SCIC to promote divestment at SOEs

The State Capital Investment Corporation (SCIC) will boost the process of divestment of non-core businesses at several State-owned enterprises (SOEs) this year.

This follows Decision 2344/QC-TTg of the Prime Minister, announced on December 2, 2013, which highlights the approval of the restructuring plan of the SCIC by 2015.

During this year, the corporation will have to consider buying financial instruments issued by SOEs if they fail to divest capital held at various banks.

It's good news for the State-owned groups and corporations, which were finding it difficult to find partners for stake transfers, especially in the real estate, financial and securities sectors.

In some circumstances, a loss may occur during the divestment process. Therefore, enterprises are afraid of taking responsibility for a loss and only conduct divestment when the capital market is strong.

To help SOEs speed up non-core divestment, a new resolution is expected to be approved by the Government in the first quarter of 2014 to allow SOEs to divest capital below the par value after setting up reserve funds for the investments as required.

The SCIC, formed under Decision No 151/2005/QD-TTg dated June 20, 2005, is responsible for managing and investing State capital in various sectors, including financial services, energy, manufacturing, and telecommunications. Transportation, consumer products and healthcare sectors are also under its purview.

In November 1, 2013, the Government issued Decree 151/2013/ND-CP, which enabled a number of new mechanisms consistent with significant functions of SCIC, including the sale of State-owned capital.

McDonald’s president surveys Vietnam market in person

McDonald’s president and CEO Don Thompson said that he made a fact-finding trip to Vietnam in person before opening the first franchise fast-food restaurant in Vietnam.

Speaking to the press on Monday, Thompson said that McDonald’s has entered the nation to expand its network but it is manager groups of McDonald’s Vietnam and the Asia-Pacific, Middle East and Africa (APMEA) that will decide how many eateries will be opened.

To open a new restaurant, McDonald’s will look into supply chain, organize manpower training and carry out construction, he said.

Thompson said that surveying is important before entering a new market. A unit of the group conducted this step, the franchisee in Vietnam, Good Day Hospitality, launched a group to take charge of media, marketing and project development. It coordinated with McDonald’s to find market opportunities.

McDonald’s focuses on making customers feel satisfied rather than increasing the number of its restaurants, he said.

McDonald’s has entered Vietnam to develop business, Thompson added.

Up until now, McDonald’s has tapped over 120 markets worldwide.

Vingroup selects new CEO

Vingroup has selected Ms Duong Thi Mai Hoa born in 1969 as the new Chief Executive Officer (CEO) to succeed outgoing Ms Le Thi Thu Thuy.

Prior to joining Vingroup in 2013, Ms Hoa served as the general director of Vietnam International Commercial Joint Stock Bank and Vietnam Maritime Commercial Joint Stock Bank (Maritime Bank). She also served a stint as the financial director of Oracle Vietnam.

Ms Thuy has officially been named as the incoming President of Executive Board and General Director of VinE-com -an established company in the field of e-commerce.

Thua Thien-Hue IZs generate jobs for nearly 16,000 workers

Industrial zones (IZs) in central Thua Thien-Hue province employed 15,920 local workers in 2013, reported Nguyen Huu Tan, Head of the provincial IZ management board.

While meeting with representatives from businesses in Thua Thien Hue’s IZs on February 11, Tan said they made up 45% of the province’s total industrial value and contributed VND1,264.9 billion to the State budget annually.

Nguyen Ngoc Thien, Secretary of the Thua Thien-Hue provincial Party Committee, spoke highly of business operations in the IZs and pledged to create the best possible conditions for businesses.

This year, Thue Thien Hue’s IZs aim to attract VND2,900 billion, with a focus on mineral exploring and processing, environment and infrastructure development.

Local authorities and businesses plan to organize more vocational training for local labourers to meet an increasing demand for skilled workers, especially in foreign firms.

Bad debt among the biggest monetary challenges of 2014

Economist Bui Kien Thanh said the Vietnamese monetary system has seen encouraging signals, but still sees three major obstacles in the way of a full market recovery in 2014, including bad debt.

According to the economist, the biggest challenge for the local monetary market in 2014 is bad debt. Last year the Vietnam Asset Management Company (VAMC) bought up a large amount of bad debts and plans on continuing doing so in 2014. However, the big task for the company this year will be how to deal with the debt it has already bought. The majority of this debt comes from the real estate sector, which has remained frozen in recent years. How to turn bad debt into money is a challenge for VAMC.

Another big problem on the list is interest rates, which are among factors affecting business operations in the country. The preferential interest rates for Vietnamese companies is around 10%, but the level for overseas and foreign-invested firms in Vietnam is only 1-2%. Currently, the Vietnamese business community expects to enjoy a long-term interest rate of 6%.

The third challenge listed was complicated cross-ownership in the banking system leading to problems for banks in the control of cash flow. This, Thanh said, compounds the problem of bad debt.

The State Bank of Vietnam needs to deal with the situation in which an individual or organisation buys stake in a bank which exceeds the regulated rate, he said, adding that individuals must take responsibility for these violations related to cross-ownership.

EVN Meets Energy Demand

Vietnam Electricity (EVN) has finally reached capacity to power the entire country after 59 years of service, said the company director general Pham Le Thanh.

Maintenance workers from HCMC Power Corporation at Thi Nghe transmission station in HCMC (Photo: SGGP)

The national grid’s capacity is 20,400 megawatts while the country’s consumption is only 18,600 megawatts, said Nguyen Anh Vu, head of the public relations of Ho Chi Minh City Power Corporation.

EVN will continue to supplement more supply sources to increase the total’s capacity by 4,466 megawatts.

The group is building two 500-kilovolt transmission lines stretching from Pleiku to My Phuoc to Cau Bong and from Vinh Tan to Song May to Tan Dinh.

EVN will be able to meet energy demands in southern regions and Ho Chi Minh City for the dry season, said Vu.

The group is still launching campaigns for reduced energy consumption even though they met demands.

Dong Nai attracts nearly 178 million USD in FDI

Industrial parks in Dong Nai province, one of the industrial hub in southern Vietnam, attracted about 177.8 million USD in foreign direct investment (FDI) in the first month of this year.

The figure made up more than 98 percent of the total FDI poured into the locality in January last year and 19.8 percent of the target set for 2014, said Mai Van Nhon, deputy head of the Dong Nai Industrial Park Management Unit.

In the month, domestic investors also injected 60.1 billion VND (2.8 million USD) into the province, he said.

According to Nhon, 18 projects in the local industrial parks raised their existing capital by 106.1 million USD last month.

During the month, the management unit granted licences to eight new foreign-invested projects with a total registered capital of 71.7 million USD and one domestically-invested project worth 60.1 billion VND.

The parks are expected to attract 900 million USD this year, with 400 million USD coming from new projects and will prioritise large-scale projects or those using cutting-edge technologies, the official said.-

Ha Noi hosts international fishing exhibition

Over 100 domestic and foreign shipbuilders and maritime groups will take part in an international exhibition in Ha Noi between February 26 and 28.

This was revealed by Vu Anh Tuan, general director of the Shipbuilding Industry Corporation, at a press conference in Ha Noi yesterday, while announcing the seventh international exhibition on shipbuilding, marine technology and transportation (VietShip 2014).

VietShip 2014, the largest meet of its kind on shipbuilding, marine tech and transportation in Viet Nam, will create opportunities for the participating businesses that will boost investment cooperation, technology exchange as well as promote trade.

Official reports show no Criffel cheese recalled in Vietnam

Official reports state that none of the Scottish cheese named Criffel, which has caused an international health scare due to deadly bacteria, has been discovered in Vietnam.

The statement was made by the Vietnam Ministry of Health Food Safety Department on February 11.

After learning of the bacterial contamination of Criffel unpasteurized cheese produced by the Loch Arthur Creamery in Scotland, the department took swift and immediate action to supervise the import of the cheese products.

The Department will continue to monitor the situation and update consumers with timely information.

Soc Trang approves windpower project

The People's Committee of Soc Trang Province in the Mekong Delta has licensed the Vinh Chau windpower project financed by German corporation EAB New Energy GmbH and HCM City's Trading Production and Service Joint Stock Company (Trasesco). The project with a capacity of 29MW in the first phase of operation will cost VND1,476 billion (US$70,280).

Soc Trang, which has huge potential for windpower sources, has approved four windpower projects with total capacity of around 300MW.

Deputy PM calls for more investment from French group

Deputy Prime Minister Nguyen Xuan Phuc on February 11 met Jean-Luc Brial, Director for Asia and building and water works of French civil engineering Vinci Group, calling on the firm to continue investing in Vietnam .

At the meeting, Deputy PM Phuc spoke highly of the performance by Vinci Group and Vinci Construction Grands Projects in particular in Vietnam over the past years.

He lauded the projects in transport infrastructure, urban irrigation, waste water treatment and environmental protection that the group has implemented in Hanoi , Ho Chi Minh City , Ba Ria-Vung Tau and Thai Nguyen provinces.

For his part, Jean-Luc Brial said in the future, the group will compete for contracts of a number of transport infrastructure and urban water supply and drainage projects in Ho Chi Minh City and Hanoi .

Vinci has recently signed a memorandum of understanding with Vietnamese partners on the transfer of advanced technology in the field, enabling it to expand its investment in Vietnam .

As part of a lineage of 100-year-old companies whose names are associated with impressive achievements worldwide, Vinci Construction Grands Projects designs and builds major engineering structures like tunnels, bridges, dams, road and rail infrastructures as well as buildings.

Dong Nai conference promotes exports

The southern province of Dong Nai held a conference on Monday with the aim of helping its businesses expand their market and seek cooperation with businesses in other countries.

The province will focus especially on the United Arab Emirates and also develop relations with Cambodia, Japan, the Republic of Korea, India, Australia, Chile and Myanmar.

Dong Nai will organise trade promotion activities, hold conferences to implement signed free trade agreements and anticipate the advantages that will be brought by the Trans-Pacific Partnership agreement, which is expected to be signed this year. Director of the provincial Department of Industry and Trade Le Van Danh said that Dong Nai's export turnover surpassed US$10 billion in 2013, accounting for 10 per cent of the national figure. Its main exports include footwear, garments and textiles and products made of wood.

Southern firms focalise retail network expansion

The business circle in Ho Chi Minh City has actively expanded its retail network across Vietnam in recent years, which is believed to be the right development direction amid increasing competition from both domestic and foreign enterprises.

As of the end of 2013, Vissan Co. Ltd. has over 100 showrooms and hundreds of outlets and provided fresh meat and vegetables for nearly 1,000 schools, organisations and hotels across the country.

Thegioididong.com, a mobile device retailer, is also present in all 63 provinces and cities. From 38 shops in 2009, this retailer has increased the number to 220.

Meanwhile, the Saigon Union of Trading Cooperatives (Saigon Co.op) places importance on developing various forms of retail to satisfy market demand.

At present, it owns 69 Co.opmart supermarkets, 72 Co.opFood convenience stores, 170 Co.op stores, along with Co.opXtra hypermarkets and Sense City trade centres from the north to the south of Vietnam.

In 2014, Thegioididong.com will upgrade and expand its retail network along with piloting outlets in rural areas, whilst Vissan will put into operation a factory in Hanoi and build an industrial cluster in the Mekong Delta province of Long An.

From now to 2020, Saigon Co.op will conduct its business in a sustainable and flexible way, its chairman of the board of directors Nguyen Ngoc Hoa said.

Vice Chairwoman of the HCM City People’s Committee Nguyen Thi Hong said over the past decade, the city has zoned land and provided finance for developing wholesale and retail systems. It has also proactively cooperated with other provinces to extend the retail network, helping fuel the sector’s development in Vietnam.

She added that diversifying business and retail forms is practical and in line with the current consumption trend. The expansion of retail facilities is also a necessary factor for the growth of the domestic market and the national economy as a whole.

Hai Phong seeks investment in added value industries

The northern port city of Hai Phong will give priority to attracting investors operating in technology-based industries which could create high economic value and save materials and fuel in the coming time.

Over the past three years, Hai Phong has been considered a highlight in FDI attraction.

In 2012, 1.2 billion USD of FDI was poured into the city, ranking it the second among localities nationwide in attracting FDI. The figure doubled last year to 2.4 billion USD, naming the city in the top three localities in this field.

The city now has over 360 active FDI projects, with a total registered capital of 8.27 billion USD.

Hai Phong has lured large projects from Japan and the Republic of Korea (RoK), such as LG, Bridgestone, Fuji Xerox, Kyocera and Nipro Pharma. These projects use modern technology and equipment, have a high added value and can help attract other projects. FDI projects worth hundreds of millions of USD and even billions of USD are also found in Hai Phong.

Hai Phong is a favorable gateway to land, railway and waterway routes and ranks first among provinces and cities nationwide in terms of seaport services. That is why most of big investors in Hai Phong produce goods for export.

In recent years, administrative procedures in the city have improved to increase investor’s comfort. Hai Phong has taken the initiative in catching the wave of investment from many countries.

To lure more FDI, the city has many solutions including speeding up the construction of infrastructure projects and creating a breakthrough in the construction of essential infrastructure in the Dinh Vu-Cat Hai Economic Zone.

The city will also promote the application of technologies and a quality management system in accordance with the ISO 9001:2008 standard to swiftly solve difficulties facing enterprises in implementing administrative procedures.

In addition, it has also paid attention to developing a high-quality workforce and improving the skills of technical workers to meet the requirements of large projects.-

Vietnam boosts transport ties with Singapore, EU

Transport Minister Dinh La Thang and his Singaporean counterpart Lui Tuck Yew have agreed to strengthen bilateral cooperation in the transport sector.

During their working session in Singapore on February 11, the two ministers were also unanimous in speeding up negotiations for the early signing of new agreements that will replace the Air Transport Agreement and Maritime Transport Agreement signed between the two governments in 1992.

The Singaporean side agreed to continue assisting Vietnam in training human resources in this field as well as share its experience in making plans on urban transport development and management, and road traffic safety.

Both host and guest noted with pleasure the development of air transport between the two nations, with 1.7 million of passengers recorded in 2013, up 1.7 percent against the previous year.

They expressed their belief that the figure will rise this year following the recovery of the world economy, contributing to fostering the economic, investment, trade, culture and tourism cooperation between Vietnam and Singapore .

Thang suggested Singapore help VietJetAir open a direct route to Singapore this year. Meanwhile, Lui affirmed his country’s agencies will provide the best conditions for the airline to realise the plan.

The Vietnamese minister is visiting Singapore to attend the ASEAN-EU Aviation Summit on February 11-12 and the Singapore Aviation Exhibition from February 11-16.

On the sidelines of the events, Minister Thang and Vice President of European Commission Siim Kallas discussed the possibility of transport cooperation between ASEAN and the EU in general, and Vietnam and the EU in particular.

According to Thang, the EU, the biggest exporter to ASEAN and the second largest trade partner of the bloc with around 200 billion USD made in annual two-way trade and ASEAN with a 600-million population boast potential of trade promotion and aviation partnership.

On the Vietnam - EU relations, Thang said the EU has in the past spent much on Vietnam ’s key goods like footwear, garment, seafood, wooden furniture, electronics and consumer goods. For this reason, the Vietnamese Government and the Ministry of Transport always pay attention to transport and aviation connections with the bloc.

On the basis of the Vietnam – EU air transport agreement signed in 2010, Vietnam signed a number of bilateral aviation deals with EU member countries like the UK , the Czech Republic , Italy and Iceland .

The country is negotiating and completing procedures to sign air pacts with other EU members like Finland , Spain and Switzerland , Thang said.

Kallas, for his part, said Vietnam , with a 90 million population, is really a big aviation market.

The national flag carrier Vietnam Airlines is running four direct flights between Vietnam and EU member nations. It has also partnered with Air Francs, Czech Airlines and Alitalia.

It is effectively operating nearly 60 Airbus planes. Additional 14 A350 planes will be put into use between 2015 and 2019.

On February 11, Thang attended the signing of a contract to buy and charter 100 planes worth 9.1 billion USD between VietJetAir and Airbus. He later toured some stalls at the Singapore airshow.

Intensive development model should be implemented in stages

The country should learn from growth model changes from extensive to intensive development and focus on stages, said General Director of the Industrial Policy and Research Institute Duong Dinh Giam.

Focusing on specific stages will help avoid stretching investments, he said.

Giam noted that it was important to adjust the model of growth to incorporate suitable industrial space planning, promote foreign investments giving priority to strategic investors, improve the quality of development strategies and plans, and uphold the combined strength of the economic system.

Despite being one of the sectors to have received priority standing in policies, support industries have still failed to meet their targets.

Although last year's targets of branch development with high growth rates of more than 15 per cent in the long term in all three sectors – state-owned, private, and foreign invested – were achieved, added value remains limited and, in some cases, is even reducing, Giam added.

He was also concerned about poor investment efficiency and the country's low technological level as well as the pivotal role economic regions have played.

Unreasonable resource allocations and planning, weak co-operation and co-ordination, and unsatisfactory development in support industries were of equal concern, he said.

He also stated that reliance on imported materials for production and unsatisfactory strategy planning and implementation were also a problem.

Giam recommended that industrial development strategy in the next few months should take advantage of domestic resources and markets and efficiently participate in the regional and international industrial production network.

It will also be necessary to develop industries and products for high-value exports and for advanced technology, besides creating a platform for agricultural and rural modernisation.

Priorities of industrial development in the next few months should include amending the industrial development model, promoting priority industries, and planning reasonable industrial spaces, Giam remarked.

He noted that to amend the industrial development model, it is necessary to follow a step by step approach by moving from a quantity-based to a quality and efficiency-based development model.

These changes, he added, should be combined with an improvement in the efficiency of the mobilisation of resources and bank branches' competitiveness.

Growth must be parallel with improvements in technology and productivity. The ratio of products with high added value and the quality of the industrial labour force must improve.

Regarding priority industries, efficient exploitation of limited resources is also a requirement, Giam stated.

The country should have a variety of offerings to create momentum for the development of priority industries, including processing and manufacturing industries, electronics and telecommunications industries, and new and renewable energy sectors.

Deputy Minister of Industry and Trade Le Duong Quang noted that despite government guidance, the existing mechanism and legislative policies have not been integrated.

Therefore, he said, the ministry will have to seek government approval for the country's industrial development strategy, taking into account the guidance and priorities that govern the existing mechanisms and policy improvements as well as the investment and business environment in key industries.

President calls for support industry acceleration

President Truong Tan Sang has underlined the need for support industry development if Vietnam hopes to become an industrial nation by 2020.

President Sang asked for greater efforts during a February 11 working session with leaders of the Hanoi Southern Support Industrial Park (HANSSHIP) project.

Municipal leaders and project managers told the State leader the HANSSHIP project is part of the national industrial development master plan and the capital city’s 2020 socio-economic development strategy (with a vision towards 2030).

The project has so far completed the necessary infrastructure and land clearance ahead of factory constructions from major companies such as TAKAKO, NIDEK, Hanel, and Thang Long.

The project aims to attract 3,000 domestic and foreign businesses, generating more than 300,000 jobs and serving as a model for support industry parks.

Municipal leaders and government representatives proposed adjusting loan, interest rate, and tax policies to improve the competitiveness of Vietnamese industrial parks and entice more major foreign investors.

President Sang acknowledged these proposals and asked businesses to focus on developing sufficient infrastructure, hiring and training human resources, and reforming practices in preparation for 2015’s ASEAN and China free trade agreements and the finalization of the Trans-Pacific Partnership Agreement (TPP).

Ha Nam strives for 30 FDI projects by 2015

The northern province of Ha Nam is aiming to attract 30 additional 30 FDI projects by 2015, bringing total FDI capital to around US$1 billion.

Provincial People’s Committee Chairman Mai Tien Dung unveiled the goal at a February 11 meeting between Ha Nam leaders and 40 foreign-invested businesses.

The province pledged to improve its investment environment, reform administrative procedures, and support labour recruitment and contract negotiation.

Dung said FDI enterprises promote economic development, contribute to state budgets, raise productivity, and advance the industrial sector. Recent provincial policies have earmarked infrastructure upgrades and bureaucratic reforms in the interests of open and transparent environment favoured by foreign investors.

The province’s 20 new FDI projects in 2013 were capitalised at US$118 million. Its cumulative FDI project total stands at 79, with registered capital exceeding US$700 million.

Australia sends first buffalo shipment to Vietnam

The Australian live animal export industry has embarked on a new endeavour with the Northern Territory’s (NT) first ever shipment of buffalo destined for Vietnam.

Vietnam is the second largest NT cattle importer after Indonesia.

Buffalo, relatively popular meat across Southeast Asia, is a new addition to the NT’s exports to Vietnam.

NT Chief Minister Adam Giles said a growing middle class and an appetite for high-quality meat is driving rising consumer demand.

He described the livestock industry as a key element in the government’s plan to develop the NT into the “food bowl of Asia”.

NT Minister for Primary Industries Willem Westra Van Holthe noted the territory is currently the only Australian jurisdiction exporting buffalo.

The first shipment of 222 farmed buffalo will be joined by another 600 next week and 1,500 more when the wet season eases in April.

Australian officials will travel to Vietnam in a fortnight to inspect animal welfare conditions.

South-East Asia Livestock Services Commercial Manager Dean Ryan said buffalo exports to Vietnam could total 10,000–20,000 heads of livestock this year, worth an estimated AUD 20 million.

115 countries register for VietShip 2014

As many as 115 foreign and domestic shipbuilders and maritime groups have registered to attend the 7th International Exhibition of Shipbuilding, Marine Technology, and Transportation (VietShip 2014).

A February 11 press briefing in Hanoi announced VietShip 2014 will be held at the capital city’s National Exhibition Centre from February 26 to 28.

Participants from Japan, the Republic of Korea, China, the US, Russia, Austria, the Netherlands, Norway, France, Singapore, Germany, Singapore, and Poland will pack more than 200 pavilions with their latest products and services.

VietShip 2014, which takes place during a period of difficulty for Vietnam’s shipbuilding and maritime industry, is expected to foster investment and trade exchanges between Vietnamese and foreign businesses.

The exhibition will also feature a shipbuilding industry seminar and contract and cooperation agreement signing ceremonies.

The event’s best products and services will be honoured with an awards presentation.

Bauxite plant's products praised

Deputy Prime Minister Hoang Trung Hai visited the Tan Rai Bauxite Complex in the Central Highlands Province of Lam Dong on February 11, where he applauded the quality of the plant's first products.

The plant opened last October and has since produced 260,000 tonnes of high-quality aluminum. More than 160,000 tonnes were exported to European and Asian markets while more than 855 tonnes were sold in the domestic market for US$320–330 per tonne.

Under the bauxite project in the Central Highlands region, which started in 2007, the Tan Rai plant was built in Lam Dong province and the Nhan Co plant was built in Dak Nong Province by the Vietnam Coal and Mineral Group (Vinacomin).

The Deputy Prime Minister asked Vinacomin and the project's Management Board to ensure safety. He stressed the need to prevent red mud from polluting the surrounding environment and build an extra reservoir for red mud in case of emergency.

Vinacom has signed a long-term contract with Japanese company Marubeni to provide 300,000 tonnes of aluminum per year and another contract with a Chinese company to provide 150,000 tonnes per year.

The Lam Dong bauxite complex is expected to produce 540,000 tonnes of aluminum and 800,000 tonnes of hydrate in 2014.