this year, the company also planned to list its subsidiary Amata Vietnam on the Thai Stock Exchange to raise capital for its investment projects in Vietnam.

The project in Quang Ninh is the largest one Amata has planned in Vietnam, and would be the province’s largest industrial park and urban area yet.

In the recent years, Quang Ninh has emerged as an attractive destination for foreign investors and in 2012 alone foreign investors committed approximately $396 million to the province, 15 times than that of 2011, raising the total foreign investment capital planned to $4.15 billion.

Apart from Amata, Rent-A-Port, a Belgian company, is also doing a feasibility study for a port and industrial park in the province.

Land allocated for key fruit plantations

The southern region will reserve more than half its fruit growing area to develop cultivation of 12 key fruits in the coming years.

Under a plan approved by the Ministry of Agriculture and Rural Development, the 12 fruits will be planted on a total area of 257,000ha, or 52 per cent of the region's total orchards, by 2020.

The Cuu Long (Mekong) Delta will have 185,100ha of the concentrated fruit-growing zones and the remaining 71,900ha will be located in the southeastern region.

Of the 12 key fruits, mango will have the largest area (45,900ha), followed by longan (29,800ha), banana (28.900ha), grapefruit (27,900ha), orange (26,250ha), dragon fruit (24,800ha), pineapple (21,000ha), rambutan (18,300ha), durian (15,000ha), soursop (8,300ha), mandarin (5,850ha) and star apple (5,000ha).

The Mekong Delta province of Tien Giang will have the largest concentrated fruit-growing zone of 51,500ha.

It will also have the highest number of key fruits – 11 of the 12 identified, soursop being the sole exception.

The plan also envisages that by 2020, all the fruits grown in the concentrated fruit-growing areas will meet food safety and hygiene standards.

More than 50 per cent of the key fruits will be planted under international and national GAP (good agriculture practises) standards.

The plan aims to increase varieties of the 12 key fruits and their output. It also seeks to raise the export value of the key fruits by 70 per cent over the next seven years.

It estimates that revenues from the concentrated fruit-growing zones will top VND150 million (US$7,100) per hectare a year by 2020.

To meet the targets, priority will be given to creating high quality strains of the key fruits, farmers will be taught advanced planting techniques and several exports promotion measures carried out.

Farmers will also be advised to participate in fruit cultivation co-operatives, and co-operation between enterprises and farmers at all stages, from cultivation to sales, will be strengthened.

To ensure steady supply and stable prices, the ministry is considering out-of-season cultivation of five key fruits – dragon fruit, mango, rambutan, durian and longan – in the southern region.

Many farmers in the southern region have applied techniques for fruits grown out of season in recent years, supplying many kinds of fruits all year round for domestic and export markets.

The southern region has about 415,800ha of orchards at present with an annual output of around 4.3 million tonnes of fruit.

This accounts for 53.2 per cent of the country's total fruit growing area and 57 per cent of the country's total output, according to the ministry's Plant Cultivation Department.

Poor global demand hits major export staples

The export turnover of agro-forestry and aquaculture products is expected to reach US$15.59 billion for the first seven months of this year, down 1.6 per cent year-on-year, according to the Ministry of Agriculture and Rural Development (MARD).

The decrease is largely attributed to the year-long downward trend in global demand and falling prices for farm produce exports, said Nguyen Viet Chien, director of MARD's Informatics and Statistics Centre.

Major agricultural exports during the period are estimated to earn $7.84 billion, down by 11.9 per cent year-on-year while aquaculture products brought home $3.41 billion (up 0.7 per cent). Earnings from forestry products topped $3 billion, registering a year-on-year rise of 12.2 per cent.

Major export staples such as rice, rubber, coffee and tea saw decreases in price. Rice suffered the lowest price reduction to $443 million per tonne, a 6.7 per cent year-on-year decrease.

During the first seven months of the year, the country exported 4.22 million tonnes of rice bringing home $1.88 billion in earnings, a fall of 11.3 per cent in volume and 13 per cent in value over last year.

China remained the country's largest rice importer with a total import volume of more than 1.29 million tonnes and a total value of $526.5 million, making up nearly 40 per cent of the country's total rice export turnover.

Rubber exports also saw a substantial decrease in export price, with prices falling by an average of $2,540 per tonne, or a year-on-year decline of 15.9 per cent.

China remained the biggest rubber importer. It was followed by Malaysia with a surge of 17 per cent in volume but down 7.5 per cent in value over the same time frame last year.

It is estimated that about 498,000 tonnes of rubber was exported during the first seven months, bringing a total export value of $1.21 billion.

Coffee and tea saw slight increases in export prices. However, export volume for coffee was estimated to have fallen to 890,000 tonnes, down by 23.7 per cent, and posting a total export turnover of $1.91 billion.

Germany and the US remained Viet Nam's two biggest importers. Export turnover of coffee to the two markets during the first seven months declined by 21.1 per cent and 28.6 per cent compared to the same period last year. Coffee export turnover to England and Russia also rose 17.6 per cent and 16.2 per cent respectively.

Tea exports were estimated to reach 77,000 tonnes with an export turnover of $120 million. Tea exports to Taiwan, the country's biggest tea importer, were up 7.2 per cent with turnover increasing by nearly 12 per cent.

Cashews and pepper registered a rise in volume. Cashew exporters earned $759 million from exporting 136,000 tonnes or a year-on-year increase of 5.9 per cent in value.

Pepper exports went up 22.8 per cent in volume to 94,000 tonnes while export value reached nearly $618 million with a year-on-year climb of 17.7 per cent. The US and Germany remained as the country's biggest pepper importers.

During the first seven months, exports of wood and wooden products topped $2.9 billion, or an increase of 12.3 per cent over the same period last year.

The Ministry of Agriculture and Rural Development has instructed agencies to continue raising the quality of export items and ensure requirements on food safety and hygiene are met.

Apart from traditional markets, exporters needed to enhance trade promotion and expand export markets while connecting with businesses and associations to propose policies to boost exports and tap potential markets during the remaining months of the year.

HCM City sets progress target for ring road

The HCM City Department of Transport is making efforts to speed up site clearance on a main section of a new expressway being built from Tan Son Nhat airport to Thu Duc District. It aims to have the section open to traffic on National Day (Sept. 2).

The South Korea-based GS Group is the sole investor in the Tan Son Nhat – Binh Loi – Outer Ring Road project.

The city has urged contractors and investors to work closely with officials in Tan Binh, Go Vap and Thu Duc districts so the road's main section can be completed in time for the holiday.

The road's main section extends from Gia Dinh Park in Go Vap District to Go Dua Overpass in Thu Duc District.

According to the GS Group, more than 70 per cent of the road has been completed, and construction on Rach Lang, Binh Loi and Go Dua bridges as well as four pedestrian bridges is nearly finished.

Many other sections also await site clearance. About 115 households in Tan Binh, Go Vap and Thu Duc districts need to be moved, according to the GS Group.

The 13.7-km expressway starts from the Truong Son intersection in Tan Binh District near the airport, passes the Nguyen Thai Son intersection in Go Vap District, crosses Sai Gon River via the Binh Loi Bridge, runs through the Binh Trieu intersection and Linh Xuan crossroads in Thu Duc District, and then connects with National Highway 1.

The expressway, which has six lanes in some parts and 12 lanes in other sections, is 30 to 60 metres wide, depending on the section.

The road has four main intersections and is covered by four bridges. The expressway, when completed, is expected to help reduce traffic congestion from the city centre to the city's eastern area.

Da Nang City needs boat shelters

The Central city of Da Nang lacks safe shelter areas for 600 boats, according to the city's Steering Committee for Flood and Storm Prevention and Control yesterday.

Huynh Van Thang, deputy head of the committee, said the main shelter area Au Thuyen Tho Quang had capacity for only 1,100 of its 1,700 boats.

He asked Da Nang Port and the Command of Navy Region 3 to allow the boats to temporarily shelter in Man Quang Bay in emergency cases.

Phung Tan Viet, deputy chairman of the city's People's Committee entrusted the Department of Construction and other authorities to decide on more effective plans to protect boats and fishermen from storms.

In the mountainous district of Hoa Vang, authorities have also been asked to take preventive measures against storms, floods and landslides.

They were also told to provide plans to shift residents in low-lying areas near the Dong Nghe and Hoa Trung reservoirs.

According to the Hydro-meteorological Centre of central region, Da Nang is flooded three to four times a year, starting in September.

Shrimp firms cash in on higher demand and price

Shrimp exports in the first half of this year amounted to US$1.1 billion, a rise of 8.6 per cent over the same period last year, according to the Viet Nam Association of Seafood Exporters and Producers (VASEP).

The major import markets including Japan, the US, China and Canada saw a rapid increase in price, which contributed a lot to the overall rise in export value.

Domestic shrimp production has also recovered from the damage caused by the outbreak of diseases in 2012, which are presently being eradicated, according to the association.

While Early Mortality Syndrome (EMS) still badly affects many other Asian countries such as Thailand, which has forecast that the country's shrimp output will fall by 50 per cent over last year. This provides opportunities for Vietnamese shrimp producers to make a breakthrough, added the association.

Exports to Japan, the biggest importers of Vietnamese shrimp, have recovered and are expected to reach $293.9 million in the first six months of this year, a rise of 6.6 per cent.

The export price for some varieties of shrimp destined for the Japanese market has also jumped by 35 per cent due to demand outstripping supplies of the crustacean.

Shrimp exports to the US also rose by 22.4 per cent over the same period last year and are estimated at $253.3 million.

However, difficulties remain for shrimp exports to some markets such as South Korea with the application of the Ethoxyquin test or to the US, that applies an anti-subsidies tax.

Industry insiders have urged Vietnamese businesses to try and expand their current markets in North America, the Middle East and Asia.

China, with its huge population holds a vast potential market for Vietnamese shrimp exports. In the first quarter of this year, China passed the EU to become the third largest importers of Vietnamese shrimp, with a monthly growth rate of 7.3-9.7 per cent.

Experts also predict that China will continue to be the world's biggest importer of seafood for the next 10 years, with a potential import value of up to $20 billion.

In the first five months of this year, shrimp exports to China are estimated at $108.5 million, an increase of 17.9 per cent over the same period last year.

Malaysia also has a lot of untapped potential as the country's supplies of shrimp fell from 90,000 tonnes to 60,000 tonnes in the year's first quarter due to diseases, forcing the country to import shrimp to meet consumer demands.

Truong Dinh Hoe, chairman of Vasep, has forecast that shrimp exports will hit $2.4 billion for the full year, 6.5 per cent higher than last year.

He urged exporters to work closely with farmers to ensure supplies of high quality shrimp, which will help to overcome technical barriers set by overseas import markets.

Viet Nam mainly exports white shrimp and black tiger shrimp, which made up 41.3 and 50.8 per cent of total export turnover respectively.

Dark days for handicraft sector

Handicraft enterprises have faced a host of challenges in production and the problematic business climate this year, making it difficult for them to reach their export targets, say industry insiders.

The Viet Nam Handicrafts Association (Vietcraft) says that almost every enterprise in the handicrafts industry is either a small or medium sized operation. Subsequently, they have suffered a lot from recent changes in the market and macro-economy, that have seen many of them fall into crisis.

Meanwhile, high input costs, high interest rates on loans and difficulties in accessing banking loans have had a detrimental effect on their production and commercial activities.

According to Vietcraft's statistics, 30 per cent of the industry's enterprises recorded losses in production in the last two years, so they had to cut production back or even stop production temporarily.

Dang Quoc Hung, deputy chairman of the HCM City Handicrafts Association, said the handicraft industry faced high production costs and serious pressure from importers to reduce export prices.

Almost every enterprise has received reduced orders and only a few larger enterprises will get large export orders by the end of the year, said Hung.

In addition, importers also asked enterprises for price cuts of 20 per cent due to their economic difficulties, when in fact they only make a profit of 10 per cent in the first place.

The General Department of Customs reports that from earlier this year to mid-July, the industry only made US$352.6 million from exports, so it does not expect to achieve its export target of $1.5 billion for this year.

The major export markets for traditional Vietnamese handicrafts include the US, Japan, Germany, South Korea, Poland, Belgium and Denmark.

Vietcraft says that importers have increased their orders for Vietnamese handicrafts due to their good design, quality and competitive prices, but the global economic downturn has affected the industry's export value.

Bad employment and payment policy blamed for slack officials

The current payroll policies for state officials are outdated and do not encourage employee engagement and development of skills, one expert has said.

Dr. Do Ngoc Quang, a lawyer, made the statement during a recent interview with the Vietnam Television.

His comments came after Deputy Prime Minister Nguyen Xuan Phuc’s recent announcement that around 30% of state officials do not work during the working hours.

“When I was deputy director of the People's Police Academy, we conducted a survey and announced these statistics but no one took notice at the time. The recent announcement by Deputy PM Nguyen Xuan Phuc has stirred up public concerns over the efficiency of state officers as many don’t work but continue to get paid, causing losses to the state budget and eroding public confidence,” Quang noted.

He attributed the situation to the lack of a criteria-based system of job requirements for state officials. Under the current payment policies for state officials, new-comers often get much lower pay than those who have longer tenure, even though the newer employees often do the same or even more complicated jobs and are more efficient.

“Due to the lack of a clear criteria system, there are often more employees than needed, which leads to employees not taking responsibility and being slack in their duties. Many state officers don’t try to improve themselves or work more efficiently, so it’s easy to understand why up to 30% of state officials failed to pass a recent exam by the Ministry of Home Affairs for promotions,” he commented.

He said that payment for state officials should be decided on a merit-based system and the complexity of the job, and that salaries should be enough to cover living costs.

Redundancy in the workforce has resulted in a reliance on others to complete tasks while low payment for those who have lower seniority forces those employees toward corruption to earn a decent living, he added.

“It’s really necessary that the government restructure the payment system so it is based on tasks performed. The current policies discourage new-comers from improving themselves or devoting themselves to the job. Due attention should also be paid to the supervision process to review the efficiency of state employees and make timely adjustments,” he recommended.

In addition, to date leaders have yet to make estimates of their human resource needs, so they tend to recruit more people than they actually need. Some even take bribes in exchange for granting employment to unqualified people.

Vietnam’s wood industry attracts equipment suppliers

Many associations of wood processing machine suppliers worldwide are expected to take part in the 10th Vietnam International Woodworking Industry Fair (Vietnamwood 2013), according to the organizing committee.

Speaking in HCMC on Tuesday, David Yang, director of Chan Chao International Company, a representative of the organizing committee, said that many international associations such as European Federation of Woodworking Machinery Manufacturers (Eumabois), German Engineering Association, Italian Woodworking Machinery and Tool Manufacturers’ Association, Taiwan Woodworking Machinery Association and American Hardwood Export Council will join the event.

Vietnam’s woodworking and export sector has made strong growth with high demand for machines and processing tools. Therefore, international suppliers have decided to seek opportunities at the fair, Yang said.

Compared to previous years, enterprises joining this year’s fair will display the latest technologies that help save energy and materials, he added.

Dang Quoc Hung, deputy chairman of the Handicraft and Wood Industry Association of HCMC (Hawa), said that the nation’s wood processing and export industry has seen strong growth. The industry generated an export value of nearly US$2.5 billion in the first half of the year, up 18% against 2012.

The sector has made a positive development over the past 10 years and the demand for machine and production line upgrading has soared, creating conditions for machine production and imports to grow.

Vietnamwood 2013 will take place from September 25-28 at the Saigon Exhibition & Convention Center in HCMC’s District 7. There will be over 500 booths of 260 exhibitors from 19 nations.

The event is co-organized by Vietnam National Trade Fair & Advertising Company, Chan Chao International and some associations such as Hawa, the Forest Products Association of Binh Dinh and Eumabois.

Displaced IZ firms promised adequate compensation

Companies operating in Dong Nai-based Bien Hoa 1 Industrial Zone (IZ) are promised adequate compensation for forced relocation from the IZ, which will be turned into an urban, service and commercial area.

Corporation for the Development of Bien Hoa Industrial Zone (Sonadezi) is assigned by the provincial government to make a plan for relocation of the firms in Bien Hoa 1 IZ.

Speaking at a press conference held in Dong Nai this Tuesday, Tran Thanh Hai, deputy general director of Sonadezi, said the corporation was drawing up the plan with adequate compensation and sufficient time for companies in the IZ to move away.

Businesses are allowed to stay if they are financially capable enough to adjust themselves to meet the new functions of the zone. If not, they will receive compensation or support in development of production facilities in new locations.

Another option is those unable to adapt to the new zone will be given priority to become shareholders of a company to be set up to manage the urban, service and commercial area. Their stakes will be proportional to the areas they are currently occupying in the IZ to ensure fairness.

If they refuse to become shareholders of the aforesaid company, owner of this company will look for strategic partners to replace them.

With the above options, Hai said the firms subject to relocation would not suffer from disadvantages if land in Bien Hoa 1 IZ became expensive after its transformation.

In addition, the government of Dong Nai has issued policies on labor support so that the displaced companies can stabilize production in new locations. The province promises to offer the displaced firms the biggest incentives.

Bien Hoa 1 IZ is one of the biggest sources of pollution in the Dong Nai River, the water supply to more than 20 million people in HCMC, Dong Nai, Binh Duong and Ba Ria-Vung Tau. Every day, 97 companies active in this IZ discharge over 9,000 cubic meters of wastewater, some 7,900 cubic meters of which is treated by the companies themselves and discharged directly into the Dong Nai River.

The Dong Nai government has encountered many difficulties in its plan for converting the functions of Bien Hoa 1 IZ, especially in relocation of 104 companies, including 97 active ones with 26,100 employees. The cost of this conversion is nearly VND15 trillion.

Companies in Bien Hoa 1 IZ will be relocated to industrial parks like Giang Dien, Nhon Trach and Ong Keo, according to Sonadezi. However, so far, no company has moved away.

Many businesses say they feel uneasy about moving to Giang Dien IP or other industrial parks, which are 20-60 kilometers from their current production base, pushing up costs in the context of financial distress.

Moreover, they are concerned their workers will be struggling when their plants have to halt operations for relocation. During this process, they will have no products to supply to customers and thus will easily lose their market.

Road to airport to open to traffic in Sept.

The HCMC Department of Transport has been asked to work with Tan Binh, Go Vap and Thu Duc districts to soon finish site clearance so that the road from Tan Son Nhat Airport to Thu Duc east of the city can open to traffic on September 2.

The eastbound road from the airport is being developed by South Korean GS Group. The city government urged the project investor and other sub-contractors to finish the road’s key section from Gia Dinh Park in Go Vap to Go Dua overpass in Thu Duc and put it into use on the Independence Day of September 2.

According to the investor, the road has now been over 72% completed. Rach Lang, Binh Loi, and Go Dua bridges as well as four pedestrian bridges on the road have also been virtually finished.

However, some sections on the road have not been constructed due to slow site clearance. Currently, around 115 households in Tan Binh, Go Vap and Thu Duc districts remain to be relocated.

Tan Son Nhat-Binh Loi-outer ring road is an expressway of the city’s belt road system. Having a total length of 13.7 kilometers, the road starts from Truong Son intersection in Tan Binh, links to Nguyen Thai Son intersection in Go Vap, crosses the Saigon River via Binh Loi Bridge, runs to Binh Trieu crossroad and then Linh Xuan intersection in Thu Duc to be connected with National Highway 1.

The road with 6-12 traffic lanes will help reduce a large volume of vehicles running from the city’s center to the eastern area.

Voluntary pension insurance put on the right track

Legal framework unveiled for voluntary pension insurance to be introduced in Vietnam within the month.

"The Ministry of Finance (MoF) is now working on the long-awaited circular guiding the establishment of voluntary pension funds and the implementation of pension insurance for release this month," said a circular drafter who is also the representative for the MoF's Insurance Supervisory Authority.

Pension insurance is a voluntary form of savings to fund retirement, usually supported by employers and encouraged by the government through tax benefits. It benefits people by providing financial independence and security during old age, aids the government by channeling individual savings to national development, and helps employers by providing an efficient means of rewarding their employees.

Under the circular draft, to be allowed to supply pension insurance products, insurance firms must meet the hold charter capital of more than VND1 trillion ($48 million), have a liquidity ratio higher than VND300 billion ($14.4 million), and are obligated to establish a voluntary pension fund not lower than VND200 billion ($9.6 million).

Currently, some insurance firms which have qualified to implement pension insurance such as Dai-ichi, Bao Viet, Prudential, AIA, Manulife and PVI Sun Life are awaiting the circular’s imminent release.

Some of these firms such as Dai-ichi and Bao Viet have established voluntary pension insurance products which will be submitted to the MoF for approval after the circular comes into force.

Meanwhile, in late June, the MoF also released Decree 65/2013/ND-CP guiding the implementation of the Personal Income Tax (PIT) Law which took effect from July 1, 2013 which stipulated conditions for insurers to implement pension insurance products.

Firstly, Article 3 of the decree regulates that accumulated premiums from life insurance and other non-compulsory insurances in the voluntary retirement fund, which are bought or paid for by the employers, is included in taxable incomes of individuals.

Before paying the insurance amount, individuals, insurers and companies managing the voluntary retirement fund are responsible for withholding tax at the rate of 10 per cent for accumulated premiums from July 01, 2013.

Secondly, the decree states that the maximum premium level of the voluntary retirement fund that is deducted from taxed incomes specified in this clause does not exceed VND1 million per month in accordance with the MoF guide.

In cases where individuals who reside in Vietnam but work abroad and having incomes from businesses, wages or salaries abroad have participated in buying compulsory insurance in those countries, the individuals are entitled to deduct these premiums from their taxable income. These types of taxes incurred while working abroad incude social insurance, health insurance, unemployment insurance and professional liability insurance.

Thirdly, the revised law raised the threshold of personal income tax from the current VND4 million ($190) to VND9 million ($428) per month and raised the deduction for families from the current VND1.6 million ($76) to VND3.6 million ($171) per dependant per month.

"Reasonable tax rates and deductions will help taxpayers to reduce their tax burden to join in pension insurance," said a representative of a foreign insurance firm which is in the process of preparing to implement pension insurance.

Viettel Post earns big profit

State-owned Viettel Post Joint Stock Corporation has reaped a big crop in this year’s first half.

The corporation (Viettel Post) last week reported that during this year’s first six months, its revenue totaled $23.7 million, up 26 per cent on-year, including over $638,000 in profit. It also contributed $1.43 million to the state budget.

“With such big revenue, we have already accomplished 49 per cent of the year’s business plan. This has been the biggest level we have achieved from the past till now,” said the corporation’s general director Luong Ngoc Hai.

“It is expected that we will be able to join Vietnam’s growing club of enterprises with revenues of VND1 trillion ($48 million) this year,” he said.

The six-month achievements have reflected the corporation’s sound and sturdy business strategy, in which on some new services have been focused on.

For instance, Viettel Post began in May 2013 cooperation with state-run Military Insurance Company (MIC). Under which MIC would use Viettel Post’s express delivery and office stationery services, and promote its brand name on Viettel Post’s envelopes. MIC would also introduce Viettel Post’s posting services to its customers and partners.

Meanwhile Viettel Post will directly distribute MIC’s insurance products to customers wanting to join these products via its transaction offices nationwide. In addition, MIC will insure Viettel Post’s all assets and responsibilities with competitive costs and best insurance conditions.

“Viettel Post has earned a monthly revenue of VND250 million from this cooperation,” Hai said.

The corporation has also implemented EMS in southern province of An Giang, and in many enterprises. As a result, revenue from this service in this year’s first half has doubled that of the whole 2012.

The corporation has also fetched big business windfalls from overseas markets. For example, Viettel Cambodia’s six-month revenue grew 22.3 per cent on-month, fulfilling 100 per cent of the initially-set plan.

Hai said Viettel Post also targeted to grow 15-20 per cent in revenue, profit and staff for this year’s second half.

At its recent annual shareholders’ meeting 2013, Viettel Post adopted its business plan for 2013, with the total asset of VND246 billion ($11.82 million), up 26 per cent on-year.

Viettelpost’s revenue for this year will be $48.8 million, up 15 per cent on-year. After-tax profit will total $1 million, up 13 per cent on-year and the workforce will rise 7 per cent, and dividend rate will be 12 – 15 per cent.

Half of Vietnamese banks see lower profit in first half of 2013

A survey by the State Bank of Vietnam (SBV) showed that nearly 50% of Vietnamese banks made lower pre-tax profit between January and June this year against the second half of 2012.

The biggest profit fall ranged from 20% to 30%, according to the survey on banks’ business trends conducted by the SBV’s Monetary Statistics and Forecast Department.

Only 30.4% of banks said that their business activities improved during the period, meanwhile 21.5% disclosed that they got worse business results.

The survey also indicated that the business environment from now to the end of the year (2013), still poses many risks, therefore, bad debts have remained the greatest challenge to customers.

Most banks said the risk-level of customer groups increased between January and June this year, thus, more than 50% of them forecast that their bad debt rate can only stay the same or rise by late 2013, compared to the end of 2012.

However, 71.4% of surveyed banks expect higher profits-- somewhere just below 10%-- in the second half of this year. Banks also think that interest rates, particularly lending interest rates, would probably continue falling in the next three to six months inclusive.

Up to 89.8% of banks interviewed said their outstanding loans would increase in number by late 2013 compared to the number at the end of last year.

Authentic noodle makers incur business slump due to safety concerns

Many noodle makers in northern Vietnam have been reporting slow sales after the recent stories of unsafe noodles reported only in the southern region of Vietnam.  

Recently environmental crime prevention police in the southern province of Tay Ninh have inspected several noodle production establishments and found that some have used bleach that is banned from use in food processing.

Such substances include Tinopal, an optical brightener for papermaking, detergents and cleaners like Oxalic acid that is used for cleaning or bleaching, especially for the removal of rust.

The incidents have stirred up public concerns over noodle food safety and hygiene. Having no other choice, many are compelled to opt not to consume such a popular food, causing a considerable fall in noodle sales recently.

Even though the incidents were reported in the south, many traditional villages in the north that make noodles are seriously affected, incurring a major slump in business, although there is no proof of bleaching in these villages.

Khac Niem Commune in Bac Ninh City has been a major noodle provider for Hanoi and localities in the surrounding areas for years. Production and trading  there have been slowing down after the recent noodle-safety reports.

Nguyen Thi Hoan, a local resident, has reported a considerable decrease in noodle sales recently. Sales fell to less than one ton per day compared to the previous amount of around 1.5 million tonnes daily.

“My whole family and several workers have been making a living from noodle production for years. The recent reports about substandard noodles in the south have seriously affected our business even though we still strictly comply with food safety and hygiene regulations. Our revenues have been reduced by around VND3 million (USD141.60) per day,” Hoan said.

Vu Thi Lan, another local woman, complained that several restaurants have continued to return noodles as most of their customers have opted not to eat noodles for health concerns after the incidents.

“Our noodles sales have critically decreased to little more than 300 kilos per days. Noodles orders and delivery are rather quiet,” she said.

Duong Minh Du, head of Tien Ngoai Hamlet in Khac Niem Commune said, “We’ve worked in noodle production for years and don’t use any toxic substances. It’s unfair for us to be victims of others’ misconduct.”

Several communal authorities said local noodles sales have decreased by nearly 30%, causing losses of hundreds of millions VND per day to producers.

In order to help improve the situation, local authorities have been making efforts to intensify propaganda to improve people’s awareness of the issue, he noted.

“Noodle producers in Khac Niem Communes have strictly complied with food safety and hygiene standards. Consumers should feel safe when using their products,” he added.

Luxury Hanoi hotels attract more domestic investor cash

As foreign owned high-end hotels in Hanoi struggle with a number of issues, including the country’s economic downturn, the real estate market crash, over supply and the reality that many international tourists are tightening their belts, domestic investors are relishing the opportunity to acquire them.

According to Phan Xuan Can, chairman of SohoVietnam, a merger and acquisitions consulting firm, many domestic investors are actively finding opportunities to either partly or fully take over Hanoi’s high end hotels.

Can said he had advised a new investor to obtain a site in the heart of Hanoi to develop a four-star hotel. “This investor has been looking for a hotel project for a long time and now is the time for them to take advantage by getting a prime location at a suitable price,” Can said.

According to Can, many other investors were coming to him for advice on hotel development projects. “However, operating a hotel is a long term capital investment, so investors must be very consistent and have long investment vision,” Can countered.

In order to be successful in the hotel business, the top condition for any investor is location. “The location must be in a central street and have convenient transportation links,” said Can.

Hanoi is now home to eight high-end hotels. In the past, foreign ownership was widespread, but that has been reversed as domestic investors become increasingly dominant.

An outstanding case is Metropole Sofitel, one of the city’s oldest and most prestigious hotels. The hotel was built in 1901 by two French companies and was the first ever five-star hotel in Hanoi. Today the hotel now is co-owned by VinaCapital and Hanoi Tourist.

Opened in 1996, Daewoo Hanoi was one of the first luxury hotels in Hanoi following the renovation period, and used to be a symbol of the presence of Korean business in the country. The hotel was taken over by Hanel, the domestic partner of its original joint venture in 2012.

The trend to domestic ownership in the five-star hotel market continued with the case of Hilton Hanoi Opera. In operation since 1999, Hilton Hanoi Opera was originally a joint German-Austrian project. In 2006 VinaCapital bought 70 per cent of the company as part of a joint venture with domestic Thang Long Corporation. Three years later, VinaCapital announced that it sold its entire stake to BRG – a strong domestic financial group.

Meanwhile, notable exceptions to the trend are Sofitel Plaza West Lake and Melia which continue to be dominantly foreign owned joint ventures.

Melia was initially built in 1994, by Thai Group SAS Trading in a joint venture with Hanoi Electromechanical Manufacturing JSC, and is today owned by renowned Thai billionaire Charoen Sirivadhanabhakdi.

Similarly, Sofitel Plaza West Lake (formerly known as Meritus Westlake Hanoi) has been a joint venture between Singapore UOL Group and the Hanoi Construction Corporation since its beginnings in 1998.

Mega-resort deal downsized

Investment management and real estate development firm VinaCapital is seeking approval for changes to the development plan of its $4 billion integrated resort in an effort to help the firm find a new partner to replace Malaysian casino operator Genting that pulled out in 2012.  

An anonymous source of the central province of Quang Nam’s Chu Lai Economic Zone Management Authority said VinaCapital had proposed a one third reduction of South Hoi An’s land site, downscaling to 1,000 hectares from a current 1,500ha. Furthermore, he said, the developer had asked permission from the provincial people’s committee to delay the completion of the entire project to 2035.

“VinaCapital thought that the change of the project’s development plan will be supportive in finding new partners to replace Genting,” said the source, adding that the investor was intent on finding a major partner within the third quarter of this year.

Nguyen Duc Huong, director of public relation at VinaCapital, did not respond when VIR’s reporter contacted her last week.

VinaCapital and Genting Malaysia Berhad (GENM), a subsidiary of Genting Group, gained an investment certificate to develop the $4 billion integrated resort in Quang Nam three years ago. VinaCapital holds an 80 per cent stake in the joint venture, with GENM holding the remaining 20 per cent.

According to Quang Nam Provincial People’s Committee, the project consists of five-star hotels, resorts, villas and a gaming facility for foreigners.

VinaCapital was founded in 2003 and is now managing $1.5 billion of assets in Vietnam. South Hoi An is VinaCapital’s largest property project in Vietnam, and one of only four licenced integrated resort projects in the country having the total investment capital exceeding $4 billion.

VinaCapital and Genting previously planned to start the construction of the project last year after completing site clearance work. However, the construction has not begun yet, as Genting suddenly announcing their withdrawal from the project in September 2012, forcing VinaCapital to find other partners.

“Actually, VinaCapital introduced the local authorities to some foreign companies to replace Genting. But none of them has seriously discussed about investing in the project,” said the source.

He said VinaCapital was still committed to pursuing the project and had made plans to open the first phase of the project in the fourth quarter of 2015.

The first phase covers an area of 23ha and will comprise 500 hotel-rooms, 90 gambling tables and other tourism facilities. This is said to be similar to the first phase of Ho Tram Strip project opened last month by Canada’s Asia Coast Development Limited in the southern province of Ba Ria-Vung Tau.

Licenced gaming tightened

After nearly a year in the works, the Vietnamese government has just issued a new decree regulating the operations of electronic gaming service providers  thereby creating a comprehensive regulatory framework for the industry in Vietnam.

The governmental Decree 86/2013/ND-CP, dated July 29, stipulated that all 5-star or equivalent hotels and resorts were free to open electronic gaming services as long as they are in a separate facility and satisfy security requirements. This also means hospitality businesses with less than five stars would no longer be allowed to operate such services.

The new decree replaced Decision 32/2003/QD-TTg, issued almost a decade ago, which was the only legal framework regulating electronic gaming service providers. According to the Ministry of Finance (MoF), the new guidelines were much needed as the old policy was archaic and a decision was not comprehensive enough to manage such a complex business.

The new decree however does not include the operations of casinos, only electronic gaming machines.

Decree 86 is unchanged regarding the prohibition of Vietnamese from entering gaming facilities, but it is a significant step forward in the development of the gaming industry.

“We are very pleased with the new decree, as it shows the Vietnamese government is taking the gaming business seriously and protecting both people and businesses with an appropriate legal framework. From what we understand, the government intended to start with electronic games and will subsequently develop a structure for the casino business as a whole,” said Colin Pine, general director of Ho Tram Project Company, a subsidiary of Canada’s Asia Coast Development Limited, the owner of the $4 billion Ho Tram Strip integrated resort casino in the southern province of Ba Ria-Vung Tau.

Pine believed that to build a successful, safe, and organised gaming industry, it is important to have an adequate legal framework that applies to all enterprises operating in the industry.

“Decree 86 is a strong first step towards Vietnam having an international standard gaming industry and we look forward to the upcoming decree on casinos,” he added.

The Vietnamese government’s decision to narrow down businesses eligible for electronic gaming to 5-star and ‘high-grade’ hotels means there would be fewer businesses of this type in urban areas.

“This strategy will create more interest in tourist destinations outside of the major urban centres, which will help diversify tourism and promote economic development outside major cities. Also, this will help focus gaming tourism to specific areas with large-scale casinos that can be more carefully and effectively monitored and managed,” Pine explained.

Electronic gaming services were first allowed in Vietnam in 1992, and since then, 50 gaming businesses have been licenced nationwide. The largest in the country is the Grand Ho Tram, the first resort of the Ho Tram Strip project, which includes 90 gaming tables and 1,000 slot machines.

The MoF reported that the total revenue from electronic gaming services reached around $72 million per year, with the industry contributing $11.5 million per year to the state budget.

VSIP offers international standard development

Launched in 1996, the Vietnam Singapore Industrial Park (VSIP) is part of an economic cooperation between the governments of Vietnam and Singapore, initiated by former Prime Ministers Goh Chok Tong of Singapore and Vo Van Kiet of Vietnam.

VSIP has developed 5 projects in Vietnam including VSIP I, VSIP II Binh Duong, VSIP Bac Ninh, VSIP Hai Phong and the latest VSIP Quang Ngai.

Up to 240 investors from 27 countries around the world have chosen to base their long-term investment projects in VSIP I of 500 hectares, VSIP has grown from strength to strength. VSIP II, officially launched in 2006 with the area of 345 hectares, was fully occupied within two years after its launch with 130 tenants. In 2008, the VSIP II was expanded comprising of 1,000 hectares of industrial zone and 700 hectares of township.

The VSIP Binh Duong is well-placed to participate in the exciting emergence of Binh Duong New City. Since 2007, VSIP has announced its expansion to the north with two projects: VSIP Bac Ninh Integrated Township and Industrial Park of 700 hectares and VSIP Hai Phong Integrated Township and Industrial Park of 1,600 hectares.

In 2011, VSIP announced its expansion to the central province of Quang Ngai. VSIP Quang Ngai comprises 1,226 hectares of industrial park located within the Dung Quat Special Economic Zone and 520 hectares site zoned for commercial and residential purposes will be developed at downtown Quang Ngai city. Target industries of the

industrial park include food and beverages, fast-moving consumer goods (FMCG), electronics assembly and other light industries catering to the oil, gas and chemical sectors.

With the latest project in Quang Ngai province, VSIP has established a total of five industrial parks and township complexes in Vietnam with the combined area of more than 6,500 hectares, attracting $6.3 billion in capital investments, and generating 140,000 jobs. With these achievements, VSIP has become the symbol of co-operation between

Vietnam and Singapore. VSIP is a leading township and industrial park complex in Vietnam, providing an operating environment conducive to success.

Bayer provides innovative solutions

Germany’s Bayer last week in partnership with Ho Chi Minh City’s Cardiology Association organised a science symposium themed as Stroke Prevention in Patients with Non-valvular Atrial Fibrillation: Present and Future.

The one-day high-profile event held on August 1, on which Bayer Group also celebrated its 150th anniversary, attracted more than 200 healthcare professionals who are cardiologists and neurologists working in hospitals of Ho Chi Minh City and neighbouring provinces.

The symposium focused on the risk of stroke in patients with non-valvular atrial fibrillation, the causes of the disease, its burden on society, and, most importantly, preventative treatments available around the world. The discussion highlighted the importance of preventing strokes in patients with non-valvular atrial fibrillation.

Atrial fibrillation is the most common sustained cardiac rhythm disorder. Major cardiovascular organisations in the world such as American College of Cardiology, American Heart Association Task Force on Practice Guidelines and the European Society of Cardiology Committee have announced that there are more than one third of patients hospitalised due to heart rhythm disturbances with 4.5 million patients with atrial fibrillation in Europe.

In Vietnam, according to a survey conducted by the National Heart Institute in conjunction with the World Health Organization showed that the number of patients with atrial fibrillation made up 0.3 per cent of the general population. Almost half of stroke sufferers due to atrial fibrillation are at risk of death while the remainder faced the risk of disability.

“Bayer is working closely with health care practitioners to introduce innovative drugs that will further improve the health of the nation. Strokes can be devastating to both patient and caregiver, and prevention should be a key priority,” said Manoj Saxena, country head of Bayer Health Care Pharmaceuticals in Vietnam.

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