BUSINESS IN BRIEF 23/10
Mekong Delta tra fish prices shoot up
Tra fish prices in the Mekong Delta have rallied in the past two months, with an average pickup of VND4,000 per kilo.
In Can Tho, exporters are buying unprocessed fish at VND22,000-22,500 per kilo. In Dong Thap, the fish have marked up to VND22,000 a kilo from VND18,000-18,500 two months ago.
Farmers in the delta said this is the highest spike since the beginning of 2016, earning them an extra VND1,000-1,500 per kilo.
This sharp price increase is attributed to a serious decline in supply while demand is recovering.
However, Vo Thi Thu Huong, deputy secretary general of the Vietnam Pangasius Association (VN Pangasius), said tra fish output early this year markedly rose from the same period last year.
As of October 9, more than 2,700 hectares of tra fish had been harvested in the Mekong Delta, down 0.1% year-on-year, but output had shot up 12% to 856,000 tons since productivity inched up from 285 tons in the year-earlier period to 313 tons per hectare.
Figures of the Ministry of Agriculture and Rural Development, albeit different than those of VN Pangasius, show tra fish production reached 861,000 tons in the first nine months of the year, up 2.5% year-on-year.
The rebound of tra fish prices is not because of a supply fall as claimed by some sources of information, but an improvement in demand, particularly of importers and local consumers, during the year-end season.
By the middle of this September, tra fish exports had totaled US$1.15 billion, an increase of 6.6% from the same period last year, said Huong.
Meanwhile, a report by the Vietnam Association of Seafood Exporters and Producers (VASEP) says that the first eight months of the year saw tra fish shipments to the U.S. surging 22.4% year-on-year to US$254.5 million, while those bound for China grew 72%.
Despite the price rallies on the domestic market, industry watchers believe it is hard for the price of unprocessed tra fish to return to the 2010 range of VND28,000-29,000 per kilo. This is because 70-80% of the current tra fish acreage is in the hands of processing enterprises or jointly farmed by processors and farmers, whereas this percentage was 20-30% in the past.
Renewable energy underdeveloped in HCMC
Despite its large potential, renewable energy has not been paid due attention in HCMC as the total capacity of renewable energy here is only 3.96 MW, accounting for 0.1% of the city’s total power consumption, said HCMC Power Corporation (EVN HCMC).
By the end of last year, the city had got 2.4 MW of renewable energy from a project which turns waste at Go Cat landfill in Binh Tan District into energy, and 1.56 MW of solar power, EVN HCMC said in a report released on Monday.
If 31 MW from all the solar water heaters is included, the consumption of green energy in the city would reach 34.96 MW, 1% of the total electricity consumption which was put at 3,575 MW.
In February last year, the city government set a target of raising the proportion of renewable energy consumption to 96 MW, 1.74% of its total power use.
As for waste-to-energy projects in the city, a 12 MW power station that is fueled by landfill gases at Da Phuoc Integrated Waste Management Facility in Binh Chanh District has not come on stream, according to EVN HCMC.
The power corporation has asked authorities to roll out more policy incentives for waste-to-energy technology research projects.
Since solar power is seen as the most potential source of renewable energy in the city, the company said the city should give financial aid to enterprises and households using solar electricity on a pilot basis.
The city should also ask the Government to adopt an attractive pricing system for those generating solar power for the national grid.
In its master plan for electricity development until 2020 with a vision towards 2030, Vietnam looks to increase the ratio of renewable energy to 4.5% of the country’s total power consumption in 2020 and 6% in 2030.
Local firms urged to use EU markets
Vietnamese firms must draw up long-term business strategies to exploit opportunities in the European Union (EU), as the EU-Viet Nam Free Trade Agreement (EVFTA) will come into force by 2018.
The EU, an open market with an integrated legal framework for all its members, can offer more export opportunities to local firms, experts told Vietnam News Agency correspondent.
In the past few years, trade between Viet Nam and EU has been on a continuous rise. In the first half of this year, the total import-export turnover to EU touched US$21.2 billion, posting a 9.05 per cent year-on-year rise. Of this, Viet Nam’s exports to EU were worth $16.2 billion and imports were $4.97 billion, both recording an 8.68 per cent and 10.28 per cent increase, respectively, from the same period last year.
The annual growth rate of Viet Nam’s export turnover to EU could be 4 to 6 percentage points higher once the EVFTA comes into effect. The trade pact can help Viet Nam promote the export of key products such as garments and textiles, leather shoes and seafood to one of the most developed economic regions in the world.
Experts said Vietnamese companies had so far only been shipping raw materials, though EU had brought the biggest export turnover for the country. Made-in-Viet Nam products are tough to find a place in big commercial centres in EU.
Businesses said they were concerned that their technology may not meet the requirements, so they were sticking to export raw products and letting EU firms package and label the products. This, however, means that Vietnamese products could lose their trademark if they did’t register brand names and geographical location.
Dang Hoang Hai, director of the industry and trade ministry’s EU Market Department, said local businesses should know the tax cut roadmap under the EVFTA, make precise calculations for their products and draw up long-term export plans.
Bui Huy Son, director of the ministry’s Viet Nam Trade Promotion Agency (Vietrade), said the country had the ability to conquer the EU market once the EVFTA takes effect. Viet Nam had two years to improve its capacity through reforms of mechanism and policies.
Truong Dinh Tuyen, former minister of commerce, said the EVFTA would mean greater export opportunities for Vietnamese firms as the EU market was bigger than the US and Japan in terms of marketshare and value.
However, the EU is a demanding market, and Vietnamese companies can face issues relating to assessment, retention, competition and domination of the market. Tuyen said under the World Trade Organisation principles, the importing companies have the right to initiate anti-dumping duty and impose sanitary and phytosanitary (SPS) non-tariff barriers and technical barriers to trade (TBT).
In addition, Vietnamese companies can be levied anti-dumping taxes if they focus on only one market. Domestic firms should come up with suitable policies to avoid concentrating on a certain market or a specific product.
Viet Nam’s strength of offering inexpensive products may no longer be an advantage once the EVFTA commitments are applicable. Product quality and trademark will be the decisive factors in the market. It will be useful if local businesses develop items that are in low supply instead of trying to offer similar products at lower costs.
Valentin Tran, exporting director of Casino, said he was optimistic about Viet Nam’s exports to the EU and that Vietnamese goods would benefit from zero tax. Firms should understand the market properly.
Vietnamese businesses should participate in exhibitions and fairs in the EU and visit its supermarket chains to understand consumption habits. The most important thing to promote export is to pay attention to the quality of goods and meet international standards, he said.
USAID, Coca-Cola to promote use of renewable energy
The US Agency for International Development (USAID) and Coca-Cola Beverages Vietnam Limited have signed a memorandum of understanding (MoU) aimed at increasing the use of renewable energy in Viet Nam.
The MoU was inked by Michael Greene, director of USAID in Viet Nam, and Nguyen Van Quyet, director of Coca-Cola Vietnam’s supply chain, at a ceremony in Ha Noi on October 19.
Under this partnership, both organisations will work together to develop renewable energy-based power and thermal systems for industry facilities, including those of Coca-Cola Vietnam and improve industrial energy efficiency, while reducing the use of fossil fuels.
Both parties will also cooperate in developing and sharing successful models of adoption of renewable energy and practices of energy efficiency.
The partnership also seeks to improve clean energy development capacities and skills among experts and practitioners in small- and medium-sized industrial enterprises.
As one of the first activities, USAID will provide technical assistance to help Coca-Cola Vietnam install its first solar battery system on the rooftop of the plant in HCM City. It is expected to supply at least 20 per cent of the facility’s power requirements.
Speaking at the event, USAID’s visiting senior deputy assistant administrator for Asia, Gloria Steele, said, “As it enjoys rapid growth, Viet Nam’s energy consumption is soaring. This energy is mainly generated from fossil fuels and this feeds into the root causes of global climate change.
USAID wants to help encourage clean-energy policies and expand market incentives and public-private partnerships that promote the use of renewable energy technologies and increase energy efficiency in Viet Nam, she said.
Quyet said Coca-Cola Vietnam is committed to growing as a sustainable business and aims to reduce the use of fossil fuel through a variety of initiatives, such as using compressed natural gas and biomass in manufacturing plants and solar energy for water heating.
The two parties are also collaborating on the Mekong Vitality project, to strengthen the social and economic status and empower 4,900 women in the southern Vinh Long province. This will be achieved by helping them increase their household income and savings, improving financial literacy, and building their confidence and decision-making power.
Bulgarian enterprises study investment opportunities in Binh Dương
A delegation of Bulgarian enterprises led by Bojidar Loukasky, Bulgarian minister of economy, visited Binh Duong on October 19.
The delegation is studying investment and business opportunities in the province and also at the Viet Nam-Singapore Industrial Park (VSIP).
At a meeting between the delegation and the Viet Nam-Singapore Industrial Park JV Company, the company’s representative reviewed operations and scope of investment at the park.
Viet Nam-Singapore Industrial Park JV Company was established in 1996 and is a leading industrial developer in Viet Nam, with seven projects in Binh Duong, Bac Ninh, Hai Phong and Quang Ngai, as well as Hai Duong and Nghe An provinces. VSIP has attracted 630 projects with total investment capital of US$9 billion from 30 countries and territories.
Meanwhile, Bulgarian enterprises said were paying attention to those fields that have given priority to attracting investment and chances of cooperation and business in VSIP. They also studied investment incentives in Binh Duong Province.
Loukarsky said he was impressed with the modern facilities, infrastructure, investment incentives and favourable administrative procedures in Binh Duong, creating good conditions for enterprises investing in the province.
He also highly appreciated the operation model of VSIP Binh Duong and said the park was a model industrial park that should be replicated.
National Assembly to discuss supporting SMEs
The draft law on support for small and medium-sized enterprises (SMEs) will be discussed at the 14th National Assembly’s second meeting sessions which opens today, heard a conference yesterday.
Deputy Minister of Planning and Investment Dang Huy Dong said at the conference organised by the ministry’s Agency for Enterprises Development and the United States Agency for International Development that SMEs were a driver for growth and the core of the economy.
SMEs accounted for 97 per cent of all firms, provided jobs to half of the labour force and contributed 40 per cent to gross domestic product (GDP). However, they were still struggling to access business resources, such as credit, land and market information.
Dong said the law would create a level playing field for firms while raising private resources in boosting the SME community. The law would aim to encourage firms to renovate the growth model and improve competitiveness.
“The support from the law is appropriate to Viet Nam’s commitments to international trade deals,” Le Van Khuong, Head of SMEs Department said, adding that the law was expected to boost employment and contribute to enabling one million firms to operate efficiently by 2020.
According to Gloria Steele, USAID’s Senior Deputy Assistant Administrator for Asia, Viet Nam was growing rapidly in the region. Creating a favourable environment for SMEs to develop was essential for the country’s growth, she said.
In a conference held on Tuesday, experts said that gender equality should be addressed in the law on support for SMEs, by supporting female-led firms.
A report heard at the workshop on Tuesday held by the Viet Nam Chamber of Commerce and Industry (VCCI) and the Ha Noi Women’s Association of SMEs (HAWASME) revealed that female-led firms significantly contributed to the country’s socio-economic development but faced several disadvantages compared with male-led firms.
The report carried out by HAWASME and Asian Development Bank’s Mekong Business Initiative (MBI) found that female-led firms accounted for 24.8 per cent of the total number of firms or 25 per cent of the total number of SMEs and created more than 1.6 million jobs. Female-led firms also used more women workers than male-led firms with respective proportions of 43.4 per cent and 36 per cent.
However, they faced barriers in accessing financial resources, market information, trade promotion programmes and Government supports. Female entrepreneurs also struggled to balance family and work, according to the report.
Ha Thi Vinh, director of Quang Vinh Ceramics Company, said that female entrepreneurs were often bound by cultural and family factors.
Experts at the conference said that the draft law should address gender-related issues.
According to Hoang Quang Phong, VCCI’s Deputy Director, there was a shortage of support for female-led firms. “It is necessary to have policies to promote female entrepreneurship,” Phong said.
Currently, Viet Nam has only Decree 56/2009/ND-CP which mentions female-led firms, saying that support to female-led SMEs or SMEs using a significant number of women workers will be given priority. However, there were no detailed regulations and support failed to reach female-led firms.
Many countries such as South Korea, the Philippines and the US have separate laws or programmes to support female-led firms.
Bui Sy Loi, Deputy Chairman of the NA’s Committee on Social Affairs said that he expected the law on support to SMEs would support SMEs and female-led firms.
Loi said that support to female-led firms should include trade promotion, resource access, developing business network and improve capacity.
“If support to female-led SMEs is included in the law, I believe that the goal of 35 per cent of firms being led by women entrepreneurs will be within reach,” Loi said.
TPBank offers new support package for businesses
The Tien Phong Commercial Joint Stock Bank (TPBank) started offering its business support package worth VND3 trillion (US$134 million) at a lowered annual rate of 6.8 per cent on Thursday.
This is the second time this year that TPBank has offered a preferential credit package for business customers. In April, it was the first commercial bank to lower interest rates, in accordance with the state policy, and offer a package worth VND5 trillion ($223 million).
Eligible businesses include exporters, support industry manufacturers and start-ups that are looking for funding. For start-ups, the package specifically applies to technology, e-commerce, services and finance sectors.
The package rates will be offered till December 31.
The bank is aiming to encourage and support businesses, in terms of technological solutions, productivity and value additions, by creating favourable conditions. Enterprises can consult with the bank, expect flexibility and avail of the package. TPBank hopes that its preferential credit package will help businesses increase production, get more competitive and meet their 2016 business goals.
Vietnam promotes trade, investment in Germany
Vietnam’s trade office in Germany and the Trade Promotion Agency (TPA) under the Ministry of Industry and Trade (MoIT) organised a trade and investment promotion forum on October 18.
The forum at the Frankfurt am Main city attracted the attendance of more than 100 Vietnamese and German enterprises.
A representative of the TPA called for German enterprises to take advantage of opportunities to expand business and investment in Vietnam and pledged to create favourable conditions for German investors.
Jurgen Ratzinger, International Director of the Frankfurt IHK, appreciated the organisation of the forum and considered it as a continuance of the relationship between Frankfurt and Vietnam.
Vietnam is considered as one of the important partners of Germany and IHK always accompanies enterprises of the two countries to boost bilateral economic and trade activities.
Udo Corts, a former minister at Hessen State, stressed the role of education and training cooperation in economic development and expected the two countries’ businesses pay more attention to highly-skilled human resources training.
Nguyen Minh Quang, Vice Chairman of the Hung Yen provincial People’s Committee, introduced the province’s advantages and called for German companies to invest in the province.
Earlier at the Vietnam Trade Office in Berlin, the TPA delegation, Hung Yen, Nghe An and Quang Binh provinces had a working session with the Trade Office and representatives of the Association of Vietnamese Enterprises in Germany.
Agencies seek ways to boost anti-IP rights violation cooperation
A roundtable discussion was held in Hanoi on October 20 to look for ways to improve the effectiveness of cooperation among enforcement agencies in the fight against counterfeits and intellectual property rights (IPR) infringements.
The function was part of a project on improving coordination among IPR enforcement agencies in Vietnam funded by the UK Embassy.
Deputy Minister of Industry and Trade Do Thang Hai said Vietnam established a national steering committee for anti-smuggling, trade fraud and counterfeiting.
He, however, admitted that the counterfeiting and IPR infringements have become more complicated and even involved foreigners.
The fight against counterfeiting and IPR violations cannot be successful without businesses’ active cooperation and the entire society’s engagement, he stressed.
Lord Puttnam, the UK Prime Minister’s Trade and Cultural Envoy, said Vietnam has strongly integrated into the regional and global economies in recent years, which required improving the business environment and competitiveness to create a transparent climate for enterprises.
The IPR enhancement will promote technology transfer, product development and stimulate businesses’ creative process, he said, noting that the British Embassy has cooperated with Vietnam through programmes to improve the capacity of market monitoring officials and the project to strengthen coordination among IPR enforcement agencies.
Data of the Market Surveillance Agency show that by October 2016, the market surveillance force detected over 29,400 cases relating to counterfeits, low-quality goods and violation of the IPR.
At the event, participants suggested measures to boost cooperation among relevant agencies. Dave Lowe, head of the IP Enforcement and Capacity Building at the UK’s Intellectual Property Office, also shared experience in reinforcing enforcement bodies’ coordination.
Mekong Delta adopts smart rice cultivation model
Experts have recommended that the Mekong Delta should expand “smart” rice cultivation to reduce production costs and increase profits.
The delta, the country’s rice granary, began a smart-rice pilot programme for this year’s summer-autumn crop with 65 participating farmers in the delta’s 12 provinces as well as Can Tho City.
The farmers, who used the model on an area of 0.5 ha each, were instructed in farming techniques, including use of proper seeds and fertilisers.
They also learned how to pump water into their fields to destroy pests before sowing rice seeds.
Speaking at a seminar held in Can Tho early this week, Mai Van Quyen, a programme consultant and former head of the Southern Institute of Agricultural Science, said that reducing the quantity of sowing seeds was a mandatory part of the programme.
All of the farmers had reduced the quantity of seeds to 74-82 kilos per ha in the summer-autumn crop, he said. Farmers who planted rice under traditional cultivation method used 104-200 kilos of seeds per ha.
The reduction of seeds had helped farmers cut costs, reduce disease and produce better rice, Quyen said.
The quantity of fertiliser used was also less compared to traditional growing methods, while the yield of paddies was 0.5-1 tonnes higher than that of traditional cultivation methods.
Tran Van Khoi, acting director of the National Agricultural Extension Centre, said agricultural production in the delta was facing difficulties because of drought and salt water intrusion caused by climate change.
Farmers using the model have had higher profits in the summer-autumn rice crop, according to the delta’s provincial agricultural extension centres.
Farmer Phan Thien Khanh from Can Tho’s Thoi Lai District said he had once used 200-250 kilos of seeds per ha but had cut back to 60-80 kilos under the new method.
His profits rose 5 million VND (230 USD) per ha compared to profits under the traditional cultivation method.
Dong Van Tiep from Hau Giang province’s Long My district said he earned a profit of 22 million VND (1,000 USD) per ha by participating in the programme.
Tiep said he would apply the smart rice cultivation model to the rest of his 2016-17 winter-spring rice crop.
Conference highlights bill on supports to SMEs
A conference was held in Hanoi on October 19 to collect ideas on the draft Law on Support to Small and Medium-sized Enterprises that will be debated during the 14th National Assembly’s second session starting from October 20.
Speaking at the event, jointly held by the Ministry of Planning and Investment (MPI) and the United States Agency for International Development (USAID), MPI Deputy Minister Dang Huy Dong noted that small and medium-sized enterprises (SMEs) form the backbone of the economy.
SMEs currently account for more than 97 percent of total firms, employing over 50 percent of the country’s workforce and making up 40 percent of GDP, he said.
However, he held that despite the great contribution, SMEs are facing many difficulties and obstacles in accessing resources such as credit, land for production and market.
The bill aims to synchronize support policies and programmes for SMEs to fit the economic targets and orientations of the country as well as strengths of specific localities and resources for each period, he said.
It also creates a legal framework for mobilising the engagement of the private sector as well as domestic and international organisations in the Government’s efforts in backing SMEs, while tackling problems in policies and implementation of supports for SMEs.
Le Van Khuong, head of the Office for SMEs under the Business Development Department, revealed that the bill comprises six chapters and 45 articles focusing on basic supports for SMEs, including regulations in entering and retreating from the market, accessing finance and credit, technology, production ground, market expansion and promotion, public purchase, and training.
The support will be offered through mechanisms and policies as well as favourable conditions for intermediary organisation to provide assistance services for SMEs. The firms will be aided in business model transformation, creative renovation and joining production chains.
Khuong added that the bill is suitable with Vietnam’s commitments to the Trans-Pacific Partnership, which is expected to create more jobs from the private sector, contributing to helping Vietnam reach the target of one million firms in 2020.
Meanwhile, Gloria Steele, USAID Vice Director for Asia, asserted that the creation of a dynamic environment for SMEs is necessary, facilitating the development of Vietnam , one of the fastest growing economies in Asia.
The USAID will accompany Vietnam in designing policies to support SMEs, she pledged.
Petrol prices inch up over 400 VND per litre
Retail prices of RON 92 petrol and E5 bio-fuel increased by 441 VND and 392 VND per litre, respectively, from 16:45 pm on October 20.
Following a joint decision issued by the Ministries of Industry & Trade and Finance, diesel 0.05S price rose by 599 VND per litre, while that of paraffin was up by 520 VND per litre.
This was the tenth hike in fuel prices so far this year with a total increase of nearly 5,000 VND per litre. By contrast, the prices have been dropped 8 times since the beginning of the year, with the decreases amounting to about 4,463 VND per litre.
Current ceiling prices of RON 92 and E5 bio-fuel are 16,845 VND per litre and 16,533 VND per litre, while maximum prices of diesel and paraffin are kept at 13,023 VND per litre and 11,543 VND per litre.
The average global price of RON 92 during the last 15 days to October 20 was 59.995 USD per barrel, while that of diesel 0.05S was 62.338 USD per barrel, the ministries said.
They also decided to maintain subsidies on RON 92 and E5 at 600 VND and on diesel and paraffin at 300 VND per litre. The subsidies are sourced from the fuel stabilisation fund.
Bac Giang offers helping hand to investors
The northern province of Bac Giang will continue its efforts to improve the local investment and business environment with the goal of attracting investors and facilitating the operation of local businesses.
Director of the provincial Department of Planning and Investment Trinh Huu Thang said the department will push the pace of major investment projects including the international logistics service centre in Bac Giang City and the Tay Yen Tu eco-tourism complex.
The Management Board of Industrial Parks will coordinate with relevant agencies in speeding up land clearance for the infrastructure development project in Ho Phu industrial park in Hiep Hoa district.
Meanwhile, the provincial Department of Home Affairs is to work with other agencies to manage the operation of the province’s public administrative centre, proposing measures to increase the effectiveness of the centre, thus contributing to local administrative reform and providing better public services.
As of the end of September 2016, Bac Giang was home to 1,091 investment projects with combined capital of over 5.5 billion USD, according to the Department of Planning and Investment.
Of the total, 250 projects worth over 3.1 billion USD are run by foreign investors.
In August and September this year, the province also granted business licences to 158 new firms with combined registered capital of more than 2.36 trillion VND, raising the newly-established companies so far this year to 626, a rise of 39 percent year on year.
Currently, Bac Giang is hosting 5,633 enterprises and 812 business branches and representative offices, with a total investment of 31.2 trillion VND (1.41 billion USD), he said.
During the past two months, a number of Japanese businesses arrived in the province to study the possibility of safe vegetable production, while Seah Vina company from the Republic of Korea met local officials to discuss investment in a solar power plant.
Deputy PM stresses need to speed up ODA disbursement and loans
Hastening the disbursement of official development assistance (ODA) and preferential loans remains a huge task for the remaining two months of this year in the context of increasing public debts and limited resources, said Deputy Prime Minister Ph?m Bình Minh.
The official made the remarks at a workshop on accelerating the implementation and disbursement of ODA programmes and projects in Hà N?i on Tuesday.
Minh, who is also head of the National Steering Committee for ODA and Preferential Loans, emphasised the need to disburse more than US$22 billion of ODA and concessional loans committed to Vi?t Nam for 2017-2020.
He explained that slow implementation and disbursement could result in higher project costs.
The Deputy PM urged ministries, agencies and localities to prepare for the projects and fulfill their commitments regarding compensation, land clearance, human resources and corresponding capital, noting that land clearance is a big problem for infrastructure projects.
With attention on the use of ODA and concessional loans, the Vietnamese Government has taken steps to speed up the disbursement and raise the efficiency of the capital, he said.
The official cited Government Resolution No. 60/NQ-CP on hastening the actualisation and disbursement of public investment capital in 2016 and the Law on International Treaties with regulations concerning the signing of international treaties on ODA.
At the workshop, World Bank (WB) Country Director for Vi?t Nam Ousmane Dione, on behalf of the Asia Development Bank, the French Development Agency, the German Development Bank, the Japan International Cooperation Agency, Korea Exim Bank and the WB, pledged further support to Vi?t Nam.
He expressed his belief that Vi?t Nam and the banks will join hands in addressing problems in carrying out these projects.
According to the Ministry of Planning and Investment, as of September 2016, over $4.9 billion of ODA and concessional loans were committed to Vi?t Nam, representing a 1.8-fold rise year-on-year.
Of the figure, only $2.68 billion was disbursed, equivalent to 81.4 per cent of the amount from the same time last year.
The projects mainly focus on transport, water supply and sewage, environmental hygiene, urban development and climate change response.
The ministry blamed the lack of corresponding capital, complicated institutional regulations and difficulties in land clearance for the sluggish implementation and disbursement of the loans.
Phu My Hung selling Saigon South Residences
Phu My Hung Development Corporation will begin sales of its new project, Saigon South Residences, on Sunday, with prices starting at VND2 billion (US$91,000).
The project marks a major change in the company’s strategy by targeting young people who want to enjoy Phu My Hung’s quality at more affordable prices. For this, the company has gone outside its Phu My Hung City Centre in District 7 for the first time to develop a project.
Saigon South Residences is situated on Nguyen Huu Tho Boulevard in Nha Be District.
It is being developed on an area of nearly 33,000ha. Of this, 31 per cent will be for apartments and 69 per cent for green spaces and facilities like a swimming pool.
Six buildings with 19-20 floors will be built with 1,840 apartments. Nearly 70 per cent of the units will have two bedrooms and range in size from 60sq.m to 70sq.m.
The apartments will be handed over to buyers in 2019.
Vinafood 1 Flourmill offering 34% stake for sale
Vinafood 1 Flour One Member Company Limited, a member of State-owned Vietnam Northern Food Corporation (Vinafood 1), will auction over 8.2 million shares, equivalent to a 34 per cent stake.
The auction on the Ha Noi Stock Exchange will take place on October 28 and the starting price is set at VND10,000 (US$0.45) per share. The deadline for participation in the event is October 26.
Foreign investors are allowed to buy all the shares put up for sale.
The precursor of Vinafood 1 Flour One Member Company Limited was Hung Quang Flour Production, a unit of Nghe An Food Company. In 2008, the flour mill company was established under the management of Vinafood 1.
The company produces and processes food, flour and related products and trades food materials and cattle feed. It has two flour production factories – Hung Quang Flour Factory in Vinh City, central Nghe An Province, and Bao Phuoc Flour Factory at the Dinh Vu Industrial Park in northern Hai Phong City.
The flourmill firm expects its charter capital to reach VND242 billion (nearly $11 million) after equitisation, of which the state will hold 65 per cent of capital, employees will hold 0.99 per cent and other investors 34 per cent.
Due to fierce competition in the local wheat market and volatile prices of input materials, business results of the company declined during the 2013-15 period.
Its net profit decreased from VND6 billion in 2013 to just nearly VND143 million in 2014. It even incurred losses of VND2.6 billion in 2015.
The company’s performance improved in the first half of this year with total revenue of VND252.4 billion and net profit of VND894 million. Until the end of June 2016, its total assets value was VND316 billion.
It expects to earn over VND1 billion in net profits for the whole of 2016 and nearly VND6.8 billion in 2017. The company targets paying 2 per cent dividend from next year, with the rate increasing to 2.2 per cent in 2018 and 2.4 per cent in 2019.
Housing developer Novaland to list, but no IPO
Giant housing company Novaland Group has unveiled plans to list on the stock exchange by the end of this year, but without making an initial public offering.
Le Thanh Hoa, the company’s capital market and investment relations director, said documents would be submitted to the HCM Stock Exchange in November and the listing would take place in December.
A private placement of shares would be done by selling to large, prestigious investors, he said.
“After the listing, we predict there will be a free float of 20-25 per cent of the shares.”
He said foreign investors would buy 70-80 per cent of the private placement and banks and securities companies, the rest.
While he refused to divulge the price, he said the company aims to be among the top 30 companies in terms of market capitalisation.
The money raised through the private placement will be used to fund ongoing and new projects and retire some debts.
Novaland is one of the biggest property developers in the country with around 40 projects in HCM City.
Last year the company sold nearly 6,700 apartments and office-tel units.
In the first half of this year it has brought into the market 3,800 units.
This year, besides apartments, Novaland has also been building villas and street houses.
Hoa revealed that his company has enough land for developing housing for the next five years.
Woman borrow less than men: finance company report
Women borrow less than men everywhere in Viet Nam, according to a new report from finance company Home Credit Vietnam.
The company attributed this to women being “careful about spending money and finance managers in families.”
In the north, women account for only around 36 per cent of the company’s customers. The rate is higher in the south (39 per cent) and central region and Central Highlands (41.3 per cent).
In terms of age, women aged 20-30 borrow the most in all three regions, accounting for 44-45 per cent of all women customers.
Women aged over 50 account for only 4.8 per cent.
Women use 80 per cent of all loans to buy household appliances and phones.
Southern women prefer to pay less down and get longer tenors for their loans compared to their other peers. More than 21 per cent of southern women borrow to buy motorbikes/scooters, at least twice the rate elsewhere.
Anti-dumping duty of 111.47% on Vietnam steel pipes maintained
The US Department of Commerce (DOC) has issued a preliminary conclusion of its administrative review (POR) for anti-dumping duties on oil country tubular goods (OCTG) imported from Vietnam from February 25, 2014 to August 31, 2015.
Accordingly, the DOC will impose a common tariff of 111.47% on Vietnamese OCTG exporters while only one business working hand in hand with the DOC during the investigation process is subject to duty of zero percent as it did not dump prices on the US market.
Judging from the initial duties as announced on July 11, 2014, it is considered a success of a Vietnam business. The DOC creates the possible conditions for relevant sides to send case briefs within 30 days since it publishes a notice in the Federal Register and rebuttal within five days since the submitted day. Besides, if relevant sides request a hearing, they must send their official requirement to the Assistant Secretary for Commerce within 30 days since the notice is published.
The DOC will issue its final decision on the review within 120 days since the preliminary decision is announced in the Federal Register.
In 2014, the Canada Border Services Agency initiated anti-dumping and anti-subsidy investigations on Vietnam OCTG products and imposed AD duties of 28.6%.
Global cold chain to grow 7% annually through 2020
The global cold chain market is projected to grow at a combined annual growth rate of 7% from 2016, to reach a value of US$234.49 billion by 2020, according to a report from Research and Markets.
The report analysed the cold chain market in terms of type, application, temperature range, technology, and region.
It said the primary factors that have and continue to drive growth and success of the global cold chain are factors such as an increased demand for chilled and frozen food and beverages due to changing consumer preferences.
Furthermore, the report concluded that factors such as increasing disposable incomes and rapid urbanization in emerging markets such as Vietnam have also heightened the demand for frozen food and hence for cold chain services.
Based on application, the report classified the cold chain market into five segments – fruit and vegetables; bakery and confectionery; dairy and frozen desserts; meat, fish and seafood; and others.
The cold chain market was further segmented into chilled and frozen.
With the increasing international trade of perishable food products, particularly from Southeast Asia, the report noted, the demand for cold chain is expected to continue to experience enhanced market growth.
Cold chain, said the report, plays a singularly key role in storage and transport of meat, fish and seafood products as they require refrigeration right after slaughter, during processing, and during packaging.
Per Julien Brun, general manager of CEL Consulting, the increased demand for frozen and pre-packaged foods in Vietnam is expected to drive the cold supply chain to exponential market growth over the next few years.
Citing a recent report from the Directorate of Fisheries, Mr Brun said the average rate of loss for farm produce in Vietnam has averaged 25%-30% of total value over recent years, even as high as 45% for some fruit and vegetables and 35% for many seafood products.
Mr Brun pointed out that over the past decade, the scale of the frozen food supply chain in Vietnam has increased 4-fold, which has barely scraped the surface of this lucrative market. The increase, he said, has primarily been concentrated in the southern region in support of aquaculture.
The expansion of the cold supply chain for frozen food in the local retail marketplaces throughout the remainder of the country such as for transporting products to restaurants and supermarkets has been severely restricted.
The solution to the problem, he said, is to let competition, the profit incentive and other open market forces come into play.
The cold chain market in Vietnam has been and is expected to continue to attract increasing expansions and acquisitions by key global players such as Americold Logistics, LLC (US), Preferred Freezer Services (US), and Nichirei Logistics Group Inc. (Japan).
The cheap and low quality supply chain logistics of using motorbikes lacking cold storage technology to transport products nationwide that have little regard for food safety will soon be a relic of the past as Vietnam moves on to a whole new modernized world.
It’s important for small business owners throughout Vietnam during this transition, said Mr Brun, to realize that they much too often opt for what they perceive to be the lowest cost alternative— only to find out that because of the lack of quality control and food safety, it leads to higher losses.
The losses caused by shortened product life and the lack of a cold supply chain is a factor that small businesses across the Southeast Asian nation must consider and open their eyes to the realization that it is more profitable for them to opt for cold storage transport only.
Forum tackles issues facing next-generation agriculture
An agriculture forum in the city of Can Tho on October 26 will gather more than 600 leaders in farming, government, academia and private enterprise to discuss issues of land tenure and the next generation of agriculture.
At a press conference on October 19 in Ho Chi Minh City kicking off the forum, Truong Quang Hoai Nam, vice chair of the Can Tho People’s Committee, one of the sponsors, said recommendations from the stakeholders are vital to the future of agriculture.
Feedback obtained at events like these and recommendations from the stakeholders, he said, help government leaders as she or he grapple with challenges and opportunities facing a new generation transitioning into the Vietnam agricultural economy.
The upcoming forum entitled ‘Mekong Connect-CEO Forum 2016’ will focus on identifying region-specific needs of new and beginner farmers and areas in which new policies can best support access to land and capital.
If the government is collectively to help agriculture in the region flourish, it needs to increase the frequency of collaborations like the Mekong Connect event among government, industry members and farmers, noted Mr Nam.
Discussions will touch heavily on farm profitability and how it influences the land tenure of small farms. There will also be in depth discussions addressing issues related to making sure agencies that exist to help farmers at any stage in their career are always communicating with other relevant agencies on what they are doing.
In turn, Vu Kim Hanh, president of the Vietnam High Quality Product Association, another sponsor, noted events like the upcoming forum help government agencies articulate the most urgent needs in agriculture, and develop long-range solutions that will keep the industry thriving.
PSI now a subsidiary of PVCombank
PetroVietnam Securities Incorporated (PSI) became a subsidiary of PVCombank after the latter increased its holding in the former from 9.32 per cent to 50.21 per cent on October 12.
“PSI will benefit from becoming a subsidiary of PVCombank, gaining access to its customer network, transaction points and office systems, enhancing PSI’s product diversification and cross-selling opportunities,” Mr. Nguyen Anh Tuan, Chairman of PSI, told VET.
PVCombank purchased shares from four previous shareholders: 22.5 per cent from Vietinbank Capital, 6.7 per cent from the Vietnam investment and Asset Trading Joint Stock Company (VNassets), 6.6 per cent from the PetroVietnam Trade Union Finance Investment Corporation (PVFI), and 4.6 per cent from the My Khe Vietnam Joint Stock Company (MKV), according an announcement from PSI on October 12.
The swap ratio between PVCombank and PSI is set at 1:1, according to a resolution from PSI’s 2016 annual general meeting.
PSI’s business plan is unlikely to undergo any significant change in the short term. “The business plan from earlier in the year will continue to be implemented,” Mr. Tuan said. “From 2017 the plan will be based on market circumstances and the general plan of PVCombank.”
PSI has secured all the benefits of investors, both local and international, and there is no change to its Board of Management, he further added. PVCombank did not provide any further information when contacted by VET.
PSI targeted total revenue of VND88 billion ($3.94 million) and profit of VND5 billion ($224,150) this year.
In the first half it recorded revenue of VND42 billion ($1.88 million), an increase of 12.6 per cent year-on-year. After-tax profit was VND2.5 billion ($112,075), compared to a loss of VND5.6 billion ($251,048) in the first half of last year. Operating costs fell 6.6 per cent to VND41.85 billion ($1.87 million), from VND37.115 billion ($1.66 million).
It also saw significant declines in total assets, by 43.18 per cent from VND1.12 trillion ($50.2 million) to VND636.52 billion ($28.53 million), due to falls in cash and equivalent.