BUSINESS IN BRIEF 26/11
HCM City hopes for more US investments
Chairman of the Ho Chi Minh City People’s Committee Nguyen Thanh Phong has told an executive of Las Vegas Sand Corp. that he expects more US firms will run long-term business and investment in his city.
At a meeting on November 25 with George Tanasijevich, Managing Director of Global Development at Las Vegas Sand, Phong highly valued the corporation’s capacity in tourism complex development.
He said HCM City wants to diversify types of tourism, including MICE (meetings, incentives, conferences, and events), so as to fully tap its potential and advantages in tourism which is defined as a key industry in the city.
The US currently ranks 12th among 79 countries and territories investing in the southern metropolis of Vietnam. That position is still modest compared to the potential and aspiration of both sides, he noted.
Appreciating Las Vegas Sand’s proposal to build a tourism complex project in HCM City, the municipal leader pledged the best possible conditions for the group to invest in the city. However, the two sides need more time to look into each other’s requirements which should be in line with local conditions and Vietnam’s policies.
George Tanasijevich said his firm’s project will include hotels, theatres, cinemas and facilities hosting meetings, exhibitions and big events that will attract entrepreneurs and high-end tourists. He hopes it can contribute to the development of local tourism industry.
He said he is impressed with the 5 million foreigners visiting HCM City in 2015, adding that if the project is carried out, the number of foreign arrivals to the city will strongly increase, thus creating more jobs and helping to spur local economic growth.
Thai companies look for franchise partners in Vietnam
Thai companies introduce food products at a trade promotion event in HCM City
More than 40 Thai businesses introduced their products to some 100 domestic firms at an event in Ho Chi Minh City on November 25 with the aim of seeking franchisees.
Thai brands offered for franchising at the trade exchange were mostly in beverage, fast food, health and beauty care services, education, car maintenance and printing.
Pitinun Samanvorawong, Director of the trade office at the Thai Consulate General in HCM City, said the function was a good chance for Thai franchisers to meet and share information with local companies and investors.
Through franchising, her country hopes to bring quality and safe products to Vietnamese consumers while strengthening cooperation between the two countries, she added.
Tanisak Ingkakittisak, a representative of the brand Rama Meatball, said Thai enterprises anticipate higher demand for food and services in Vietnam in the near future. Similarities in culinary culture between the two countries will also help Thai brands be easily accepted. Notably, HCM City has a young and dynamic population who will be frequent customers of food and fast food restaurants.
Bui Thi Thanh An, Deputy Director of the Vietnam Trade Promotion Agency under the Ministry of Industry and Trade, said Vietnam is a potential destination for franchise companies thanks to its open policies and laws, a dynamic business circle, and a large number of consumers.
The local franchising market is set to become more vibrant with the presence of an array of global brands, she said, noting that nearly 150 international brands have been successfully franchised in Vietnam.
The appearance of foreign brands offer more opportunities for consumers to access high-quality goods and services while creating an attractive investment channel for enterprises. The growth of franchising will also fuel domestic firms’ efforts to reform technology and business strategy and improve product quality, An added.
Measures sought to support women-run SMEs
A workshop was held in Hanoi on November 25 to seek ways to support women-run small- and medium-sized enterprises (SMEs).
The event was jointly organised by the Vietnam Women Entrepreneurs Council (VWEC) and the Hanoi Women Association of Small and Medium Enterprises (HAWASME), the Mekong Business Initiative (MBI) and the International Labour Organisation (ILO).
Addressing the event, VWEC Chairwoman Nguyen Thi Tuyet Minh said women-run enterprises have made active contributions to the State budget, economic growth, job creation and stable incomes.
She also highlighted challenges facing the group from business establishment to operation, particularly in accessing financial resources, market and technology.
She suggested that the Government devise incentives to encourage women’s broader participation in economic development.
The Government should also make it easier for the Vietnam Chamber of Commerce and Industry (VCCI) and other associations to organise more investment and trade promotion events for women entrepreneurs, she added.
HAWASME President Mai Thi Thuy highlighted the participation of women in different fields, including running businesses, adding that they face more challenges than men in such issues as gender barriers.
Participants discussed the need for support for women-run businesses and shared international successful experience and initiatives for the group.
They also called for practical and effective measures to promote women-run start-ups and enterprise development, such as trade promotion assistance, access to funding and competence building.
Ngo Hong Diep, a gender expert from the MBI affirmed addressing gender barriers among women entrepreneurs is not only in line with the gender equality goals and international practice but also helps enhance the role of SMEs.
The move also helps to implement the national sustainable development strategy by 2020, which aims to raise the number of women-run enterprises to 35 percent, from the current 25 percent of the nation’s total SMEs, she added.
Top 100 products, services honoured
The Consumption Consultation magazine and Vietnam Economic Times hosted a ceremony in Ho Chi Minh City on November 25 to honour 100 products and services voted by consumers this year.
The “Trust and Use Award 2016” , launched since 2006, nominated products and services in the fields of finance-banking-insurance, food and retail, fashion-cosmetics-beauty services, household appliances-interior décor, pharmaceuticals and health care equipment, tourism-resort-real estate, and telecommunications-technology.
In January-October, the organising board received 16,000 votes and 62,000 online feedback nationwide.
This year’s awardees include Vinamilk, Vissan, Ba Huan, Trung Nguyen, Minh Long, Lock & Lock, Saigon Co.op, Vinmart, HD Bank, TP Bank, Phu Thai and PNJ.
Hoang Thuy Chung, a representative from the organising board, said the selection is based on criteria such as the product quality and eco-friendliness; safe, clean and energy-saving manufacturing.
RoK consumer goods introduced in HCM City
A festival on consumer products from the Republic of Korea (RoK) opened in Ho Chi Minh City on November 25.
Co-organised by the RoK’s Ministry of Industry, Trade and Energy (MoITE) and the Korean Trade-Investment Promotion Agency (KOTRA), the three-day event sees 50 RoK enterprises displaying their products like cosmetics, food, and home appliances.
There are also business-to-business exchanges between RoK and Vietnamese firms during the festival.
E-mart, the RoK’s largest distributor, is showcasing many famous RoK products which are on shelves of its supermarket in HCM City.
In addition, 1,000 prestigious products from well-known Korean brands such as Tony Moly, Enprani, Ottogi, Paldo and Daesang will be introduced to Vietnamese consumers, in addition to many interesting entertainment activities like a K-POP contest and K-POP dancing.
Kim Jae Hong, KOTRA Chairman, said the agency hoped the event would contribute to boosting bilateral trade, particularly in consumer goods, between the two countries.
On this occasion, KOTRA signed memoranda of understanding with LAZADA Vietnam Co. and CJ IMC Vietnam Co.
EuroCham supports HCM City to become smart city
The European Chamber of Commerce in Vietnam (EuroCham) has proposed measures to support Ho Chi Minh City to become a smart city at a workshop in the city on November 24.
Yannick Millet, a member of the Executive Board of the Vietnam Green Building Council (VGBC), highlighted the role of green construction materials, such as baking-free bricks, foamed concrete, saying that they will contribute to effective construction while reducing carbon emission during operation.
He also underlined the availability of a variety of green construction materials that make practical contribution to saving energy, recycling wastes, and reducing adverse impacts on the environment.
Experts from EuroCham underlined the need to take energy-efficient solutions right from designing to operating projects, thus reducing construction and operation costs while protecting the environment.
Nguyen Cong Minh Bao, Vice Chairman of the Green Growth Business Sector Committee said the city needs incentives to encourage sustainable construction to become a smart city.
Relevant agencies should grant more green construction certificates to contractors, designers and constructors while launching campaigns to promote green construction sector.
Vice Chairman of the municipal People’s Committee Le Thanh Liem said the city welcomes foreign support, including EuroCham, for the city’s sustainable development.
The city has focused investment in sustainable construction, green technology and efficient energy management to become a smart city in 2017-2025, Liem said.
Hanoi forum seeks to foster IT links in ASEAN
Cyber security and smart society development were the main focuses of a forum in Hanoi on November 24, which was attended by scientists from research institutes at ASEAN and Vietnamese universities.
Organised by the Posts and Telecommunications Institute of Technology (PTIT) and the National Institute of Information and Communications, the event is part of efforts to strengthen information and telecommunications connectivity within ASEAN.
PTIT Deputy Director Hoang Dang Hai said information communities worldwide are prioritising cyber security and smart applications.
Smart applications help make life easier and more convenient, he said, stressing the need to ensure sustainable and safe development in the sector.
Regional scientists shared initiatives and practical solutions, which are expected to be studied and applied in the future.
According to Nguyen Thanh Tuyen from the Ministry of Information and Communications, Vietnam aims to reach a minimum 15-percent growth for the sectors of software, digital content and IT service by 2020.
The country should exert efforts to improve its competitiveness to maintain its position as one of the ten leading suppliers of software processing and digital content services in the region, he said.
It also plans to attract more foreign direct investment projects in major industries.
Vietnam needs to expand IT cooperation with other countries to share experience and software solutions and to learn from its partners, he noted.
Participants of the forum discussed items related to smart community and city development, IT application in health care and natural disaster prevention, green IT, and fuel saving, traffic jam, construction and entertainment, and measures to narrow the digital gap in rural areas.
PM urges diversifying resources for maritime medicine
Prime Minister Nguyen Xuan Phuc requested diversifying all possible resources to develop the Vietnam National Institute of Maritime Medicine (VINIMAM) – the first of its kind in Vietnam and the Southeast Asia, during a working session with its staff in the northern port city of Hai Phong on November 25.
The institute is tasked with conducting scientific research, joining disaster response at sea, offering training in maritime medicine, and providing first aid and health care to workers and people at sea.
It currently provides health check-ups and treatment to 100,000 people at sea each year.
The PM expressed his hope that the VINIMAM staff would further improve their professional and governance skills to deserve reputation as the country’s leading maritime medicine centre.
He also suggested adopting technological advances and pitching for investment from international organisations.
The Health Ministry, Vietnam Social Insurance and VINIMAM were asked to launch the model of medicine cabinets on vessels to better serve fishermen.
In the afternoon the same day, the Government leader issued an order to begin the construction of a five-star hotel and apartment complex worth 200 million USD in Hai Phong.
It is part of a riverside urban project which covers a site of 5ha in Le Chan district and is invested by Chuo Vietnam company.
ROS to issue additional shares
The Faros Construction Corporation (ROS), in which FLC Chairman Mr. Trinh Van Quyet holds 65 per cent of capital, will issue additional shares to fund real estate projects and rename itself as the FLC Faros Construction Corporation.
With an extraordinary shareholders meeting scheduled for November 29, ROS has announced a proposal to issue 107.5 million shares to existing shareholders, at a ratio of 4:1.
The share issue will collect a minimum of VND1.075 trillion ($47.72 million) and fund the investment in the FLC Sea Tower project in Quy Nhon city, south-central Binh Dinh province.
The offering price is expected to be VND12,500 ($0.55) per share and will not be lower than the par value of VND10,000 ($0.44). ROS’s shares are currently trading at around VND120,000 ($5.32).
The issue will be conducted in the first quarter of 2017 after being passed at the upcoming shareholder meeting and procedures approved by the State Securities Commission (SSC).
There will then be 537.5 million ROS shares on the market, equal to charter capital of VND5.375 trillion ($238.6 million). Its renaming to the FLC Faros Construction Corporation will further strengthen its cooperation with the FLC Corporation.
Mr. Quyet overtook Vingroup Chairman Pham Nhat Vuong as the richest man on Vietnam’s stock market on November 14.
With 279.559 million shares in ROS and 108.86 million in FLC, his holdings stood at VND33.25 trillion ($1.49 billion) on that day, up VND2.1 trillion ($96 million). In contrast, shares in Vingroup (VIC) fell VND1,100 and closed at VND42,900, pushing Mr. Vuong’s holdings down VND1.16 trillion ($52 million) to VND30.7 trillion ($1.37 billion).
The FLC Group and Faros have become major players in Vietnam’s real estate and construction sectors. The total value of their projects nationwide, including the VND5.5 trillion ($246.6 million) FLC Samson Beach & Golf Resort in Thanh Hoa, the VND7.5 trillion ($337.7 million) FLC Quynhon Beach & Golf Resort in Binh Dinh, and the FLC Vinh Phuc Resort (Phase I) in Vinh Phuc, has been estimated by real estate consultants Savills at more than $3 billion.
Their financial statements show little short-term debt, at VND4.3 trillion ($193 million) in total, equal to just 7 per cent of their total project value. The FLC Group set a profit target for 2016 of VND1.2 trillion ($56.7 million) and reached it two months ahead of schedule, according to CEO Huong Tran Kieu Dung.
Mr. Quyet was born in 1975 in northern Vinh Phuc province. He started out in legal and investment consulting services before entering into trading and real estate. He has a major influence in Vietnam as the owner of a large portfolio of resorts and golf courses. Internationally, he was recognized as one of the most influential people in real estate in Asia in 2016.
Automated transport ticketing on way
Automated ticketing on roads and public transport will soon be applied in Vietnam as the government attempts to boost e-payments in transport and provide greater convenience.
“The government met yesterday and determined that there will be a decision issued on automated ticketing by the end of November,” Deputy Minister of Transport Nguyen Hong Truong told the Vietnam E-payment Forum held on November 24.
Under build-operate-transfer (BOT) projects, automated ticketing will come in three stages. Vietnam is still in the first stage, where road users pay for tickets and then must be let through. The second stage does not require a person in the tollbooth but still requires a barrier of some sort, and the third stage allow vehicles to pass by after their automated ticket is scanned, Mr. Truong said.
“Vietnam is trying to remove barriers at all tollbooths by 2019, and the government has also directed research be conducted on post-payments,” he added.
The Ministry of Transport (MoT) manages 86 tollbooths on national roads and highways and local departments 15 tollbooths, of which only two-thirds are in operation already, according to Mr. Nguyen Manh Thang, Deputy Director of the Directorate for Roads of Vietnam at MoT.
“Charging in BOT project still has shortcomings, including a lack of consistency in technologies and a lack of coordination among BOT investors with automated ticket projects,” Mr. Thang said.
Automated ticketing can bring many benefits, such as saving on costs, fuel and time, and also contributes to the goal of reducing cash payments, according to Mr. Thang.
The problems Vietnam has faced with automated ticketing stem from the fact that BOT projects involve different types of investors, from governments, ODA, the World Bank and so on, and all wish to use their own technology.
“We need to issue technology standards, and we have worked with the Ministry of Science and Technology and the Ministry of Information and Telecommunications on this and concluded that investors must follow such standards when investing in Vietnam,” Mr. Truong said.
Regarding the role of the banking system in transport e-payments, he said that commercial banks should introduce solutions and methods than enable automated ticketing.
In reply, Mr. Pham Tien Dung, Chairman of the National Payment Corporation of Vietnam (Napas), said the banking system is able to provide automated ticketing in BOT projects, but the issue is whether BOT investors will permit a third party to provide the technology.
HCMC seeks funds to build Can Giuoc-Bay Hien metro line
The HCMC Urban Railway Management Board on November 24 in coordination with the Korea International Cooperation Agency (Koica) organized an international workshop to seek funds for the second phase of metro line no.5 from Can Giuoc bus station to Bay Hien crossroads.
The second phase is estimated to have a total investment capital of $2.1 billion. Of these, South Korea has committed to finance $500 million and the city has found no source for the remaining funds.
According to the board, the second phase will build the rail over 14.5 kilometers including 5.8 kilometer above ground and 8.8 kilometer underground sections, 13 stations and one depot in Da Phuoc commune, Binh Chanh district.
The board is now establishing the second phase’s feasibility study report and expected to submit it to the HCMC People’s Committee next year, said Mr. Hoang Nhu Cuong, deputy head of the board.
After considering, the committee will send the report to the Prime Minister to assess and consult the National Assembly about the project’s investment policy in accordance with the Public Investment Law.
The metro line no.5 plays a significant role in developing the urban railway system in HCMC, connecting metro routes together and linking Nguyen Van Linh street up to Ben Luc-Long Thanh expressway.
From the route, passengers can continue travelling to HCMC’s neighboring provinces such as DongNai, Binh Duong and Long An.
The feasibility study of the first phase has been built and submitted to the city People’s Committee to consider and send to the Government for assessment.
Austrian firms pay attention on Vietnamese investment environment
Vietnam Chamber of Commerce and Industry, Ho Chi Minh City and the Commercial Affairs of Austria yesterday held a trade exchange program between businesses of the two countries.
Representatives of Austrian Business Association said that the country’s enterprises have strongly developed in the sectors of finance, technology and management experience while Vietnam needs the financial, technological and environmental protection support of those.
Therefore, the Austrian Government and enterprises expressed their desire in cooperating and promoting long-term investment projects being suitable with plans of Vietnam’s economic and social development in next coming times.
Kido closes vegetable oil acquisition
On November 24, Foodstuff producer Kido Joint Stock Company (KDC) completed the purchase of a 65 per cent stake, equalling 12.34 million shares, in Tuong An Vegetable Oil JSC (TAC), according to information published on Ho Chi Minh Stock Exchange’s website.
The official value of the deal was not disclosed. However, in early November, KDC offered a higher price than initially offered to show its determination to buy TAC’s shares. Notably, KDC is willing to pay VND82,000 ($3.66) instead of VND78,000 ($3.48) for a share.
Thereby, the purchase value may reach VND1.01 trillion ($45.17 million).
KDC’s increasing stake acquisitions in vegetable oil manufacturing companies, the newest addition of which would be TAC, is part of its strategy to penetrate deeper into the food and spice market.
Notably, earlier in June, KDC announced a plan to buy at least an additional 26 per cent stake in cooking oil company Vietnam Vegetable Oil Industry Corporation (Vocarimex) to raise its shareholding in Vocarimex from 24 to at least 51 per cent within the year.
Along with stake acquisitions from domestic partners, KDC also increased to co-operate with foreign firms.
Notably, on June 22, 2015, KDC, Felda Global Ventures (FGV) from Malaysia, and Indo Trans Logistics Corporation (ITL) inked a memorandum of business exploration (MOBE) on forming a cooking oil joint venture to produce and trade bottled cooking oil products in Vietnam.
Australia to import more vegetables and fruit from Vietnam
Vietnam and Australia will establish a technical working team to help boost exports of vegetables and fruits from Vietnam to Australia, heard a two-day meeting on the topic that wrapped up in Hanoi on November 23.
Amy Guihot, an agricultural counselor from the Australian Embassy in Hanoi, said at the first high-level dialogue on agricultural policies between Vietnam’s Ministry of Agriculture and Rural Development and Australia’s Department of Agriculture and Water Resources that Australia wants to set up a technical working group to help boost vegetable and fruit exports.
The group will tackle technical barriers to agricultural trade, as well as plant and animal quarantine regulations, aiming at promoting market access, trade and development cooperation between the nations.
Vietnam has recently shipped litchi and mangoes to Australia and has allowed imports of grape and orange from Australia. Vietnam exported US$17 million worth of vegetables and fruit to Australia in January-September, according to Vietnam’s Ministry of Agriculture and Rural Development (MARD).
At the dialogue, Vietnam hoped the Australian government would create favorable conditions for its domestic firms to export raw shrimp and fish to the Australian market.
Statistics of the General Department of Customs showed Vietnam shipped US$410 million worth of agro-forestry-aquatic products to Australia in January-September, of which seafood took the lead, followed by wooden products, coffee and cashew nuts. The export value of vegetables and fruit was still low because Australia has just opened its market to Vietnam’s farm produce.
Meanwhile, the total export value of Australia’s agro-forestry-aquatic products to Vietnam hit around US$497 million, with wheat alone making up US$289 million, followed by cotton (US$119 million), and dairy products.
Vinaconex water firm lists on UPCoM
Vinaconex Water Supply JSC (VCW) on November 23 made its debut on the market for unlisted public companies (UPCoM), offering 50 million shares at the reference price of VND40,000 each.
Closing the session, VCW went up 11.75% to VND44,700 a share. The firm has total chartered capital of VND500 billion and is the investor of a pipeline project to transport water from the Da River to residential areas in the west of Hanoi. The water pipeline has broken 19 times over the past four years, affecting 70,000 users.
VCW is 51% owned by Vietnam Construction and Import-Export Joint Stock Corporation (Vinaconex) and 43.6% by Ecology Development and Investment JSC.
The water pipeline was put into use in 2009.
A number of VCW leaders were detained as the police found irregularities in the project.
VCW’s revenue stood at VND361.2 billion and after-tax profit at VND89.7 billion in 2014, and climbed to VND401.9 billion and VND147.2 billion in 2015.
Though the pipeline’s fractures caused serious consequences, the Hanoi government selected VCW to develop the second phase of the project that costs nearly VND1.05 trillion to raise the water supply capacity to 600,000 cubic meters a day.
Finance firms oppose cash lending limit, late payment penalties
Finance companies have objected to certain articles of the central bank’s draft circular setting limits on cash lending and interest rate penalties for overdue loans.
At a seminar discussing the draft circular in HCMC on November 23, Nguyen Hoang Minh, deputy director of the central bank’s HCMC branch, said that regulations on lending activities by credit institutions were released in 2000 and have become outdated to some extent. Therefore, the central bank has to make adjustments and provide new guidelines.
The old regulations fail to tell differences among lenders such as banks, credit funds and finance companies. Meanwhile, banks and finance firms target different customers.
Finance firms serve middle or low-income earners without mortgaged assets who are usually rejected by commercial banks. Besides, finance companies mainly provide small loans with short tenors but high risks.
Therefore, given the disparity, actual operations of finance companies and management of the central bank, it is necessary to issue specific regulations on consumer lending to help firms better operations and protect consumer interests, Minh explained.
Bui Quang Tin from the HCMC Banking University’s business administration faculty said the central bank has launched the second draft circular on consumer lending with more updates.
Once completed and issued, the regulations would help secure sustainable growth for the consumer lending market and finance companies. Citizens will be able to tap official capital sources instead of approaching loan sharks.
The circular also legalize the relationship between lenders and borrowers. Besides, administering agencies will have a legal framework to deal with disputes between both sides, Tin said.
However, most finance companies disagreed with those articles regulating limits on cash disbursements at VND10 million (US$443) and penalties on late payers.
The regulation aims at reducing cash use as per the Government’s orientation. However, VND10 million is too small, said Pham Hai Van from FE Credit Company.
In fact, finance companies have specific products with direct disbursement and flexible products for customers in remote areas that cannot access modern payment channels. The latter helps customers get cash and buy goods anywhere with more affordable prices.
Currently, motorcycle loans are a popular product of finance firms with a bike costing from VND17 million or more. Therefore, the VND10-million limit does not reflect the reality, she said.
Vuong Thuy Tien, a board member of Home Credit Vietnam, said consumer finance providers usually do not give cash to customers but transferring money to retailers. The firm now offers loans from VND30-50 million each, higher than the limit set in the draft circular.
Besides, the draft regulates that interest rates on overdue debts will not exceed 150% of the interest rate for consumer lending that has been agreed in the lending contracts. This rule will force the company to restructure products as it is offering certain loan packages at a zero rate, Tien said.
Many State capital reps found above retirement age
The Government Inspectorate has found State Capital Investment Corporation (SCIC) having appointed many people above the retirement age as State capital representatives.
The results of the inspection into SCIC were made public Tuesday, unveiling 21 people above the retirement age had been serving as representatives of State capital as of September 30, 2015.
These personnel are given too many tasks, representing State ownership at 4-5 large enterprises or acting as administrators or executives at 5-6 firms at the same time, while doing financial management at SCIC.
Certain representatives have not made periodical reports as required. In several cases, investment is approved without any report to SCIC and consultation with shareholders.
Many State capital representatives are said to have not fulfilled their obligations and responsibilities, letting their enterprises breach the regulations on bidding, and not evaluating the results of investments leading to inefficiency and mismanagement, making it difficult to recover capital.
A number of them who serve as business executives have even disregarded the rules of financial management and accounting, such as making improper provisions, use of illegal invoices, and invalid administrative expenses. Such violations have more than VND183 billion involved.
In some specific enterprises, the representatives have gone against the regulations on borrowing and debt collection, or miscalculate the corporate value at the time of equitization.
In addition to the problematic appointment of State capital representatives, many other irregularities have also been detected at SCIC.
SCIC is considered basically profitable with their capital investment. However, for a number of particular enterprises and specific funds, the investment is not substantive or undergoing improper procedures, with unidentifiable efficiency.
In the sale of State capital, a very topical issue (with the sale of 9% in Vinamilk as the most recent event), SCIC is said to have no long-term plans.
The Government Inspectorate has discovered the sale of capital in some companies does not guarantee the provisions and the interests of the State.
Citing the auction of a stake in Vietnamtourism as an example, when weighing on the advantages of this enterprise to determine the starting price, SCIC excluded the real estate transfer profit in 2011 from the three-year business results.
Besides, there are many problems in receipt and transfer of the State capital representation right at SCIC, such as failing to adhere to the duties and functions assigned, setting unclear regulations, making an incomplete and inaccurate list of businesses eligible for handover, says the Government Inspectorate.
The Government Inspectorate has proposed the agencies related to the irregularities of SCIC such as the Ministry of Finance and the Ministry of Natural Resources and Environment to join hands with the governments of Hanoi and HCMC to resolve the problems.
Vietlott lottery ticket sales skyrocket
A representative of Vietnam Lottery Company (Vietlott) has revealed its sky-high sales revenue even though its Mega 6/45 lottery game was launched in mid-July this year, Nguoi Lao Dong newspaper reports.
As of November 20, the company has reported its revenue of some VND734.4 billion (some US$32.4 million), of which Mega 6/45 generated VND730.4 billion and Max 4D some VND3.9 billion.
Notably, the company’s revenue has snowballed by nearly VND600 billion in less than two months, from some VND159 billion on September 30 to over VND700 billion on November 20.
So far, Mega 6/45 has confirmed four jackpot winners with a total prize value of up to VND284 billion, and there have been around 1.6 million people walking away with various smaller prizes worth a total of VND377.3 billion.
Nguyen Thanh Dam, vice chairman of Vietlott, said the jackpot-winner award ceremony has been made public, with the full participation of parties, including representatives of relevant authorities, the winner and the company. In addition, Vietlott also asked VietinBank to issue a confirmation letter to prove the award-granting procedure had been completed after the deduction of personal income tax under the prevailing rules.
The State-run Vietnam Computerized Lottery Co. Ltd. (Vietlott) was established in 2011. After nearly five years of thorough preparation, Vietlott officially opened computerized optional lottery in HCMC, and launched the product Mega 6/45 in July this year.
Condo building in backpackers’ quarter deteriorating
An apartment building in the popular backpackers’ quarter in HCMC has seriously deteriorated and residents there must be relocated as soon as possible, according to the city’s Department of Construction.
As evaluated by the department, the building at 155-157 Bui Vien Street, District 1 looks solid outside but is crumbling inside and can collapse anytime.
Managed by District 1 Public Service Company, the seven-floor building is currently home to 80 households. The building has a total floor area of 4,000 square meters.
Earlier, New City Development Investment Corporation had suggested the construction department and the city’s government allow it to renovate the building.
Data of the department revealed that the city has around 474 apartment buildings built before 1975 which house 27,000 families.
Many real estate firms including C.T Group, Novaland, Asia – Pacific Investment Joint Stock Company, Hoang Son Group Joint Stock Company, the joint venture of Tan Thuan Industrial Development Company, Tuan Loc Construction Investment Corporation and Phu My Hung Development Co. Ltd. have shown keen interest in revamping these old apartment buildings.
Sugarcane prices expected to be stable
It is forecast that sugarcane prices purchased by local sugar plants in the Mekong Delta will be stable in this crop rather than rising up strongly due to an earlier prediction of a global production shortfall.
The world sugarcane undersupply is not as severe as earlier predicted owing to good signs of sugarcane production in various countries, according to DATAGRO, an agricultural consulting firm.
The firm said a global sugar shortfall would ease from 8.26 million tons to 6.48 million tons. In particular, sugar output in China, the world’s biggest sugar producer, is expected to range from 9.64 to 9.69 million tons in the 2016-2017 sugarcane season, an increase of around one million tons compared to 8.69 million tons of the previous season.
Sugar production in Australia is expected to reach 5.1 million tons in 2016-17, some 200,000 tons higher than in the previous season, due to a 2.6% increase in its farming acreage.
Vietnam’s sugar prices are driven by global prices. If global sugar prices surge, domestic prices will follow suit, leading to sugarcane prices edging up, according to Nguyen Hai, general secretary of the Vietnam Sugarcane and Sugar Association (VSSA).
VSSA said five sugar plants in the Mekong Delta region and one in the southeastern region have started processing sugarcane in the new crop. Many local sugar companies will announce their sugarcane purchase prices to farmers this month.
Van Hung, a farmer in Tan Bien District of Tay Ninh Province with some 40 hectares under sugarcane cultivation, said he expected to start pricing negotiations with processors next week.
VASS admitted the reason for a rise in sugar prices at the beginning of the crop is that many farmers are still reluctant to sign contracts with sugar plants because they anticipated higher prices.
Nguyen Hai of VASS said the Ministry of Agriculture and Rural Development had issued a regulation stabilizing sugarcane prices for the benefit of local farmers.
In particular, a ton of sugarcane purchased from farmers will be equivalent to 60 kilograms of sugar sold by factories. At present, sugar prices from these factories are ranging from VND16,900 to VND17,300 per kilogram, meaning sugarcane prices should be around VND1 million per ton.
Currently, sugarcane prices purchased by sugar factories of Phung Hiep and Vi Thanh are at VND1.04 million per ton.
Malaysian businesses interested in Vietnam’s equitisation
About 170 Malaysian companies attended a seminar on investment in Vietnam and opportunities offered by the equitisation process of state-owned enterprises (SOEs) held in Kuala Lumpur on November 24.
The event was co-organised by the Vietnamese Embassy in Malaysia and the Malaysia External Trade Development Corporation (MATRADE).
Dang Quyet Tien, deputy head of the Agency for Corporate Finance under the Ministry of Finance briefed the participants on the equitisation process of SOEs in Vietnam.
He also introduced the Vietnamese government’s equitisation policies and highlighted investment opportunities generated from the process.
Malaysian businesses showed their interest in the issue through discussions on the various aspects of the topic and the Vietnamese investment environment.
They also asked for more information on macro and micro issues such as investment procedures, property ownership and exchange rate, among others.
The event is part of activities of the Vietnamese Embassy in Malaysia, aiming to promote and attract investors from Malaysia, said Pham Cao Phong, Vietnamese Ambassador to Malaysia.
He also expressed his hope that Malaysian companies will understand better and be able to grasp the opportunities brought by the Vietnamese equitisation process, thus making plans and implementing projects in Vietnam.
First Vietnamese company to export chicken to Japan
Koyu & Unitek has become the first Vietnamese company to export chicken breasts to Japan, as it had secured a deal for the first batch to leave port in early 2017.
Under the deal, the Dong Nai-based poultry company will monthly export about 300 tonnes of chicken breasts to Japan, according to the Sai Gon Giai phong (Liberated Saigon) newspaper.
The Dong Nai Animal Husbandry and Veterinary Branch said Koyu & Unitek’s Japan shipments are likely to help more local company to enter the choosy market of about 100 million people.
The southern province of Dong Nai is home to 16 million farmed chickens.
RoK highly values Vietnam’s consumer goods market
Businesses of the Republic of Korea should boost the export of consumer products to Vietnam to maintain the current export growth in this market, according to a report by the Korea International Trade Association (KITA) released on November 24.
The report stated that the Vietnamese Government’s policy on promoting domestic consumption may create opportunities for RoK businesses. It also predicted the spending rate of Vietnam in 2017 will increase 11.5 percent against this year.
According to the report, 2017 will witness a big change in Vietnam as local consumers’ demand for high quality products is expected to soar, while the RoK’s export of industrial materials and components to Vietnam will drop due to a decline in Vietnam’s exports.
Vietnam is currently the third largest importer of the RoK. A previous report of KITA showed that RoK exports to Vietnam hit 22.4 billion USD in 2015.
Dragon fruit needs more quality, diversity
Delegates at a conference on promoting dragon fruit consumption called on scientists and farmers to create new varieties and boost productivity while increasing measures to prevent dragon fruit diseases.
The dragon fruit growers demanded stable electricity resources to produce quality fruits and urged the Ministry of Agriculture and Rural Development to issue a master plan on dragon fruit growing zones and criteria for using pesticides.
Dragon trees are one of Vietnam’s twelve key fruit tree groups and one of Vietnam’s nine key trees with competitive advantages.
Vietnam’s dragon tree area is around 37,000 hectares with annual output of 630,000 tonnes. Binh Thuan has the largest area of 27,000 hectares, with the remaining area located in Tien Giang and Long An provinces.
Dragon fruit is exported to the European Union, the United States, Japan, the Republic of Korea. Around 80 percent of dragon fruits in Binh Thuan are exported to China.
In 2015, dragon fruit exports reached 12,659 tonnes with revenue of eight million USD and in the first seven months of 2016, export volume was 4,400 tonnes with a value of 3.4 million USD.
Ho Thi Kim Thoa, Deputy Minister of Industry and Trade, said dragon fruit production area has increased in past years because of the tree’s high economic value.
Thoa, however, advised growers to grow dragon fruit according to VietGap criteria and apply technological advances in processing, packaging and preservation.
Furnishings fair opens in HCM City
Interior and exterior decor, furniture and handicraft products are being showcased at the 2016 Vietnam furniture & home furnishing fair (VIFA HOME) that opened in HCM City on November 24,
The fair, organised by the Handicraft & Wood Industry Association (HAWA) of Ho Chi Minh City, brings about 109 exhibitors with 477 pavilions.
The event is expected to help furniture enterprises to explore and expand the domestic market amidst international and regional integration.
HAWA Vice President Huynh Van Hanh said, a number of enterprises have started their projects targeting the domestic market by producing sample products, product lines and expanding distribution channels.
He expressed his hope that the event will see a stronger purchasing power than previous years and help create a domestic networking venue for producers and consumers. Currently, the sector’s annual purchasing power is at 2 billion USD.
According to the Ministry of Industry and Trade, in the first ten months of this year, the exports of wood and wood products reached 5.76 billion USD, a year-on-year increase of 0.8 percent. Of the total export value, the foreign-invested enterprises make up of 46 percent.
In October alone, the export value recorded an increase of 32 percent from the previous month. The figure is expected to meet the yearly target of 7.2 billion USD this year.
HCM City Infrastructure JSC sells $40m bond
HCM City Infrastructure Investment JSC yesterday signed a contract to sell US$40 million worth of convertible bonds to KEB Hana Banktrustee and Custodian Business, the first tranche in its plan to issue $60 million in bonds to raise funds for its projects, the HCM Stock Exchange-listed company announced.
These non-guaranteed, five-year bonds yield 1 per cent per year with the face value of $100,000.
Under the contract, the infrastructure developer is entitled to redeem bonds from the third year of the sale onwards but the buyback amount cannot exceed 50 per cent of the total bond issuance.
The conversion price is set at VND38,500 ($1.71) per share, equivalent to 130 per cent of the CII’s closing price on November 23. The exchange rate used for the conversion is the average value of buying and selling prices of US dollar by Vietinbank on the same day.
Bondholders have the right to extend the bond’s maturity for another five years and the conversion price from the sixth year will increase by 10 per cent over the previous year.
CII’s shares have climbed nearly 41 per cent this year, ending yesterday at VND29,700 a share on the HCM Stock Exchange.
The bond issuance is aimed to raise investment capital for the company’s projects. CII plans to issue non-guaranteed convertible bonds worth a maximum value of $60 million to Korean investors.
The first investor is Hana KEB Banktrustee and Custodian Business, a custodian of Rhinos Asset Management Co Ltd (RAM). The South Korean investment fund manages a $1.2 billion portfolio, focused on convertible bonds in developed markets like the United States, Japan, Hong Kong and Europe.
At the company’s extraordinary shareholders’ meeting in October this year, CII said besides ongoing works, it was aiming at larger infrastructure projects with total investment capital of over $100 million such as Ha Noi Highway BOT project valued at $260 million, Trung Luong – My Thuan Expressway worth $650 million and Skyway Stage 1 project worth $900 million in HCM City.
The proceeds from this bond issuance are expected to finance the Thu Thiem Infrastructure Development project which has total investment cost of VND2.64 trillion ($117.4 million).
The company is planning to hold another extraordinary shareholders’ meeting to discuss the appointment of one member from the Korean fund in its managing board, as well as the reduction of ownership in CII Engineering and Construction (CII E&C) and Tan Hiep Water Investment JSC.
Glass products exhibition opens in HCM City
The latest industrial and consumer products and technologies in the glass industry are on display at the 14th International Glass Products, Glass Manufacturing, Processing and Materials Exhibition (Glasstech Asia 2016) that opened in HCM City on November 24.
It has attracted 163 exhibitors from 15 countries and territories, including Germany, Singapore, the UK, China, Taiwan, and Viet Nam.
Speaking at the opening ceremony, Ho Quynh Hung, chairman of the Viet Nam Glass Association, said in Viet Nam the industry has developed strongly in recent years, and there are more than 300 firms now.
Global demand for flat glass is expected to increase by 6.6 per cent a year to nearly 10 billion square metres by 2018.
With their rapid economic growth and boom in the construction industry, Asia-Pacific countries including Viet Nam account for 50 per cent of the world’s glass consumption.
Glasstech Asia 2016 is being held together with the 11th Specialized International Exhibition for Hollow Glass Manufacturing, Machinery, Equipment & Glass Products Industry (Hollow Glass Asia) and the first International Windows, Doors, Skylights, Curtain Wall and Facade Technology Exhibition (FENESTRATION Asia 2016).
The exhibitions, on at the Saigon Exhibition and Convention Centre, are expected to provide a platform for industry players across the globe to tap into the growing Southeast Asian market.
Woodwork, furniture fair opens in HCM City
More than 100 domestic and foreign companies are showcasing their products at the seventh Viet Nam Furniture and Furnishing Fair that opened in HCM City on November 24.
On display in 477 booths are outdoor and indoor furniture, handicrafts and home decor, household appliances, garden decor, gifts, souvenirs, and consultancy for equipment, materials, designs and architecture.
Many exhibitors are offering attractive discounts on export-quality furniture and interior and exterior furnishing items.
Speaking at the opening ceremony, Nguyen Chien Thang, chairman of Hawa Corporation, one of the organisers, said VIFA Home 2016 is expected to be a good place for domestic firms involved in wood working and interior decoration to promote their brands domestically.
“The wood products on display are all made from legal timber,” he said.
Pham Thanh Kien, director of the HCM City Department of Industry and Trade, said the wood processing sector is included in the Government’s industrial master plan for until 2020, which provides it a good opportunity to develop and make Viet Nam the world’s wood processing factory.
Domestic demand is expected to increase by more than 10 per cent this year from last year’s $1.3 billion, according to the Handicraft and Wood Industry Association of HCM City.
The expo, organised jointly by the association at the Phu Tho Sport Centre in District 11, closes on November 27.