BUSINESS IN BRIEF 11/4

Licenses granted to 28 FDI projects in Binh Duong

Authorities in southern Binh Duong province hosted a ceremony on April 10 to grant licenses to 28 foreign direct investment (FDI) projects worth 304 million USD, including 20 new and 8 added capital projects.

These projects contributed to bringing the number of foreign-invested projects in the locality in the last quarter to 85, valued at 402 million USD.

A number of high-value projects are in the motorbike and bicycle industries, sports equipment, electronic spare parts and beverages.

Speaking at the ceremony, Chairman of the provincial People’s Committee Tran Van Nam highlighted the important role played by businesses in promoting the locality’s socio-economic development.

He stated that local authorities will design measures to improve the investment climate and reform administrative procedures, thus facilitating investment project operations and drawing more foreign investors.

They will also pay attention to investing in the construction of infrastructure systems to meet investor demand while intensifying investment promotion activities, targeting projects using advanced technology and manufacturing high added-value products.

So far, as many as 2,440 FDI projects with a combined capital of 20.8 billion USD have operated in Binh Duong. The province aims to attract one billion USD in FDI in 2015.

Kunming steel group encouraged to expand investment in Vietnam

Deputy Prime Minister cum Foreign Minister Pham Binh Minh has highlighted the Kunming Iron & Steel Group Co.Ltd (KISC)’s investment cooperation with Vietnam as a contribution to stimulating the local socio-economic development and deepening the time-honoured friendship between Vietnam and China.

On April 10, Deputy PM Minh accompanied by Minister of Planning and Investment Pham Quang Vinh, Minster of Industry and Trade Vu Huy Hoang visited the Kunming Iron & Steel Group Co.Ltd (KISC) and the China Southern Power Grid Co., Ltd (CSG) as part of the China trip by Party leader Nguyen Phu Trong and his entourage.

Established in 1939, experiencing more than seven decades of development, KISC has become a major industrial firm in China as well as in the region with more than 200 factories and 10,000 employees spreading throughout Yunnan province.

The Vietnam-China mineral metallurgy project having a capacity of 500,000 tonnes/ year built by KISC, the Vietnam Steel Corporation and the Lao Cai Mineral Company have entered operations.

Deputy PM Minh suggested the Kunming steel group apply most advanced technologies to effectively use iron ore resources in northern Lao Cai province and pay heed to environmental protection, adding that the Vietnamese Government would facilitate the group’s expanded investment in Vietnam.

Meeting with the Board of Directors of the Yunnan Power Grid Company under China Southern Power Grid Co., Ltd that ranks 115th in the top 500 enterprises in the world, Deputy PM Minh appreciated the company’s efforts to rise from a power supplier for Vietnam in 2014, to become a power plant construction and infrastructure investor in the Southeast Asian nation evidenced by the Seo Chong Ho hydropower plant project in Sa Pa, and the Vinh Tan 2 thermal power project in Binh Thuan province.

Minh also reiterated the Vietnamese Government’s willingness to create every condition for Chinese investors to do business in Vietnam.

He also underlined the need to ensure steady and safe power supply and technical skill training for Vietnamese employees.

By late 2014, the Yunnan Power Grid Company provided Vietnam with nearly 2 billion kWh.

Australia,New Zealand support ASEAN to maximise economic integration benefits

Around 30 senior policy officers and industry representatives from ASEAN, Australia and New Zealand gathered at an investment policy workshop entitled Facilitating Implementation and Business Utilization of ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) in Ho Chi Minh City on 8-9 April.

The workshop took place under the umbrella of the AANZFTA Economic Cooperation Work Program (ECWP).

“Australia is pleased to support the AANZFTA Economic Cooperation Work Program, which provides technical assistance and capacity building to developing ASEAN countries in their implementation of the AANZFTA”, said Ms Nadia Krivetz, Counsellor, Australian Embassy Vietnam, who spoke at the workshop.  “This particular workshop supports moves towards a more open, predictable and transparent investment regime, a key to enhancing ASEAN’s competitiveness for foreign investment and stimulating investment within ASEAN.”

“Activities under the AANZFTA Economic Cooperation Work Program also complement the work of ASEAN countries towards establishing the ASEAN Economic Community at the end of this year”, added Mr Robbie Taylor, Deputy Head of Mission, New Zealand Embassy.

A number of ECWP activities are being undertaken in eight broad areas, linked to different aspects of the AANZFTA: rules of origin; sanitary and phytosanitary measures; standards, technical regulations and conformity assessment procedures; customs; services; investment; intellectual property; and competition policy.

For Vietnam, in addition to a range of joint regional benefits, the ECWP recently assisted with the production of training modules on AANZFTA Rules of Origin in Vietnamese language; capacity building for intellectual property officers to conduct substantive patent examination; and strengthening the investigation skills of Vietnam Competition Agency officials. An investment policy review for Vietnam supported by the program is also underway and will be completed in 2015.

Australia, New Zealand and Vietnam are all also engaged in the Trans-Pacific Partnership and Regional Comprehensive Economic Partnership negotiations.  Both processes will provide a basis for more open trade and investment in the region and form possible pathways to a free trade area of the Asia–Pacific.

HCM City, EU look towards stronger trade links

Cooperation potential between Ho Chi Minh City and European Union (EU) countries is huge, especially in trade and investment, Chairman of the municipal People’s Committee Le Hoang Quan has said.

At his meeting with Chairman of the European Parliament’s International Trade Committee Bernd Lange on April 9, Quan said 23 European countries have invested in 600 projects in the city while two-way trade reached US$6 billion by the end of 2014.

The conclusion and signing of a free trade agreement (FTA) between Vietnam and the EU in the coming time will bring about optimal conditions for both sides to foster their cooperation, he added.

Congratulating HCM City on its attainments, Bernd Lange said his Vietnam visit coincides with the 25th anniversary of the EU-Vietnam’s diplomatic ties, which will help further their friendship and mutual trust.

As the FTA talks is entering the final stage and its final say depends largely on the European Parliament, Vietnam and HCM City in particular, therefore, should provide concrete information to prepare for the next negotiation round, he noted.

He expressed his belief that the FTA ratification will deepen bilateral relations and help HCM City address its shortcomings in urban infrastructure and climate change response.

It will also be a good opportunity for the city to receive an inflow of European investments, thus benefiting people of the two sides.

FoodPanda expands its northern market share

FoodPanda Vietnam under the Rocket Internet AG – the world’s largest online food ordering platform has unveiled its cooperative strategy to cooperate with BBQ Chicken to operate exclusively in Vietnam in the long-term.

Delivery services have kicked off in Hanoi and will soon be available in HCM City. According to BBQ, the move aims to diversify services to win more customers in Vietnam.

BBQ Chicken has been operating more than 20 restaurants including 15 franchises. Currently, the company is following the franchising model which is a proven route to rapid growth.

BBQ Vietnam hopes to become Vietnam’s largest franchising business with 500 restaurants in the next five years.

In 2012, FoodPanda made its first debut in Vietnam after expanding its network over 40 nations in the world. Foodpanda is connecting to more than 800 restaurants with famous international fast-food brands such as KFC, Burger King,Jollibee and others.

With its presence in Hanoi, HCM City, Da Nang and NhaTrang, Foodpanda has become a fierce competitor against other trademarks specializing in online food ordering. The cooperation with BBQ Chicken is the first Foodpanda’s move to expand its business in the northern market.

Supporting industry goes to Europe

A business delegation has flown to Austria to participate in a workshop on attracting investment for Vietnam's supporting industries.

The workshop was coorganised on April 8 by the Commercial Office of the Vietnamese Embassy in Austria, the Austrian Economic Chambers (WKO) and the Association of the Austrian Electrical and Electronics Industries.

The workshop helped enterprises from both countries further their understandings about each other's advantages and seek partnerships in the supporting industry sector.

Vietnam has become Austria's second largest export and import market, following Thailand, since last year.

Austrian import turnover of Vietnamese commodities was 550.3 million euro (US$586 million) last year. Imports consisted of garment and textiles, footwear and smart phones from Vietnam. Austria exported mechanics, electronics and health devices to Vietnam, making a turnover of 159.3 million EUR.

Hans-Jorg Hortnagl, WKO Regional Director for South and Southeast Asia, said that Vietnam and Austria's cooperation potential is large. Over the past few years, Vietnam has become one of the most important partners for Austria in the ASEAN region.

Hans-Jorg attributed the growth in bilateral trade to three causes. The first being the large number of Austrian companies in China. Now that Chinese market is becoming more expensive, many Austrian companies might move to Vietnam in the future.

Secondly, Vietnam is an important partner in the ASEAN Economic Community (AEC), which will be established at the end of this year. Vietnam's market will be even more attractive as it becomes a manufacturing centre for ASEAN countries as well as other Asian and European countries.

Thirdly, the free trade agreement between the European Union and Vietnam will be a foundation for the further cooperation between Vietnam and Austria.

Vingroup launches promotions for sale of R6 apartments

Vingroup launched a special promotional scheme in April for buyers of its luxury apartments R6 at the Vinhomes Royal City in Ha Noi.

R6 Building is the last apartment building in Vinhomes Royal City. VNS Photo

Vinhomes 2 Real Estate Company said under the scheme, customers who purchased apartments, purely from an investment point of view, would be given the opportunity to lease the property to the company for a fixed payment.

The company would commit to a lease of 24 months at a monthly rental price of VND13million (US$610) to VND 30 million ($1,408) each.

The company also said the first 20 customers to purchase apartments on the official sale day of the building at the JW Marriott Hotel on April 11 would receive a gift voucher for a six- night stay at the Vinpearl Resorts in Nha Trang or Phu Quoc, worth VND57 million ($2,670).

At the same time, the group would also offer buyers of each apartment entertainment tickets for the Vincom Mega Mall Times City and Vincom Mega Mall Royal City, valid for three years, and valued at a total of VND6 million ($281).

Vingroup would also help customers obtain incentive loans from banks.

R6 is the last apartment building to be sold under the Vinhomes Royal City project. It offers apartment with an area of 55 to 154.5 square metres and between one and four bedrooms. The building is designed with airy atrium skylights and indoor trees to offer residents a naturally harmonised living standard.

DBS and Manulife form 15-year life bancassurance partnership

On April 8, DBS Bank Ltd and Manulife Financial Asia Limited entered into a 15-year regional distribution agreement covering four mutually significant markets, namely Singapore, Hong Kong, China and Indonesia.

The agreement will take effect on 1 January 2016. This new exclusive life bancassurance partnership will combine DBS’ superior Asian banking franchise with the insurance and wealth management expertise of Manulife, a global leader with a long-term commitment to Asia.

In the four markets, DBS’ large and growing six million retail, wealth and small and medium sized enterprise (SME) customer base will gain access to Manulife’s best-in-class suite of life and health insurance solutions, through the bank’s extensive network of over 200 branches and its sales force of over 2,000 professionals, as well as via its internet and mobile banking platforms.

Leading to the agreement with Manulife, DBS conducted a thorough insurance partner selection process, which attracted strong interest from a number of leading regional and multinational insurers. The process considered a number of factors, including customer focus, expertise, execution track record and potential for long term value creation.

The partnership is expected to bring significant benefits to both parties. Specifically, DBS will further strengthen its regional life insurance distribution capabilities, including its position as a leading bancassurer in Singapore, while providing its customers with a full suite of innovative and customised insurance solutions. Manulife will gain exclusive access to DBS customers in four highly attractive insurance markets, which remain significantly under-insured with a sizeable insurance protection gap and underfunded retirement needs.

Piyush Gupta, chief executive officer (CEO) of DBS said: “Bancassurance is a key focus for DBS and an important part of our overall customer value proposition. Manulife’s strong customer focus and deep commitment to Asia are aligned with our own vision. We are already working with Manulife in Singapore, Hong Kong and Indonesia, and will soon be their flagship regional bancassurance partner and their largest bancassurance partner globally. Together, we look forward to building upon the momentum we have achieved in bancassurance.”

Donald A. Guloien, president and CEO of Manulife said that Manulife was delighted to be chosen as the bancassurance partner of DBS in four important markets in Asia. “We know DBS well, and want to be an integral part of their continued success as a leading financial services group in Asia. This 15-year agreement builds on our existing successful relationship with DBS. It accelerates our growth in Asia, deepens and diversifies our insurance business, and gives us access to a much wider range of customers,” added Guloien.

Under the agreement, there will be an initial payment by Manulife to DBS of $1.2 billion, which Manulife intends to fund with internal resources. This payment will be amortised by both parties over 15 years. There will also be ongoing, variable payments, which are based on the success of the partnership, and Manulife expects the agreement to be accretive to Core EPS in 2017.  The initial payment for this regional agreement is expected to reduce Manulife’s regulatory capital ratio by 10 points on or before January 1, 2016.

DBS is a leading financial services group in Asia, with over 250 branches across 17 markets. Headquartered and listed in Singapore, DBS has a growing presence in the three key Asian axes of growth: greater China, Southeast Asia and South Asia.

Manulife is a leading provider of insurance and wealth management solutions. It is the sixth largest life insurer in the world, with a 118-year track record in Asia, and more than six million customers across 12 markets in the region. Manulife first established a presence in Singapore in 1898 and is the leading life insurance provider of retirement and wealth solutions in Hong Kong, where it established operations in 1897. Manulife is a leading Canada-based financial services group with principal operations in Asia, Canada and the United States.

TMMC Healthcare creates partnership with Capital Medica – Sojitz

Vietnam’s TMMC Healthcare and Japan’s Capital Medica - Sojitz have agreed to form a strategic healthcare partnership, to offer the improved medical services to millions of Vietnamese patients.

The partnership will focus on professional training for medical and supporting staff, sharing knowledge and technology, transferring latest technology and know-how in healthcare, providing evidence-based collaboration for treatment and clinical outcome management, creating cross-border medical study and research; developing a wide spectrum of Medical Centres of Excellence, and introducing Japanese best practice to Vietnam healthcare.

Since the very first stage of the Memorandum of Understanding (MOU) on January 1 this year, both sides have been working closely to build the collaboration framework. The first theme of cooperation is to launch joint clinical management programs at some of Medical Centres of Excellence being developed by TMMC Healthcare at their hospitals. The project will benefit patients and community in elevating the standards of healthcare deliver comparable with international best practices.     

 “Through this high level of collaboration, the partnership enables us to offer the improved medical services to millions of Vietnamese patients, and build our competency to emerge as the leading healthcare entity in Vietnam and in the region,” stated Dr. Dilshaad Ali, president and CEO of TMMC Healthcare.

Capital Medica Co., Ltd.is famous as the leading healthcare management entity which currently owns and manages nearly 40 hospitals, polyclinics and elderly care facilities in Japan while Sojitz Corporation is one of the most influential trading and investment conglomerates from Japan with many subsidiaries across various industries in Vietnam.

TMMC Healthcare is the first integrated healthcare system in Vietnam with four general hospitals and one polyclinic in Ho Chi Minh City, Nha Trang, Danang and Dong Thap.

Philippine enterprises promote trade in HCM City

Enterprises from the Philippines are looking for opportunities to meet with Vietnamese partners to expand connections across food processing, cosmetics, hotels and construction.

Sanchez Dannilo, Vice President of the Philippine Chamber of Commerce and Industry- National Capital Region (PCCI-NCR), expressed the wish as he led a Philippine business delegation to a meeting with Vietnamese firms in Ho Chi Minh City on April 9.

Nguyen The Hung, Deputy Director of the Vietnam Chamber of Commerce and Industry (VCCI)’s Ho Chi Minh City branch briefed the Philippine delegation on the city’s policies to attract foreign investment and enlarge import-export activities. He also highlighted that two sides have opportunities to bolster cooperation in food, farm produce, fertilizer and education.

Vietnam has enjoyed a trade surplus with the Philippines since 2008. Major exports include rice, consumer goods, food products and seafood while fertilizers and electronic equipment are its primary imports from the Philippines.

Trade in 2014 was US$2.8 billion; the two countries are working to lift it to US$3 billion this year.

8 transport BOT projects to start in Q2

Eight build-operate-transfer (BOT) transport projects with total investment capital of VND22 trillion (US$1 billion) are expected to commence in the second quarter of 2015, according to the Ministry of Transport.

The Dau Giay-Phan Thiet Expressway project is a pilot under the Private-Public Partnership (PPP) form with total estimated investment capital of around US$750 million. Once completed, the four-lane 98.7-km expressway will link the southern province of Dong Nai to the coastal city of Phan Thiet, Binh Thuan province.

In a bid to attract investment to expressway projects along National Highway No 1, the ministry has requested the addition of sections such as Phan Thiet to Nha Trang.

The scale of the Bien Hoa-Vung Tau project was adjusted and divided into two sub-projects, of which the Bien Hoa-Phu My sub-project will be implemented under the BOT model with total investment capital of over VND7.6 trillion (US$362 million).

The Nha Trang (Khanh Hoa)-Phan Thiet (Binh Thuan) section of the North-South highway project has a total length of 235 km with four lanes and designed velocity of 80-100 km per hour. It will be funded through the public sector, the State’s budget and the official development assistance (ODA).

Nguyen Danh Duy, Head of the Management Board of PPP Projects under the Ministry of Transport, said the ministry is guiding the implementation of 50 BOT projects, including 37 in land transport, six in aviation, three in waterway transport, three in railway and one in maritime navigation.

The management board is working on a report on PPP projects with the planned addition of more projects, including a road connecting Noi Bai- Lao Cai highway with Sa Pa resort town.

Roles of foreign investment highlighted

Foreign investment has helped drive industrialisation and modernisation in Vietnam via the supply of capital and technology and contribution to the State budget, heard a conference held in Hanoi on April 9.

Nguyen Huy Hoang from the National Centre for Socio-Economic Information and Forecast under Ministry of Planning and Investment said foreign-invested enterprises make up two thirds of the nation’s export revenue and have created 3 million jobs in the country.

A wide range of products manufactured by foreign-invested enterprises have gained a stable share in international markets such as phones, electronic spare parts, garments and leather shoes.

A representative from the Irish Economic and Social Research Institute stressed that foreign-invested enterprises have exerted their influence on domestic businesses, pushing them to improve business management in line with international standards and respective competitive capacity.

FDI businesses also helped create more jobs in materials and parts supply in the country.

Specialists at the conference recommended Vietnam improve its investment climate and create favourable conditions in administrative procedures to attract more foreign investment.

They also said that a number of drawbacks in foreign-invested enterprises need to be addressed, including languid technology transference, environmental pollution and tax evasion, which have adverse effects on the investment climate in Vietnam.

Vietnam, React cooperate in combating counterfeit products

The Department of Market Management under the Ministry of Industry and Trade and Cooperative Vereniging SNB–REACT U.A (React), an anti-counterfeit network in Vietnam, have signed a memorandum of understanding (MoU) on cooperation in combating fake goods and enforcing intellectual property rights.

According to the MoU, inked in Hanoi on April 8, the two sides will works together to build action programmes and inspection plans for various commodities and fields, contributing to increasing the effectiveness of fake goods prevention.

Representatives from the Department were instructed to distinguish between genuine and fake goods, useful for Vietnamese market-managing forces in enforcing intellectual property rights and tackling counterfeit products.

Do Thanh Lam, Vice Director of the Department said market-management forces nationwide inspected and settled over 100,000 cases of legal violations, including over 10,000 cases concerning fake goods and intellectual property right infringement.

However, he noted that the fight against counterfeit goods is still facing difficulties and requires a stronger effort from and joint collaboration of all sectors and legal enforcement forces.

React is a non-profit organisation with over 20 years fighting counterfeit trade. With over 200 members covering all industry areas—including fashion and merchandising, tobacco, electronics and mobile phones, pharmaceuticals, football and toys—React has experience in dealing with almost all instances of goods infringement.

React has a large international network with strategically placed offices and partners to efficiently fight the global trade in counterfeit goods and protect the rights of its members.

HCMC hosts international fairs in garment, cosmetics

Ho Chi Minh City kicked off simultaneous exhibitions of garment and cosmetics industries on April 9.

The 2015 Vietnam Saigon Garment & Accessories Machinery Expo (Saigon Tex 2015) was launched at the Tan Binh Exhibition and Convention Centre.

Vietnam plans to develop the textile and garment industry towards the goal of earning 28 billion USD export turnover and increase local content to 60-70 percent of garment products in 2015, remarked Deputy Minister of Industry and Trade Ho Thi Kim Thoa at the launching ceremony.

The goals necessitate urgent technology innovation, improvements in product quality and human resources management and development of a global-standard supply chain, she noted.

Saigon Tex 2015 will provide a platform for both domestic and foreign enterprises to seek partnership and promote their brands and products.

Running through April 12, the expo features a collection of accessories, advanced technologies and machinery in the field, exhibited by some 655 businesses from 21 countries and territories, including Belgium, France, Germany, Hong Kong, India, the Republic of Korea, Pakistan, the Netherlands, Thailand and Japan.

Srijib Roy, Director of the Synthetic and Rayon Textiles Export Promotion Council (SRTEPC), said over 20 Indian leading textile companies attended the Exhibition of Indian Textiles (INTEXPO), part of the Saigon Tex this year, to showcase a wide range of the latest Indian textile products from rayon to fashion and upholstery fabrics.

The same day, the International Exhibition and Conference on Cosmetics, Beauty, Hair and Spa (CosmoBeaute Vietnam 2015) was also opened, drawing 150 business participants from 15 countries worldwide, such as the US, Hungary, Indonesia, Singapore and the Republic of Korea.

Around 200 booths showcased an array of perfumes, cosmetics and accessories, professional care products, beauty salon equipment, packaging equipment and materials.

A make-up contest, fashion show and hair show, alongside seminars, will be organised on the sidelines of the three-day event.

Binh Duong seeks solutions for Taiwanese enterprises

The southern province of Binh Duong’s Customs Department held a dialogue with Taiwanese-financed enterprises on customs clearance, tax declarations and import and export activities on April 9.

At the dialogue, questions were raised regarding the import of used equipment, the destruction of remaining materials from export outsourcing deals, import tax refunds and how tax is calculated when there is a change in purpose of use.

Duong Hong Hanh, Deputy Director of the Department, responded to questions on non-taxable cases when there is a change in purpose of use through re-exporting or transferring to tax exempt entities.

The department also provided Taiwanese enterprises with customs declaration priority.

Huynh Vuong Duy, the economic division’s representative of the Taipei Economic and Cultural Office in HCM City, appreciated the administrative reforms and increased interaction between Binh Duong Customs and the enterprises.

The implementation of the VNACCS / VCIS system more than one year ago benefited Taiwanese enterprises in their customs declarations and balance sheets, he added.

The Binh Duong Department also reminded enterprises of the strengthening of management over their digital signatures used on the VNACCS / VCIS system. Philippine enterprises promote trade in HCM City

Enterprises from the Philippines are looking for opportunities to meet with Vietnamese partners to expand connections across food processing, cosmetics, hotels and construction.

Sanchez Dannilo, Vice President of the Philippine Chamber of Commerce and Industry- National Capital Region (PCCI-NCR), expressed the wish as he led a Philippine business delegation to a meeting with Vietnamese firms in Ho Chi Minh City on April 9.

Nguyen The Hung, Deputy Director of the Vietnam Chamber of Commerce and Industry (VCCI)’s Ho Chi Minh City branch briefed the Philippine delegation on the city’s policies to attract foreign investment and enlarge import-export activities. He also highlighted that two sides have opportunities to bolster cooperation in food, farm produce, fertilizer and education.

Vietnam has enjoyed a trade surplus with the Philippines since 2008. Major exports include rice, consumer goods, food products and seafood while fertilizers and electronic equipment are its primary imports from the Philippines.

Trade in 2014 was US$2.8 billion; the two countries are working to lift it to US$3 billion this year.

Property market recovers but price fever unlikely

The property market performed impressively in the first quarter of this year, with figures showing that recovery returned after a long freeze.

The Viet Nam's real estate market is seen warning up as it reflects the rising number of successful transactions, property start-ups and falling inventory, together with easier credit.

However, a price fever or "market bubble" is not expected to occur due to several sources of supply, and because both buyers and property developers have become more cautious after the 2007-08 bust.

The real estate market started warming up last year. In the first quarter of this year, the recovery of the market was reflected in the rising number of successful transactions, property start-ups and falling inventory, together with easier credit.

The construction ministry's statistics showed that the number of transactions in March and in the first quarter of this year rose a whopping three times year-on-year.

The property inventory, as of March 20, fell by nearly VND58 trillion (US$2.74 billion), compared to a year ago, to VND70.7 trillion ($3.34 billion). Outstanding loans as of the end of January rose by 4.8 per cent over the end of last year to reach VND316.578 trillion ($14.98 billion).

The number of property start-ups in the first quarter of this year also increased by 50 per cent year-on-year, showing improved confidence and expectations for profits, the Agency for Business Registration said. The property sector also ranked second in attracting foreign direct investment (FDI), with $202.93 million being poured into the sector, accounting for 11 per cent of the country's total FDI.

The government is speeding up the disbursement of the VND30-trillion ($1.4 billion) credit package for the property market. The construction ministry said as of February 25, about 20 per cent of the package had been disbursed.

Although there was worry that market fever, as during the 2007-08 period, might occur, given strong capital inflows due to the return of speculators, several experts were optimistic about the realty market's recovery and expected breakthroughs to occur in the following quarters.

Director of An Gia Real Estate Investment and Development Company Nguyen Trung Tin said the market was recovering, but was not in a fever. The housing supply was moving to meet customers' demands and buyers had several choices, while developers were seeking stable and long-term growth, he said.

According to Director of Hung Thinh Land Nguyen Nam Hien, the scars of the 2007-08 crisis would make both home-buyers and property investors more cautious in transactions, which would contribute to stabilising the market.

Sharing the same viewpoint, Deputy President of the HCM City Real Estate Association Nguyen Van Duc said the prices of several projects increased recently, but this was not evidence of speculation as those were good projects that fit buyers' demands.

The market would gradually warm up this year, but recovery did not mean that all projects would have a large number of successful transactions, experts said, adding apartments with average prices of about VND1 billion ($47,300) per unit would dominate the market.

In addition, the regulation that allows foreigners to own houses in the country will help boost transactions in the medium and high-end segments.

Hanoi property market has strong recovery in Q1

The real estate market in Ha Noi has seen a strong recovery, especially the luxury apartment segment, the CBRE Viet Nam announced yesterday in Ha Noi.

In Q1 2015, the market continued its recovery with the comeback of high-end apartments. Construction of some 4,879 new units has begun among 18 projects, an 82 per cent against the same period in 2014, said Nguyen Hoai An, senior manager at CBRE Viet Nam's Ha Noi branch.

"Notably, five out of 18 projects are for the high-end segment, more than in any single quarter during 2012-14," she said. "The number of new projects for high-end units went up 60 per cent q-o-q and 30 per cent y-o-y."

Despite a long Tet break, sales remained strong during this quarter, An said. An estimated 3,079 units were purchased during the quarter, which was double the number of sales from Q1 2014.

"The share of transactions for high-end apartments increased to 26 per cent of total sales, as compared to 14 per cent in the previous quarter. The mid-end segment remained the highest share of total units sold, while the low-end segment saw a dip in the share of total sales, as compared to last quarter," she said.

In terms of pricing, some projects in good locations near city centres have increased their asking prices. On average, primary prices in high-end and low-end segments increased by 7 per cent and 5 per cent y-o-y, respectively, An said.

"These are mostly projects near city centres and displaying good construction or offered by reputable developers. This price rise is attributed to the scarcity of land in city centres, and hence, projects in or near city centres become highly sought after."

In the near future, the market is expected to welcome a supply of some 13,000 new units for the remainder of 2015, An said. The West and Southwest will see the most number of units, accounting for 64 per cent of the total supply. However, the East and Southeast is seeing construction of attractive residential clusters.

Additionally, sales performance is expected to remain positive for the remainder of the year, with the resurgence of top-tier developers and projects, she said.

Thua Thien-Hue targets $25.5m in Q2 investment

The central province of Thua Thien-Hue aims to attract VND550 billion (US$25.5 million) in investment during the second quarter of this year, according to the provincial industrial zone (IZ) management board.

The board said it would implement measures to help solve investors' problems with site clearance and access procedures for land, electricity and water.

The board also unveiled English, Japanese and Korean editions of promotion materials to help facilitate activities.

The IZs have attracted 94 investment projects to date - 22 of which have foreign investors with a combined registered capital of nearly VND20 trillion (US$930 million).

Disbursed capital has reached VND7.4 trillion (US$345 million), or 37.3 per cent of registered capital. The occupancy rate at industrial zones is 33 per cent, according to the board.

Delta urged to build strong producer-distributor linkage

The Central Institute for Economic Management (CIEM) has urged the Mekong Delta to build a stronger linkage between producers and distributors and localities in the region if it wants to bank on Vietnam’s deeper integration into the world economy.

There are opportunities for many sectors in the region to fare further, particularly after Vietnam signs bilateral and multilateral trade agreements, CIEM vice president Vo Tri Thanh told a seminar in Can Tho City on April 6 on economic orientations and measures for improving the competitiveness of enterprises in the Mekong Delta.

Farming, aquaculture, tourism, logistics and labor-intensive sectors such as apparel, leather and footwear, and furniture will benefit much from the trade pacts including the U.S.-led Trans-Pacific Partnership (TPP) and those with the Eurasian Economic Union (EAEU) of Russia, Belarus and Kazakhstan, the European Union and South Korea, as well as the establishment of Asian Economic Community (AEC) later this year.

Thanh said various tariff lines will be cut to zero in accordance with the trade agreements, and these reductions will help enterprises lower costs and make competitive goods for export.

However, to tap into these opportunities, local enterprises will have to build strong partnerships with distributors on the home and foreign markets. In addition, they should meet strict requirements for quality and food safety in those markets.

As the Mekong Delta has chosen agriculture as a core sector for growth, local governments need to boost institutional reform and have proper mechanisms in place to support the establishment of strong value chains and allow farmers to earn more from the sector.

Connectivity among cities and provinces in the Mekong Delta is important to the success of the region as many localities have similar advantages. What matters most is that localities should combine their advantages and resources to develop strong value chains.

Thanh noted that the Mekong Delta should cooperate with HCMC and other regions to foster development of logistics and industrial clusters for textile and garment, farm produce and seafood processing.

The Mekong Delta should seek to tap into the potential of the ASEAN market of more than 600 consumers after the AEC comes into existence.

“Opportunities are out there but we should speed up reforms to cash in on these opportunities,” Thanh said.

Can Tho wants Song Hau Farm debt written off

Can Tho City has proposed the Government write off Song Hau Farm’s overdue debt totaling VND150 billion (US$6.9 million) to allow the farm to go public this year.

Le Hung Dung, chairman of Can Tho City, confirmed the proposal at a recent meeting held in the Mekong Delta city. He said the city has many times asked the Government, relevant ministries and agencies to clear the debt of Song Hau but has not got clearance.

Deputy Minister of Finance Tran Xuan Ha told the Daily that how to settle this debt was tough, so the Government has told the State Bank of Vietnam to urge lender banks to considering writing off the original debt of Song Hau.

Although the final decision has not been made, Ha said, the debt will be settled soon to pave the way for the farm to undergo equitization.

The bad debt resulted from the inefficient operations of Song Hau and the failure of honoring its contracts with farmers.

A report by Song Hau Farm dated November 27, 2009 showed its accumulated loans amounted to VND280.3 billion including bank loans of VND150 billion. If interest was included, the amount was more than VND290 billion.

The Vietnam Bank for Agriculture and Rural Development (Agribank) has taken legal actions against the farm for its debt but the case has not been settled.

Song Hau Farm was established in April 1979 with over 2,500 farm members working on an area of around 7,000 hectares.

Food safety challenges Vietnam

Controlling food safety in Vietnam has proven to be a big challenge due to the country’s rapid economic development, according to the World Health Organization (WHO).

WHO said in a statement released on the occasion of World Health Day (April 7) that up to 80% of more than 5,000 people struck by 194 food poisoning cases in Vietnam last year were hospitalized, or 11 people a day.

Unsafe food is the cause of more than 200 diseases, from diarrhea to chronic diseases like cancers as it contains harmful bacteria, viruses, parasites or chemical substances.

Diseases caused by unsafe food hinder socioeconomic development, burden the healthcare sector and erode national economy, tourism and trade.

WHO is working with the Vietnam Food Administration and other key stakeholders to promote the protection of human health by promoting food safety via the behavior of consumers and producers in the local food chain.

WHO advises individuals to its Five Keys to Safer Food to prevent diseases when processing food. The simple actions are to produce clean food, separate raw and cooked foods, cook food thoroughly, keep food at safe temperatures, and use safe water and raw materials for food cooking.

HCM City apartment inventories fall by half

Apartment inventories in HCMC had fallen from 14,490 units in late 2012 to 8,208 in the first quarter of this year, according to a recent report by the city government.

The report on the city’s economy in the first quarter of this year revealed that most of the apartments sold in the period were small units of less than 70 square meters at the projects with completed infrastructure and affordable prices.

Previously, a report on the government city’s housing sector showed that 1,900 apartments were sold in January-September last year, raising the total to 7,000. Buyers had registered for around 1,200 units in the six months from October 2014.

The falling apartment inventories and rising transactions are clearer signs of a recovery of the local real estate market. Property prices have stayed stable in the past time, according to the city government.

Regarding the development of Thu Thiem New Urban Area in District 2, the city so far paid more than VND17.28 trillion (US$800.5 million) in compensation for 715.9 hectares in total, meeting 99.4% of the target.

The local authorities have moved 10,470 households out of 15,000 households living along rivers and canals in the city, up a mere 1% against six months ago.

The HCMC Department of Transport reported last year that by the end of September 2014, the city had relocated 10,456 households in line with a plan to resettle 15,000 households living along the city’s rivers and canals.

Petrolimex reports losses last year

Vietnam National Petroleum Group (Petrolimex) reported losses of VND9 billion (US$416,790) last year instead of VND4.8 billion profit as estimated before its financial report was audited.

According to its audited report, Petrolimex incurred losses last year when its gross profit fell by some 21% year-on-year, or VND886 billion, while its sale costs rose by 12.6% or VND679 billion.

Last year, the group posted net profit of more than VND1.22 trillion.

For its holding firm Petrolimex only, the audited report revealed net profit of more than VND58.8 billion, a sharp decrease of 91.8% against 2013, instead of VND67 billion as it said it its unaudited report released earlier.

As reported by the Daily earlier, Petrolimex announced a loss of more than VND1.14 trillion in its unaudited financial report for the fourth quarter of last year. These losses reduced its profit to around VND4.8 trillion, well below its profit of VND1.57 trillion in 2013.

Explaining the business result differences, Petrolimex said the audited report reflected the impact of diving oil prices in the fourth quarter last year on its business. Moreover, the enterprise had to stock up on fuels for 30 days while the base price is calculated on an average of 15 days following regulations in Decree 83/2014/ND-CP.

However, according to a document obtained by the Daily, one of the major reasons behind Petrolimex’s poor performance last year was the heavy losses of its subsidiary Petrolimex Singapore, which was established in 2009.

Last year, Petrolimex Singapore ran a total loss of US$31.38 million due to the oil price plunge on global markets.

Investors look to Q1 earnings – brokerages

Securities companies said stock traders would keep a close watch on listed firms’ first quarter earnings amid the lack of supporting news and predicted capital would flow into shares of enterprises with good earnings and sound business plans this year.

Dau tu Chung khoan newspaper quoted Tran Hoang Son, strategy director of MB Securities Company, as saying that mid-cap stocks might report good earnings results in the first three months of this year. In addition, stocks that dropped sharply previously and high dividend payments would attract investors this week.

According to vietstock.vn, strong bottom fishing and foreign buying buoyed the market last week after a market crash in the week earlier.

The VN-Index edged down 0.61% at 574.85 and the HNX-Index dropped 0.57% at 81.93.

Matching volume on the Hochiminh Stock Exchange inched up 1.8% to over 430 million shares and put-through volume stood at 51.29 million shares, up around 70%.

On the contrary, the Hanoi market saw matching volume sliding 9% against the previous week at 165.6 million shares.

Large-caps like GAS, BID and VNM were VN-Index drivers during the week. Of them, GAS fell strongly on Monday and Wednesday and dragged the market down. Meanwhile, banking stocks performed well in the losing sessions, supporting investor sentiment.

Thursday saw the local market recovering thanks to bottom fishing on heavyweights and shares of the construction, realty, mining and securities sectors.  

Investors turned wary in the last session of the week although the market gained 1.47%.

Foreign investors shifted to the buying side on both bourses. The southern bourse saw net buying value reaching VND49.4 billion (US$2.3 million) worth of shares, mainly heavyweights BID, VCB and MSN. Notably, foreigners acquired VND148.9 billion worth of CII shares while offloading petroleum tickers GAS and PVD worth a combined VND266 billion.

On the Hanoi market, the investors net bought a slight VND500 million worth of shares, chiefly VCG, SHB and BVS.

Overall, the VN-Index in the first quarter rose 1.24% against the end of last year but dropped over 3% compared to the same period last year.

More enterprises optimistic about Q2

More local enterprises are looking to perform better in the second quarter of this year as shown in a recent survey conducted by the General Statistics Office (GSO).

The survey found nearly 88% of 3,245 respondents in the manufacturing and processing sectors nationwide believe that their operations in April-June could fare as well as in Q1 or even better given stable production and more orders.

The survey revealed a jump in the number of enterprises with optimistic views compared to 57% in the first quarter.

The findings of the survey are similar to the report released on Wednesday by HSBC. The report painted a better picture of Vietnam’s manufacturing sector in the first months of this year as both output and new orders rose on lower prices, signaling an improvement of business conditions in the sector.

The enterprises upbeat about Q2, according to the GSO, are those in the sectors of pharmaceuticals (82.1%), electrical equipment (69.6%), uniforms (65.4%),  electronics, computer and optical device (65.3%), tobacco (63.6%), beverages (62.8%), and food processing (60.7%).

The survey showed around 62% of State-owned enterprises (SOEs) expect better production and trading results this quarter while the proportion of foreign direct investment (FDI) companies is 59.6% and domestic private firms 52.7%.

According to the survey, only 12.3% hold a gloomy view on their business operations in the period.

As for goods orders, 88.3% of respondents hope their orders will stay stable or rise in the second quarter while only 11.7% are pessimistic about this quarter. The respective percentages in the first quarter were 68.1% and 32%.

Up to 60.8% of SOEs have higher expectations for good orders in April-June while the proportion of FDI firms is 57.3%. These enterprises are active in pharmaceutical (80%), electrical equipment (66.7%), uniform (61.7%), chemical (60.7%) and beverage (58.7%).

Despite a lower-than-expected rise of 6.9% in the country’s export revenue in Q1, more exporters (86%) are optimistic about a pickup in orders while those who project declining sales this quarter account for only 14%. The percentages in the first quarter were 75.3% and 24.6%.

Enterprises expecting better export performance operate in the sectors of tobacco (66.7%), pharmaceutical and chemical (64.7%), vehicle (56.5%) and leather and (55.7%).

According to the survey, 65% of respondents said their inventories will go up this quarter, well below the 70.1% in the first quarter.

Australia, VinaCapital Foundation donate medical equipment to Khanh Hoa

The Australian Consulate General in HCMC and VinaCapital Foundation (VCF) have handed over life-saving equipment to Khanh Hoa General Hospital in the central coast city of Nha Trang.

The Australian Consulate General said in a statement on April 2 that the gifts of one pediatric ventilator and 17 injection pumps are vital equipment additions to the hospital’s new Neonatal Intensive Care Unit (NICU) as they will allow the hospital to provide critical care to infants and children in need of hospital-based life support systems as the regional referral center for seven provinces.

“The pumps and ventilator will save one to three children’s lives every week. The increase in capacity will play a significant role in the continuing efforts to reduce mortality for children in Khanh Hoa and adjacent provinces,” the statement said.

The equipment donation is funded by the Australian Government’s Direct Aid Program (DAP) and part of VCF’s nationwide Survive to Thrive medical equipment provision program.

Australian Consul General, John McAnulty, said the consulate continued joining hands with VCF to improve the quality of life for low-income and disadvantaged communities in Vietnam.

“We are proud to support this vital project, the largest we have ever funded at VND988 million (over A$58,420) to ensure that local children have access to the medical facilities and care required to lead strong, healthy, happy lives,” McAnulty said.

VCF has worked with the Australian consulate general in previous years to improve the quality of health care for children in the south central region.

In 2014-2015, DAP has awarded grants to 22 projects in a wide range of sectors from community healthcare to small-scale infrastructure in Vietnam.

Financed by the Australian Government, DAP provides grants for small-scale development projects aimed at addressing humanitarian hardship and advancing developmental outcomes in disadvantaged communities.

DAP aims to make small grants available to community groups, NGOs, and other organizations that may not have access to large-scale aid or grants programs. Through DAP, the Australian Consulate General funds projects in various sectors including healthcare, education and small-scale infrastructure development.

DAP funding forms a small part of Australia’s non-refundable aid to Vietnam, which is expected to total A$141.3 million in the 2014-2015 financial year.

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

FoodPanda expands its northern market share, 8 transport BOT projects to start in Q2, Vietnam, React cooperate in combating counterfeit products, Property market recovers but price fever unlikely, HCM City apartment inventories fall by half
 
*
*
*
  Send