Major city CPIs rocket on soaring fuel increases

Consumer price indices in the two largest cities have hit their highest levels in five months, driven by last month's petrol price hike, General Statistics figures show.

July's CPI in Ha Noi rose 0.22 per cent over June and in HCM City, 0.17 per cent.

In the capital, prices of all 11 CPI goods increased, of which transport costs rose the most (115 per cent).

The General Statistics Office said July's transport price rise followed a decision to allow petrol prices to go up VND420-430 per litre and diesel, VND220 on June 16.

Another rise of VND420-470 per litre for gasoline, diesel and kerosene made on July 17 will impact on following months, the office noted, estimating that the petrol price hike could add 0.15 per cent to August's CPI.

July's prices of housing, power, fuel and construction materials in Ha Noi saw a rise of 0.66 per cent against last month in the wake of the petrol price hike.

With this month's rise, the capital's CPI was up 5.97 per cent against the same period last year.

In HCM City, July's 0.17 per cent hike caused the city's CPI to increase 0.96 per cent against December last year and 3.54 per cent over the same period last year.

Transport in HCM City saw the highest rise of 1.3 per cent. Items of food-restaurant, culture-entertainment, garment-textiles, hats and footwear also crept up between 0.1 per cent and 0.4 per cent.

Not included in the CPI, gold prices in July recorded falls of roughly 6.6 per cent month-on-month or 14.1 per cent year-on-year.

In contrast, the US dollar rose by 0.63-0.79 per cent month-on-month and 1.08 per cent year-on-year in July.

HCM City stock exchange makes it lucky 13

Around US$62 billion in capital has been raised from the stock market during its 13 years of operation, State Securities Commission statistics shows.

VN, S Korea develop industrial co-operation

Economists and managers from Viet Nam and the Republic of Korea debated ways to promote the two countries' industrial cooperation at a seminar in the capital on Thursday.

The event was co-organised by the Viet Nam Academy of Social Sciences (VASS) and the RoK Institute for International Economic Policy (KIEP).

Major issues on the agenda included industrial policies, economic zones and complexes, international trade and production network, vocational training and industrial cooperation, plus measures to overcome the economic crisis.

Viet Nam has made many changes to its development policies to promote links between industries after the negative impacts caused by the mass development of coastal and border economic zones.

Last year, the Government decided to focus investment from the national budget on six coastal economic zones and eight border economic zones nationwide.

During its process of industrialisation and modernisation, the country has shifted priority policies from ones beneficial to enterprises to those that benefit the market.   

Viet Nam is conducting negotiations to join regional and international production and trade organisations, which will bring about benefits as well as difficulties and challenges for the country.

Accordingly, Viet Nam must gradually remove its protection policies, while the country still lacks advanced technologies and a quality workforce for enterprises, especially those invested by foreign businesses.

In addition, Viet Nam is one of the countries hardest hit by climate change, which forces it to rearrange and select suitable production industries for development.

The RoK is now one of Viet Nam's crucial economic partners, especially in the field of industry.

Participants remarked that the two countries need to seek measures to boost industrial cooperation as the potential between them is great.

Vice Director of the Institute of World Economics and Politics (IWEP) Nguyen Binh Giang said the two sides have numerous opportunities to increase development cooperation in the electronics industry, information technology, automobile, garments, footwear and support industry.

Professor Bokyeong Park, a lecturer from the RoK university of Kyung Hee, said Viet Nam's State and Government need to help small and medium-sized enterprises reform the production structure and apply advanced technologies.

Vietnam, Haiti ink trade, investment agreement

Vietnamese Minister of Industry and Trade Vu Huy Hoang and Haiti Minister of Economics and Finance Wilson Laleau signed a framework agreement on trade and investment in Hanoi on July 22.

Both sides want to increase cooperation in trade, investment, agriculture, cultivation, livestock breeding, and garment making for export to Haiti.

They agreed to continue implementing a memorandum of understanding (MoU) on rice trading between Vietnam and Haiti, including supplying some quality varieties of rice to this Caribbean nation.  

They also discussed the possibility of sending Vietnamese civil engineering businesses to Haiti to build infrastructure facilities and houses during its reconstruction process.

Bilateral trade and investment ties have developed vigorously after a Vietnam visit in December 2012 by Prime Minister Laurent Salvador Lamothe.

During the visit, the Ministry of Industry and Trade of Vietnam and the Ministry of Economics and Finance of Haiti signed a MoU on rice trading, under which Haiti will annually purchase between 250,000-300,000 tonnes of Vietnamese rice. Vietnam started delivering rice to Haiti as of April 2013.

In the first five months of 2013, Vietnamese exports to Haiti rose 355% to US$20.2 million. Major export items included rice, machinery, equipment, and phone handsets.

Vietnam, Laos boost trade and investment cooperation

A meeting to promote trade and investment cooperation between Laos and Vietnam was held in Vientiane on July 19.

Participants included officials from theVietnamese Embassy in Laos,Lao authorities, and representatives from Dong Nai and Ben Tre provincial businesses.

Provincial representatives briefed meeting attendees on respective socio-economic development and strengths and outlined potential future cooperation opportunities with Lao businesses.

Dong Nai province enterprises are interested in exploring partnerships with Lao counterparts in a number of key export items--timber, bamboo and rattan, pharmaceuticals, agricultural produce,and clothes.

Ben Tre provincial enterprises are focused on collaborating in fruit cultivation, fisheries, and food processing.

The two provinces are expected to take advantage of the benefits Laos has been granted under the European Union's generalised scheme of tariff preferences (GSP) and help push Vietnam’s and Laos’  bilateral trade turnover to US$2 billion by 2015.

Supply chain management on discussion

A seminar on supplier managed inventory (SMI), also known as supply chain management, was held in the southern province of Ba Ria-Vung Tau on July 19 to boost Vietnamese enterprises’ sustainable development.

The event was organised by the Vung Tau branch of the Vietnam Chamber of Commerce and Industry (VCCI) in coordination with the Vietnam Marketing Association (VMA).

SMI is an integrated system that manages related units’ effective activities in the continuous process from material supply to final consumers. It aims to control the demand chain of customers and producers’ supply capacity.

According to VMA Chairman Le Phung Hao, supply chain in Vietnamese businesses still lacks linkage and integration to establish competitive edges and criteria to evaluate the effectiveness of SMI phases, as well as appropriate investments in information technology to foster the effectiveness of management.

Domestic companies have not made full use of the supply chain’s advantages to supplement added values to their products, and they have not yet set up strategies to integrate their value chain into the global one, Hao added.

SMI, which normally accounts for over 50 percent of enterprises’ total production and business costs, determines and benefits their sustainable development.

It is a key element that shapes the cost price of products, and is a process of supplying materials and commodities just in time and at reasonable prices to better meet customer demand.

East-West corridor nations promote trade, investment

A conference was held in the central province of Ha Tinh on July 19 to boost trade and investment among Vietnamese, Thai and Lao companies.

Enterprises from the corridor got a chance to promote their brands, expand markets and seek their partners.

The conference, associated with the 2013 International Trade Fair in the province, also helped tighten the solidarity, friendship and cooperation between Ha Tinh and its two foreign countries.

Ha Tinh province, a major area of the northern central key economic region, is the gateway of the East-West corridor with the Cau Treo International Border Gate and a favourable seaport system for local and foreign businesses to boost trade and investment.

The locality is home to several of Vietnam’s key economic zones such as Vung Ang and Cau Treo Border Gate, which have attracted a number of investment projects with capital of trillions of VND.

Ways sought for homebuyers to access stimulus package

The HCMC branch of the State Bank of Vietnam (SBV) suggested that the housing status of individuals wanting to take out loans from the VND30-trillion preferential home credit package be confirmed by banks instead of grassroots authorities.

The proposal has been sent to SBV and the Ministry of Construction, said Nguyen Hoang Minh, deputy director of the central bank’s HCMC branch.

As per the current regulation, only those without houses can access the preferential loan, and a housing status confirmation must be done before lenders appraise collateral for loans.

Multiple homebuyers have failed to get a housing status confirmation and thus they have been unable to borrow loans from the VND30-trillion package.

To benefit from the low-cost home credit package, homebuyers have to submit home purchase contracts and confirmations that they have not owned a house.

It is easy for State employees to meet this requirement as they simply need confirmations from the heads of the agencies where they are working. Meanwhile, those working in non-State sectors must seek confirmations from the authorities of the wards where they are residing, and many of them have failed to overcome this obstacle.

Nguyen Huu Nghia, deputy director of the Saigon West branch of Bank for Investment and Development of Vietnam (BIDV), said a lot of people had contacted the branch to ask about the VND30-trillion home loan package, but most of them had difficulty getting housing status confirmations from authorities.

BIDV Saigon West is offering a preferential credit package for the Khang Gia-Tan Huong project in Tan Phu District. Few homebuyers have taken out loans from this package.

In HCMC, so far only 18 loan applications have received the nod, with seven of them approved by BIDV and eleven by Vietcombank. Meanwhile other banks entrusted to provide such loans, namely VietinBank, Agribank and MHB, have not given out loans to any borrower, said Minh.

As for property developers, Hung Phu and Hoang Quan are the only two companies that have applied for low-interest loans, around VND1 trillion. BIDV is still considering their applications.

Le Hoang Chau, chairman of the HCMC Real Estate Association, said the preferential home loan package was aimed at stimulating housing demand and thus settling inventory and a part of bad debt in the property market. In addition, it offers a chance for low-income people to own a home.

However, loan disbursement will remain sluggish without a determination of lenders and solutions to break down the procedure barriers so that homebuyers can have easier access to the credit package.

Apart from Khang Gia-Tan Huong, BIDV Saigon West is working with the owners of two other projects over preferential loans, said Nghia.

As State-run banks are still cautious about disbursing the VND30-trillion credit package, a number of property developers are launching budget housing projects with low-interest loans provided by joint stock banks outside the stimulus package.

For example, Nam Long Investment Corporation said its low-cost condos at the Ehome 4 Saigon North project in Binh Duong’s Thuan An District would go on sale at an average price of VND450 million per unit.

Although this project is eligible for the VND30-trillion package, Nam Long still joins hands with VPBank to provide its customers with another choice when they need financial support, said Nguyen Vinh Tran, deputy general director of Nam Long.

VPBank pledges to offer customers of the Ehome 4 Saigon North project a fixed lending rate of 6-8% in the first two years. The first 322 Ehome 4 apartments will go on sale next month.

ABBank shakes hands with aviation insurer

An Binh Commercial Joint Stock Bank (ABBank) and Vietnam National Aviation Insurance Company (VNI) on Tuesday struck a cooperation deal in Hanoi.

Under the deal, ABBank and VNI will favor the products and services provided by the other party and offer each other the incentives available for strategic partners and special clients.

VNI will opt for the saving and financial investment programs launched by ABBank, while ABBank will choose the insurance services provided by VNI, especially property insurance.

ABBank currently has charter capital of VND4.8 trillion and a network of 144 transaction points nationwide.

VNI, established in 2008, is a non-life insurance company with capital of VND500 billion. Its founding shareholders include Vietnam Airlines Corporation, Vietnam Machinery Installation Corporation, Vietnam National Coal and Mineral Industries Group, Hanoi Export-Import Company, Nam Viet Group and some others.

VNI is offering property, fire, building, marine, motor, travel and aviation insurance, along with other products.

AGPPS sells preferential shares to farmers

An Giang Plant Protection Joint Stock Company (AGPPS) will increase its chartered capital by selling shares to farmers next month, Huynh Van Thon, general director of AGPPS, said.

Thon on Monday informed his firm would mobilize an additional VND80 billion, equivalent to nearly 15% of its chartered capital worth VND621 billion at present.

AGPPS will sell preferential shares to farmers with outstanding performance who have cooperated with the firm over the years at a value of VND30,000 a share. The trading price of each AGPPS share now stays at VND57,000 in the market.

“Instead of spurring State-owned capital at AGPPS as planned earlier, we have sought approval from the Government to issue shares to farmers to encourage them to get attached to farming and improve their incomes,” Thon said. Farmers are expected to enjoy a dividend of some 20% from AGPPS shares annually.

When asked about the source of money for share purchase by farmers, Thon said AGPPS has proposed the State provide low-interest loans to farmers as its would-be shareholders. This proposal is still being considered but Thon believed it would be approved and that the Vietnam Bank for Agriculture and Rural Development would give loans to farmers underwritten by AGPPS.

Many local and foreign shareholders also support AGPPS’s plan of issuing shares to farmers rather than using the State budget to increase its State ownership.

Before that, the Steering Committee for Enterprise Renovation and Development of the Government Office informed the Government planned to replenish chartered capital for the parent companies of 100% State-owned groups and corporations and supplement investment capital to maintain and increase State ownership at other enterprises. The State has plans to increase State ownership to more than 30% at AGPPS this year.

HCM City seeks AIA investment via bond purchase

HCMC Vice Chairwoman Nguyen Thi Hong suggested AIA Group consider buying local bonds to provide funding for infrastructure development in HCMC.

Talking to Mark Tucker, executive chairman and chief executive officer of AIA Group, Hong said: “Foreign direct investment (FDI) plays a very important role in the economy of Vietnam in general and HCMC in particular. Like the World Bank and the Asia Development Bank… AIA can inject capital into infrastructure projects in HCMC, such as metro lines or roads and bridges.”

She suggested AIA purchase bonds. “This is a medium- and long-term capital source that the city longs for. We hope AIA investment will be intensive and long-term,” she said at the meeting with Tucker on Tuesday.

Tucker expressed his concern over the negative signs of Vietnam’s economy, especially the vast number of loss-making and inactive private firms.

However, Hong stated the municipal authorities always provide enterprises with special support to overcome difficulties. In addition, she gave some information proving “the situation is not so gloomy”.

The AIA leader said he would continue to follow the developments in Vietnam before coming to a decision.

Grade-A office building opens in downtown HCMC

Mai Thanh Service Co. Ltd. on Tuesday inaugurated the grade-A office building Lim Tower in downtown HCMC.

With 34 upper floors and two basements, Lim Tower offers over 34,000 square meters of grade-A office space. The building is located at 9-11 Ton Duc Thang Street in District 1, at Ton Duc Thang-Le Thanh Ton intersection.

With design consultancy provided by two foreign companies, CASA of Hong Kong and Arquitectonia of the U.S., Lim Tower was built in 31 months, said Tran Thi Lam, founder and major shareholder of Mai Thanh Service Co. Ltd.

To ensure safety of the building, Mai Thanh has hired two other consultants from France. APAVE Asia-Pacific has been selected as project management consultant, while ARTELA has served as construction supervision consultant, said Lam.

Equipped with a high-speed lift system, the office building has a double-layer glass exterior for heat and UV resistance, being friendly to the environment, protecting the health of the people working in the building and helping tenants reduce power costs, said the developer.

Lim Tower is the tenth grade-A office building that has been developed in HCMC and the only one inaugurated this year, after Bitexco Financial Tower was opened in 2010.

CB Richard Ellis (CBRE) Vietnam has been picked as operator of this office building as well as exclusive leasing and marketing agent for the building with six floors for parking.

The developer of Lim Tower is one of the very few investors that have completed their projects on schedule and timely handed space to tenants in the current tough times with the frozen property market, according to realty consultancy firms.

Lim Tower has found mid- and long-term tenants for 65% of its total area. Techcombank has chosen this building to locate its southern headquarters, renting 17 floors with a total space of some 17,000 square meters, said Lam.

Still, CBRE Vietnam informed that with an average rent of US$28-30 per square meter, Lim Tower is competitive with other grade-A office buildings in HCMC.

Lam remarked the average rent offered by Lim Tower is about 15% lower than the rents quoted by other grade-A office buildings in the city, encouraging companies to rent office space here. Such a rent does not generate profits for the company, but given the troubled property market, the occupancy rate for Lim Tower is quite satisfactory, she said.

Saigon Newport expands wharfs, warehouses

Saigon Newport Corporation will expand its warehousing systems in Dong Nai, HCMC and Haiphong by a total of 238,000 square meters next year, the company said at a function celebrating the establishment of two offshoots in HCMC on Tuesday.

While many seaports in Vietnam have seen their business operations slumping in recent years, Saigon Newport has still decided to invest in building more warehouses and wharfs to prepare for the development of the local freight transport market in the years to come.

Saigon Newport on Tuesday formally established SNP Logistics Center and SNP Road Transport Company as its new subsidiaries to operate warehousing and logistics facilities.

The Inland Clearance Depot (ICD) Newport – Long Binh in the southern province of Dong Nai now is expanding a warehousing system by 18,000 square meters while Cat Lai Port will construct a three-level container freight station on a total area of more than 20,000 square meters, said Nguyen Nang Toan, director of SNP Logistics Center.

Similarly, SNP Logistics Center will continue to develop an ICD warehousing system on a combined 200,000 square meters in the northern coastal city of Haiphong next year. The warehousing expansion is to meet rising commodity storage demand from customers.

The parent firm Saigon Newport reported total cargo throughput of 3.5 million twenty-foot-equivalent units (TEUs) in 2012, achieving total revenue of VND6.4 trillion, growing 14% year-on-year. In this year’s six-month period, total throughput of cargo handled by Cat Lai Port alone marked up over 10% over the same period in 2012.

At present, warehousing areas of Saigon Newport total nearly 500,000 square meters, including container freight stations and bonded warehouses. The company holds up to around 85% of the southern import-export container market and roughly 50% of the whole local market.

Nguyen Dang Nghiem, general director of Saigon Newport, informed his enterprise would inaugurate a 260-meter quay at Cat Lai Port at the end of this month, thus extending the total length to more than 1,500 meters in the port.

The other subsidiary, SNP Road Transport Company, has total chartered capital of VND60 billion, with 70% contributed by the parent company. The newly-established firm specializes in transporting commodities by road, exploiting warehouses and making new containers.

With the two new subsidiaries, Saigon Newport expects cargo transport between Vietnam and other neighboring nations like Laos and Cambodia will develop vigorously in the near future, Nghiem said.

Leather-footwear firms may benefit little from TPP

It is probable that local leather-footwear companies won’t benefit much from the Trans-Pacific Strategic Economic Partnership Agreement (TPP) under negotiations now, said Diep Thanh Kiet, vice chair of the Vietnam Leather and Footwear Association (Lefaso).

At a seminar on the sidelines of this year’s international leather and footwear exhibition in HCMC last Thursday, Kiet said the TPP brings benefits to the country’s leather-footwear industry as a whole. However, he noted, when import tariffs are slashed in line with the TPP, it is foreign importers who will enjoy the most benefits besides consumers.

Currently, about half of leather-footwear exports of local companies are done under subcontracts, meaning the enterprises only enjoy 10-15% of the product value. For the remaining half of footwear exports, local subcontractors earn 25-30% of the total value.

As such, the biggest value proportion still belongs to big foreign brands and distributors, according to Kiet.

Meanwhile, foreign-invested companies though accounting for less than one quarter of the total number of members in the industry are earning up to 77% of the country’s total leather-footwear exports. Once the TPP becomes valid, foreign-invested companies will stand to earn the most, Kiet said.

At present, the two global giant shoes brands Nike and Adidas are having 30% of their outputs processed in Vietnam. However, sub-contractors for these two giants are mostly South Korean and Taiwanese firms, not Vietnamese ones.

Textile-garment, leather-footwear and seafood products are believed to have many opportunities for exports when the TPP gets effective, said Vuong Duc Anh from the Import-Export Department under the Ministry of Industry and Trade.

The present export tariffs imposed on local footwear shipments to the U.S. are high, ranging from 37.5% to 48%. Still, it is likely that local footwear won’t be subject to a low export tariff of 0% as soon as the agreement comes into force as footwear products might fall into the exclusive category under the TPP, Anh added.

Paddy, rice prices bounce back

Despite the country’s offered export prices of the 5% broken rice still sitting pretty low, at only US$380-390 a ton, paddy and rice prices have bounced back strongly in the local market.

Unlike the dreary atmosphere seen at the start of last week, the paddy and rice market in the Mekong Delta was bustling on Monday, with prices jumping by VND400-500 a kilo.

According to Nguyen Thanh Hon, a rice trader in Tien Giang Province’s Cai Lay District, prices of the fresh IR 50404 fluctuate between VND4,300 and VND4,500 a kilo while long-grain types such as OM 6976, OM 5451 and OM 4281 sell for VND4,600-4,700 a kilo.

Rice of the strain IR 50404 was bought at only VND6,200-6,300 a kilo by companies in Dong Thap and Can Tho provinces a week ago, but they have surged to VND6,500-6,600 per kilo now. Similarly, rice of long-grain types has also shot to VND7,000-7,100 a kilo from the VND6,600-6,700 a kilo recorded a week ago.

Nguyen Van Tien, general director of An Giang Import-Export Joint Stock Company (Angimex), ascribed the revived paddy and rice market to the better export performance. He expected local prices to be more stable in the near future and advised local exporters to be prudent in signing export contracts as the current Jasmine rice supply is small.

Despite the paddy and rice price increases, many delta provinces have almost completed harvesting the summer-autumn rice crop 2013, with many farmers selling out fresh paddies right at their fields.

Dong Thap Province already harvested a combined 155,000 hectares out of 198,000 hectares for this year’s summer-autumn rice crop, the provincial agriculture department reports. Hau Giang Province, meanwhile, cultivated a total of 76,000 hectares in the summer-autumn crop 2013 and has almost completed rice harvest with an average yield of 5.7 tons a hectare.

Sugar assoc wants wider power in sugar export

The Government should delegate the power to the Vietnam Sugarcane and Sugar Association in weighing sugar export volumes in line with the actual situation instead of applying an export quota regime, said the association’s chairman.

Nguyen Thanh Long, who also serves as general director of Can Tho Sugar Joint Stock Company, told the Daily that the sugar trade should be driven by the market rather than administrative sanctions imposed by the Ministry of Industry and Trade.

In November 2012, facing mounting inventories and price falls, the association had sought approval from the Government to export sugar, but it was not until this March that the industry ministry had given its green light under the Government’s instruction, Long said.

However, as the Lunar New Year holiday as the peak consumption season had been over, there were not many chances to ship sugar abroad. The export volume, therefore, has yet to reach the licensed 200,000 tons up to now, he remarked.

The industry ministry now only allows the association to extend the export deadline of 200,000 tons of sugar until the end of this month even though the latter asked for an extension until the end of this year or until exporters run out of stock.

Long noted that with the deadline extended to end-July, the industry would be unable to ship the amount abroad as there are only two weeks left for this month.

As of the middle of this month, sugar inventories at local firms remained very huge, at a combined 450,000 tons, while the demand is dropping, with total sale volume at enterprises only reaching 70,000-80,000 tons a month, the association reports.

“If such a low sale tempo continues, sugar stocks will run high in the near future as the Nuoc Trong sugar plant in the southern province of Tay Ninh has entered the new crop while other plants in the Mekong Delta will also be busy in September,” Long forecast.

Regarding sugarcane production in the delta, Nguyen The Tu, director of the agriculture department of Hau Giang Province’s Phung Hiep District, said the locality as the largest sugarcane growing area in the region cultivated more than 9,500 hectares in the crop 2012-2013 and will begin sugarcane harvest in the middle of September.

Compared to last year’s crop, this year’s sugarcane price is VND70 a kilo lower, at only VND830 a kilo for quality sugarcane, he said.

Small foreign investors opt for factory leases

Foreign direct investment (FDI) companies in HCMC are inclined to lease ready-built factories of industrial park (IP) infrastructure development enterprises, instead of constructing their own facilities. Most of these entities are small- and medium-sized enterprises (SMEs).

According to a recent report of the HCMC Export Processing and Industrial Zones Authority (Hepza), the number of new FDI enterprises hiring land for factory construction fell considerably while those choosing ready-built plants rose sharply in the city in this year’s first six months.

Total land leased to the FDI sector at the city’s IPs and export-processing zones only reached nearly 3.9 hectares in the first six months, slumping over 55% year-on-year. Meanwhile, the total area of ready-built factory space for lease at these zones was nearly 18,200 square meters, jumping over 161%.

A majority of new foreign-invested projects hiring factories from IP infrastructure developers are SMEs in supporting industries, Hepza’s Investment Department said.

As these enterprises are still in the process of exploring investment prospects in Vietnam and looking for outlets for their products, they just want to lease workshops for trial production for about two to three years. Therefore, their investment capital is very small and they might consider expanding operations or asking for land to build their own plants when their business operations fare well.

These companies come mainly from Japan, South Korea and Taiwan but the city has seen German, Swedish and Dutch enterprises active in supporting industries coming, such as precision engineering.

The number of FDI companies using ready-built factories at the IPs is increasing, Hepza said. It noticed these businesses even hire the plants of the local enterprises that have suspended operations due to tough conditions at home.

Hepza said it would focus on working with companies developing quality factories to lure foreign SMEs to local supporting industries. The authority will cooperate with Japanese infrastructure developers to construct quality plants tailored to the needs of Japanese investors at Hiep Phuoc IP.

In contrast, the area of land leased to local companies has totaled 11.44 hectares so far this year, up 10.81% year-on-year, while the total area of plants hired by these entities has risen only 2,600 square meters, tumbling nearly 72%, Hepza said. It promises to create favorable conditions for enterprises facing difficulties in business and production to hire plants that are not in use in the near future.

The city attracted a combined US$214.5 million in investment from January to June, representing nearly 43% of the year’s target and surging 1.27% year-on-year, Hepza reported. Total leased land amounted to 15.33 hectares, dipping 20% year-on-year, while leased factory space leapt 27.45% to about 20,800 hectares, according to the authority.

Higher seafood export quality

Soc Trang – a Mekong Delta province that is a key supplier of aqua products, especially shrimp – is taking a range of measures to support enterprises to push up exports to traditional and new markets.

Soc Trang is home to 33 aquaculture investment projects, mostly domestic ones, whose combined capital is over VND1,750 billion, or more than US$83.3 million.

The province’s strong agriculture and fisheries sectors are partly attributable to the Mekong Delta’s rich land and good climate. Official statistics show that more than a third of Soc Trang’s 67,102ha under aquaculture cultivation in 2011 was for intensive and semi-intensive farming, without total output of 142,045 tons.

Aquaculture for export plays a key role in the province’s master plan to improve the provincial economy in some rural and difficult areas.

Soc Trang has already completed the zoning of key shrimp farming areas in Long Phu, My Xuyen, Cu Lao Dung and Tran De districts and Vinh Chau Town. These are really stable and rich farming sources securing material supplies for seafood processors and exporters.

The provincial leaders are committed to issuing more comfortable and accessible policies, one-stop procedures and better investment promotion programs to call for more domestic and foreign investors to the province.

In 2011, the province’s total export revenue was US$476.54 million. In 2012, however, the figure declined to US$409.104 million. Seafood was the major export item, accounting for 91.90% of total export sales, followed by rice with 6.65%.

In particular, frozen shrimp export sales reached US$310.97 million in 2012, down 15% versus 2011. The main cause of the decline was lower import demands of key markets such as the U.S. (down 20.28%), the EU (down 12.13%) and Japan (down 40.08%). Besides, shrimp export prices also dropped.

In the first half of this year, shrimp export revenue totaled US$141.75 million. Its main markets were the U.S. (42.86%), Japan (26.36%), the EU (11.71%), Canada (5.52%) and Korea (4.78%).

To cope with such difficulties, Soc Trang Province has conducted a series of trade and investment promotions and joined national key trade promotion programs. The highlights include setting up a fund for the province’s trade promotion, supporting enterprises to seek markets and collaboration opportunities, and supplying updates about foreign markets to exporters.

In addition, the province has stepped up trade promotions such as conducting market research and surveys, joining local and international fairs and exhibitions, and organizing fairs and exhibitions. The province also disseminates information such as market forecast and trade barriers to farmers as guidelines in production and processing.

Via its official web portal, Soc Trang posts important information about export activities such as international agreements between Vietnam and foreign markets.

Last but not least, Soc Trang always supports companies’ attempts to improve quality and hygienic conditions of exports, either meeting international standards or saving costs. Enterprises are particularly encouraged to diversify exports, add value to their products and use the internet for marketing and advertising.

Soc Trang is looking to obtain total export sales of US$430 million this year, up 5.11% year-on-year, with seafood estimated to hit US$375 million, up 7.12%.

M&A deal value surges five times

Mergers & acquisitions (M&A) activities among businesses in Vietnam have seen strong growth over the past five years with value jumping from over US$1 billion in 2009 to US$5.1 billion in 2012.

The data was released on Tuesday by a research group of M&A Vietnam Forum at a briefing announcing the fifth M&A Forum 2013. The event will take place in HCMC on August 8.

M&A deals since 2009 are expected to have a total value of US$14.8 billion with an average growth rate of 65% each year, according to a report of the M&A Vietnam Forum.

However, the M&A market reached a total value of US$1.8 billion in the first half of the year. The market is estimated to generate US$4 billion this year.

Nguyen Anh Tuan, editor-in-chief of Dau Tu newspaper, the organizer of the annual event, said that M&A should not be viewed as a concern.

“Foreign investors that have acquired Vietnamese firms will bring capital, technologies and management capability into the country, encouraging local firms to improve competitiveness. This is a positive sign,” Tuan said.

M&A has been a global tendency while the scale of the M&A market in Vietnam is small compared to regional countries.

Besides, there is no danger of foreigners taking over local enterprises due to the barriers of Vietnamese laws, Tuan added.

One of most notable M&A deals in the first half of the year is the sale of Vincom Center A in HCMC at US$470 million. Last year, Bank of Tokyo-Mitsubishi acquired a 20% stake of VietinBank at US$743 million.

Meanwhile, France’s Conoco Philips has withdrawn from two oil rigs and Nam Con Son Pipeline project and sold its assets to Parenco at nearly US$1.3 billion.

According to the research group, M&A deals related to foreign investors accounted for 66% of the total value of US$5.1 billion last year.

Japanese investors have been paying much attention to the M&A market in Vietnam, pouring US$1.5 billion into the market in the 2011-2012 period.

However, the report also noticed acquisitions among rivals in recent times. Up to 50% of business leaders in this report said that they were concerned about being acquired while only 23% said that acquisition was normal.

Floor prices, tax incentives may hinder exports: official

Export floor prices and tax incentives for export items can easily cause problems for Vietnam with foreign countries, said Nguyen Phuong Nam, deputy director general of the Vietnam Competition Authority (VCA) under the Ministry of Industry and Trade.

For limited understanding of the competition laws of Vietnam and foreign countries, certain sectors in Vietnam easily commit violations, he said.

For example, Vietnamese rice prices keep falling, although Vietnam is the world’s largest rice exporter in terms of volume. Nam ascribed this situation to the price competition among rice traders.

To cope with this situation, floor prices for export rice are set, which is an anticompetitive practice, he stated.

Nguyen Ngoc Son, an expert on Competition Law at the HCMC University of Economics and Law, stressed that imposing export floor prices goes against Article 8 of the Competition Law and Article 14 of Decree 116/2005/ND-CP.

Competition agencies of foreign nations will notify Vietnam of any price fixing agreement they detect. They cannot handle such anticompetitive practices themselves because Vietnamese exporters are not present in their countries.

The U.S. and the member states of the European Union (EU) can intervene in price fixing agreements in case the Competition Law allows, but they rarely do so. Instead, they adopt other measures like erecting trade barriers, restricting imports and levying tariffs.

Nam said Vietnam should carefully consider before offering incentives, particularly tax and loan interest incentives, which easily lead to subsidy accusations made by foreign countries.

In a recent anti-subsidy lawsuit against Vietnamese frozen warm-water shrimp, the U.S. plaintiffs brought 18 accusations against the subsidy program maintained by the Vietnamese Government, including subsidies under the seafood development program, loan interest support for machine and equipment purchase and land use fee cuts and exemptions, said Nguyen Hai, Master of Laws in international trade at law firm Mayer Brown JSM.

Theoretically, exporters cannot dump their goods over a long period of time but still earn profits and keep developing. However, the U.S. Department of Commerce (DOC) ignored this economic theory when determining a dumping margin of up to 80% for Vietnamese goods.

“In this game, what matters isn’t whether you have received subsidies or not, but what you can do to prove to investigation agencies that you have not received any subsidies,” said Hai.

In mid-March, DOC announced its determination for the eighth administrative review (POR 8) on Vietnamese tra fish. As a result, each kilo of tra fish fillet exported to the U.S. has to bear an anti-dumping duty equivalent to its tax-exclusive price, leading to proposals for export floor prices.

Four housing projects get loans from VND30-trillion package

Four out of 30 budget housing projects endorsed by the Ministry of Construction have gained access to loans from the VND30-trillion housing stimulus package.

Do Duc Duy, chief of the ministry’s office, said that the four projects belonged to private enterprises, with two projects located in Haiphong City, one in Hue City and the other in HCMC.

The two projects in Haiphong are the An Dong apartment project of PG Company and the Bac Son housing project for low-income earners of Haiphong Construction and Development Investment Joint Stock Corporation.

Meanwhile, Vicoland Development and Construction Group Joint Stock Company borrows nearly VND118 billion to develop a budget housing project in Thua Thien-Hue Province’s Hue City and VND540 billion is the loan taken out by Hoang Quan Consulting-Trading-Service Real Estate Corporation for the commercial-turned-budget housing project in HCMC.

According to Duy, after inspecting and evaluating documents of projects registered by provinces, cities and enterprises, the ministry has endorsed 30 projects in the first phase so that the central bank and commercial banks can consider offering loans.

Among the 30 projects, four projects belong to State-owned enterprises. Besides, 11 projects are in the northern region, nine others are located in the southern region and the rest in the central region.

The ministry has asked owners of projects in the list to complete documents and directly contact banks for loan borrowing guidance.

In addition, the ministry is also evaluating some commercial projects converted to budget ones. The list of projects proposed in the second phase will be announced within two week’s time.

According to Haiphong Construction and Development Investment Joint Stock Corporation, ten of its customers have conducted procedures to borrow preferential loans of the credit package.

The package directs at not only investors of housing projects but also buyers of budget homes. However, there have not been any statistics on how many home buyers have got access to this package.

According to Nguyen Viet Manh, head of the central bank’s Credit Department, the package is to be disbursed in three years, and thus customers should prepare documents and select banks to borrow loans. Besides, banks need to provide transparent and clear information.

Deputy Prime Minister Hoang Trung Hai has asked the central bank to urge commercial banks to deal with borrowing documents of home buyers. The Central Steering Committee for Housing and Real Estate Market Development will have a meeting to handle problems encountered in the process of implementing policies and regulations to facilitate the loan borrowing of the people.

HCM City axes 48 foot-dragging projects

The HCMC government has cancelled its land allocation and leasing decisions previously issued to 48 housing, production and public welfare projects covering a total of 850 hectares for their little progress.

In addition, the city is considering how to handle 36 other slow-moving projects with a total area of 2,600 hectares, says a report by the HCMC People’s Council presented at the meeting last weekend.

The HCMC People’s Council has found a number of projects in the city inconsistent with the planning and their owners incapable of implementing them, yet such projects have not been handled properly. They include a golf course project and six resettlement projects in Nha Be District, 20 projects in Cu Chi District occupying nearly 250 hectares, the Xuan Thoi Thuong Industrial Park project with 391 hectares and the Tan An Hoi residential project in Cu Chi with 120 hectares.

In regards to urban planning, the municipal people’s council informed 97 detailed plans of the scale 1:2,000 had not been passed.

The report also says that the HCMC government in 2013 and 2014 will thoroughly deal with temporary residence in the city.

There are currently 24 projects with 1,341 households in temporary residence in HCMC, including 767 households forced to move for site clearance purpose and 574 others living in degraded apartment buildings subject to urgent relocation.

Ministry kicks off site-clearance for north-south highways

The Ministry of Transport on Monday organized a conference in the central city of Danang to deploy site-clearance for investment projects expanding national highways 1A and 14 a total cost of VND8.6 trillion.

The projects include a scheme to expand sections of National Highway 1A stretching from the north-central province of Thanh Hoa to the Mekong Delta city of Can Tho and the other to expand the Ho Chi Minh Road running through the Central Highlands.

The conference was attended by Deputy Prime Minister Nguyen Xuan Phuc, Minister of Transport Dinh La Thang and representatives of 23 related provinces and cities.

As per the planning, around 1,500 hectares will be recalled with 25,000 households affected, including roughly 7,500 households in need of resettlement.

The Ho Chi Minh Road project running 663 kilometers through the Central Highlands region, or National Highway 14, connects Dak Gion in Kon Tum Province with Chon Thanh in Binh Phuoc Province. The scheme’s first phase already completed a 110-kilometer section running from Dak Gion to Tan Canh in Kon Tum while construction on the remaining one is still going on as the second phase.

According to Minister of Transport Dinh La Thang, the national highway expansion projects aimed at reducing traffic accidents and increasing the highways’ exploitation capacity have been given the Government’s support as the

key projects. He said the transport ministry had been working with related ministries, agencies and provinces to have the schemes carried out for completion at the end of 2016.

Thang asked involved provincial leaders to instruct owners of sub-projects to make site-clearance and relevant authorities to make compensations, and provide supports and arrange resettlement in line with what they had committed to ensure the project’s construction on schedule.

Southern Thu Thiem suggested as green space

Building should be restricted in the southern delta of Thu Thiem New Urban Area to save green space and tide rise should be taken into account to maintain ecological balance, said scientists and experts at a meeting on the detailed plan for Southern Thu Thiem on Monday.

Nguyen Anh Tuan, head of Thu Thiem Investment Construction Authority, said the plan on the 1:2,000 scale for Thu Thiem New Urban Area was passed in 2005 and the zoning plan was revised in 2012. The southern delta covering over 150 hectares is described as the green lung for the urban area, which helps conserve the natural environment.

According to a report by Archetype, a French company in charge of drawing up the 1:500 scale plan for Southern Thu Thiem, there will be three projects in this area, including a resort, a water park and a flora research institute.

These projects will be constructed on wetlands and connected to one another by internal roads or elevated roads. The roads will have a suitable width for travel.

The resort will be developed on 13 hectares, the research institute on 18.9 hectares and the water park on 9.6 hectares. Some 4.78 hectares will be used to build roads and green space will cover around 103.9 hectares.

Pham The Vinh, deputy head of the Center of Water Resource Technology Research under the Southern Institute of Water Resource Research, said tide had reached a peak of 1.62 meters, asking the consultant to update the information and map out an appropriate design plan.

Dinh Quang Diep from Agro-Forestry University said that building should be limited in the southern delta to preserve the existing vegetation. He suggested building houses on stilts on the water surface.

Luu Trong Hai from the HCMC Architects Association described Thu Thiem as a water container of the city when tide rises and flood occurs. Therefore, the southern delta should be planned to contain the maximum amount of water to keep the ecosystem in balance.

“I think this area should be kept intact. No buildings, no research institute, no resort, just a natural forest,” he said.

He suggested transforming the existing residential areas along the river bank into tourism villages rather than relocating them. Landscapes on the river sides should be kept in their status quo, he said, adding that there is no need to build embankments.

Trang Bao Son, deputy head of Thu Thiem Investment Construction Authority, said the suggestions of scientists and experts would be considered and appropriate adjustments would be made to the plan. The detailed plan for the southern part of Thu Thiem will be put up for comments two more times before being submitted to the HCMC government.

Singapore becomes 6th largest trading partner

Singapore is the 6th largest trading partner of Viet Nam after China, Japan, the US, the Republic of Korea and Taiwan, according to the statistics of the Viet Nam Customs.

Since 2006, goods trading between the two countries has always accounted for a large proportion of Viet Nam’s total export and import value.

By the end of May, the two-way trade stood at US$3.53 billion, in which Viet Nam’s import value stood at US$2.49 billion, down 12.9% against the same period of 2012.

Key exports to Singapore in 2012 included computers, electronic products, components with the turnover of US$300 million, up 10.7% against 2011 and accounting for 12.8% total export turnover of Viet Nam to Singapore market.

The Customs agency said deficit has increased sharply over the past two years, from US$1.98 billion in 2010 to US$4.32 billion last year.

More than 6.4 million tourists visit Ba Ria – Vung Tau province

The southern coastal province of Ba Ria – Vung Tau attracted more than 6.4 million tourists in the first six months of 2013, up 10.75 percent over the same period of 2012.

The figure included 248,095 foreign visitors. Total tourism revenues reached 1.48 trillion VND, an increase of 17.9 percent over the same period of 2012.

The result can be attributed to considerable efforts Ba Ria – Vung Tau province has made to promote local destinations and improve tourism environment.

According to Nguyen Van Son, Deputy Director of the provincial Department of Culture, Sports and Tourism, the first phase of Ho Tram Strip tourist complex will be open to visitors at the end of July, which is expected to draw more visitors to the province.

The department also plans to organise workshops to find solutions to attract Japanese tourists and launch a contest to design the province’s typical souvenirs. More tourism promotion publications will be published in Vietnamese, English and Japanese languages.

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