Plans to disburse housing package

Home buyers will soon be allowed to mortgage their new houses or apartments for loans from the VND30 trillion housing stimulus package.

The Ministry of Construction (MoC), the State Bank of Viet Nam (SBV) and the Ministry of Justice will issue a joint circular in that regard.

Deputy Minister for Construction Nguyen Tran Nam announced the news at a conference earlier this week in Ha Noi to discuss solutions for resolving the problems in the property market held by the Bank for Development and Investment of Viet Nam (BIDV).

Nam said the circular would be issued right after the Tet (Lunar New Year) holiday, adding that State workers would be eligible for accessing the loans if they have certified letters from their office without income statements.

Those working in non-State companies would have to apply for certification from their wards without income statements.

"This is considered as a breakthrough to accelerate disbursement of the package which was modestly disbursed last year," he said.

MoC and SBV would also include more commercial banks as participants in the VND30 trillion package.

The deputy minister said the ministry would focus on solutions for creating long-term capital for housing development such as credit trust fund and real estate investment fund. Especially, the Government would promote the establishment of housing banks to support housing projects.

"We would implement the pilot establishment of the bank after the holiday," he said.

A BIDV representative said that excluding bad debts, the bank would extend loans to home buyers who find it hard to repay their debts.

In addition, BIDV also proposed the Government allow commercial housing projects with apartments of less than 70 square metres and costing less than VND15 million per square metre to access the loan.

He also asked MoC to grant the Certificate of Housing Ownership Right to buyers of social housing projects and allow transfer of the certificate.

Responding to the proposal, Nam said the ministry has allowed some commercial housing projects access the loan package. However, it has not allowed home buyers from social housing projects to transfer their certificate within five years as it could be advantageous to property speculators.

BIDV also proposed to increase the loan period of the package from the current 10 to 15 to 20 years. It also submitted that the loan interest rate be lowered by 1 to 2 per cent.

Responding to the proposal, Tran Xuan Chau, SBV's deputy head of the Credit Department, said the central bank has reviewed the proposal to allow some commercial banks to join in the package's disbursement.

SBV would also increase the housing loans periods, but would not reduce the interest rate as it was already lower than normal loans. The proposed solutions are expected to heat up the property market this year.

Da Nang-Kawasaki shipping route set to be opened

A shipping route connecting Da Nang and Kawasaki in Japan via Shanghai, China will launch next Tuesday, general director of Da Nang port Nguyen Thu told Viet Nam News on Friday.

"The route will promote trading from Viet Nam's central region with cargo ships from Thailand, Myanmar, Laos and Viet Nam via the East-West Economic Corridor to Kawasaki and Shanghai," Thu said.

"It means that Da Nang Port will host cargo ships this year. As scheduled, the route will help transport an average of 200 TEUs (twenty-foot equivalent unit) per week," he said.

The beginning of ships traveling on the cargo route marks the 20th anniversary of friendship established between Da Nang and Kawasaki Port.

Da Nang Port handled a record 5 million tonnes of cargo in 2013, including 167,000 TEUs (twenty-foot equivalent unit).

The Japan International Co-operation Agency (JICA) Viet Nam had agreed to provide financial aid to Lien Chieu Port and Tien Sa Port in Da Nang for the second phase of construction.

Tien Sa port only allows access to 30,000 DWT (deadweight tonnage) ships, while 50,000 DWT container ships can dock at Lien Chieu.

January sees 10 percent fall in farm exports

Export turnover of farm products nationwide for the very first month of this year reached a modest US$2.32 billion, reducing by 9.7 percent from one year ago, according to the Ministry of Agriculture and Rural Development.

While exports of farm produce decreased by 17.9 percent year on year to US$1.17 billion, forestry produce registered a 3.3 percent rise to US$534 million and aquatic products fetched US$552 million, up 13.9 percent.

Several export staples such as coffee, rubber, tea, pepper, and cassava have plunged with rubber exports seeing the steepest reduction of 32.8 percent to hit US$199 million.

However, the situation may be better next month as exports to some major markets including India , Malaysia and China are increasing.

Coffee exports during the month were estimated at 165,000 tonnes, raking in US$323 million, down 24.7 percent in volume and 29 percent in value.

On the other hand, the export of rice hit 517,000 tonnes, earning US$243 million, up 16.4 percent in volume and 19.5 percent in value.

China took the lead in importing rice from Vietnam, accounting for 31.1 percent of the country’s total rice export whilst many traditional markets including Malaysia and the Philippines saw falls in both volume and value.

The export of aquatic products during the month maintained its rising momentum with US$552 million, up 13.9 percent against last year.

Given the overall fall, the Agriculture and Rural Development Ministry has guided relevant sectors in boosting exports with the focus on heightening quality and added value in parallel with ensuring supply for the domestic market, particularly in the upcoming Tet holiday when demands for food and foodstuff surge.

Remittances revive real estate

Property developers are eyeing the remittances overseas Vietnamese traditionally send before Tet (the Lunar New Year).

Banks and remittance companies have launched promotion campaigns targeted at the increasing remittances.

"Many people, especially those who have yet to buy a house, would like to buy by the end of the year so that they can enjoy Tet in their own house," Hoang Anh Tuan, director of real estate company Tac Dat Tac Vang, said.

According to the Phu My Hung Development Co Ltd, when it announced the first phase of sales of the Nam Vien Villas project on 19 January, 44 of the 48 villas were snapped up immediately, mostly by families of overseas Vietnamese. Some customers even bought two of three.

Similarly, 29 villas in the Him Lam Riverside project in District 7 were bought on 26 November, the opening day of sales.

The Ha Noi property market too is showing signs of stirring.

A report from the Ministry of Construction said the G5 trading floor has seen many successful trades of houses in property projects.

A representative of the trading floor said in the first two weeks of December 70 apartments were sold at the Thang Long Number One project for VND27.9 million per square metre and 170 at the Golden West Residence for VND22-24 million.

According to property services provider CBRE Viet Nam, the remittances sent by overseas Vietnamese at the end of the lunar year have helped revive the property market, especially projects expected to be completed soon.

Analysts expect the market to "warm up" later in 2014.

Fund management firms suffer losses

Recent statistics from the State Securities Commission showed that about half of the fund management companies were suffering from aggregated losses.

Of the 47 fund management companies, seven had halted their operations or were put under special control, while 23 companies - equal to half of the rest - were incurring aggregated losses.

Two of the companies showing losses were Manulife Viet Nam and Vinawealth, according to Dau Tu Chung Khoan (Securities Investment) newspaper.

Manulife Viet Nam reported an accumulated loss of VND25 billion (US$1.19 million) as of September 30, 2013, while its charter was only VND53 billion ($2.5 million).

The accumulated loss of Vinawealth was VND26.5 billion ($1.2 million), as of June 30, 2013, equivalent to more than half of its VND40 billion ($1.9 million) charter capital.

Besides Manulife Viet Nam and Vinawealth, 21 unprofitable fund management companies are small scale organisations and are little known in the market.

The State Securities Investment also asked 20 out of 104 securities companies to implement compulsory restructuring.

Binh Duong hits industrial growth in key sectors

Since the start of 2014, the southern province of Binh Duong has seen consistent growth in the wood processing, garment and textiles, footwear and ceramic industries.

These are the province's key sectors and they contribute more than US$4.5 billion each year to the value of its exports.

Since the start of 2014, many businesses belonging to the Binh Duong Furniture Association (BIFA) have received orders from their US, European and Japanese partners.

Director General of Sao Nam Co Ltd Do Thi Kim Loan said her company has received orders to provide products for the US market that will continue through September.

She attributed this business to the development of connections between BIFA and several hardwood processors' associations from the US and Europe.

Meanwhile, the province's ceramic producers have also signed recent contracts with many foreign companies.

Director of Cuong Phat Ceramic Company Ly Ngoc Bach said his firm has enough orders to remain busy until the end of the second quarter of this year.

The ceramics sector still remains prestigious in the eyes of foreign distributors and consumers, as Vietnamese businesses often change their techniques and designs to meet foreigners' tastes, Bach said.

According to Le Thanh Cung, Chairman of the provincial People's Committee, these positive signals will provide motivation to further develop Binh Duong's economy in 2014.

The province will focus its resources on economic development in a stable manner, curbing inflation, improving the investment environment and addressing difficulties for businesses, he said.

In the first 20 days of this year alone, the province attracted $300 million in foreign direct investment, three times higher than in the same period last year, Cung noted.

Garment businesses join int’l fair in Paris

Three Vietnamese garment and textile businesses participated in the Paris apparel and garment fair – Who’s next 2014 which is taking place from January 25-28.

The annual professional event aims to introduce new trends for fashion designs and showcase collections and designs from prestigious global fashion houses.

The fair attended by more than 1,000 garment and textile businesses from over 30 countries worldwide, provides an opportunity for manufacturers and importers to discuss and sign contracts for the provision of products.

Tong Thi Thu Ha, Deputy General Director from Vieba Garment and Knitwear Co, Ltd (Vieba) said that her company’s first participation in such a fair will offer new opportunities for Vieba to study the use of materials and create high-level designs to penetrate the European market.

In the long-term, the company plans to outsource for foreign companies. However, with the support from the Centre for the Promotion of Imports from developing countries (CBI), Vieba introduced products under the trademark Casways to European importers, she said

Louk Grauwen, a CBI design expert highlighted the quality of Vietnamese garment enterprises, noting that in order to conquer the European market, businesses need to invest in design and select materials and colours in line with the tastes of European consumers, and in particular introduce two distinct collections on a seasonable basis. Vietnamese ambassador to France Duong Chi Dung applauded domestic businesses’ involvement in in a bigger arena, which marked the transition from outsourcing to self-designing products and building an exclusive collection.

Duong Chi Dung emphasised that businesses should cooperate with Vinatex to develop their trademarks and seek new orders as well as expanding export markets.

Businesses also met with French garment importers, including retail group Casino to introduce Vietnamese garment products.

WEF Davos 2014: Agriculture sees chances to grow

The Ministry of Agriculture and Rural Development (MARD) will, together with the World Economic Forum (WEF), work out an action plan for the Public-Private Partnership (PPP) in agriculture sector during the 2014-2018 period.

Minister of Agriculture and Rural Development Cao Duc Phat, who is in Davos for the WEF 2014, said agriculture plays a primary role in the backbone of any economy, even in times of difficultly.

He argued that the agricultural sector in emergent nations is seeing a chance to grow stronger and suggested these countries step up investment and science and technology application to add value to agricultural products.

The minister said agriculture is among the topics that drew much attention from attendees, adding that within this year’s meeting agenda there is one session preserved for the sector, themed “Renewal for a New Vision for Agriculture”.

At the meeting, state leaders from Asian, African and Latin American countries, together with businesses and scholars, will discuss the best measures to make progress in the field.

They will also consider the scientific advances that can be applied to improve agricultural infrastructure and develop it in a more market-oriented way.

The measures put forth at the session will be important as the WEF looks to build the global agriculture agenda, bring about new initiatives and create more cooperation opportunities in the field, Phat noted.

Participants at the meeting will focus on sharing their experience of the PPP model, which is working effectively in Vietnam, and is recognised by WEF as an option for other countries.

In order to boost the WEF’s initiative “A New Vision for Agriculture”, MARD is now working closely with the forum to foster the “Green Growth Action Alliance ” to mobilise finance through the PPP model.

Minister Phat said environment issues were included for the first time on the prioritised agenda in Davos 2014 with the theme “Water Security”.

Vietnam is one of the countries that is most affected by climate change, especially in agriculture areas, he said, adding that the country’s government and agriculture ministry attach much importance to reducing the impacts of climate change to the economy in general and agriculture in particular.

MARD has approved a programme to reduce greenhouse gas emission to assist economic growth, ensure food security, agricultural industrialisation and modernisation.

Measures are also being carried out to protect the environment and effectively cope with climate change and step up safe production with the expectation to reduce 20 percent of the emission by 2020.

Vietnam is recognised as one of the nations strongly committed to the green growth content in actions plans for socio-economic development, particularly in the agriculture and rural development, Phat stated .

Donafoods eyes Middle East export market in 2014

Dong Nai Import Export Processing Agricultural Products and Food Company (Donafoods) has exported its first batch of 14 tonnes of cashew nuts, worth US$115,000, to the Middle East.

Donafoods will focus on exporting its products to the market this year, said Donafoods general director Nguyen Thai Hoc.

Hoc revealed that his company is expected to produce and process over 13,000 tonnes of products of various types in 2014 and  will accelerate the outsourcing work and cooperate with other businesses and establishments in Dong Nai Cashew Association.

Moreover, Donafoods plans to restructure its branches and human resources to improve operational efficiency and focus on products which can generate higher profits.

According to a report from Donafoods, last year, the company’s import turnover was estimated at US$61 million, including US$40 million from exports and US$21 million from imports.

January’s FDI slides 52.4%

The General Statistics Office (GSO) reports Vietnam granted licenses to 40 foreign direct investment (FDI) projects from January 1 - 20.

January’s FDI capital, totalling US$211 million, represents a 50.6% decrease in volume and a 52.4% fall in value compared to a year earlier.

Six other projects were authorised to add a cumulative US$186.1 million to existing investments.

Approximately US$465 million was disbursed during the month, 3.3% more than the comparable period in 2013.

Processing and manufacturing industries received around 47.6% of January’s FDI capital (US$189 million), real estate projects attracted 44.4% (US$176.3 million), while other sectors shared the remaining 8% (US$31.8 million).

New projects were licensed in 12 provinces and cities. Ba Ria - Vung Tau province is home to the bulk of them, followed by Thai Nguyen, Vinh Phuc, and Binh Duong.

The majority of January FDI capital came from the Republic of Korea (US$88.8 million), Malaysia (US$27.2 million), and France (US$19.5 million) and Belgium (US$17 million).

Foreign arrivals up 7.5% in January

Vietnam welcomed nearly 777,000 foreign visitors in January, increasing 7.5% from the previous month and 21% from a year ago.

The General Statistics Office (GSO) reported nearly 476,000 came on holiday (up 20%), 131,078 arrived on business (up 18%), 128,363 visited their relatives (up 25.5%) and the remainder travelled for other purposes (up 26.4%).

China topped the list of countries having the highest number of visitors to Vietnam (158,700), closely followed by Japan (57,800), the US (51,800), Russia (48.6), Australia (46,300), Taiwan (31,500), Cambodia (31,300), Malaysia (25,700), and Thailand (24,100).

However, foreign arrivals from Laos fell 17.3%, Finland 2.85%, the Republic of Korea 2.4% and Indonesia 2.1%.

The tourism industry aims to welcome 8 foreign visitors and 40 million domestic holidaymakers in 2014 to earn VND220 trillion in revenue.   

Kim Doo-il, Chairman of Anyhomes Asia of the Republic of Korea, which has recently opened a representative office and showroom in Vietnam, has described the country as a potential market for power saving products.

Vietnam consumes a large amount of electricity, he said, forecasting that the country’s demand for energy-saving products will swell in the coming time in the context of increasing power prices.

According to a report released by Nielsen, a leading global information and measurement company, 90 percent of Vietnamese consumers have changed their spending habits economically, with priority given to gas and power saving, he said.

The report also reveals that Vietnam is the only Southeast Asian nation that has chosen the economisation of gas and electricity as the most effective way to cut daily expenditure.

Kim pointed out that Vietnam fulfilled its national target programme on the effective and economical use of energy for the 2006-2010 period by successfully saving from 3-5 percent of the country’s total consumed energy. He added that it is on track to achieve 5-8 percent, as hoped, in the 2011-2015 timeframe.

Responding to this desire for thrift, the Korean company exported to Vietnam 2,000 Anyhome Saver products last year, he said, noting that nearly 1,000 of them were present on market shelves within a month and received an enthusiastic response from local consumers.

Regarding the company’s plans for 2014 and the years to come,Kim predicted that Anyhomes will coordinate with the Departments of Science and Technology in all 63 cities and provinces nationwide to introduce Anyhome Saver products to each household.

The company is seeking large-scale distributors to form a broad network covering the entire country, he said, adding that it will also work with the Electricity of Vietnam (EVN) to apply such products.

Considering the application as a solution to the national problem of power losses and cost reduction of electricity companies, he said the product can become an essential money-saver for about 24 million Vietnamese households.

Vietnamese Minister of Industry and Trade Ho Thi Kim Thoa said at a recent conference that Vietnam has is successfully saving power and energy, a top ministerial priority.

According to the EVN, the country saved 2.2 trillion VND (103.4 million USD) worth of electricity in 2012 and nearly 4 trillion VND in 2013.

Labour export up in 2013, signs good for 2014

Vietnam’s top labour markets this year have shown some surprising results due to various factors around the world.

According to the head of the Ministry of Labour, Invalids and Social Affairs’ Overseas Labour Management Department (OLMD) Nguyen Ngoc Quynh, Taiwan led in receiving guest workers from Vietnam for 2013 with 40,000 of a total 89,000 Vietnamese going abroad to work.

This was partly due to the fact that last year Taiwan stopped receiving guest workers from the Philippines, increasing the opportunity for Vietnam.

Taiwan is not a high-demand market and associated costs for export labourers range from only $3,800 to $4,500, affordable to most.

Another factor, according to the Vietnamese Labour Management Unit in Taiwan, was that the Taiwanese government recently expanded occupational fields and quotas for labour recruitment at factories, allowing new investors to increase their employment of foreign workers by 5-10 per cent.

On a similar note, Taiwan is considering resuming employment of Vietnamese workers as housemaids in 2014.

“This year we plan to bring about 45-50,000 workers to Taiwan out of a total about 90,000 local workers working abroad, maintaining Taiwan’s position as a key labour export market for the country,” said Quynh.

To achieve this goal, near the end of last year the OLMD ratified a number of policies aimed at facilitating manpower export businesses’ operations.

“Of 45 firms likely to bring workers to Taiwan, half are operating well. To support these firms, this year the OLMD will allow them to cooperate with other firms to increase supply,” said the head of a section responsible for bringing guest workers to Taiwan and America at OLMD Nguyen Xuan Tao.

Also, to bring down the rate of runaway guest workers (about 10 per cent in Taiwan currently) the OLMD will keep a closer eye on the operations of labour export firms to quickly detect violations such as charging higher fees than regulated, said OLMD deputy head Dao Cong Hai.

“Higher cost is one of the main reasons guest workers run away. They violate their contracts in search of a higher income and to deter them the OLMD will apply sever sanctions on disobedient firms,” added Hai.

In the recent past, the Ministry of Labour, Invalids and Social Affairs established regulations requiring labour export firms to cut costs for export labourers (from $4,500 to $4,000 for three-year contracts for factory workers and from $3,800 to $3,300 for those working as nurses).

As well as Taiwan, Japan and Korea are also major markets which plan to receive 10,000 and 12,000 Vietnamese guest workers this year, respectively, reported the OLMD.

After a period of stasis, Middle East markets have shown signs that they will rebound with Saudi Arabia recently announcing its plan to increase recruitment of guest workers from nine countries, including Vietnam.

The two countries have also signed a memorandum of understanding on labour co-operation.

According to a Saudi Arabian source, all contracts involving guest workers will be insured and include compensation for labourers in case of illness, death or in scenarios where workers run away.

“As such, we will focus on reviving our traditional markets in the Middle East this year,” said Quynh.

Nearly 89,000 Vietnamese labourers went to work abroad last year exceeding the 85,000 target, reported the OLMD.

MobiFone and VNPT may split

The Ministry of Information and Communications (MIC) has submitted a plan to separate MobiFone from the state-owned Vietnam National Post and Telecommunications (VNPT).

MobiFone would then come under the management of MIC and be restructured into MoiFone Telecommunication Corporation, upon the Prime Minister’s request.

According to the plan, MobiFone would take over the management of satellites Vinasat 1 and Vinasat 2 as well as VNPT Post Company, which has caused VNPT's most losses to date.

VNPT will divert capital from other companies, including SACOM, SPT, Vinacap, VNPT Epay and Nhon Trach 2 gas-fueled power project, which will be then managed by MobiFone.

VNPT will also restructure some of its subsidiaries operating in three sectors: network infrastructure, telecom services and communications. These subsidiaries include VNPT Network Corporation (VNPT-NET), VNPT Telecom Service Corporation (VNPT-Vinaphone), and Communication Corporation (VNPT-Media).

To Manh Cuong, VNPT Deputy General Director said the final restructuring plan for VNPT was submitted to the government late last September. The plan is expected to be approved by the government in the first quarter of this year.

According to the ministry, the splitting of MobiFone and VNPT is the best solution as the mobile service provider has made its mark on the domestic and regional telecom markets.

Once MobiFone is privatised, the government will hold a 75% stake in the company and the rest would be sold to both foreign and domestic investors. MobiFone’s stake are expected to be attractive to investors, especially VNPT members, other than the privatisation of VNPT itself.

Dr. Mai Liem Truc, former Deputy Minister of Information and Communication, supports MobiFone’s privatisation, saying that the separation of MobiFone from VNPT would be good for the telecom market and facilitate healthy competition, as currently, the three biggest mobile service providers are all wholly-stated owned companies.

“The separation of MobiFone from VNPT would initially cause some difficulties for VNPT but the process would bring about long-term benefits,” said Truc.

Hoang Anh Gia Lai Group wins over import for re-export plan

The ministries agreed to HAGL's plan to import raw sugar from Laos for processing before exporting it again, saying it will strengthen the relationship between Laos and Vietnam.

Hoang Anh Gia Lai, which has a sugar-making facility in Laos, proposed the importation 30,000 tonnes of sugar into Vietnam. The sugar will be refined by its partner, Bien Hoa Sugar, before it is exported to China.

The plan has received strong criticism from sugar manufacturers, especially from the Vietnam Sugar and Sugarcane Association (VSSA). Vietnam only exempts tax for certain amount of import sugar in accordance with its commitment with WTO. High taxes will be levied on any amount exceeding this limit.

Also, many have commented that the local sugar industry has been struggling against smuggling due to lax management. According to VSSA, the import for re-export plan may lead to trade fraud and cause more damage than good. Moreover, the VSSA also said the local sugar prices are higher because the government does not support to the industry, as the government of Thailand does.

Answering questions from VSSA, the Ministry of Industry and Trade said 30 firms are allowed to import 73,500 tonnes of sugar and HAGL was not on the list. However, the ministry said HAGL and Bien Hoa Sugar Company should be allowed to import 30,000 tonnes of sugar to raise the export-import turnover between two countries. The import for re-export plan will not affect local suppliers.

The ministry added that they received feedback from the Ministry of Agriculture and Rural Development, the Ministry of Finance and the Ministry of Foreign Affairs. They are either agree or do not oppose the HAGL plan.

However, the Ministry of Agriculture and Rural Development said the supply will exceed demand by 500,000 tonnes this year and many firms will have to export sugar. Other ministries also said they need stricter regulations to prevent smuggling, trade fraud and unfair competition.

After being approved, the stock prices of both HAGL and BIen Hoa Sugar Company immediately rose.

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