BUSINESS IN BRIEF 19/10
Vietnam Expo 2016 to be held in HCM City
The 14th Vietnam Expo will be held at the Saigon Exhibition and Convention Centre in Ho Chi Minh City from November 30 to December 3.
It is expected to draw the participation of businesses from more than 20 countries and territories, including Indonesia, the Republic of Korea (RoK), China, and Taiwan.
According to the Ministry of Industry and Trade, with the sponsorship of Mobifone, the event provides a platform for businesses to meet, expand business and promote trade and investment.
Indonesia is the country of honour at this year’s expo, sending over 60 businesses to display modern technology products in the event.
The RoK’s state businesses and provincial trade organisations, such as the Bucheon Chamber of Commerce and Industry, representatives of Incheon, Suwon, Daejeon authorities, will be among those present.
Nearly 100 RoK businesses will introduce their latest technologies, services and products to the expo.
The event will see first time participation of hard ware tools and eco-friendly technologies. Environmental issues and solutions for the manufacturing industry will also be discussed at those booths.
The organising board said through the past 13 Vietnam Expos, various agreements and projects were signed.
Vietnam light industry park to be set up in Moscow
Authorities of Ho Chi Minh City and Moscow are working together to establish a light industry park for Vietnamese enterprises in the Russian capital.
According to the Ho Chi Minh City Trade and Promotion Centre, the park is expected to cover between 100 and 120 hectares. It will offer production support, legal and logistics services, among other facilities.
The park’s target sectors include garment-textiles, leather footwear, woodwork production and packaging.
Vietnam has so far channeled 2.93 billion USD into 20 projects in Russia, mostly in oil and gas exploration and services.
Russia ranks 17th out of 112 nations and territories investing in Vietnam with 114 projects worth 2.08 billion USD.
Work starts on TH True Milk complex in Russia
Vietnamese dairy firm TH True Milk began construction on its farming and processing project in Kaluga Oblast’s Ulianov district, Russia on October 18.
According to TH True Milk Chairwoman Thai Huong, using technologies from Israel, the project covers nine farms with nearly 100,000 cows. Its products are expected to go on sale in October 2017.
The complex is part of the group’s ten-year investment worth 2.7 billion USD in Russia. The investment is divided into three phases, with 500 million USD earmarked for the first phase.
In the last phase, TH True Milk will expand its herd to 350,000 cows reared on 140,000 hectares of land and be capable of processing 5,900 tonnes of milk a day.
The company also plans to run a distribution network of 300 stores across the country.
Speaking at the project’s opening ceremony, Kaluga governor Anatoly Artamonov said local authorities are working on freeing up 100,000 hectares of land to handover to TH True Milk.
He thanked the company for choosing his locality to invest in and hoped more Vietnamese investors would do likewise.
He said TH True Milk has made a good decision as Russian milk production capacity falls short of domestic demand.
Vietnamese Ambassador to Russia Nguyen Thanh Son said the dairy group is a pioneer of big Vietnamese investors in Russia.
The project will help enhance ties between Vietnam and Russia.
Previously, TH True Milk took part in an international food exposition in Russia, winning seven awards and a warm welcome from local consumers. The company broke an India-based Asian Record Organisation record by being the top Asian large-scale and high-tech dairy farm in 2015.
European businesses upbeat about Vietnamese market
A poll carried out by the European Chamber of Commerce in Vietnam (EuroCham) showed that Vietnam’s business climate index in the third quarter of 2016 went up ten points from the previous quarter to 84 points.
71.5 percent of participating European firms described their current operation as “excellent” and “good”, only 5.5 percent rated “not good” and a very few said “very bad”.
The majority of responded European enterprises acknowledged that the country’s macroeconomic stability is likely to continue, with nearly 60 percent of respondents forecasting “stabilisation and improvement”.
Approximately 41 percent of polled firms said to maintain their current investment level in Vietnam, while 39 percent planned to pour more money into the market.
EuroCham Chairman Michael Behrens said the index reflected EuroCham enterprises’ positive outlook for Vietnam, which is a good sign for the implementation of the European Union-Vietnam free trade agreement (EUVFTA).
Hoan My strikes new M&A deal
The Hoan My Medical Corporation officially announced the acquisition of the Van Phuc private hospital and clinic system in southern Binh Duong province on October 17.
With the merger and acquisition (M&A) Hoan My raises its hospital and clinic numbers to 12 (nine hospitals and three private clinics) around Vietnam, up from eight. “We have been in negotiations over this deal for about six months,” Mr. Huynh Le Duc, CEO of Hoan My, told VET.
The Van Phuc private hospital and clinic system was founded in 2011 in Binh Duong and after four years of operations has called for investors. Its network includes two general hospitals – Van Phuc 1 and Van Phuc 2 – along with two clinics. Van Phuc 1 has 200 beds and Van Phuc 2 120, which it was planning to increase to 200 in the future. It can treat about 500,000 patients each year.
Hoan My Medical Corporation is a foreign-invested private hospital owned by Singapore’s Clermont Group and focuses on medical care for Vietnamese people. Clermont constantly expands its network to meet increasing local healthcare demand.
This is the second M&A deal involving Hoan My this year, following its purchase of a controlling stake in Vinh International Hospital in north-central Nghe An province in March.
It now has eight members, including seven hospitals and one clinic: Hoan My Saigon, Hoan My Da Nang, Hoan My Cuu Long in Can Tho city, Hoan My Da Lat, Hoan My Minh Hai in Ca Mau province, Dong Nai International Hospital, Vinh International Hospital in Nghe An, and Hoan My Saigon Clinic.
Founded in 1997, Hoan My was one of the first private medical service providers in the domestic market and is now the largest in Vietnam in terms of presence. “We continue to seek new opportunities for development and to provide high quality healthcare services at a reasonable cost to Vietnamese people around the country,” Mr. Duc said. “Through this M&A deal we hope to meet demand for various medical services in Binh Duong in particular and in the south in general.”
In related news, the US’s Quantus, Inc has recently announced it will invest in a hi-tech hospital at the Saigon Hi-Tech Park (SHTP) in Ho Chi Minh City’s District 9. The US company signed a memorandum of understanding (MoU) with SHTP’s Management Board on the investment last month.
The project’s total capital is expected to be around $500 million and construction will be carried out in two phases. According to SHTP, the project will have 25-storey and 12-storey buildings on an area of 7 ha, with a hi-tech hospital, a life science research and development institute, a residential area for patient relatives, a VIP area, and a trade center.
Enterprises touted as pillar of agricultural development
Enterprises should be the key driving force behind agricultural sector development and competitiveness in the global integration process as they have finances, human resources and expertise.
Ho Xuan Hung, president of the General Council of Agriculture and Rural Development, said at the Vietnamese Farmers’ Forum in Hanoi last weekend that agriculture should be comprehensively restructured.
Agricultural restructuring is still based on cooperatives as a key player while there is no clear policy drawing enterprises into the process. Statistics show a mere 1.4% of foreign-invested enterprises and around 6% of domestic firms are involved in agriculture.
The restructuring process should not be geared towards putting cooperatives back in place but rearranging the workforce, facilitating land amassment for large-scale production, making clear services which cooperatives could provide, and rezoning agricultural production.
Therefore, it is enterprises, not farmers, that will play the key role in agricultural development. Due attention should be paid to creating a value chain and helping farmers improve skills and competitiveness, said Hung.
He underlined the need to help industry associations improve their performance for the benefit of farmers. These associations will serve as a link between farmers and enterprises and provide certain resources for farmers.
Investment in human resources should match what the sector contributes to society, he said.
Despite the hardships in the past 30 years, the agricultural sector has grown by leaps and bounds, said Deputy Prime Minister Vuong Dinh Hue at the forum.
However, there have remained a lot of pressing issues with agriculture, farmers and rural areas. Hue said “low yield, high risk” and “small production, large market” have been dogging farmers.
Agriculture is plagued by poor human resource quality and low labor productivity. Farm products in many areas fail to meet the requirements of both local and foreign consumers.
Hung acknowledged agriculture has been lagging behind since it has excessively focused on food security for a long period. In Vietnam, irrigation is the most important to Vietnam’s agricultural production, whereas other nations pay attention to seeds and breeds.
CMG to open 10 more fitness and yoga centers
California Management Group (CMG) last Friday launched its new brand “Yoga Plus” and planned to open 10 more yoga centers under this brand within the next 18 months.
Randy Dobson, chairman and chief executive officer of CMG, said Yoga Plus centers will be equipped with modern facilities, attentive services, as well as associated utilities. This will create a pleasant atmosphere for yoga enthusiasts to recover their energy. Besides, patrons will be regularly updated on new yoga programs, or will be trained by world-renowned yoga teachers.
For example, Yoga Plus has introduced In-Trinity to its yoga programs. In-Trinity enables users to tilting training platforms considered as a new trend for yoga enthusiasts.
CMG has been completing two Yoga Plus centers in HCMC and one in Hanoi. The company will have ten Yoga Plus centers put into use in the next 18 months, with a capital of US$20 million. The group is working towards its 2020 vision of 100 such centers in many cities and provinces.
CMG was launched in Vietnam in 2007 to provide fitness services combined with popular entertainment trends, such as fashion, media, digital marketing, film production and health technology.
In 2014, Randy Dobson announced the company’s strategic financial partnership with Mizuho Asia Partners, a subsidiary of Mizuho Bank. Mizuho Asia Partners has invested US$15 million for a 10% stake in California Fitness & Yoga Centers (CFYC), CMG.
Vietnam firms urged to use J-GoodTech to connect with Japan partners
SME Support, JAPAN is calling for Vietnamese manufacturers to find Japanese partners via putting their profiles on the J-GoodTech website.
Speaking to the media last week, Hirotaka Yasuzumi, director of the Organization for Small and Medium Enterprises and Regional Innovation (SME Support, JAPAN), said J-GoodTech was originally used to support Japanese SMEs. However, to meet the increasing demand for expanding overseas of Japanese firms, the website has been globalized over the past two years.
Currently, there are 3,500 Japanese SMEs in manufacturing, trading, technology and service sectors and 1,500 foreign businesses, 50% of them Vietnamese firms, using the website. When using J-GoodTech, firms can make contact with 300 leading Japanese companies who are partners of the website such as Toyota and Canon.
Yasuzumi said J-GoodTech is a trade exchange platform with the profiles of partner firms, especially those from Japan, verified.
Using the Internet helps SMEs reduce costs and have many chances of approaching partners, according to Yasuzumi, who was ex-director of the Japan External Trade Organization (JETRO) in HCMC.
SME Support, JAPAN is working with organizations, industry associations, and business support and management agencies in Vietnam to find potential Vietnamese firms to sign up with J-GoodTech.
The website is in English and Japanese. In case Vietnamese firms do not communicate in these two languages, they can still send information in Vietnamese to SME Support, JAPAN as it has people translating it into English. However, for detailed information about a transaction, Vietnamese companies should have their own translators.
There are around 600 successful deals transacted on the website, including those between Vietnamese and Japanese firms. The organization expects there will be more enterprises using the website to do business.
Firms told to list shares after IPOs
State-owned enterprises (SOEs) must list shares on the market for unlisted public companies (UPCoM) within 20 days after their initial public offerings (IPOs), according to the Ministry of Finance’s Circular 115/2016/TT-BTC, which takes effect on November 1.
The regulation issued in 2011 by the ministry encourages SOEs to list on UPCoM after their IPOs. However, many have delayed their listings on UPCoM and the stock exchange although they already had long gone public.
From the beginning of next month, SOEs must register their IPO auctions and listings on UPCoM at the same time. Their shares shall be tradable on UPCoM with 20 days upon the payment deadline for auctioned shares.
The Hanoi Stock Exchange said the change would have strong impact on the SOE equitization process.
Decision 51/2014/QD-TTg requires SOEs to float shares on UPCoM within 90 days after they get business registration certificates. Meanwhile, businesses have to register their IPO auctions and listings on UPCoM at the same time in line with Circular 115.
The circular prevents equitized SOEs from delaying their listings without sanctions, which has been seen for years.
With the circular becoming effective, IPOs in Vietnam will gradually meet international practices.
All IPO documents must be enclosed with listing plans. This means if enterprises receive permission to launch their IPOs, they must list shares on the stock exchange as well.
SHB to lend VND1 trillion to individual clients
Saigon-Hanoi Bank (SHB) has launched a program to provide VND1 trillion (US$44.8 million) in loans for individuals and households at an annual interest rate of 7.5%.
The program lasts until December 31 or until the sum is fully disbursed, the lender said. Individuals and households can take out loans from SHB to purchase properties, autos and goods, supplement working capital, and implement business plans.
SHB noted the program does not apply to the rural development project, the housing development program under the Government’s Resolution 2, securities investment, discounting of valuable papers, and unsecured consumer loans.
The interest rate of 7.5% is applied to all tenors of less than 60 months in one-fourth of the lending term but this must not exceed 24 months. Meanwhile, the annual rate of 9% is for 60-month-plus loans in the first 24 months.
SHB general director Nguyen Van Le said in a statement that individual clients and households often have higher demands for houses, autos and consumer goods at year-end.
Electricity meter replacement frequency to be reduced
HCMC Power Corporation (EVN HCMC) has suggested cutting the frequency of electricity meter replacement as part of a broader plan to reduce operating costs and electricity tariffs.
Single-phase electricity meters, which are mostly used by households, should be replaced every eight years, instead of the current five years, and three-phase electricity meters should be changed every four years, instead of two years as at present, EVN HCMC said at a meeting on October 17 with the city’s delegation of National Assembly (NA) deputies.
Tran Kim Tuan, deputy general director of EVN HCMC, said most electricity meters in use are electronic ones, so they have a long lifespan, over 10 years.
The company covers all expenses for electricity meter replacement, maintenance and evaluation work. In HCMC alone, EVN spends VND200 billion (US$8.9 million) replacing 450,000 of two million electricity meters in use a year.
If electricity meters are used longer, the power sector could save hundreds of billions of Vietnam dong a year, making it possible to cut or stabilize power prices.
EVN HCMC said it sent the proposal to the Ministry of Science and Technology in 2008 but the ministry’s Directorate for Standards, Metrology and Quality has not made any official response since.
NA deputies from HCMC said they would take the proposal of EVN HCMC into consideration and pass it to relevant ministries and agencies later.
Dong Nai: FDI disbursement surpasses year target
Disbursement of foreign direct investment (FDI) capital from the beginning of this year in the southern Dong Nai province has reached nearly 800 million USD, surpassing targets for the year, according to the provincial Department of Planning and Investment.
The figure represents 50 percent of the total registered capital, the department said, adding that the majority of disbursed FDI capital comes from Japan, Taiwan, the Republic of Korea and is focused in the manufacturing, processing and electronic industries.
Cao Tien Dung, director of the department, said FDI disbursement in the first nine months was high and stable.
The southern province attracted 1.6 billion USD in FDI capital since the beginning of this year, surpassing its target of one billion USD set for the whole year.
Dong Nai has lured a large number of FDI business over years, partly thanks to its position is the southern key economic region and convenient transport network.
It has worked to reform administrative procedures, with many of administrative units applying e-services, reducing the time for granting investment licences and processing required documents by one third or by half compared with the government standards.
Brexit exerts no impacts on HCM City-UK relations
Relations between the UK and Vietnam and Ho Chi Minh City in particular will not be affected as the UK leaves the EU, affirmed Lord Price, Minister of State for Trade Policy at the UK Department for International Trade.
Lord Price told Chairman of the HCM City People’s Committee Nguyen Thanh Phong on October 18 that the UK wishes to continue developing cooperation with Vietnam and the southern metropolis, especially in trade and investment
The UK guest said his visit to Vietnam aims to study investment opportunities in the country and convey the UK’s desire for stronger links with Vietnam and the city even after the UK leaves the EU.
He hailed Vietnam’s efforts in reforming administrative procedures, fighting corruption and improving th investment climate.
UK investors will provide financial support and transfer techniques to HCM City to help it become a smart urban area, he said.
Phong thanked the UK Government for its assistance in building metro line No. 5 and training human resources to implement the project.
He noted his wish to receive more support from the UK in development programmes, especially in infrastructure and smart urban development.
More internet users help e-commerce grow: experts
The strong growth of smartphone and internet users in Việt Nam offers further opportunity for the development of e-commerce, experts said at a recent seminar held in HCM City.
Deepesh Trivedi, e-commerce head for South East Asia at Facebook, said that in Việt Nam mobile sharing, including texts, videos and photos on Facebook, had spiked during the shopping season up to 40 per cent.
He said that people would start shopping as early as November and continue in the new year season.
Nguyễn Ngọc Dũng, vice president of Vietnam E-commerce Association, said that customers now had a wide access to goods information on various channels, including e-papers and social media networks, so they could shift to online purchases other than focusing on brick-and-mortar retail shops.
Experts at the Meet Magento seminar advised e-commerce start-ups first to study the market, identify target customer groups and employ online support services such as Facebook, YouTube and emails for their product marketing.
Under the e-commerce development master plan for the 2016-2020 period, Việt Nam is targeted to achieve US$10 billion B2C turnover in 2020. –
Casumina rubber company to increase exports to US
The Southern Rubber Industry Joint Stock Company (CASUMINA) plans to capitalise on opportunities arising from the Trans-Pacific Partnership trade agreement to increase sales of its semi-steel radial tyres, considered a strategic product of the company, to the US market.
Nguyễn Hồng Phú, the company’s general director, said the company will plan to implement a project producing semi-steel radial car tyres with an annual output of one million products and put into operation a production chain of tubeless motorbike tyres with an annual output of 2 million products.
Lower input costs and free trade agreements have created favourable conditions for the company to expand export markets.
The TPP, however, has opened the door for imported tyres, causing intense competition in the domestic market, especially in steel radial tyres.
Casumina, the leading tire manufacturer in Việt Nam, supplies tyres and tubes to many well-known automotive and motorbike makers in Việt Nam.
Its products are also exported to countries and territories in Asia, Europe, the US and Africa, with revenue from exports accounting for one-third of the company’s total revenue.
Casumina’s revenue reached VNĐ1.5 trillion (US$67.3 million) in the first half of the year.
HCM City banks’ credit at 4-year high
Credit growth in HCM City in the first nine months this year surged 13.26 per cent to VNĐ1,400 trillion (US$62.5 billion), the highest level in four years.
At a meeting yesterday with National Assembly members, the director of the State Bank of Việt Nam’s HCM City branch, Tô Duy Lâm, attributed the rise to the lending interest rate reduction in recent months. Interest rates for short-term loans currently average 6.75-9 per cent per year and 8.7-9.9 per cent for medium- and long-term loans.
HCM City’s preferential lending programmes for the city’s firms and its local people also helped boost the city’s credit growth, Lâm said.
According to the SBV’s HCM City branch, lending programmes to five prioritised sectors – agriculture, exports, part supply industries, small- and medium-sized enterprises and hi-tech businesses – in the first nine months reached roughly VNĐ770 trillion, up 10 per cent against the end of last year.
Lending through the city’s programmes that helps connect banks with businesses also provided total loans of more than VNĐ178 trillion to 19,156 customers.
The SBV representative said the central bank would keep interest rates low to boost economic growth.
At the meeting, HCM City’s Party Committee Secretary, Đinh La Thăng, urged the SBV’s HCM City branch and the city-based credit institutions to examine the feasibility of credit packages for start-ups and small- and medium-sized enterprises in accordance with the city’s seven prioritised programmes. The programmes include improved human resource quality, quality of economic growth and competitiveness; administrative reform; reduction of traffic congestion and accidents, flooding, and environmental pollution; and climate change adaptation and rise in sea levels.
In the first nine months, the city’s total capital mobilisation also rose 11.37 per cent against the end of last year to more than VNĐ1,740 trillion.
As for bad debt, the city-based banks settled VNĐ35 trillion, reducing the city’s bad debt from 3.92 per cent at the end of last year to 3.8 per cent of total outstanding loans at the end of August.
At the meeting, bank representatives hailed the Việt Nam Asset Management Company for the way it has dealt with bad debts.
Đỗ Minh Toàn, general director of Asia Commercial Bank, said bad debt-related regulations are still not optimal and do not offer effective solutions since borrowers shun their responsibility.
The Secretary of the HCM City Party Committee, Đinh La Thăng, called on banks to strengthen their co-ordination with the VAMC to better tackle the bad debt problem.
Viglacera to develop key projects in Q4
Vietnam Building Glass and Ceramics Joint Stock Corporation (Viglacera) is focusing on implementing its key projects as planned by the year end, Viglacera general director Nguyen Anh Tuan said.
The projects included Viglacera Dap Cau Glass Joint Stock, Phu My glass project and the organisation of international bidding for items of the My Xuan A Ceramics Factory that just started construction.
In the fourth quarter of this year, Viglacera will continue robust investment in the local real estate market by starting construction of the Dong Van 4 Industrial Zone and several other real estate projects.
In addition, Viglacera is also preparing for the issuance of more shares for increasing capital to obtain more funds for potential projects developing by the end of this year and next year, he said.
Since early this year, the corporation has actively restructured itself to improve competitive ability, ensure efficiency in production and business and set up development plans for each sector.
The corporation’s profit in the first nine months of this year reached 104 per cent of the yearly plan for 2016.
HCMC to upgrade and relocate LPG retail shops
The HCMC government is working on a plan to upgrade and relocate 100 liquefied petroleum gas (LPG) retail stores which fail to meet the safety standards, and at the same time construct around 400 new shops by 2020.
There are currently a total of 1,157 cooking gas stores in the city, according to data from a new development plan for LPG trading. Under the plan, the city aims to renovate and relocate 100 stores over safety concerns and build an additional 472 standard stores, taking the total to 1,627 by 2025.
The city will build a modern LPG distribution system comprising storage facilities, bottling and distribution stations, and facilities of wholesale traders, general agents and agents, minimizing fire and explosion risks, and protecting the environment.
The HCMC Department of Construction is going to provide new guidelines on the installation of LPG facilities at high-rise buildings, restaurants, hotels and condos. Developers of these buildings must design central cooking gas distribution systems through pipelines, instead of transporting flammable substances like LPG cylinders by elevator.
State stakes in SOEs remain big
State stakes in State-owned enterprises (SOEs) remain big as the equitization process at those businesses has moved at a snail’s pace.
According to data from the Ministry of Finance, 49 SOEs have had their equitization plans approved in the January-September period. Their actual value is VND31.9 trillion with State stakes accounting for around VND23.3 trillion.
In the nine-month period, State enterprises divested their stakes from non-core businesses and obtained over VND6.2 trillion compared to their book-value investments of VND3.2 trillion.
However, the amount collected from divestments are lower than the book value in securities, insurance, finance-banking, real estate and investment fund management sectors, at VND441 billion compared to VND481 billion originally.
Regarding other business sectors, SOEs obtained VND2 trillion compared to VND1.3 trillion in book value. State Capital Investment Corporation (SCIC) offloaded its stakes in 54 enterprises, collecting VND3.8 trillion versus VND1.4 trillion in book value.
The Central Institute for Economic Management (CIEM) estimates that around 15% of total State stakes in SOEs have been sold so far, meaning the unsold ones are still colossal.
By the end of this year, 843 enterprises will remain 100% State-owned, according to CIEM. They have total chartered capital of a combined VND3,105 trillion, equity of VND1,233 trillion, revenue of VND1,709 trillion and pre-tax profit of VND187 trillion.
If the companies which are still majority-owned by the State are taken into account, the number of SOEs in Vietnam would total 3,199. They have total assets of US$275 billion, revenue of US$140 billion and profit of US$9.5 billion, and create jobs for 1.6 million people.
HCMC proposes setting up property market info center
HCMC has proposed establishing a center to store and manage data about land, homes and housing projects, heard a meeting last week.
This is one of a number of measures suggested in the city’s property market development plan in 2016-2020 with a vision towards 2030, which was the topic of discussion at the meeting.
The city expects the information center could help it build official real estate market indexes which market participants could use as references.
The plan will develop infrastructure to connect urban areas, diversify property products, boost development of condo buildings, and encourage investors to get involved in projects to build homes for low-income people.
The city petitions the Government to establish a general department for housing development and allow it to form a housing development board under the city government.
The plans also mentions a number of measures to ensure transparency on the market, improve the cityscape and oversee housing development.
Tran Du Lich, former deputy head of the HCMC delegation of NA deputies, said the plan is well prepared but contains no deep analysis of market conditions. It should point out what is not transparent, and what regulations overlap, he said.
Lich said laws such as the Land Law, the Construction Law, the Housing Law and the Law on Real Estate Business have conflicting provisions which have left negative effect on the real estate market.
Le Chi Hieu, vice chairman of the HCMC Real Estate Association (HoREA), shared Lich’s view, saying many existing regulations are inconsistent, making life difficult for property companies.
High land prices and land-use fees are weighing on businesses and homebuyers, he noted, adding the State should set up a special financing mechanism, such as a housing development fund, to lure more businesses to join low-cost housing projects.
An official of the State Bank of Vietnam’s HCMC branch said the plan does not make clear the financing structure of enterprises involved in property projects. At present, a majority of investors rely heavily on bank loans to fund their projects but this source of capital would drop in the future in line with the central bank’s Circular 06 which sets out a roadmap for tightening lending to real estate projects.
To ensure sustainable development for the property market, bank loans should fall while increasing capital from other sources such as homebuyers, investment funds and corporate bonds, the central bank official said.
Extra conditions suggested for debt collectors
The Ministry of Finance has proposed the Government impose some additional conditions on debt collection service providers and relax a number of the prevailing requirements.
Enterprises could provide debt collection service only if they have obtained a business registration certificate in which debt collection is listed as one of their business fields and have publicized their business operations on a national portal.
They must have a certificate of eligibility for security and order meeting the Government’s rules on conditional business fields, says the finance ministry in the latest draft of the decree on debt collection service posted on its website for comment.
For years, securing a business registration certificate for debt collection service has been the only requirement for debt collectors.
The draft decree stipulates that providers of debt collection service would be required to equip their staff on duty with uniforms whose designs must be shown to the police and local authorities.
The uniforms and badges must be taken back from staff who part company with their employers.
This draft decree does not set any requirements for legal capital while the current rules fix it at VND2 billion.
Leaders of a debt collection company are not required to have a college degree or higher in economics, management, law and security, according to the draft. Employees are not obliged to have graduated from a vocational school or college with majors like economics, management, law and security.
The Ministry of Finance proposes in the draft decree that the Ministry of Public Security oversee the operations of debt collection service firms. This content is not included in the current regulations provided by Government Decree 104/2007/ND-CP.
In July the Ministry of Finance drafted a decree amending and supplementing some articles of Decree 104. Compared to this draft, the latest version removes all requirements for capital, and qualifications of senior and junior staff at a debt collection service company.
Trade ministry says to relax inspection rules
The Ministry of Industry and Trade has said it will streamline paperwork requirements even though it is in disagreement with a complaint that it has the most inspection procedures among the ministries.
In giving the first feedback about the complaint made by the Ministry of Planning and Investment and the business community, Deputy Minister of Industry and Trade Tran Quoc Khanh said his ministry does not have too many procedures for industry-specific inspections of businesses. But he affirmed the ministry would make some changes for the benefit of the corporate sector.
On the ministry’s website, Khanh said his ministry has 447 administrative procedures. However, not all of them are related to licensing and some of them are just part of a licensing process, he noted.
The Ministry of Planning and Investment recently claimed the Ministry of Industry and Trade takes the lead in terms of industry-specific inspection procedures and that these procedures should be cut to make life easier for businesses.
Deputy Minister Khanh, though disapproving of the claim, said: “The ministry will change the rules that are inappropriate as soon as possible to make things more convenient for businesses.”
The ministry’s Circular 37 on testing of concentrations of formaldehyde in fabric imports that received the most complaints from the Vietnam Textile and Garment Association was revised last Tuesday in a way that does not require importers of fabric as a material for manufacturing and processing to go through the cumbersome testing procedure at the border gates.
As for chemical declaration, the trade ministry was originally the agency that issued a chemical declaration form but this form has eventually become a mandatory procedure without the ministry’s knowledge, Khanh said, and his agency would make adjustments. And the ministry will also change the energy labeling rule.
These are the issues which the Ministry of Planning and Investment cited as evidence of the presence of so many procedures of the trade ministry, which enterprises must perform.
Khanh said the ministry would also fix a decree on trading of cooking gas in a way that protects the interests of businesses.
BIDV cuts lending interest rate
The Bank for Investment and Development of Vietnam (BIDV) will cut lending interest rate for prioritised sectors from October 18 to support businesses.
Accordingly, the rate applicable for short-term loans for the five prioritised sectors of agriculture, exports, parts supply industries, small- and medium-sized enterprises and hi-tech businesses will be reduced from 7 per cent to 6 per cent per year.
The preferential rate is also applicable for startups, environmental firms and those that have good financial status and credit ties with BIDV for more than three years.
Notably, BIDV is also offering a lower rate of 5.5 per cent per year for firms and households affected by the recent floods in the central provinces.
Some other preferential lending packages with interest rates from 4.5 per cent to 6 per cent per year are also being offered to exporters to Russia, Myanmar, Laos, Cambodia and the Eurasian Economic Union.
Last week, Vietcombank was the first bank to cut its lending interest rate in response to the Government’s recent resolution.
Oil & gas expo underway in Ba Ria-Vung Tau
The 4th Oil & Gas Vietnam (OGAV) 2016 exhibition opened in the southern province of Ba Ria-Vung Tau on October 18.
The event brings together leading oil and gas firms in Vietnam and abroad, including Zarubezhneft, Honeywell, Maass Global Singapore, United Mekong, and Thai Nam Industrial Investment JSC.
Latest technologies of the sector are on display, while conferences and seminars on the application of them in oil and gas exploration and processing are scheduled to take place.
The event is offering opportunities for participating companies to seek partnerships and potential clients.
Organised by the Fireworks Vietnam Co. Ltd, the exhibition lasts through October 20.
Da Nang’s Golden Square coming back to life
The Golden Square complex in central Da Nang city is expected to be revived by a new investor, the Alphanam Real Estate JSC, after lying idle for some time due to a lack of capital.
But a completion date remains unknown, according to Alphanam. A representative from Alphanam confirmed with VET that it has finished all procedures relating to the sale and will soon resume construction, though could not say exactly when.
Golden Square was originally invested by Dong A Real Estate, with investment capital of VND1 trillion ($45 million) and features a shopping mall, office space, a hotel and high-end apartments. The project covers an area of 10,664 sq m in the center of the city, at the junction of Pham Hong Thai, Nguyen Thai Hoc, Yen Bai and Nguyen Chi Thanh streets.
In 2008 the project got underway and sales were expected to open in 2010 at prices ranging from $1,500-$1,700 per sq m. The investor also committed that homebuyers could borrow 70 per cent the apartment’s value in a 15-year loan from Dong A Bank.
Golden Square has two main shareholders: Dong A Bank and Phu Nhuan Jewelry (PNJ). It was expected to be one of the largest projects in Da Nang but in 2014 construction came to a standstill. Mr. Nguyen Xuan Anh, Secretary of the Da Nang Party Committee, asked authorities earlier this year to create the conditions necessary for a new investor, if one could be found.
Dozens of large-scale projects in Da Nang have been transferred to new investors this year, with Golden Square going to the Hanoi-based Alphanam Group. The details of the transfer were not disclosed.
Industry insiders believe that Alphanam has the potential to develop the project because it has invested in other projects in Da Nang, such as the Four Points by Sheraton hotel project and the Luxury Apartment project, both of which are scheduled for completion this month. It has targeted investing in five to seven real estate projects in the city
The Alphanam Real Estate JSC is a subsidiary of the Alphanam Group, a major Vietnamese corporation with a 20-year history and involved in a host of different business sectors, including real estate, construction and engineering.
In real estate it has developed projects such as the King Palace residential complex in Hanoi’s Thanh Xuan district and Golden City in An Giang province’s Long Xuyen city in the Mekong Delta.
Quang Ninh calling for investment
Northern Quang Ninh province is seeking capital for at least 14 investments in the tourism and property sector during the 2016-2020 period.
Mr. Truong Manh Hung, Deputy Head of the Investment and Promotion Agency (IPA) under the Quang Ninh Department of Planning and Investment (DPI), confirmed with VET that these projects are among 43 in which the province is calling for investment.
This full list of projects has already been approved by the province, he added.
Of the 14 projects, an eco-tourism resort on Phuong Hoang Island is the most prominent. The project is located at the Van Don Economic Zone and covers an area of 691 ha, with beaches, villas, hotels and a marina. It requires capital of $250 million, all of which must come from the investor.
The second most notable project is an ecotourism area in Minh Chau commune on Quan Lan Island, which will feature a golf course and three- to six-star hotels and requires capital of $159 million.
Another ecotourism resort has total capital of $150 million and is located on an area of 116 ha on Nat Dat Island, with beaches, villas, hotels and a marina.
“Investors can propose other projects, but they must be suitable with the province’s planning,” Mr. Hung said. “Each locality within the province will also issue a list of projects seeking investment.”
Other projects include the Hon Chin high-class ecotourism complex in Van Yen commune with capital of $113 million, a tourism site in Binh Lieu ward with total investment capital of 38 million, the Cao Ba Lanh tourism site, with capital of $38 million.
Some projects are in principle economic fields and advantageous sectors, including the Dam Nha Mac Industrial and Service Zone, an Administrative Center in the Van Don Economic Zone, the Van Don – Tien Yen Highway, and an Industrial Breeding Development Center.
As at August 20, Quang Ninh province had granted investment certificates to 1,619 new projects with total registered capital of $9.795 billion, up 24.3 per cent year-on-year, while 770 existing projects added a total of $4.571 billion to their investment capital, or 83.7 per cent of the figure in the same period last year.
In the first seven months of this year Quang Ninh welcomed over 5.9 million visitors, an increase of 4 per cent year-on-year, according to the Quang Ninh Department of Culture, Sports and Tourism. Of these, 2.1 million were international visitors, up 42 per cent year-on-year.
Phan Thiet’s real estate market hots up
Phan Thiet City’s real estate market is expected to benefit from improved local infrastructure constructions.
The HCM City-Dau Giay-Long Thanh Highway was opened in February which shortened travel time between HCM City and Phan Thiet to over 3 hours.
The new Dau Giay-Phan Thiet Highway will shorten the travel time from HCM City to Phan Thiet to two hours once completed in 2017.
Construction will also start on the Phan Thiet-Mui Ne-Nha Trang Highway next year, underlining Phan Thiet’s likely improved attraction as a destination.
In addition the Phan Thiet Airport project, which was approved by the Ministry of Transport in 2013, has secured VND5.6trn (USD251m) in investment from the Rang Dong Group and is expected to completed in 2018.
The highways will boost the number of domestic tourists, while the new airport is hoped to bring more international visitors to the city.
Phan Thiet may become Vietnam’s fastest developing tourism city when all the highways and airport are opened, said a leader from the Vietnam National Administration of Tourism.
As a result, house and accommodation prices have started to rise with more hotel and resort projects being considered. Some believe that Phan Thiet has even more potential for hotel and resort projects than Phu Quoc and Danang.
The Rang Dong Group is also investing in a 168-hectare Sea Links City resort complex in Mui Ne including a world-class golf course. It also recently announced a USD116m Ocean Dunes resort complex.
Construction starts on urban estate in Tuy Hoa
Work began on October 16 on a project to build technical infrastructure for the Nam Tuy Hoa urban area situated in the south of Tuy Hoa, capital city of the central coastal province of Phu Yen.
The first phase of the project, which costs an estimated VND318 billion (US$14.21 million), will cover nearly 55 hectares, including 7.8 kilometres of internal roads, water supply, drainage and power supply systems, and two roads connecting the estate with Hung Vuong Boulevard.
The estate, situated near the Da Rang River, is designed to expand Tuy Hoa further into the south and connect with the Nam Phu Yen Economic Zone, home to the Vung Ro Refinery with a total capacity of eight million tonnes per year.
The projects also help to form a string of urban areas and industrial parks along the coast connecting with the northern part of Khanh Hoa province.
It is scheduled for completion in early 2018 with homes, villas, commercial buildings and other facilities to be occupied.
The province plans to put land use rights on 32 hectares of the estate up for auction in December of this year.
Vietnam Print Pack Foodtech 2016 features most foreign products
Most machinery and equipment which are on display at the ongoing 16th Vietnam International Printing, Packaging and Food Processing Industry Exhibition (Vietnam Print Pack Foodtech) in HCMC belong to foreign enterprises, according to the organizers.
Vietnamese exhibitors at the expo, which was opened on October 12 at the Saigon Exhibition & Convention Center (SECC), are importers, distributors or dealers of foreign producers.
Taking part in the event are 250 exhibitors from ten countries and territories such as Singapore, Japan, South Korea, Thailand, India, Indonesia, Hong Kong, Taiwan and China, which present their products in nearly 440 booths.
A majority of showcased machinery and equipment belong to the printing and packaging industry.
Some industry insiders said the packaging sector has reported strong growth in Vietnam thanks to domestic consumption and exports. The industry also offers many business opportunities as Vietnam has signed multiple free trade agreements.
For enterprises providing food processing machinery, Vietnam is considered a fast growing market given a number of factors, including the young population, changes in consumption habits, and especially the rising demand for high-quality and safe processed food.
The organizers expect this year’s exhibition will achieve good results and create a bridge for local and foreign enterprises to exchange technologies and apply advanced sciences and technologies in their production.
The show is jointly organized by Vietnam National Trade Fair & Advertising Company (VINEXAD), Chan Chao International Co. Ltd., Paper Communication Exhibition Service Co. and Yorkers Trade & Marketing Service Co. Ltd., and endorsed by relevant government agencies and industry associations.