US investment at US$248 million in 11 months

American investors put US$248 million into 38 projects in Vietnam over the past 11 months.

That helped the US rank 11th among 60 countries and territories that have invested in Vietnam during the period.

The latest addition has helped the American registered investment capital in Vietnam to reach US$10.92 billion, with an average of US$15.35 million per project, business news website Cafef.vn quoted statistics from the Ministry of Planning and Investment's Foreign Investment Agency as saying.

During the reviewed period, it said that the hospitality, catering and restaurant sector attracted US$4.67 billion, or equivalent to 42.8% of the total American investment capital in Vietnam. It was followed by the manufacturing and processing sector with US$2.2 billion, or 20% of the total American registered capital, and the real estate trading industry with US$2.05 billion, or 18% of the American capital.

American investors have invested in 41 out of 63 cities and provinces nationwide. Among these localities, the southern Ba Ria -Vung Tau province was the most attractive investment destination for American businesses as they had 18 projects, worth US$5.3 billion, there. The northern port city of Haiphong ranked second, attracting 13 projects worth US$1.2 billion, and the southern Binh Duong province came third, attracting 96 projects valued at US$779 billion.

Over 20 countries attend int’l food festival in HCM City

More than 60 restaurants and hotels from over 20 countries and territories are showcasing their special dishes at an international food festival which opened in Ho Chi Minh City on December 4.

During the festival, the ninth of its kind, visitors can understand more about the culinary culture of many countries around the world with their plentiful and unique dishes displayed in nearly 100 booths.

The event also features a wide range of attractive activities such as Thai muay performances and programmes to launch new records on traditional Vietnamese pastry and sculptural works on world cultural heritages in Vietnam.

I n addition, visitors have a chance to enjoy over 60 kinds of pastry made by 100 renowned cooks right at the festival.

Addressing the opening ceremony, Vice Chairwoman of the municipal People’s Committee Nguyen Thi Hong said that the event is expected to preserve and promote the culinary culture of Vietnam and other countries in the world.

It will run until December 7.

Vinmec and Sodexo cooperate to improve nutrition for patients

Vinmec International Hospital has entered partnership with France’s Sodexo to provide food and nutrition services for patients.

Sodexo will provide Vinmec with Healthcare Food & Nutrition services that meet the Joint Commission International (JCI) and world-class HSE standards. These services include in-patient dining, VIP and presidential patient dining, staff dining, tube feeding service to service patients that cannot be fed by mouth and out-patient snacks service.

“Partnering with Sodexo – a world leader in food services, is an important progress in asserting the service quality at Vinmec, starting from caring about and standardising nutrition need of each single patient,” said Prof. Dr. Nguyen Thanh Liem, CEO of Vinmec International Hospital.

Vinmec is located in Hanoi and was developed by Hanoi South Urban Development JSC (an affiliate of Vincom JSC – member of conglomerate Vingroup). Over the next five years Vinmec plans to have 10 hospitals nationwide with one each in Phu Quoc, Ho Chi Minh City and Nha Trang slated to start operations in 2015. Vinmec has also developed a medical university that has announced it will start admitting students in 2016.

Founded in 1966, Sodexo now operates in 80 countries, has 428,000 employees throughout the world and serves 75 million consumers each day. It earned €18.4 billion in consolidated revenue in its fiscal year 2013 and is valued at €12.4 billion as of July 8, 2014.

BioSpring Hoa Lac seeks suppliers of fermentation equipment

BioSpring Hoa Lac JSC is looking for suppliers that can provide specific components or a turn-key set of equipment for the probiotics production lines in its new 1,000 tonnes per year fermentation factory in Hanoi’s Hoa Lac Hi-tech Park.

The needed components include spore fermentation system 1000L, filter system, spore cleaning, heat system, collecting spore product; air compressed system, air filter system for fermentation, boiler and chiller for fermentation and autoclave system 1 or 2 doors. Suppliers who can provide a turn-key set are preferred.

Overseas suppliers that have experience in supplying and installing such equipment are invited to submit their company profile, a list of clients in the fermentation/probiotics field and a catalogue with specifications of relevant equipment.

Interested suppliers can contact Biospring by December 15, 2014 at ELCOM building, Duy Tan street, Dich Vong Hau ward, Cau Giay district, Hanoi, Vietnam, by telephone number +84 4 38 359 359 or by email at [email protected].

Alternatively, they can contact the Vietnam Business Challenge Fund (VBCF) at Office 103, Building B1, Van Phuc Diplomatic Compound, 298 Kim Ma Street, Hanoi, Vietnam, by telephone number +84 4 37 265214 or by email at [email protected].

BioSpring Hoa Lac produces natural probiotics. Its project to expand the use of probiotics in husbandry and aquaculture is one of the 20 projects funded by the Vietnam Business Challenge Fund (VBCF). It is the first company in Vietnam that has successfully produced bacillus on an industrial scale for use in pharmaceutical production, food production and husbandry.

Germany’s Gentherm starts factory construction

The Vietnam subisidiary of global market leader and developer of innovative thermal management technologies Gentherm has just started construction on a factory in the northern province of Ha Nam’s Dong Van Industrial Park.

The factory, capitalised at $15 million, will manufacture air-conditioners for the domestic automotive industry. Gentherm Vietnam also supplies air-conditioning products to other industries.

Spanning some 20,000 square metres, the facility will consist of a production floor, clean room and related offices and utilities. Gentherm Vietnam has announced that it will complete construction of the factory within 20 months with the investment certificate expiring in 2056.

The project is expected to make a significant contribution to the Vietnamese government’s efforts to boost the development of the country’s auto industry.

Vu Dai Thang, Deputy Chairman of the Ha Nam Provincial People’s Committee said Gentherm would be successful in Vietnam and pledged the support of the local authorities to the project.

Policy makers seek to develop social housing construction

Vietnam’s Ministry of Construction and Japan’s Ministry of Land, Infrastructure, Transport and Tourism held a workshop to seek to generate more capital for social housing construction in Hanoi on December 4.

Deputy Minister of Construction Nguyen Tran Nam said the Vietnam National Assembly ratified the amended law on housing and real estate business, which will take effect in early July next year.

The law will help the housing market in Vietnam become more attractive, especially for foreigners living and working in the country, who wish to run investments in the field, as well as creating a healthy and stable estate market.

Akihiro Gozawa, an official from the Japanese Ministry, shared that the housing policy in Japan has changed in accordance with population movements and focus has been given to the quality of houses to ensure their long-run use.

He introduced participants to the Japan Housing Finance Agency (JHFA), which was established in 2007 in charge of supporting private financial institutions via the issuance of government bonds and offering loans for post-disaster housing rehabilitation.

The agency will provide long-term and low-interest loans for house buyers or constructors. Meanwhile, the public houses for lease will be provided by the central and local governments at prices lower than that of the market, he said.

During the workshop, participants discussed experience on how to mobilise middle and long term capital to help low-income people and social welfare recipients in urban areas buy their own houses.

They also exchanged views with Japanese experts in service of the building of documents guiding the early enforcement of the Vietnamese amended law on housing and real estate business.

Japanese bank helps facilitate investment in Vietnam

Japan’s Sumitomo Mitsui Banking Corp. (MSBC) is set to help more of its client companies set up business operations in Vietnam, as they are eyeing Vietnam as a destination beyond China to park their next investment.

A memorandum of understanding to this effect was signed by MSBC and the Ministry of Planning and Investment’s Foreign Investment Agency (FIA) in Hanoi on December 4.

The tie-up allows MSBC and FIA to improve investment performance and facilitation in Vietnam, making it easier for Vietnamese and Japanese firms to reach business deals, head of FIA Do Nhat Hoang said at the signing ceremony.

According to General Director of MSBC branch in Hanoi Noriyuki Watanabe, in recent years, Japanese manufacturers and processors have considered Vietnam a focus of their “China+1” strategy in which they seek to diversify commercial reaches and reduce overreliance on China.

Besides, Japanese retail companies are also seeing great opportunities in the country which has the third largest population in ASEAN.

As of October 20, 2014, Vietnam lured over 36.5 billion USD worth of Japanese investment in 2,434 projects, making Japan the biggest foreign investor in the country. In the first ten months of this year, Japanese enterprises reported 1.66 billion USD in newly-registered and additional capital.

Currently, around 1,000 Japanese firms operating in Vietnam are MSBC clients.

Vietnamese banks, IT gurus get awards

On December 2 the Vietnam Outstanding Banking Awards and CSO/CIO Awards selected four outstanding banks and three commendable IT professionals in the banking sector.

Asia Commercial Bank (ACB) was named Outstanding Retail Bank of the year for its customer service quality, particularly in the area of personal financial management.

The Bank for Investment and Development of Vietnam (BIDV) grabbed the title Outstanding Digital Bank for its 2.5 million digital banking customers. BIDV currently boasts 12,000 corporate customers and four million monthly transactions.

Vietnam International Bank (VIB) was honoured as the bank with the best branches. “The business and service model at VIB’s Saigon branch, which was implemented in 2009, most impressed us,” the judges noted.

Lastly, the Bank with Outstanding Products and Services award went to Vietinbank for its innovative mobile point of sale (MPOS) service. MPOS allows the bank’s customers to use their smartphones or tablets to complete transactions anytime, anywhere, with their domestic or international credit cards.

The Vietnam Outstanding Banking Awards have been organised annually by International Data Group since 2011. This year the panel of judges, consisting of 14 representatives from the state and banking sectors, started the voting process in September.

At the same time, three IT professionals in banking were honoured by the ASEAN CIO/CSO Awards 2014. The first was Tran Nhat Minh, vice president of VIB for his contribution to the bank’s e-banking system, virtual Facebook branch and disaster repair systems.

Head of the IT Department at PG Bank, Hoang Long, also got an award thanks to his 20-years improving information management at different banks. The last recipient was Alan V. Bornas from Landbank in the Philippines for his core banking system that connects 346 Landbank branches.

The CIO/CSO Awards is an event that celebrates technological breakthroughs in various sectors across Southeast Asia, including banking. Both the Vietnam Outstanding Banking Awards and CIO/CSO Awards are part of the 2014 ASEAN Bankers Forum, during which professionals gather to discuss issues relating to the regional banking sector.

Vinacomin sets new record in pit excavation

Nui Beo Coal JSC under the Vietnam National Coal and Mineral Industries Holding Corporation Limited (Vinacomin) has set a new record in pit depth after it completed the excavation of a pit of 371.6m under the sea level.

The company’s underground mining project started in March 2012 with a total investment of 5.3 trillion VND (245 million USD).

It is expected to go into operation in 2019 and reach its annual designed capacity of 2 million tonnes two years later.

Under its development plan until 2020 with a vision to 2030, Vinacomin aims to produce 64.6 million tonnes by 2015, 71.9 million tonnes by 2020, and 87 million tonnes by 2030.

To achieve the goal, the corporation has put into use a series of high technologies and modern equipment to increase coal mining and processing efficiency while minimising the adverse impact on the environment.-

Housing for residents of Vietnam and solutions for a better future living environment was the agenda of a Vietnam-Japan workshop held on December 4 in Hanoi.

Delegates from the Vietnam Ministry of Construction introduced the new contents of the amended Housing and Real Estate Business Laws which have been adopted at the eighth session of the 13th National Assembly.

Japanese experts highlighted amendments to these laws and while underlined the necessity to clarify regulations on foreigner house ownership in Vietnam.

They also shared experiences in building houses for rent at for low-income earners by mobilising capital resources from public financial organisations.

At present, Vietnam has encountered difficulties in renewing old residential buildings in big cities, said Mr. Hideyuki Iwata from Ministry of Land, Infrastructure, Transport and Tourism of Japan.

Construction projects should be publicized in a transparent manner to ensure they can improve people’s living conditions.

Phu Yen licenses luxurious tourism project

The People’s Committee of central Phu Yen province on December 3 granted an investment certificate to build an US$80 million tourism complex to Sunrise Vietnam Co. Ltd. from the Republic of Korea.

The complex, to be built on 52 ha of land and 56 ha of water surface in Tuy An district and Tuy Hoa City, will feature 5-and 6-star leisure facilities such as high-end villas, coffee shops, swimming pools, beaches and restaurants.

The construction will be carried out in three phases, and the first part is scheduled to be put into operation in 2017.

Tran Quang Nhat, Vice Chairman of the municipal People’s Committee, said he hopes the project will help boost the tourism industry in the province.

Measures to prop-up real estate market

Leading economists say it is essential to have a separate financial system that is not run by State-owned banks to insure lending is based on merit, reduce the risk of a banking liquidity crisis and to better manage the country’s foreign exchange position.

Deputy Minister of Construction Nguyen Tran Nam emphasizes that unstable capital sources have caused major hurdles for the real estate market.

Deputy Minister Nam says many countries have their own separate financial system for the real estate sector to best accommodate long-term investment in real estate projects adding that, there is not such channel in Vietnam.

Vietnam’s funding market is heavily skewed toward the short term, driven by customers who see bank savings tools mainly as a way to hold and invest their funds for the short term.

This creates a high risk of a national liquidity crisis as insufficient funds are available for long term real estate projects when bank deposits are invested by customers primarily for the short term.

Most Vietnamese businesses are of small and medium sizes, with total charter capital of less than VND1,000 billion, which is not sufficient to get involved in a high-rise building (estimated to cost at least VND1,500 billion), Nam elaborates.

Obviously, he says, many real estate businesses find it difficult to access credit loans. Moreover, these loans have experienced strong fluctuations, standing at around 30% 10 years ago, climbing to 57% in 2008, and declining to 10% in recent years.

There’s growing concern about the Government’s VND30,000-billion aid package, aimed at stimulating the local real estate sector. In 2013 and 2014, credit growth in this sector doubled the nation’s average rate, Nam adds.

He also voices his concern over bad debts, which have been purchased by the Vietnam Assets Management Company (VAMC). Outstanding debts in the real estate market are estimated at below 10% of Vietnam’s total debts. However, collateral in credit rationing of the real estate sector make up about 70%.

80% investment in real estate projects come from banks

In a recent research, Prof. Dr. Pham Quang Trung and his associates from the National Economics University show that few real estate businesses have enough financial capacity to run their projects.

As a consequence they are highly dependent on bank loans (up to 80%), although banks are unable to ensure an adequate and stable supply of medium and long-term loans.

Trung points out a number of obstacles that the real estate sector investors face, such as complicated procedures to borrow bank loans and high interest rates.

To more effectively manage and develop the capital market for the real estate sector, it is necessary to increase capital sources for owners of real estate projects while completing risk management mechanisms for the financial markets.

Trung and his associates propose diversifying financial products for the real estate sector and setting up a separate real estate financial system in order to ensure long-term liquidity for the real estate market.

Ancillary funds can be established, such as life insurance and pension funds, which would also provide long term funding for real estate projects.

Dr. Tran Kim Chung, deputy head of the Central Institute for Economic Management (CIEM), shares Trung’s view, affirming that solutions should be implemented to create long-term investment financial inflows to support the local real estate market.

Among these solutions are – mobilizing overseas remittance sources, issuing policy on secondary mortgage system, establishing home savings banks and  setting up real estate trust fund.

He also suggests boosting disbursement of the Government’s VND30,000-billion aid package, measures to ensuring market transparency and stabilizing bank interest rate at 5-6%/year.

Seafood export enjoys trade surplus of 5 billion USD

Seafood export contributed 5 billion USD to a trade surplus of 8.2 billion USD run by the agriculture sector in the first 11 months of 2014.

During the period, seafood brought home 7.2 billion USD and is to earn 7.8 billion USD by the end of the year, Deputy Minister of Agriculture and Rural Development Vu Van Tam reported at the first meeting of the aquatic disease prevention and control steering committee in Hanoi on December 4.

He was optimistic that the maintenance of the trend would make the export target of 8 billion USD set for 2015, which was stated in the sector’s strategy by 2020, reachable.

To ease farmers’ and exporters’ worries about common parasites and diseases that could affect aquatic animal health and export, the aquatic disease prevention and control steering committee was set up and started operation.

The committee will work with localities on the supply of breeds and the planning work in order to go in line with market demands.

VietJet Air spreads wings over India

A VietJet Air flight safely touched down in India on December 5, marking the start of the airline’s new international service connecting Vietnam – Thailand – India, a milestone in the airlines growth strategy.

The inaugural flight carried monks and nuns from Vietnam and Thailand to attend the start of a formal ceremony in the Venuvan garden where King Bimbisara preached extensively in the 6th century.

To serve the demands of Vietnamese, Thai and Asian monks and Buddhists to travel to Bohd Gaya, India, VietJet Air has scheduled flights from Vietnam to India via Bangkok to begin every Saturday as of January 2015.

Khanh Hoa province targets 4 million tourists in 2015

The central coastal province of Khanh Hoa aims to attract 4 million tourists and gross VND6.5 trillion (US$309 million) in revenue next year, representing a respective rise of 17% and 30% year-on-year.

This year, Khanh Hoa set a target of receiving 3.4 million visitors, including 840,000 foreign tourists, and earning VND5 trillion (US$238 million) in revenue.

By the end of November, the province already served over 3.3 million holiday makers, up 22% against the same period last year.

Russia continued to top the list with more than 210,000 arrivals, up 60%. Other markets such as the Republic of Korea , Australia , China and Belgium all registered growth.

Local authorities have sketched out schemes to improve tourism services, diversify tourism products, and accelerate the implementation of key projects, particularly those in the north of Cam Ranh peninsula and Nha Trang resort city and the conversion of the Nha Trang sea port into a specialised tourism port.

The province will enhance cooperation with domestic and foreign provinces and cities and speed up the construction of the second runway at Cam Ranh International Airport in anticipation of the tourism sector’s growth.

Khanh Hoa is well-known for its beautiful beaches and many relic sites, particularly the Nha Trang Bay, one of the most beautiful bays in the world.

EVN’s 11-month power production hit nearly 133 bln kWh

The Electricity of Vietnam (EVN) group generated a total of 132.8 billion kWh of electricity in the last 11 months, up by nearly 11 percent compared to the same period last year, ensuring sufficient supply for production and consumption needs.

In the reviewed period, the group’s total commercial electricity output hit 117,636 billion kWh, a year-on-year increase of 11.3 percent.

EVN also saved an estimated volume of 2.6 billion kWh, equivalent to 2.23 percent of the commercial power output.

The group said it strives to generate 405 million kWh per day in December.

To ensure sufficient power supply for the entire country this month as well as during the dry season of 2015, EVN will optimise hydropower and coal-fired power plants’ capacity by storing water in reservoirs.

This month, the group will begin the expansion of the Duyen Hai 3 power plant and the construction of infrastructure system of the Ninh Thuan nuclear power project, among other works.

It has also planned to accelerate progress on several projects, including Van Tri-Chem, Thuong Tin-Kim Dong and Song May-Uyen Hung 220kV transmission lines, and Kim Dong and Uyen Hung transformers, while completing procedures for the kick-off of Pleiku 2 500 kV and Hai Ha 220kV transformers.

Japan bank signs MoU with FIA

Japan's Sumitomo Mitsui Banking Corp. (MSBC) is set to help more of its client companies establish business operations in Viet Nam, as they eye investment destinations beyond China.

MSBC and the Ministry of Planning and Investment's Foreign Investment Agency (FIA) signed a memorandum of understanding to this effect in Ha Noi yesterday.

The tie-up allows MSBC and FIA to improve investment performance and facilitation in Viet Nam, making it easier for Vietnamese and Japanese firms to reach business deals, head of FIA Do Nhat Hoang said at the signing ceremony.

In recent years, Japanese manufacturers and processors have considered Viet Nam a focus of their "China+1" strategy, in which they seek to reduce over-reliance on China, according to general director of MSBC's Ha Noi branch Noriyuki Watanabe.

Japanese retail companies also see great opportunities in the country, which has the third-largest population in ASEAN. As of October 20, Viet Nam drew over $36.5 billion worth of Japanese investment in 2,434 projects, making Japan the biggest foreign investor in the country. In the first ten months of this year, Japanese enterprises reported $1.66 billion in newly-registered and additional capital.

Around 1,000 Japanese firms operating in Viet Nam are MSBC clients.

Appeal evaporates for oil, gas stocks

Oil and gas stocks have lost their shine given steep falls in global oil prices in November.

These stocks dropped nearly 20 per cent in value last month while the benchmark VN-Index declined less than 6 per cent and the HNX-Index fell just 0.7 per cent, according to a Viet Dragon Securities Corporation (VDSC) report.

Analysts reckoned that selling pressure for these stocks would increase following the Organization of Petroleum Exporting Countries (OPEC)'s decision to maintain oil production despite declining prices.

After OPEC's decision, the oil price retreated below the psychological level of $70 per barrel. In November, oil prices plunged around 18 per cent, according to Bloomberg.

The value of PV Gas (GAS), the biggest stock in term of market value, also plummeted from VND 106,000 (US$4.98) to VND86,000 ($4.04). In just one month, GAS's market capitalisation evaporated nearly VND38 trillion to VND163 trillion ($7.7 billion).

Market value of PetroVietnam Drilling and Wells Service Corporation (PVD) also decreased VND5.6 trillion ($263 million) and that of PetroVietnam Technical Services Corporation (PVS) fell VND3.4 trillion ($159.6 million) as of November 30.

"Very few investors could imagine this scenario, as oil and gas stocks were considered the investment trend of 2014," analysts at VDSC said.

Foreign investors also opted to sell off these stocks, selling VND281 billion ($13.2 million) worth of PVD shares in seven consecutive sessions. GAS stocks were sold for 10 days in a row with a total value of VND200 billion ($9.4 million).

The price of oil and gas stocks improved early this month. However, in the short and medium term, these stocks are no longer attractive given the sharp declines in oil prices, according to Phan Dung Khanh, head of analysis for KimEng Securities Co.

Investment is shifting to businesses that are benefiting from low oil prices such as transport, shipping, steel and plastic, Khanh said.

HCM City launches year-end promotion

Discounts of 10-50 per cent, gifts, and lucky draws are part of HCM City's year-end Grand Sales that kicked off yesterday with more than 500 travel agents, hotels, restaurants, retailers, and traditional markets are taking part.

Travel services, entertainment, cosmetics, beauty-care products, handicrafts, souvenirs, clothes, and food and foodstuff are all sold at discounts. More than 1,000 stalls selling many of these products and services have been set up at September 23 Park in District 1.

The annual event, organised by the Departments of Tourism and Industry and Trade to attract tourists and stimulate tourism, will run through the month.

Medical expo held in capital

The 21st Vietnam International Medical, Hospital & Pharmaceutical Exhibition took place at the Hanoi International Exhibition Centre fromWednesday.

The three-day exhibition displayed the latest medical and laboratory products and services as well as healthcare, beauty, ophthalmologic and dental products of more than 115 companies from 16 countries and territories.

The expo offers enterprises a platform to introduce their products and services as well as exchange experiences, seek counterparts and sign contracts.

VFM opens second mill in Quang Ninh

Vietnam Flour Mills Ltd (VFM) inaugurated a US$47-million mill in the Cai Lan Industrial Zone in the northern province of Quang Ninh on Wednesday.

VFM, which is a subsidiary of FFM Berhad, Malaysia's largest flour mill company with 100 per cent Malaysian investment, is the leading flour mill enterprise in Viet Nam.

VFM's new mill, spanning 3,400sq.m in the IZ, can mill 500 tonnes of flour per day. It will also create more than 150 jobs and will contribute about VND200 billion (US$9.4 million) to the Quang Ninh Province's budget annually. The Cai Lan IZ mill will be the second VFM mill in Viet Nam. The first mill, with a capacity of producing 400 tonnes of flour per day, is located in the southern province of Ba Ria-Vung Tau.

Lotus Impact, KOTO plan JV

Lotus Impact, an impact investment firm focused on Southeast Asia, announced yesterday that its first investment in Viet Nam would be a joint venture with leading social enterprise KOTO.

Impact investments are made in companies, organisations or funds with the intention to generate social and environmental impact along with financial returns.

The catering joint venture will produce high-quality international and Vietnamese food options for businesses and other organisations, with facilities in HCM City and Ha Noi. Lotus Impact managing director James Dien Bui expects operations to begin next March. He did not disclose the investment amount.

Plastics, rubber industry imports 80 percent materials

Vietnam has to import 80 percent of materials in plastics and rubber industry, reported the Vietnam Plastics Association and Ho Chi Minh City Department of Industry and Trade at a seminar on Thursday.

Most businesses operating in this field are of medium and small scale with inconsiderable export value accounting for only 1.2-1.5 percent of the total export turnover.

Ho Chi Minh City has about 2,000 businesses in the plastics and rubber industry occupying two thirds nationwide. They concentrate in Cho Lon area including Districts 5, 6 and 11 under the form of home based businesses, making household items and industrial plastics.

Most of the industry’s businesses use secondhand equipment and outdated technologies. They have faced with capital shortage and difficulties in credit access to renovate technologies and improve product quality amidst high cost prices.

Vietnam's credit growth rises 10.22% in 11 months

Vietnam's credit growth in the January- November period increased 10.22% compared to the end of 2013, the State Bank of Vietnam (SBV) announced on December 4 in its report on monetary policy and banking operations in the first 11 months this year.

Credit structure continues to shift towards sectors of Government's priorities such as small and medium sized enterprises, agriculture and rural development among others.

This year, the SBV kept the credit growth target for the whole year at 12% - 14%.

According to the SBV, the total means of payment and deposit mobilisation in 11 months, both advanced over 13% against the end of 2013, of which deposits in Vietnamese dong (VND) was up 14.74% despite the lowered lending interest rates.

The central bank continues to ask commercial banks to reduce lending rates including old loans to less than 13% per year. To date, the interest rates for deposits and loans in VND have been slashed by 1.5% - 2% per year compared to the end of 2013, contributing to removing difficulties for production and business activities while ensuring the goals of curbing inflation and stabilising the monetary market.

The central bank will continue to closely monitor the market to assure the stability of the monetary market, interest rates and foreign exchange rates, and will sell foreign currency to intervene the market if necessary.

Preferential import tariffs imposed on petrol

The Ministry of Finance (MOF) on December 4 issued a document, sent to the Customs Departments and businesses trading on petroleum, on preferential import tariffs imposed on goods.

The document stipulates that if Platts price of WTI crude oil is below US$60 per barrel, the maximum preferential rate for all petroleum products is 40%. If the price is between US$60 and US$75 per barrel, the maximum rate for gasoline and oil is 35% and that for diesel and mazut is 30%.

The maximum rate is 25% for gasoline and oil, and 20% for diesel and mazut if the price is between US$75 and US$95 per barrel. The rate is from 15-20% if the Platts price is over US$95 per barrel.

The document stated that the Platts price of WTI crude oil is the price announced by Platts in Singapore 15 days before the day on which the preferential import taxes are adjusted.

According to an MOF representative, the preferential import taxes lay a foundation for the ministry to give specific directions on applying preferential taxes on petroleum while helping businesses trading in petroleum devise their business plans.

Earlier, the world oil price fell sharply from US$105 per barrel at the end of July, to US$68.53 per barrel at the end of November, the lowest price in the past five years.

FDI major driver for growth

There have been early signs of economic recovery in Vietnam with this year’s economic growth expected to rise to 5.6% from 5.4% last year, with the foreign direct investment (FDI) sector playing a major role, says the World Bank’s (WB) Taking Stock report.

According to the report, the FDI sector helps promote economic growth momentum while domestic enterprises are still mired in difficulties.

This positive outlook is mainly underpinned by ongoing macroeconomic stability and continued strong performance of the foreign-invested manufacturing export sector.

Positive macroeconomic developments contributed to the country’s improved sovereign risk ratings, helping the Government successfully issue bonds in international capital markets and raise US$1 billion on favorable terms.

Sandeep Mahajan, lead economist at the WB in Vietnam, said there are improvements in the foreign-invested sector and confidence of foreign investors has been improved in the past four to five months

According to Mahajan, leaders of foreign-invested manufacturing firms appeared to be optimistic about the future when interviewed and they mentioned their expansion plans. The findings before September of last year did not indicate such optimistic signs.

Eurocham also had similar findings.

However, Mahajan gave a warning about the operation efficiency of domestic, private enterprises. The number of business closures, bankruptcies and suspensions is high while the number of new business start-ups is in decline, he added.

According to the global lender, there were up to 60,300 enterprises dissolved in the January-November period while the respective figures of 2013 and 2012 were 60,700 and 54,300.

Mahajan said it would be better if Vietnam was able to improve the efficiency of the domestic sector, and added domestic investments are low, retail sales grow slightly and consumer spending is weak.

Vietnam’s growth potential is projected at 6-6.5% but the country has not made full use of its potential as GDP growth has reached only 5.6%, according to Mahajan.

Vietnam’s potential for more growth can only be realized if substantial progress is made in addressing distortions such as in the state enterprise and banking sectors, says Victoria Kwakwa, WB Country Director for Vietnam.

“Stepping up this reform agenda and strengthening the business environment are critical for moving forward,” she continued.

The WB report also points out the remaining dichotomy in performances of domestic and foreign-invested firms. The foreign-invested sector continues to be a significant source of growth while domestic enterprises continue struggling with a rising number of closing or suspending enterprises.

The medium-term outlook of Vietnam’s economy is quite positive with continued modest GDP growth and a further consolidation of macroeconomic stability.

Thailand wants more Vietnam visitors

Travel enterprises, industry associations and events organizers in Vietnam will receive more financial incentives from the Thai government if they send more visitors to the neighboring country, Thailand Convention and Exhibition Bureau (TCEB) said on December 3.

At a function to introduce business opportunities and a special program designed for the Vietnam market held in HCMC on December 3, TCEB said this will also cover trade promotion firms in Vietnam from next year.

Nguyen Ba Vinh, chief representative of TCEB in HCMC, said financial bonuses for such Vietnamese firms will be based on the whole-year number of visitors joining international exhibitions in Thailand.

Vietnamese enterprises will be able to receive an extra 5% of the financial aid from this supporting program, equivalent to US$500, for every 100 visitors they send to Thailand annually, on top of the ordinary bonuses under prevailing programs.

The financial support will be revised up to 10% and 15%, or US$2,500-4,490 and US$6,750, when the respective numbers of visitors are 250-449 and over 450.

Currently, TCEB pays Vietnamese companies US$100 a visitor if they organize trips for 10 people to Thailand with a two-and-a-half-day stay and meet with partners there.

Speaking on the sidelines of the event, Vinh said visitors to exhibitions in Thailand can have opportunities to participate in meetings and trade connections organized by TCEB, which will help expand their operations.

French companies eye bauxite industry

A memorandum of understanding (MoU) on cooperation in bauxite mining projects was signed on Tuesday between a Vietnamese firm and some French corporations, said Frederic Sanchez of the French business confederation MEDEF International.

The chairman of the Vietnamese-French union of employers under MEDEF International told the Daily that a Vietnamese company in the bauxite mining industry wanted French companies’ involvement, but he declined to reveal any names of the parties concerned.

“One Vietnamese enterprise needs the collaboration of Western businesses to become a leading aluminum processor. The MoU defines the aluminum processing technology, the possibility to buy bauxite and the capability of providing electricity for aluminum production. It also states that French corporations will purchase alumina products from the Vietnam Coal and Mineral Industries Holding Corporation (Vinacomin) to produce aluminum,” said Sanchez.

He added more than 10 enterprises in France including Fives, Pechiney and Alstom are interested in cooperation in bauxite mining and processing in Vietnam. These enterprises are leaders in the aluminum industry, using more advanced technology than in other countries.

“The MoU has not been completed because we are still looking for other financial covenants. The Vietnamese side wants to produce aluminum to supply airplane or auto producers, creating more value-added products,” according to Sanchez.

A delegation of 20 large and small businesses in various industries such as Alcatel, Alstom, BNP Parisbas, GDF Suez, SNCF and other firms operating in cutting-edge technology sectors is visiting Vietnam.

The trip is expected to help French companies who are interested in the local market meet and contact with potential partners, as well as consider the possibility of setting up manufacturing plants here.

Bauxite set besides tourism in Central Highlands’ vision

The development vision to 2030 for the Central Highlands mapped out by the Ministry of Construction chooses bauxite mining and hydropower alongside coffee production and tourism as “spearhead industries” for the region.

The ministry on Tuesday announced the master plan and transferred it to the five provinces in the Central Highlands for implementation. The localities there are Daklak, Daknong, Gia Lai, Kon Tum and Lam Dong, most of which are well-known as favorite destinations for tourists.

The Central Highlands, covering 54,600 square kilometers, or one-sixth of the national total natural area, will be divided into three sub-regions of north, central and south zones associated with urban corridors, according to the master plan.

The north zone encompassing Gia Lai and Kon Tum will be home to numerous hydropower projects alongside eco-tourism facilities, especially those in national parks and nature reserves.

The central zone covering the entire province of Daklak will focus on the farm produce processing industry, especially production, processing and export of coffee.

The south zone straddling Daknong and Lam Dong provinces will develop bauxite, tourism and hi-tech agriculture projects, according to the vision.

Under the plan, each zone will be associated with a core urban center.

As envisaged in the plan, the whole Central Highlands will have 117 urban areas by 2030. There will be ten border gates in the whole region, 24 industrial zones, and 74 industrial clusters.

By 2030, the region’s population is projected at nearly 7.4 million, with nearly 3.1 million living in urban areas.

S.Korea tourism rewards local travel firms

The Korean Tourism Organization (KTO) will celebrate the Korean Night in Danang, HCMC and Hanoi and reward Vietnamese travel firms that have brought large numbers of tourists to South Korea.

The program will respectively take place at the foresaid locations on December 5, 10 and 12.

At the event in Hanoi, KTO will award cash prizes worth US$2,000-5,000 for tourism agencies which brought many guests to South Korea. Excellent sales staff taking guests to South Korea will also be commended.

These promotional activities aim at maintaining the strong growth of Vietnamese visitor arrivals in South Korea. According to KTO, more than 130,000 Vietnamese had traveled to South Korea as of November 11, up 19% compared to the same period last year.

The number of flights between South Korea and Vietnam has increased significantly. The national flag carrier Vietnam Airlines added five more flights per week to South Korea, while VietJetAir and Jeju Air opened new air links between the two countries.

Of the total figure, the number of Vietnamese tourists coming to South Korea in incentive tours has posted a remarkable growth rate, rising 200% year-on-year.

South Korea is offering preferential services along with easier visa requirements to attract tourists from Vietnam. For example, a group of five Vietnamese whose visits are financed by businesses in Vietnam’s top 500 large companies posted on the website www.vnr500.com.vn or those firms with revenues surpassing US$5 million a year will be able to apply for easy visa.

It will take these tourists only three days to apply for visa with a fee of US$15 per person instead of US$20 and seven days like before. They will be free from customs declarations if their visa applications are processed through 14 travel agencies designated by the consulate, and all members are on board on the same flights.

Gov’t okays second phase of hospital JV

The Government has given approval in principle to HCMC authorities to develop the second phase of Cho Ray-Phnom Penh Hospital project in Cambodia.

According to the plan, the city government is responsible for choosing enterprises to invest into Saigon Medical Investment Co. (MECO) as the project owner to implement the next phase.

The Ministry of Health will collaborate with the municipal government in asking Cho Ray and other hospitals in the city to support Cho Ray-Phnom Penh Hospital in expertise, personnel, training and technology transfer, while the Ministry of Planning and Investment will revise the project’s investment certificate for MECO.

As planned, the hospital will have 300 more beds in the second phase, taking the total to 500 beds. This phase costing US$10 million is expected to kick off by the end of next year for completion in 2018.

Previously, the first phase of the hospital with an investment of nearly US$38 million was opened early this year with a capacity of 200 beds in Meanchey District, around 10 kilometers from Phnom Penh.

During the ten-month operation, as many as 60,000 patients have received medical checkups and treatments at the new general hospital.

Cho Ray-Phnom Penh Hospital is the first cooperation project between Vietnam and Cambodia to develop modern hospitals to serve healthcare needs of Cambodians.

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