BUSINESS IN BRIEF 10/9

Survey: Locals prefer foreign employers

Employees in Vietnam have overwhelmingly chosen foreign-invested companies as the best places to work, with only a few local exceptions, according to a new survey by recruitment network JobStreet.com.

The survey for the second quarter attracted more than 2,500 employees in various industries.

Unilever Vietnam, a giant in fast moving consumer goods (FMCG), came first among the top 10 employers, followed by Vietnam Dairy Products Joint Stock Co (Vinamilk), Vingroup and technology firms Samsung, FPT, Viettel and Intel.

Nestle, P&G Group and Suntory PepsiCo rounded up the top 10.

Multinational corporations tended to be dominant in most industry-specific lists. For instance, Vinamilk was the only local player in the top five FMCG companies.

Domestic enterprises only outnumbered foreign-invested ones in retail and finance-banking sectors. Vingroup, FPT Shop, Viettel Store and The Gioi Di Dong (Mobile World) took the lead in retail, with Japanese retailer AEON the only foreign name in the top five.

In the finance-banking sector, employees favored the Bank for Foreign Trade of Vietnam (Vietcombank), Bank for Investment and Development of Vietnam (BIDV) and Saigon Thuong Tin Commercial Bank (Sacombank). They were ranked right above foreign-invested banks HSBC Vietnam and Citibank.

Among tech companies, two local enterprises FPT and Viettel came behind Samsung, but they managed to edge out Intel and Bosch Vietnam.

Job search websites also showed that foreign firms often organize recruitment events and large-scale programs at schools to attract talent.

Can Tho to host conference on Vietnam-France cooperation

Can Tho has announced a series of events between September 14 and 16 to promote economic and cultural ties between Vietnam and France, as part of a major conference billed as the biggest international gathering ever in the Mekong Delta city.

Organized by the local authorities in association with Cités Unies France (CUF), the tenth Vietnam-France locality cooperation conference will feature many events under the theme “Working towards becoming effective and sustainable business partners.” The CUF, also known as “French United local governments,” is a federation of French local and regional governments involved in international relations.

Truong Quang Hoai Nam, vice chairman of Can Tho, described the conference as the biggest international event in the city.

It will gather representatives from the region and 44 enterprises of France, as well as 800 participants from 40 localities across Vietnam, Nam said at a news briefing held on Monday to announce the event.

“We hope the conference will provide cooperation opportunities to Vietnamese and French organizations and enterprises,” he said.

Ho Thi Thanh Bach, deputy director of Can Tho’s Department of Foreign Affairs, said French localities and enterprises will organize five workshops at Muong Thanh Hotel.

Two of them will take place on September 14, focusing on economic, tourism, educational and healthcare cooperation. The other three on September 16 will approach other key issues such as climate change, urban development and cultural cooperation, she said.

Other  activities include a seminar to promote investment and trade between Vietnam and France on September 15, Vietnamese-French cultural days and the Vietnam-France international fair between September 15 and 17. Taking place at Can Tho’s Center for Investment, Trade and Expo Promotion, the fair will feature 300 Vietnamese and French localities and enterprises. There will be a cooking contest in which participants are asked to create dishes from tra fish and bake French bread.

According to the Department of Foreign Affairs, France ranked 16th among 114 countries and territories investing in Vietnam, with over 460 projects and a combined investment of US$3.42 billion as of late April.

Most of the investment came through joint-venture projects, which accounted for 24.5% of all projects and 35.38% of the total investment capital. They were followed by wholly foreign-invested projects with 340 projects worth US$1.12 billion.

There were also seven projects carried out under business cooperation contracts worth US$618 million, and one under the build-operate-transfer (BOT) model worth US$480 million.

Vietnamese firms have so far invested US$2.48 million in France.

Concerns over huge new coastal steel project

A steel project in south-central province of Ninh Thuan is facing public scepticism due to the recent mass fish deaths caused by Formosa’s pollution incident.

On September 6, Hoa Sen Group’s board of directors approved a decision to invest in a steel manufacturing complex in Ca Na Industrial Zone. Chairman Le Phuoc Vu persuaded other holders that Ca Na coastal area was the most suitable location for the complex. The total capital needed for both steel complex and Ca Na International Port is VND250bn (USD5.5bn) but Vu confirmed was proceeding according to plan.

The Vietnam Foundry and Metallurgy Science and Technology Association chairman Pham Chi Cuong raised concerns that drought in the area was so severe that sheep didn't have enough water so the steel complex could suffer water shortages. But Vu said they could exploit the sea.

On August 1, Hoa Sen Group asked Ninh Thuan’s provincial authorities to prepare clean water as they would need 33,000 cubic metres a day in the first phase and 180,000 cubic metres per day afterwards.

A few days later, the provincial authorities directed the Department of Construction to draft a plan to build water pipes from Phuoc Nam water supply plant to the complex. However, Phuoc Nam only has capacity of providing 30,000 cubic metres a day and still has to provide water to other provinces.

In addition, the drought in Ninh Thuan Province has become more serious in the past years. Many lakes have dried up and the agriculture suffered VND700bn (USD31.39m) in losses last year, 6,000 people lack clean water and over 2,000 sheep died in the first four months of this year.

In the report to Ministry of Industry and Trade, the provincial authorities had listed the scale, investor capacity and benefits from the project but didn't touch on the impact on local lives.

Hoa Sen Group chairman Le Phuoc Vu said that they would use western technology and an American consultant. But its consultant listed on papers is the CISDI Group, a Chinese corporation that helped build important constructions for Hung Nghiep Formosa Ha Tinh. This raised even more concerns with people who worry that there could be a disaster in Ninh Thuan Province like the one in Ha Tinh Province.

However, only the provincial authorities and the Ministry of Industry and Trade have given their approval. The project still needs to be submitted to the Ministry of Natural Resources and Environment, Ministry of Planning and Investment and the Ministry of Finance. Many hope the authorities will have solution to the problem.

Budget deficit to expand over remaining months

The pressure on the budget deficit will likely increase in the remaining months of this year due to the anticipated rapid rise of investments in capital construction. 

This was stated in a report by the National Financial Supervisory Commission (NFSC). 

NFSC in its latest economic report said budget deficit, as of August 15, totalled nearly 111.5 trillion VND (4.98 billion USD), equivalent to 43.8 percent of the estimate for the entire year. 

Although budget deficit dropped by 1.135 trillion VND against the same period last year, NFSC said that budget deficit would expand in the remaining months as investments in capital construction were rapidly rising. 

Disbursed investments in capital construction saw a significant increase in August, following Government Resolution 60/NQ-CP, dated July 8, NFSC said. 

As of August 15, disbursement in capital construction investments was equivalent to 42.2 percent of the estimate, compared with the 36.2 percent for the seven-month period. 

Budget collection from crude oil and state-owned enterprises (SOEs) was struggling due to low fuel prices as a result of stagnant state stake divestments. 

Vietnam’s crude oil selling price averaged 41 USD per barrel, 19 USD lower than the estimated price. 

According to the Ministry of Finance, only 10 trillion VND, or one third of the National Assembly’s plan, was added to the national coffer from selling stake in SOEs in the first eight months of this year. 

The ministry’s statistics revealed budget collection in August totalled 69.49 trillion VND, falling by 28.9 trillion VND from the previous month. State revenue totalled 649.46 trillion VND in the first eight months, or 64 percent of the estimate. 

The finance ministry said it would improve budget collection in the remaining months of this year by tightening tax management, especially tax arrears.

Vietnamese firms introduce green construction products in Singapore

Nearly ten Vietnamese businesses and organisations are showcasing their products at a green building exhibition in Singapore from September 7-9.

Sado Group, a leading construction glass exporter in Vietnam, is among the participants at the Build Eco Expo Asia (BEXASIA2016).

Statistics show that Vietnam exported nearly 500 million SGD (371 million USD) worth of construction materials in 2015, of which glass products account for 400 million SGD (297 million USD). 

Dien Quang Lamp JSC, which is well-known for environmentally-friendly and energy-efficient lighting products, also joins in the event.

The company’s Deputy General Director Nguyen Thai Nga said Dien Quang Lamp JSC wishes to cooperate with Singaporean companies to introduce its products in the country. 

Nguyen Viet Chi, Vietnamese Commercial Counsellor in Singapore, said through the exhibition, the participating enterprises can directly promote their products, seek partners and update themselves with green construction trends and solutions worldwide. 

Besides, nearly 50 speeches delivered by the world’s leading scholars at fringe workshops will provide them with lessons in this field. 

BEXASIA 2016 draws more than 450 businesses from 50 countries and territories in Asia, Europe and America.

Cities share SME knowledge

Representatives from member cities of the Business Partner City network shared their experiences in developing supporting industries and backing the development of small- and medium-sized enterprises (SMEs) at a roundtable in HCM City on Wednesday.

Pham Thanh Kien, director of the city Department of Industry and Trade, admitted the development of supporting industries in HCM City has met neither potential nor expectations.

He blamed it on several factors, including a dearth of funds and capable human resources, outdated technologies, and the lack of linkages between manufacturers and supporting industries.

Therefore, the city pays special attention to mechanisms and policies required to develop supporting industries.

It would continue to focus on attracting investment from SMEs to raise supporting industries' production capacity to meet demand from the city's four key industries (mechanical engineering, electronics - information technology, chemicals - plastics - rubber, food processing) and two traditional industries (garment and textile and footwear), he said.

Kevin Louey, chairman of economic development at the Melbourne City Council, said the Australian city has adopted measures to support SMEs, including directly connecting with the world's six largest cities to help the SMEs access other markets.

Delegates also discussed how to better exploit co-operation opportunities when the Trans-Pacific Strategic Economic Partnership Agreement comes into effect.

Nguyen Thanh Phong, Chairman of the city People's Committee, said with the rapid globalisation, countries need to enhance co-operation and support each other to develop.

Under the theme "developing supporting industry and new business opportunities for small- and medium enterprises", the meeting offered BPC member cities a good opportunity to exchange experiences and strengthen relations, especially in the field of supporting industries.

Tran Vinh Tuyen, deputy chairman of the city People's Committee, said the city offers great potential for foreign companies to operate.

Its links with other BPC member cities and organisations have enabled local SMEs to expand to foreign countries, he said.

The 2017 meeting will be held in Osaka. 

SBV seeks safer online transactions for customers

State Bank of Viet Nam (SBV) Deputy Governor Nguyen Kim Anh yesterday called for drastic steps to make online payments more secure.

He told an online conference held by the central bank that commercial banks and customers needed better protection against hi-tech attacks. Such attacks on the banking and finance sectors were increasing in number, he said.

He asked the Payments Department to intensify supervision of transactions and revise regulations covering credit institutions and intermediaries towards minimising risks in payment processes.

Anh directed the Information Technology Department to build a roadmap for applying international security standards in payment systems, including ISO 27001 and PCI/DSS for bank card payments.

Banking authorities will co-ordinate with the ministries of Public Security and Information and Communications in fighting IT scammers and guaranteeing cyber-network security, he said.

He also said that SBV branches would check on any interruptions in non-cash payment services of credit institutions and intermediaries between now and the end of October, and report results by mid-November. Anh also asked the National Payment Corporation of Viet Nam, formerly known as Viet Nam Financial Switching JSC, to assist banks in detecting and handling doubtful card transactions.

He urged credit institutions to thoroughly test their technological infrastructure, human resources and processes related to electronic payments, and submit reports to the SBV by October 30.

The institutions should regularly check ATM and point-of-sale (POS) systems to make sure that cameras, alarms and other antitheft devices are in good condition, and ensure no spy ware is illegally installed, he said.

Officials from the Ministry of Public Securities said yesterday that banking and finance networks were now prime targets for hi-tech attackers world-wide and new payment scams had recently emerged in Viet Nam.

The central bank had already directed relevant agencies to enhance security against risks and frauds in payment transactions last month, following the unearthing of several scams.

About VND500 million (US$22,500) was stolen from the account of a Vietcombank customer in Ha Noi last month, shocking account holders across the country. This is a huge sum of money in Viet Nam, where the annual per capita income is around $2,100.

However, Ministry of Public Security officials also said yesterday that Viet Nam's electronic payment systems were basically secure.

"The recent scams are rare. Customers should be more cautious about tricks criminals play cyber-space. They should not provide personal information to unreliable sources," Anh said. 

HNX issues new regulatory items for stock trading

The Ha Noi Stock Exchange (HNX) has issued some new regulatory items for stock trading, which come into effect on September 12. The new items are expected to increase market trading liquidity in the future.

Two main items are:

1. Investors cannot correct and cancel their orders set during the At The Close Order (ATC), including orders that are set at the uninterrupted trading period during the session.

This item aims to prevent investors from manipulate trading prices during the ATC.

2. Investors can set buy and sell orders at the same time for a specific stock during the uninterrupted trading period of the session.

This item will help investors to buy and sell a stock at the same time during the session, however, selling and buying a stock at the same time are forbidden during the ATC to avoid price manipulation. 

Higher import tax levied on imported used cars

The price of used cars imported from foreign countries will possibly be higher than the price of new vehicles following the Government's new calculation of import tax from September 1.

This was stated in a new decree issued by Prime Minister Nguyen Xuan Phuc.

Decree 122/2016 ND-CP showed that used cars with engine displacement of below 1,000cc will be taxed US$5,000, while used cars with engine between 1,000cc and 1,500cc will be levied $10,000.

Meanwhile, a mixed tax level for models with nine seats and lower and engine displacement from 1,500cc to below 2,500cc will be calculated as follows: import price multiplies according to the tax rate of the new similar model and adds $5,000. With regard to vehicles more than a 2,500cc engine, the import price multiplies in accordance with the tax rate of the new similar model and adds $15,000.

According to this calculation, the price of used cars will increase. For example, for a used Toyota Camry with an engine displacement of 2,000cc, which has an import price of $15,000, the import tax will be totalled at $15,500. The car's final price at customs will be $30,500.

This price does not include other taxes such as special consumption tax, value-added tax and corporate fees.

With this decree, the market keeps the door closed for the import of used cars.

The decree also mentions the import taxes for used vehicles with 10-15 seats. Taxes equaling $9,500, $13,000 and $17,000, respectively, will be levied on vehicles with engine displacement of 2,000cc and below, over 2,000cc to 3,000cc, and more than 3,000cc. 

Pack, print and foodtech expo to improve competitiveness

Two annual exhibitions by the packaging and printing and food processing industries will be held in HCM City next month.

The VietnamPack&Print will feature equipment, machinery and services related to packaging systems, carton manufacturing, jet printers, and printing quality control machines while Vietnam Footech will showcase additives and chemicals and food manufacturing technologies.

Mỹ Lan Group will show off their high-speed, high-security, environment-friendly technologies and Japan's UCHIDA will showcase its digital printing solutions for the food and pharmaceutical industries.

Organisers Vinexad and Chan Chao of Taiwan said the event would be a forum for buyers and producers to get together.

A seminar on quality management in the printing industry will be held on its sidelines.

More than 250 companies from Việt Nam, Singapore, Japan, Korea, Thailand, India, Hong Kong, Taiwan, and China have hired 440 stalls at the exhibition, which will run from October 12 to 15 at the Saigon Exhibition and Convention Center in District 7.

Cam Ranh International Port receives first cruise ship

The Bahamas flagship Legend of the Seas anchored at Cam Ranh International Port in Nha Trang City on September 8, bringing 1,800 visitors and 740 crewmen to the central coastal tourist destination.

cam ranh international port receives first cruise ship hinh 0 This is the first time the port has received an international cruise ship since its inauguration on March 8.

Most of cruise travellers are from China and the Republic of Korea. During their stay in Nha Trang, they have toured famous tourist destinations like Long Son Pagoda, and Ponagar Temple Towers.

At the welcome ceremony, leaders of Cam Ranh Port presented gifts to the captain and the first five visitors stepping on the quay.

Legend of the Seas weighs 5,200 tons and is 264m long, 32m wide and 49m high. It is scheduled to leave the port on September 9 afternoon.

Since its inauguration day, Cam Ranh Port has welcomed 14 naval ships from different countries.

Domesco removes foreign ownership limit

On September 6, Domesco Medical Import Export JSC (Domesco) officially removed its 49 per cent foreign ownership limit, according to information published on the company’s website.

On the same day, Domesco’s foreign shareholder CFR International SpA from Chile registered to buy two million shares, equalling a 5.76 per cent stake, to increase its holdings to 51.7 from 45.49 per cent. Domesco’s two foreign shareholders are CFE International SpA and Seutsche Bank Aktiengesellschaf & Deutsche Investment Management Americas Inc., with a 4.89 per cent stake.

Domesco is Vietnam’s third-largest domestic drug maker, with a market capitalisation valued at nearly VND3.3 trillion ($148 million) as of September this year.

This is the third company which the State Securities Commission of Vietnam has allowed to lift the foreign ownership limit, after Vietnam Dairy Product JSC (Vinamilk), the largest listed company, and Everpia Vietnam.

Domesco is the only drug maker that has agreed to remove its foreign ownership limit, while other leading domestic pharmaceutical firms, including Imexpharm (IMP), Traphaco (TRA), and Hau Giang Pharmaceutical JSC (DHG), refusing once again to change the cap.

DHG, Vietnam’s biggest publicly-traded drug maker, declared at its recent annual shareholders’ meeting that it would keep the foreign ownership limit (FOL) unchanged at 49 per cent.

IMP and TRA, which are two of the four biggest domestic drug makers, also decided to make no move related to the FOL at their annual shareholders’ meetings in May. IMP and TRA’s piece for foreign investors remained tiny, at 0.009 and 3.266 per cent, respectively, as of September 2015.

Works starts on 5-star hotel and trade centre complex in Tay Ninh

Vingroup, a giant in Vietnam’s real estate sector, kick-started a five-star hotel and commercial centre project in the southern province of Tay Ninh on September 8.

The Vincom Tay Ninh centre is located on a total area of 22,000 m2, including a 21-storey building, two basements and a commercial house complex with total investment capital of over VND1 trillion (US$45 million).

Vinpearl Hotel City is to occupy floors six trough twenty-one of the complex, with a capacity of 130 rooms in accordance with international standards. The remaining five floors of the tower will be for the commercial centre, while the Shophouse area offers both housing and trading services.

Speaking at the ceremony, Chairman Pham Van Tan of the Tay Ninh Province People’s Committee said that the complex had an important significance, as it marked the province’s 180th celebration of its formation and development.

The project not only opens up more opportunities for job creation, business and commercial services, but also promotes local socio-economic development, he said, adding that Tay Ninh would pay special attention and create favourable conditions for Vingroup and other investors to operate in the locale.

He also urged the project’s investors, consultants and contractors to comply with their commitments in the approved project and to follow provisions of law ensuring the project’s progress and quality.

The project is expected to be completed and put into operation by September 2018.

VEC to transfer expy operation rights to France’s Vinci

Vietnam Expressway Corporation (VEC) has agreed to work toward transferring the operations of Cau Gie-Ninh Binh and HCMC-Long Thanh-Dau Giay expressways to France’s Vinci Group.

The transfers of operations of the two expressways is part of a memorandum of understanding (MOU) clinched by VEC and Vinci Concessions, a member company of Vinci Group.

Under the MOU, the two sides will jointly work out a plan to transfer the operation rights of the two expressways. The plan will be submitted to competent agencies for consideration and approval.

VEC and Vinci Concessions will exchange experience and new technology in management and operation of expressways. They will study and propose ways of partnership between them to implement new expressway projects in the priority list until 2020 approved by the Ministry of Transport.

Vinci Concessions pledged to support VEC to approach new technology as well as manage, operate and maintain expressways in the country.

VEC said the MOU is a principle for the two sides to partner in accordance with Vietnam’s law. VEC expected that the partnership with Vinci would enable it to achieve a target of operating 1,000 kilometers of expressway in 2020.

Earlier at a meeting with the Ministry of Transport, Vinci Group expressed its interest in acquiring expressway operation rights and investing in new expressway projects in Vietnam.

Travel firms to ask insurers to cover Zika

Many travel companies in HCMC will request insurers to include the Zika disease in travel insurance contracts for their tourists to Singapore and Malaysia given the increasing Zika scare in the two regional countries.

Tour operators said there have not been many cancellations of bookings by Vietnamese visitors to Singapore and Malaysia. The two countries attract hundreds of thousands of Vietnamese travelers a year.

Tran Thi Viet Huong, marketing director of Vietravel, told the Daily that the company is sending six groups of 140 guests to Singapore until September 10 and schedules for the group remain unchanged.

Other tourist companies such as Fiditour, Ben Thanh Tourist, Viking and Viettours confirmed their ongoing Singapore and Malaysia tours for Vietnamese. But they are concerned that they will attract fewer bookings than usual if Zika infections in the two countries show no signs of letting up.

Travel firms are reviewing travel insurance contract terms for their guests to ensure that they will be insured against the disease while traveling to the countries. Some are willing to pay more for their insurance coverage to add the Zika disease to the contracts to protect their customers.

Luu Dinh Phuc, director of Viettours, said no customer had expressed concern about the Zika situation in Singapore and Malaysia. However, he said all insurance contract terms for the company’s guests would be checked carefully to make sure that they will be insured although insurance contracts contain terms on epidemics at destinations.

Huong said Vietravel is working with insurers to include compensation terms for guests. In addition, the company provides face masks and hand sanitizer for travelers.

Tran Xuan Hung, director of Viking, said he has contacted insurance companies to discuss compensation terms for customers. Insurance firms are unsure about it but have promised to calculate appropriate compensation for travelers.

Hung said the current travel insurance contract for customers only specifies that tour operators are required to report to their insurance firm partners when their guests enter Zika-hit areas.

However, travel companies like Fiditour assumed that customers would be compensated when they are infected by diseases including Zika as stipulated in travel insurance contracts.

Vietnam discusses IDA “graduation” with WB

Vietnam’s Minister of Planning and Investment Nguyen Chi Dung discussed with WB senior officials the preparations for Vietnam’s “graduation” from IDA capital sources during his visit to the US beginning September 6.

Dung held a working session with the World Bank (WB)’s Vice President of Development Finance Axel van Trotsenburg, WB Vice President for the East Asia and Pacific Region Victoria Kwakwa and WB Country Director in Vietnam Ousmane Dione, during the first day of the visit.

The Minister appreciated the WB’s provision of international development assistance (IDA) and policy assistance for Vietnam, noting that though Vietnam has become a lower middle-income country and will stop receiving IDA soon, the nation still needs more of WB’s capital for development.

He affirmed that the Vietnamese government will continue restructuring the economy, especially public investment, commercial banks and State-owned enterprises, while continuing to realise international commitments such as the 2030 Agenda for Sustainable Development and the Paris Agreement on Climate Change.

On Vietnam-WB cooperation, he suggested the WB assist Vietnam in devising a strategy to attract foreign direct investment, building a comprehensive master plan on regional development, as well as in the fields of technology transfer besides the traditional fields of health care, education and climate change.

Trotsenburd, for his part, pledged to work closely with Vietnam to ensure a smooth IDA graduation and improve the efficiency of using the WB-funded official development assistance.

According to him, a final decision on support for countries to be graduated from IDA will be made at a meeting slated for October.

On the occasion, Kwakwa introduced Minister Dung to the newly-appointed WB Country Director in Vietnam, who will begin his tenure in mid-September.

During a meeting with a WB team working on the Doing Business 2017 report, Dung shared the Vietnamese government’s priorities on developing the private sector, improving business climate and national competitiveness, supporting start-ups and boosting administrative reform.

At another session with the WB department for studies on global and regional economic prospects, Dung spoke highly of the result of the research project on economic prospects of the world and East Asia, including Vietnam.

He agreed with the WB’s viewpoint on challenges to the recovery of the world and regional economy, and asked the WB and experts to make policy recommendations to the Vietnamese government in the context.

State bank: credit up 9.09 pct from late last year

The State Bank of Vietnam announced on September 7 that credit rose 9.09 percent from the end of 2015 as of August 23, most of them poured into production and priority fields set by the government. 

Lending for agriculture and rural development was estimated at nearly 900 trillion VND as of August, up 6.64 percent from late 2015, accounting for nearly 18 percent of the total outstanding loans of the economy. 

As of August 15, four State-owned commercial banks signed credit contracts worth 6.57 trillion VND to build 590 new fishing boats and upgrade 73 others. 

Fishermen in the provinces of Nghe An, Ba Ria - Vung Tau, Binh Thuan, Ninh Thuan, Tien Giang, Thua Thien-Hue, Quang Ngai, Quang Binh, Quang Tri, Quang Nam and Ninh Thuan began paying debts for shipbuilding. 

As of the end of the second quarter this year, 540 dialogues were held in all 63 cities and provinces nationwide between banks and businesses to seek ways clearing difficulties in debt payment facing more than 50,000 firms and 120,000 other debtors, including cooperatives and household businesses. 

New loans committed by banks in the period totalled more than 800 trillion VND to businesses, marking a four-fold increase from the late 2014, with interests ranging from 6-9 percent per annum for short-term loans and 9-11 percent per year for long-term ones. 

Fishermen affected by unusual fish deaths in the central coastal provinces of Ha Tinh, Quang Binh, Quang Tri and Thua Thien-Hue are enabled to enjoy interest waive and reduction. 

As of August 15, banks offered new loans worth nearly 300 billion VND to more than 3,700 affected fishermen.-VNA

Conference discusses experience in supporting SMEs

Orientations for support industry development and experience in supporting small- and medium-sized enterprises (SMEs) were focused at the Business Partner City (BPC) 2016 conference which took place in Ho Chi Minh City on September 7.

In his speech at the event, Chairman of the Ho Chi Minh City People’s Committee Nguyen Thanh Phong stressed that the city has made active contributions to the activities of BPC Community since it joined the network 19 years ago.

The conference offered a good chance for the network’s member cities to enhance links, especially in support industry, thus promoting bilateral and multilateral economic cooperation, he said.

Informing participants about measures to develop support industry and business opportunities for SMEs, Director of the municipal Department of Industry and Trade Pham Thanh Kien said the municipal authorities should pay special attention to building mechanisms and policies facilitating support industry development.

HCM City needs to actively attract foreign direct investment to help improve the support industry’s production capacity, he added.

Koh Ching Yu, director of an international relations centre of Singapore in HCM City said there are many opportunities for Singaporean companies to develop in the city, especially in manufacturing, tourism, petroleum, electricity and energy if they can fully tap advantages from free trade agreements signed between Vietnam and partners.

Meanwhile, Phairush Burapachaisri, Vice Chairman of the Thai Chamber of Commerce revealed that his country is focusing on developing a digitalization era and startup movements with many new industries. It is also creating opportunities for SMEs to develop infrastructure in various fields such as interprovincial rail routes, public transport networks and highways connecting with neighbouring countries.

Chairman of Australia’s Melbourne Economic Development Portfolio Kevin Louey said his city, which boasts sustainable economic development and skilled labour, has encouraged SMEs to promote innovation and creativity and boost exports.

Participants to the event discussed measures to boost development of support industry and SMEs.

A seminar to directly connect 100 enterprises in HCM City and those from BPC member cities was arranged in the framework of the conference.

The BPC network, grouping Hong Kong, Singapore, Bangkok, Kuala Lumpur, Manila, Seoul, Shanghai, Mumbai, Melbourne, Tianjin, Osaka, Jakarta, Auckland and Ho Chi Minh City, helps promote business interaction within the Asia–Pacific region, contributing to economic development of each member city.

Its aim is to create opportunities for SMEs to establish links with their counterparts in the network. 

Doubts over 5% average lending interest rate target

Banking experts have expressed a great deal of scepticism at the government's target to cut the average lending interest rate to some 5 per cent.

This rate is equivalent to the average level of developing countries by 2020, as stated in a draft plan on economic restructuring being circulated for public opinion.

According to the plan drafted by the Ministry of Planning and Investment for the 2016-2020 period, the rationale behind the target is based on the government's willingness to raise the confidence of enterprises in the stability of the interest rate in the long and the medium-term, thereby encouraging more investment activities.

"Though the target has been applauded by many borrowers, in my point of view, it is unfeasible in the next few years," Chau Dinh Linh, a lecturer at the HCM City-based Banking University, wrote in a commentary for cafef.vn.

It was also contrary to the other objective mentioned in the draft plan -- that the inflation rate must be maintained at 5 per cent by 2020 -- Linh said.

The lecturer explained that if banks wanted to keep the lending rate at 5 per cent, they would have to offer a deposit interest rate below 5 per cent to be profitable. However, no one wanted to put money in banks if the interest he/she got could not cover the inflation. In this case, depositors would lose their money.

Therefore, the targeted inflation would hinder efforts to push down the lending interest rate.

Besides this, commercial banks' provisions for bad debts would continue to be a big cost for them, and they would have to maintain operational efficiency by raising the interest rate, Linh added.

As long as bad debts were not tackled, the lending interest rate of 5 per cent would be difficult to achieve, Linh stressed.

In its report on the economic situation in the first eight months of the year, the National Financial Supervisory Commission (NFSC) also said the reduction of lending interest rate is less likely due to the slow progress of bad debt settlement.

According to the commission, the bad debt ratio of the whole commercial banking system as of June this year is 2.78 per cent, an increase of 0.23 percentage points compared with the end of last year.

Meanwhile, expert Can Van Luc said setting a target for lending interest rate in the next five years seemed to be an administrative order not suitable in the context of the country's increasing integration and not in tandem with its effort to be recognised as a market economy.

"Cutting interest rate of loans to below 5 per cent is really a big challenge for commercial banks," Hoang Viet Trung, deputy director of the State Bank of Viet Nam's Ha Noi branch, said.

He said the feasibility of the target depended on many economic factors, including the stability of dong value, inflation rate, capacity of credit institutions and the supply-demand relation between depositors and lenders.

Falling inter-bank rate not connected with lending rate

According to the NFSC's report, in August, inter-bank rates continuously declined by 0.3-0.5 per cent across all tenors compared with figures from the previous month and maintained low levels.

Bao Viet Securities Corporation reported on Tuesday that the rates of three tenors – overnight, one-week and two-week – over the past week fell to below 0.8 per cent per year. In particular, the overnight rate dropped below 0.5 per cent per year on a particular day -- a historic record.

Early this year, the rates of the three tenors hovered at some 5 per cent per year.

Vice Chairman of the National Assembly's Economic Committee Nguyen Duc Kien attributed the situation to the banks' abundant liquidity and their improvement in ability to raise capital.

Nguyen dinh Tung, general director of the Orient Commercial Joint Stock Bank, said "the low inter-bank rates can be traced back to the slower pace of credit growth and the banks' obedience of the State Bank of Viet Nam's loan-to-deposit ratio regulation." 

Under the regulation, the central bank requires commercial banks to keep the ratio at 80 per cent, meaning that if a bank can raise deposits amounting to VND10 trillion, it is allowed to lend a maximum of VND8 trillion and the rest can be used in the inter-bank market.

However, both Kien and Tung admitted that the drop in the inter-bank rate would not be followed by a decline in lending interest rates, as expected.

Tung affirmed that the idle capital would not be lent to enterprises. It would only be used to ensure liquidity, he added.

Meanwhile, Kien said the ability to reduce lending interest rates relied on the stability of the macro-economic conditions and enterprises' ability to absorb and use capital efficiently.

Vietnam badly in need of auto parts suppliers

Automobile makers in Vietnam cannot take advantage of the booming demand for cars of the people due to a sore lack of parts suppliers.

vietnam badly in need of auto parts suppliers hinh 0 Auto sales in Vietnam have been on a sharp increase lately. According to data released by Vietnam Automobile Manufacturers’ Association, this year’s sales till the end of July stacked up to 123,978 units, up 35 per cent on-year. Imports in the period rose 24 per cent on-year to 39,889 units.

The demand is set to continue on its trend of growth in the upcoming period, according to a research produced by the Industrial Policy and Strategy Institute under the Ministry of Industry and Trade (MoIT) and presented yesterday at the conference on development of the automotive and auto parts industry in Vietnam organised by the Japan International Cooperation Agency and the MoIT.

According to the research, the “golden” population structure, consisting of a high percentage of young people, is going to last till 2030. Meanwhile, the middle class is going to expand, with income per capita levels increasing from $2,111 to an expected $3,000 per year by 2020.

Vietnam’s transport infrastructure is going to improve, with highways linking provinces and the north-south highway being completed, which is expected to make transport by personal vehicles easier. These factors all point to an increase in the demand.

The sharp increase in the demand poses great potential for the auto industry. However, car manufacturers in the country are poised to hit difficulties in expanding production because of a distinct lack of parts suppliers that are able to meet their standards.

Moreover, according to a recent research by Professor Kobayashi Hideo from Waseda University, most parts suppliers in Vietnam are of a small scale in terms of both capital and human resources.

Decree No.111/2015 /ND-CP issued by the government on growing the supporting industries outlined multiple incentives for companies in supporting industries, such as receiving partial financial support for research and development activities, or tax and import tariff cuts.

“These incentives should be modified a little bit so that it is easier for companies to access them,” said Truong Thanh Hoai, director of the MoIT’s Department of Heavy Industry.

Hoai said that the ministry is in the process of getting government approval on a programme to grow supporting industries from now to 2025. 

“We hope the programme is going to receive funding and be implemented soon,” he said.

All companies, domestic and foreign alike, will be eligible.

Vietnam is going to remove import tariffs on a host of products from the ASEAN bloc, including completely built units. The Vietnamese auto industry risks disappearing if its products cannot compete with imports.

10 local builders attend Singapore trade expo

Ten local companies have sent representatives to attend one of Southeast Asia’s premier green building tradeshows – BEX Asia (September 7-9) – at the Marina Bay Sands in Singapore, reports the Vietnam News Agency.

The size of the group is a sign that local builders are increasingly looking towards Southeast Asia as a growth market and are becoming more aware of the need to keep up to date with the latest technologies to remain competitive in the local market.

Held during Singapore Green Building Week 2016, the expo, expected to attract 12,000 visitors, focuses on building green, smart living and provides participants a networking and knowledge-sharing platform for the entire Southeast Asian region.

Continuing the tradition of previous exhibitions, this ninth edition of the event also houses dedicated market pavilions from mainland China, Taiwan and Singapore, consolidating in-country exhibitors for an overview of game-changing solutions of local relevance to the regional audience.

Among the many top brands attending this year’s event are Anacle Systems, Nippon Paint, Akzo Nobel Paints, Camfil, Fuji SMBE, Kansai Paint, LifeSmart Singapore, Mun Hean, Parex Group, REC, and ST Electronics.

Expansion work begins at Cam Ranh Airport

On September 8, work got underway on an expansion of the passenger terminal at Cam Ranh Airport in Khanh Hoa Province, which will eventually be able to accommodate eight million passengers annually.

The need for the terminal expansion has been felt for some time now, said Nguyen Nhat, deputy minister of the Ministry of Transport, in a speech at the ground breaking ceremony.

He said the project has a total budgeted cost of US$180 million but that it is spread out over three phases to be constructed through 2030. Phase 1 will increase the capacity of the terminal to accommodate 2.5 million passengers per year.

While phase two will bump it up to four million passengers annually with phase three reaching a capacity of eight million passengers by 2030. Minister Nhat didn’t elaborate on how the construction would be financed.

The terminal expansion is expected to have an enormous influence on the development of the region and on its business community, he said, noting at the same time the scope for establishing business parks around the airport is being improved.

Also important for the region is the project’s effect on local employment. It is estimated to provide hundreds of jobs during the construction phases and hundreds more jobs when the terminal is in operation.

It is hoped the expanded terminal will make the region even more attractive as a centre for all kinds of events, conferences, congresses and fairs, and as a place of learning and research, as well as for tourism and business activity.

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

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