BUSINESS IN BRIEF 15/8

Widening trading band makes exchange rate more flexible: SBV official

The State Bank of Vietnam’s move to widen the trading band for the Vietnamese dong makes the exchange rate more proactive and flexible to negative external factors, said deputy governor Nguyen Thi Hong.

Following China’s surprise devaluation of the yuan, Vietnam’s central bank reacted by allowing the dong to trade by as much as 2%, from the previous 1%, on either side of a fixed reference rate.

Hong said as Vietnam is a net importer of Chinese goods and has strong trade relations with Asian countries, whose currencies fell sharply after the yuan weakening, the SBV’s move would help Vietnam better deal with risks and uncertainties in the international financial market.

She assured that the SBV would continue to closely monitor the macroeconomic situation, and developments on the local and international monetary markets to take appropriate policy measures.

Economist Can Van Luc said the central bank still kept its promise of adjusting the exchange rate by no more than 2% this year while making it more flexible by widening its trading band to 2%.

Vietcombank’s Deputy General Director Pham Thanh Ha said the SBV’s action is a strategic timely move, in line with market expectations, adding that the lender also adjusted the USD/VND rate by 1% following the SBV’s decision.

Some have expressed concerns that while China has weakened the yuan by more than 1%, Vietnam has widened the trading by only 1 percentage point - the pressure on trade deficit remains strong.

According to economist Le Xuan Nghia, the yuan devaluation would make Vietnam’s exports to Southeast Asia and China less competitive and increase the import of Chinese goods into Vietnam.

He said the exchange rate, however, is just part of the problem. Vietnam’s export growth is slowing due to falling oil prices and prices of agricultural commodities on the global market, while Vietnam is also not exporting coal this year.

Therefore there is no need to adjust the USD/VND exchange rate despite the rising impact of the yuan devaluation, Nghia said.

Credit growth on target to hit 15-17%

Credit growth by August 10 reached 8.3 per cent compared to December last year, much higher than during the same period last year, said director of the State Bank of Viet Nam's Credit Department, Dang Tien Dong.

The rise was only 3.7 per cent between early January and end July last year.

At this pace, Dong expected the country's credit growth this year to reach 15-17 per cent in keeping with the target fixed by the central bank.

Such fast-paced credit growth was attributed to a sharp rise in lending to infrastructure, consumption and real estate sectors.

However, experts are concerned about a rising loan-to-deposit ratio.

According to the HCM City Securities Co (HSC), the lack of balance between lending and deposit growth rates will lead to an unsustainable banking system in the long term, a situation that will force the central bank to make a tough choice: either increase the money supply or restrict the credit growth in times to come.

The central bank would have to work out ways to achieve lending and deposit growth balance, and while the task may not be very urgent but nevertheless should be undertaken before the end of this year, the HSC said.

According to statistics from the central bank, the dong lending rates in the week ending July 31 continued to be stable.

The average rates were commonly at 6-7 per cent per year for short-term loans for priority fields, and 9-10 per cent for medium- and long-term loans.

For ordinary loans, the rates were commonly 7-9 per cent per year for short-term and 9.3-11 per cent for medium- and long-term loans. During the week, a few banks reduced dong mobil-ising rates by 0.1-0.3 percentage points for several terms.

The rates were commonly 0.8-1 per cent per year for demand and below 1 month terms, 4.5-5.4 per cent for deposits of 1 month to below 6 month terms, 5.4-6.5 per cent for 6 month to below 12 month terms; and 6.4-7.2 per cent for 12 month plus terms.

Thang Long GTC makes $16m at IPO

Thang Long GTC sold nearly 34 million shares at its initial public offering (IPO) yesterday, the Ha Noi Stock Exchange (HNX) said.

It earned more than VND363 billion (US$16.42 million) from the sale. The average share price of the one-member public limited company was VND10,724, and the starting price was VND10,600.

Sixteen individuals bought the shares, while no organisation reportedly bought any.

After the IPO, Thang Long GTC will offer 27 per cent of its stake to its strategic investor, the Thung Lung Vua (King's Valley) Limited Company.

Thang Long GTC aims to have VND1.228 trillion ($55.55 million) in charter capital after equitisation, 45 per cent of which will be owned by the government.

It owns a large number of real estate areas in the capital city. It has also invested in many large hotels, including the Hilton, Intercontinental, Mercure and BigC Thang Long hotels.

Thung Lung Vua is a member of the BRG Group, which invests and operates mainly in the fields of finance and banking and golf resorts with member companies, associate companies, investment projects and businesses with remarkable reputations in Viet Nam and worldwide, such as Kings' Island Golf Resort in Ha Noi, Do Son Seaside Golf Resort in the northern Hai Phong City, and Legend Hill Golf Resort in Ha Noi.

Farm sector needs more change

The domestic agricultural sector has been successfully restructured over the past two years but it must promote further restructuring in the coming time, Deputy Prime Minister Hoang Trung Hai told a conference on restructuring of the agricultural sector yesterday in Ha Noi.

At the conference aimed at reviewing the implementation of restructuring initiatives in the last two years in the agricultural sector, Hai said knowledge about the importance of such restructuring has been enhanced among farmers, enterprises, state offices and scientists.

Therefore, the production and business have achieved good results in the sector in areas such as added value, export value, output and quality of farming products.

Farmers were able to develop production models that were cleaner and more efficient, Hai said.

They had paid attention to enhancing the quality, increasing productivity and applying better technology in production. Mechanisation of agriculture saw the fastest growth during this period.

However, Hai said some provinces and cities as well as enterprises continue to ignore the need for agricultural restructuring. These provinces and cities must implement such restructuring.

According to the Ministry of Agriculture and Rural Development (MARD), by the end of July, 47 out of 63 provinces and cities had plans for restructuring of the agricultural sector while the remaining 16 provinces and cities did not have any defined plans towards this end.

Hai said these 16 provinces and cities must have those plans in place by the end of this year and called upon the enterprises there to implement this agenda.

The MARD reported at the conference that restructuring of the agricultural sector has contributed to growth in production and business.

In 2014, the sector grew by 3.9 per cent in production value and 3.49 per cent in gross domestic product (GDP) against 3.27 per cent and 2.64 per cent, respectively, in 2013. Total export value in 2014 reached a year-on-year increase of 11.2 per cent to US$30.86 billion.

Japanese SMEs get VN backing

A two-step loan agreement was signed in Ha Noi yesterday to finance a project for Japanese small-and-medium enterprises (SMEs) in southern Dong Nai Province's Nhon Trach 3 Industrial Park.

The Bank for Development and Investment of Viet Nam (BIDV), the Japan International Cooperation Agency (JICA) and Japanese SME Company (JSC) signed the agreement to finance a rental factory for the SMEs.

Under the agreement, the JICA would lend the BIDV a preferential loan of 2.94 billion yen (US$24 million) within 15 years from the Private Sector Investment Finance (PSIF). The BIDV would then provide the loan for the project.

Speaking at the signing ceremony, Quach Hung Hiep, BIDV's deputy general director, said the bank has further confirmed its prestige and ability in the international capital market as it was chosen for the two-step loan. In addition, the bank's loan for the project has also confirmed its commitment in supporting businesses which have Japanese investments in Viet Nam.

Yasushi Tanaka, director general, Private Sector Partnership and Finance Department, JICA said the co-operation would be an opportunity to expand credit relationship with one of leading banks in Viet Nam. The project in Dong Nai Province aimed to meet the business demands of the support industry in Viet Nam. It was expected that under the support of Saitama Province, there would be many SMEs with high technologies to rent a factory here.

Nguyen Thanh Binh, a member of the JSC's management board, said the loan would help the company save costs to stabilise and expand its production. It was targeting the provision of long-term factory areas for Japanese companies in the province.

The JICA had evaluated several Vietnamese banks for the loan as well as around 5,000 Japanese firms on factory demand in Viet Nam. Established in June 2015, the JSC is a joint venture between the Tin Nghia Corporation, the Forvan Japan Company and the Dong Nai Container Port Company.

Sacombank, Southern Bank get approval for merger

The State Bank of Vietnam (SBV) has approved in principle the merger of Southern Bank (PNB) into Sai Gon Thuong Tin Bank (Sacombank).

The SBV affirmed that the merger is in line with the common orientation of the Government and the central bank on the restructuring of the banking system, which aims to provide the market with more powerful, safe and professional financial institutions.

After the merger, Sacombank is expected to become one of the top five largest banks in Vietnam with total assets of nearly 291 trillion VND (13.5 billion USD). The bank will own a network of 567 transaction offices across the country as well as in Laos and Cambodia, with 15,500 employees.

The move will help the bank raise its competitiveness via service quality improvements while optimising capital sources and market potentials.

Conference to show Hanoi business strengths

The Hanoi Trade Promotion Centre (HTPC) has announced a major investment conference will be held August 24 at the Daewoo Hotel starting at 8 am aiming to promote jobs and growth in the region.

The conference, organized in collaboration with the Hanoi Municipal People’s Committee, will showcase the region’s potential to investors as a location of choice for inward investment and the strength and potential of key export sectors.

It is expected to be the biggest ever investment conference in the region, with a large gathering of leaders from businesses, politics, academia, civil society and the media in attendance.

Over 5,438 tonne hi-tech pressure vessels produced for Nghi Son Refinery

Since its first shipment in February this year, Doosan Vina’s Chemical Processing Equipment (CPE) plant has made another eight shipments to Vietnam’s second petro- chemical refinery complex (NSRP) which is now under construction in the north central province of Thanh Hoa with a total of 169 hi-tech pressure vessels weighing 5,438 tonnes.

The project with NSRP was signed in March 2014 and encompasses a total 169 pressure vessels, towers and heat exchangers that will be installed to help the NSRP complex to produce 200,000 barrels of crude oil per day once it’s put into operation in 2017.   

In the items sent to Nghi Son refinery project, the largest tank was 5.7m in diameter, 50m long and weighed more than 205 tonnes.

“We have applied cutting-edge technology to produce these high tech pressure tanks. After fourteen months working at full tilt, we have now completed 93 per cent of the project,” said Phan Huong, CPE project manager.

“This is CPE’s biggest domestic project so far which requires 10 shipments and the final one is scheduled this September,” Huong added.

Doosan Vina is a high tech industrial complex located in Dung Quat Economic Zone in Vietnam’s central province of Quang Ngai.

The company, part of Korea-based Doosan Group- a multinational focusing on power, water and other infrastructure developments,  manufactures and supplies mega infrastructure products such as boilers for thermal power plants, heat recovery steam generators, material handling systems and chemical processing equipment.

Doosan Vina reaped an export value of VND4.3 trillion ($200 million) last year which is expected to touch VND6.4 trillion ($300 million) this year.

Corporate-governmental cooperation to better farmer’s lives

Farmers in the northern province of Lao Cai are benefiting from cooperation with Dekalb Vietnam, the local Department of Agriculture and Rural Development, Southern Seed Corporation and An Nghiep Ltd., a corn wholesale buyer.

In the 2014-2015 corn harvesting season more than 100 farming households in the province have joined the local government agencies and participating companies in a pilot value chain. They planted 110 hectares of hybrid corn, using seeds produced by Dekalb Vietnam and distributed by Southern Seed Corporation, which they purchased on credit. After harvest, An Nghiep bought all the corn, as previously agreed.

According to the Lao Cai Department of Agriculture and Rural Development, each year about 36,500 hectares of corn are planted in Lao Cai, with an average yield of 3.65 tonnes per hectare. Farmers use one third of the corn in food and animal feed and sell the remaining two thirds to traders who will then export it to China. The price is not stable and depends greatly on these traders and the ups and downs of the Chinese market.

The 110 hectares of hybrid corn had an average yield of 12 tonnes of fresh corn or 6 tonnes of dry corn. Having a company that commits to buying their corn at a previously contracted price also brings farmers peace of mind.

“In previous seasons, we had to buy our own seeds. We did not know whether the seeds are of good quality or not, or if they are counterfeit. Now that we can buy seeds on credit and then sell the corn we harvest to a company, it’s a lot less to worry about,” farmer Ha Thi Hong from Bao Thang district in Lao Cai said.

Dekalb Vietnam has piloted the plantation of genetically-modified corn breeds in many other provinces in Vietnam. Farmers have all reported an increase in yield and quality as the corn was no longer attacked by certain types of common pests. They also reported that the new types of plants required less care.

According to Dekalb Vietnam’s calculations, farmers earn a profit of VND30.5 million ($1,430) per hectare from the genetically-modified corn, while conventional breeds bring in onlyVND16.2 million ($760) per hectare.

In 2014, Vietnam imported 4.79 million tonnes of corn worth $1.22 million, a 119.05 per cent on-year rise in volume. The Ministry of Industry and Trade forecasted that the import value is going to rise by 20 per cent on average each year in the next two years.

FMCG market moving at slugglish pace

Vietnam’s economic growth continues to exhibit positive signs and CPI remains under control at 0.9 per cent, according to the latest report from Kantar Worldpanel.

“Although financial capacity has improved, Purchasing Konfidence in Quarter 2 found that urban consumers are now more cautious and even cutting their spending in the fast-moving consumer goods (FMCG) market,” said Mr. David Anjoubault, General Manager of Kantar Worldpanel Vietnam. “They have especially cut down in ‘nice-to-have’ categories.”

He added that this indicates the current market is yet to completely meet consumers’ demands and expectations. “We therefore see no lack of opportunity for growth but manufacturers and retailers need to quickly adapt to consumer changes, moving quickly towards consumer trends and actively stimulating consumer needs in the near future,” he said.

Accordingly, Purchasing Konfidence in Quarter 2 continued to fall, to 6.4 points, compared to 8.3 points in the previous quarter; its lowest point in the last two years. Urban consumers are now more conservative and cost-conscious in grocery shopping and leaning more toward savings, especially those in Hanoi.

A downtrend was more readily seen in Hanoi. The report shows that Hanoi people react later than those in Ho Chi Minh City, as the market slow-down began in the latter at the end of 2013 but around mid-2014 in the capital. Hanoi consumers even seem to be more price-sensitive and more cost-conscious now, which also happened earlier in Ho Chi Minh City, in 2013.

FMCG trends

Overall market growth follows a “new normal” trend - moving at a sluggish pace. Yet in the short term Urban market growth is getting its momentum back in both value and volume while Rural growth is stable, in single digits.

Hot categories

The hot FMCG categories enjoying big increases in the 12-week period ending July 12 were canned fish in Urban and floor cleaner in Rural, achieving incremental growth in volume, mainly driven by reaching more new buyers.

Retail landscape

Street Shops and Modern Trade have struggled while Specialty and Mini stores are emerging in Urban. In Rural, Street Shops preserved its dominance in market share and keeps growing.

Foreigners and overseas Vietnamese eyeing housing

More than a month has now passed since the new Law on Housing and the Law on Real Estate Business expanded the right of home ownership to foreigners. According to Novaland Group, overseas Vietnamese have accounted for 10 per cent of transactions in its projects and they mainly target high-end apartments in a favorable location.

At D’.Le Roi Soleil, on the corner of Xuan Dieu and Dang Thai Mai in Hanoi’s Tay Ho district, the Tan Hoang Minh Group has also recorded significant interest from foreign homebuyers due to the project’s favorable location. “D’.Le Roi Soleil has already received 230 registrations for purchasing apartments,” Mr. Tran Nhu Trung, Deputy Director Managing of Tan Hoang Minh, told VET. “Among customers registering to buy our apartments are many from Malaysia and Singapore.”

From July 1 to August 8 the Phu My Hung Development Corporation has also conducted more than 100 transactions by overseas Vietnamese and foreigners in its projects.

The remainder of the year will start to show the effectiveness of the new laws, Mr. Marc Townsend, Managing Director of CBRE Vietnam, commented in the recent CBRE Vietnam report. “Foreign investors have complained in the past about how unfair the market has been for the past 15 years,” he said. “Now we will see whether they will really embrace it, whether they are actually happy with the new laws or whether they are still looking at how to get money in and out of Vietnam.”

The real estate market continued to see positive growth signs in July. There were about 3,550 successful housing transactions in Hanoi and Ho Chi Minh City, an increase of 3 per cent compared to June, according to figures from the Housing and Real Estate Market Management Agency under the Ministry of Construction.

JICA provides $24 million loan via BIDV

The Japan International Cooperation Agency (JICA) lent $24 million to the Bank for Investment and Development of Vietnam (BIDV) on August 13, with the Japanese SMEs Development Joint Stock Company to then borrow the funds from BIDV. The 15-year loan is to build a factory for lease in Nhon Trach district in Dong Nai province.

Mr. Nguyen Thanh Binh, a member of the company’s Board of Directors, said the factory has an area of 100,000 sq m with facilities for Japanese enterprises in support industries and electronics in the province.

He explained it could not borrow directly from JICA because it requires a domestic bank do so.

Established in June 2015, the Japanese SMEs Development Joint Stock Company is a joint venture between the Tin Nghia Corporation, Forval from Japan, and Dong Nai ICD, a container service company.

There are currently 198 Japanese projects in the province with total investment of $3.5 billion, Mr. Binh said.

Vinachem receives preferential loan from Vietinbank

Vietinbank and the Vietnam National Chemical Group (Vinachem) have signed a $143 million credit agreement for Vinachem’s salt processing plant project in Nongbok district in Khammouan province in Laos, which is a key project of the Group and the largest Vietnamese investment in the country.

The project has been approved by the Ministry of Industry and Trade and has a total investment of $522.4 million, of which Vinachem’s capital stands at $104.5 million.

The mine is located to the east of the Nonglom salt mine on an area of approximately 175,000 sq m and will produce two major products: K60 KCl, with a capacity 320,000 tonnes per year, and high quality NaCl salt, with a capacity of 300,000 tonnes per year.

“The project’s output will meet the demand for fertilizer for agricultural production, provide NaCl to produce other chemicals in Vietnam, resolve the shortage of industrial salt, and reduce imports,” the General Director of Vinachem, Mr. Nguyen Gia Tuong, said.

Upon completion the project will create jobs for thousands of local people. In addition to ensuring economic efficiency, Vinachem will also focus on the application of technology to protect the local environment and develop a long-term and sustainable investment.

VietinBank previously held a launch ceremony to open a subsidiary bank in Vietnam’s neighbor, which is expected to create conditions for the business communities of the two countries to promote cooperation and investment.

Tan Thang Cement secures loan for plant

The Bank for Investment and Development of Vietnam (BIDV) and Bac A Bank signed a VND3.1 trillion ($147 million) credit agreement on August 13 with the Tan Thang Cement Joint Stock Company for the latter’s Tan Thang cement plant project in northern Nghe An province, with a maximum term of 12 years.

“We believe the project will be quickly completed and create jobs for local people and contribute to local economic development,” Chairman of BIDV, Mr. Tran Bac Ha, said.

The plant is being built in Quynh Luu district and has total investment of VND4.5 trillion ($213.8 million) and a capacity of 1.98 million tonnes of cement per year. This is a key project in the province and on the development planning list of Vietnam’s cement industry to 2020 and orientations to 2030, approved by the Prime Minister in Decision No. 1488/QD-TTg dated August 29, 2011.

Output from the project will be PCB 50 and PCB 40 cement of high quality, with about 30 per cent to be exported to Laos and elsewhere.

Its production line will come from leading cement equipment manufacturers such as Bedeschi (Italy), ThyssenKrupp (Germany), Loesche (Germany), Haver & BOECKER (Germany), and ABB (Switzerland).

Estimated consumption of cement this year is 72-74 million tonnes, up from 1.5 per cent to 2 per cent compared to 2014, according to the Ministry of Construction. Domestic consumption is about 53-54 million tonnes and exports 9-20 million tons.

In the first six months of 2015 cement production was estimated at 34.16 million tonnes, an increase of 6 per cent compared to the same period of 2014. Domestic consumption stood at 25.97 million tons, up 5 per cent, while exports totaled an estimated 8.19 million tonnes, up 7.7 per cent compared to the same period last year.

Japan promotes imports of Vietnamese fruits

Japanese Minister of Agriculture, Forestry and Fisheries Hayashi Yoshimasa on Wednesday said that they were collecting opinions on imports of Vietnamese fresh mangos.

He was speaking at the second submit on agricultural cooperation between Vietnam and Japan hosted by the Vietnamese Ministry of Agriculture and Rural Development in Hanoi.

Mr. Yoshimasa also proposed Vietnam to facilitate imports of Japanese pork, beef and poultry. Their fresh apple is expected to be shipped to the Southeast Asian nation in September, he added.

Besides mango, Minister of Agriculture and Rural Development Cao Duc Phat suggested Japan to plan for trade promotion and import open doors to red flesh dragon fruit and fresh litchi. Previously, he said that Japan was considering Vietnam’s proposal to import litchi.

Automobile market shows optimism

According to the General Statistics Office, automobile and spare part imports had strongly increased in the first seven months of this year, reaching US$3.4 billion, an increase of 88 percent over the same period last year.

Noticeably, the number of automobiles imported into Vietnam rose to 65,000, worth more than $1.72 billion, up 107.7 percent in volume and 154.4 percent in value compared to the same period last year. Of which, more than 22,000 cars are less-than-9-seater vehicles with import turnover of $261 million, up 61 percent in volume and 57 percent in value over the same period last year. Vietnam mainly imports cars from China, Japan, South Korea, Thailand, and India.

Automobile consumption has also improved robustly. According to the Vietnam Automobile Manufacturers Association, sales of automobiles by the end of July this year climbed by 59 percent compared to the same period last year with passenger buses surging 45 percent, commercial vehicles rallying 76 percent, and specialized vehicles jumping 128 percent.

Sales of domestically-assembled automobiles increased 56 percent while that of imported ones shot up 67 percent.

It is forecast that automobile consumption will hit 200,000 vehicles for the whole year as automobile consumption usually improves by year end.

Ministry seeks to axe two tollgates in close proximity

The Ministry of Transport has asked the Government for approval to remove two toll stations and relocate four others located in a shorter-than-allowed distance.

The toll stations of build-operate-transfer (BOT) road projects violate the distance rule specified in Circular 159/2013/TT-BTC of the Ministry of Finance. The circular sets a distance of at least 70 kilometers between two BOT toll stations.

According to the transport ministry, 86 toll stations have been put into operation or will be put into use nationwide. Of them, 53 are located in a distance of over 70 kilometers on the same road, nine others are 60-70 kilometers apart and 24 with a distance of less than 60 kilometers apart.

This means 33 tollgates are located in a distance of at least 70 kilometers.

In a recent document submitted to the Government, the ministry proposed 53 toll stations meeting the distance requirement and nine others located 60-70 kilometers apart on the same road be kept.

The ministry suggested keeping 18 out of 24 toll stations which are less than 60 kilometers apart as their locations had already been approved. Some tollgates are located near important bridge and tunnel projects such as Bac Hai Van, Dong Nai Bridge, Co Chien and Viet Tri toll stations, so they cannot be relocated.  

Of the six remaining tollgates, Ngang Pass toll station in Ha Tinh Province and Nam Hai Van tollgate in Danang City will be eliminated. The four others, namely Duc Pho in Quang Ngai Province, Ban Thach in Phu Yen Province, Ninh An in Khanh Hoa Province and Bao Loc in Lam Dong Province, will be relocated.

Minister of Transport Dinh La Thang told a regular media briefing held by the Government Office in May that Circular 159 sets a distance of 70 kilometers between two BOT tollgates. But toll stations may go up in a distance of less than 70 kilometers if they are approved by the finance ministry and local authorities.

Last month, the Government told the ministry to review all BOT road projects and report the result to the Government this September. The review should focus on investment procedures and efficiency, selection of investors and their capability, costs and project quality.

Last week, the ministry pledged to suspend new BOT road projects with tollgates planned to go up in a distance of less than 70 kilometers on the same road.

The ministry’s public-private partnership (PPP) projects management department said that apart from the projects already approved and under construction, the ministry is planning to implement 63 new BOT projects. The number comprises 44 roads including ten expressways and seven aviation, six waterway, four railway and two marine projects.

After the review, the department suggested implementing the projects with their feasibility studies approved and those whose investors do not build up more tollgates.

The department said five tollgates planned to go up in a distance of less than 70 kilometers will be put on hold and their investors will have to wait after the Government approves the ministry’s master zoning plan for BOT projects.

Construction of the five toll stations located within a distance of 70 kilometers on the same road will be approved until the Government passes the ministry’s zoning plan. The same solution applies to 15 other projects with toll stations to be less than 70 kilometers apart on close roads.

Financial capability checks for BOT project contractors urged

* Minister of Transport Dinh La Thang has requested relevant agencies to cooperate with credit institutions to check the financial capability of BOT project contractors to prevent bad debt.

The minister wants financially capable investors to continue their projects, a source from the ministry said.

The ministry required better management of BOT road projects, including completed ones, after the public voiced outcry over the cost, efficiency, quality and shorter-than-allowed distance of tollgates of BOT projects.

The ministry told agencies under its umbrella including the Directorate for Roads of Vietnam and the departments of finance and planning-investment to review legal procedures for BOT projects and keep a close watch on toll revenues at such projects.

Within this month, the ministry plans to inspect BOT projects including those already opened to traffic such as the expanded Thanh Hoa-Can Tho section of National Highway 1A and the upgraded section of Ho Chi Minh Highway running through the Central Highlands to timely cope with violations.

EVN asks oil-fueled power plants to spike output

Vietnam Electricity Group (EVN) has requested a number of oil-fired power plants to increase generation for the south as the PM3 gas supply for Ca Mau 1 and Ca Mau 2 stations has been suspended for scheduled maintenance at the gas field.

The thermal power plants including O Mon in Can Tho City have been asked to prepare sufficient diesel and fuel oil supplies to keep their generators running to meet the electricity demand of the south for more than 10 days ending August 26.

EVN said in a statement that energy agencies would join hands with the coal industry to ensure sufficient coal for power stations when PM3 gas supply is stopped, with priority  given to Duyen Hai 1 and Vinh Tan 2 plants.

EVN will accelerate the pace of power projects, including Generator No.2 of Mong Duong 1 thermal power plant and Ban Chat hydropower project, and connect Circuit No.2 of 110kV Muong La - Son La line. The group will start transformer installation at 500kV Pleiku No.2 station and 220kV Xekaman No.1-Pleiku No.2 line.

This month, the power consumption can reach 473 million kWh a day, which is lower than the peak consumption of 536.8 million kWh on July 3.

In March 2014, power supply in the south was strained due to a leakage on the PM3 gas pipeline that disrupted gas supply for the two Ca Mau power plants with a total capacity of 1,500 megawatts.

The incident forced EVN to suspend operations of Ca Mau plants and asked O Mon power plant to generate more electricity to meet demand in the south, especially the souwestern region.

Customs clearance time reduction tough

Experts have expressed concern that it is difficult to reduce the customs clearance time to 13-14 days at the end of this year as targeted by the Government.

Nguyen Dinh Cung, president of the Central Institute for Economic Management (CIEM), said cutting the customs clearance time to the average of 13-14 days in the ASEAN-6 countries and to 10-12 days in the ASEAN-4 bloc this year and next was an ambitious and challenging target.

ASEAN-6 groups Singapore, Malaysia, the Philippines, Thailand, Indonesia and Brunei and ASEAN-4 consists of Indonesia, Malaysia, Philippines, and Thailand.

Speaking at an online dialogue on improving the nation’s competitiveness by streamlining customs procedures organized by the Government’s web portal on Tuesday, Cung said amendments to the documents identified as impediments to customs clearance at border gates like Decree 187 are moving slowly.

Resolution 19 of the Government points out nearly 300 documents governing export-import activities should be revised by various ministries. However, some ministries have been hesitant, according to Cung.

“Ministries are capable of amending a circular within one month or even one week but they have not done it,” Cung said.

Nguyen Van Than, vice chairman of the Vietnam Association of Small and Medium Enterprises, said the business community had held high expectations over Resolution 19 as it would help them reduce time for customs clearance procedures and lower input costs.

But as many enterprises do not comprehend procedures and regulations, the resolution’s target could not be achieved this year, Than said. “I’m not optimistic (about the target) because there are so many things to do while little time is left for 2015,” Than said.

Vu Ngoc Anh, deputy head of the General Department of Customs, said the authority had introduced many reforms but the major problem was the inspection process.

Ministries are determined to amend documents but changing administrative procedures takes time and is not simple for inspections conducted by some ministries like the ministries of agriculture-rural development and health, according to Anh.

The customs authority is currently enforcing 19 laws, 54 decrees and hundreds of circulars and decisions. “We are working with ministries to find out which documents need to be revised,” Anh said.

Cung said ministries need to be proactive, creative and determined if they want the ambitious and challenging target set in Resolution 19 to be realized.

Over 230 firms to join combined expo in city

More than 230 enterprises from 12 countries and territories will participate in a three-in-one exhibition on packaging, printing and food processing industries at the Saigon Exhibition and Convention Center (SECC) in HCMC’s District 7 from September 30.

The four-day 15th international show includes VietnamPack & Print 2015 on packaging and printing industry, VietnamPrint & Label 2015 on print and label industry and VietnamFoodtech 2015 on food processing industry.

The organizers said at a press conference in HCMC on Wednesday that exhibitors from Vietnam, Singapore, Japan, South Korea, Germany, Thailand, India, Indonesia, Malaysia, Hong Kong, Taiwan and China will mostly feature the latest machines and equipment in the fields of packaging (40%) and printing (30%).

Foreign manufacturers will dominate with 75% of modern technologies and products on display at the event. Local enterprises, manning some 225 out of nearly 400 booths (62%), are mostly importers, distributors or agents of foreign manufacturers.

The number of exhibitors this year rises by 10% compared to the 2014 event, where some US$45 million worth of trading transactions was recorded.

The organizers expected that local and foreign enterprises will have the opportunity to expand their markets, establish business relationships and exchange and approach advanced technologies in the industries. For Vietnamese firms, this is a chance to boost exports and increase the competitiveness of domestic products.

The event will be jointly organized by the Vietnam National Trade Fair and Advertising Company (Vinexad), Taiwanese Chan Chao International Co. Ltd., Hong Kong-based Yorkers Trade & Marketing Service Co. Ltd. and Paper Communication Exhibition Services, the Vietnam Packaging Association (Vinpas), and the Vietnam Plastics Association (VPA).

HCM City lenders' bad credit rate inches down

Non-performing loans (NPLs) of HCM City-based credit institutions by the end of last month stood at VND62.2 trillion (US$2.86 billion), equal to 5.49 per cent of total outstanding loans.

According to deputy director of the State Bank of Viet Nam's HCM City office Nguyen Hoang Minh, the rate inched down by 0.11 per cent from late June.

However, Minh said, if the NPLs of VNBC, OceanBank and GP Bank, which the central bank acquired all of their equity at a price of zero dong per share, were excluded, then the NPL rate of HCM City-based lenders was 3.7 per cent of total outstanding loans.

According to the central bank's plan, HCM City-based lenders would have to handle a total of VND25.3 trillion ($1.16 billion) in NPLs before September.

Minh said that by the end of last month, the lenders handled VND3.1 trillion ($142.85 million) in NPLs by using their provisional funds. They also sold another VND13.9 trillion ($640.55 million) in NPLs to the Viet Nam Asset Management Company.

Minh expected the lenders would meet the central bank's target to bring down the NPLs to 3 per cent by September this year.

According to the central bank's Governor Nguyen Van Binh, the target is feasible, provided that all credit institutions step up and take drastic measures to handle the NPLs to meet the deadline.

"Credit institutions must make accurate debt classifications, adequately fund risk provisions and actively sell NPLs to the Viet Nam Asset Management Company," Binh noted.

According to experts, the establishment of the Viet Nam Asset Management Company (VAMC) in 2013 was an important first step in recognising that NPLs in the banking system needed a systemic approach; however, the pace of selling these debts needs to be accelerated.

They said to move this process forward quickly, besides needing greater authority over the disposition of collateral and legal impediments and needing to resolve the disposition of collateral in the distressed assets market, the VAMC also needed a larger pool of resources – financial and human – to process NPLs that enter the distressed assets market.

Such a market in turn needed enough buyers and sellers to be functional and may need external participation and expertise, they said.

MOG Vietnam launches new platforms

MOG Vietnam, a company specializing in mobile online advertising, online payment platforms, and apps to synchronize mobiles and PCs, introduced a range of new platforms, including Admactic, Gimi, YOLO Family, and 1Pay version 2.0. to the market on August 12.

Admatic is a smart, multi-channel advertising platform, developed based on the RTB (Real Time Bidding) platform, coordinating with other mechanism such as Advertising Exchange, Re-targeting and Programmatic.

It can provide all current popular advertising forms, including CPD (Cost per Duration), CPM (Cost per Miles), CPC (Cost per Click), CPI (Cost per Install), CPA (Cost per Action), and CPR (Cost per Redeem) on PCs and mobile for personal / organizational needs. Admatic promises to give enterprises an effective, transparent, and professional advertising model.

Gimi, meanwhile, is the first advertising platform in Vietnam that allows award gifts, including model products, promotions, and virtual currency, among others, to users. The platform will also allow brands to reach the right customer at the right moment in the form of gift awarding within apps / games on mobiles.

Revenue in Vietnam’s online marketing is expected to reach $329 million in 2015, according to Mr. Nguyen Ngoc Hoang, who in charge of developing Gimi at MOG Vietnam. “The company targets to get 1 per cent of online marketing revenue in the country, equal to $3 million, in 2016,” he said.

YOLO Family will focus on the development of mobile apps that bring the most practical utilities and new experiences to users. It includes major products such as YOLO Launcher, YOLO Browser, YOLO Booster, YOLO Locker, and YOLO Security.

1Pay version 2.0. is an online payment platform that has developed from the 1Pay platform. The new version, with multi-language integration, allow users to conduct online payments through banks, card charging, Visa, and SMS, among others, in a simple, smart, speedy, and secure manner.

Established in 2011, MOG Vietnam has more than 3 million international users and 5 million domestic users in entertainment platforms and more than 500 partners cooperating in online marketing and advertising.

MBLand kicks off MBLand Central Point My Dinh

MBLand began construction of the MBLand Central Point My Dinh residential complex in Hanoi’s Nam Tu Liem district on August 12.

“After a period of time for preparations, MBLand Central Point My Dinh has completed legal procedures and entered the construction stage,” said Mr. Vu Thanh Hue, Deputy Chairman and General Director of MBLand. “We will focus all our resources and financial resources on implementing the project on schedule, ensuring the committed quality standards.”

Located on the corner of Nguyen Co Thach and Ham Nghi Streets, the project covers an area of 4,435 sq m. With expected investment of VND1.1 trillion ($49.9 million) it comprises a 30-storey building that includes three basements, 400 high-end apartments for sale, a shopping mall, office space for lease, a kindergarten, swimming pools, and sport centers, among others.

Expected to be completed in 2017, the project promises to become a highlight in the general landscape of the My Dinh I new urban area.

MBLand Real Estate JSC, under the MB Group, has been the developer of a range of projects, including MB Sunny Tower in Ho Chi Minh City’s District 1, MB Grand Tower and MBLand Central Point in Hanoi’s Cau Giay district, and the Swiss Viet Hotel and Resort in Khanh Hoa province’s Cam Ranh Peninsula, among others.

The company is also seeking opportunities to expand their business activities overseas. It is expected to establish a representative office in Japan and Australia and it has recently worked with the UAE-based Vault Investment Foundation fund to seek investment cooperation in Vietnam and the UAE.

VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR

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