BUSINESS IN BRIEF 27/2

Kuwait eyes US$1 billion trade with Vietnam

Kuwaiti Consul General in Ho Chi Minh City Omar Al-Qenael has voiced his hope that two-way trade between Vietnam and Kuwait will exceed US$1 billion in the next few years.

The Consul General was speaking at a February 25 ceremony in HCM City marking the 53rd National Day and the 23rd anniversary of the Liberation Day of Kuwait.

The Kuwait-Vietnam relations have developed constantly for decades demonstrated in various cooperation areas while their trade ties have grown rapidly, reaching US$740 million in 2013, Omar Al-Qenael said.

He cited the Nghi Son oil refinery and petrochemical complex as one of Kuwait’s high-profile joint ventures in Vietnam.

Vietnamese businesses should be more proactive in market survey and marketing their products in Kuwait through trade fairs or exhibitions which will provide good opportunities for information sharing.

Municipal People’s Committee Vice Chairman Le Thanh Liem affirmed his city’s willingness to facilitate Kuwaiti investment and applauded the Consul General’s idea of calling for Vietnamese investors to come to Kuwait to seek opportunities.

Liem also used the occasion to congratulate Kuwait on its achievements recorded over the past years, including a 4.5% growth rate last year, the second highest in the Persian Gulf.

Farm exports hit US$4.33 billion in two months

Agro-forestry and fishery exports in the first two months of 2014 jumped 9.4% from a year earlier and reached US$4.33 billion, according to official statistics.

Statistics of the Ministry of Agriculture and Rural Development (MARD) also report that exports of major farm products dropped sharply by 20.5% to US$1.73 billion.

Seafood exports shot up 23.5% and fetched US$919 million and key forestry products skyrocketed up 30.2% to US$837 million, compared to the same period last year.

Rice exports in the first two months hit US$154 million, while other key export items seeing continual export growth included coffee (US$254 million), rubber (US$80 million, cashew nuts (US$57 million), pepper (US$63 million), seafood (US$335 million), and timber products (US$263 million).

Viettel boosts foreign market expansion

Military-run telecom group Viettel recently announced that telephone exports comprised at least 90% of its total sales in 2013.

“The domestic mobile phone market has become saturated” said, the group’s Research and Production Department Head Luu Quang Truong.

“Therefore, the group has devised a bold business plan that targets expansion in foreign markets both in investment and sales.” he added.

Viettel is invested heavily in markets such as Laos, Cambodia, Mozambique and Haiti, Truong said, and these markets accounted for 60% of last year’s total sales, largely attributable to well developed in-depth nationwide distribution channels.

These distribution channels give out us a competitive edge and an advantage in delivering our products to customers, he continued. Viettel aims to expand investment to many nations.

In the future, Viettel is eyeing investment in the telecoms sector in markets such as Peru, East Timor, Tanzania, Cameroon, and Burundi that have a potential combined market of roughly 70 million customers.

Truong postulates that these are huge markets where sales of its terminal equipment will explode.

The most significant problem facing the group is increasing its localization rate.

The group’s rate currently remains low and it is dependent on importing key components which add significant costs.

By increasing the localization rate the group will be better able to control the overall quality of its products at a more economical price, bringing more value to the customer and concurrently providing an economic boost to the nation.

Viettel’s telephone products are becoming ever-increasingly more popular in foreign markets, especially some smart phones such as the V8404, 8403, i67 models which sell for an average price of VND900,000 -VND1,400,000.

These are “Made by Viettel” and “Made in Vietnam” products which are designed by the group and manufactured on its modern production line, Truong concluded.

HCM City beefs up cooperation with Australian region

Ho Chi Minh City and Australia’s Northern Territory on February 25 inked a memorandum of understanding (MoU) allowing the two sides to strengthen their friendship and cooperation in the time to come.

The document was signed by Chairman of the municipal People’s Committee Le Hoang Quan and Chief Minister of the Northern Territory Adam Giles in Ho Chi Minh City on the occasion of the latter’s working visit.

Both sides will share experience and foster collaboration in a wide range of areas, including education and training, fishery, agriculture, cattle breeding, trade promotion, tourism and environmental protection.

They agreed to deepen their engagement in each other’s key trade and investment promotion activities, while assisting the two governments in considering and approving cooperation opportunities in such fields.

Both leaders shared the same view on the necessity of further boosting the connectivity between the two localities in the future, which they agreed will fuel the economic and strategic development of both sides.

Ho Chi Minh City and the Northern Territory will beef up their cooperation by enhancing exchanges of high-ranking delegations in both governmental and business areas.

EuroCham: Vietnam’s business climate improving

The 14th quarterly EuroCham Business Climate Index (BCI) survey released on February 25 showed that business confidence and outlook among European businesses in Vietnam improved remarkably.

For the first time since 2012 the index has exceeded the 50-point threshold to reach 59 points, affirming European enterprises’ confidence in the Vietnamese market, it said.

According to the European Chamber of Commerce in Vietnam (EuroCham), the remarkable rise is likely due to the increasing optimism in the business outlook and turnover during the Lunar New Year festival, plus falling inflation concern, enhanced trust in macroeconomic prospects and a hope for the conclusion of a feasible and effective Free Trade Agreement (FTA) between Vietnam and the EU.

Nearly half of the businesses involved in the survey operate in the service sector, one quarter in the manufacturing sector, one fifth in trade, and the remaining in other sectors.

The number of respondents reporting satisfactory business outcomes rose from 38% last quarter to 45%. This showed that business operations have much improved.

Businesses said that they will increase investments in Vietnam as the country boasts a large market size and effective business opportunities, low labour cost and a young population.

The positive development in investment plans and expected business orders has translated into increased recruitment plans, with many respondents expecting to slightly increase their headcounts.

EuroCham Chairman Preben Hjortlund commented that he is glad to see the BCI reach 59.

EuroCham will continue to work with the Vietnamese Government to create practical benefits for the business community in order to ensure this positive progress, he stressed.

Since its establishment in 1998, EuroCham has grown from 60 members to represent more than 750 European businesses, counting among its supporters many of the world's leading enterprises.

Handbook on Vietnam’s support industries published

The State Bank of Vietnam (SBV) in collaboration with Japan International Cooperation Agency (JICA) on February 25 announced the publication of a handbook for use by Vietnam’s support industries.

The manual aims to provide guidance to small and medium-sized enterprises (SMEs) in the industry on methods of evaluating business risk, techniques for making equipment investment decisions and marketing tips.

According to Chief Advisor of SMEFP III (Small & Medium Enterprise Finance Program) Manabu Tsurutani, many support industry SMEs want to access bank loans for investment in future business projects.

However, most of the surveyed enterprises reported that they find it difficult to access bank loans due to their lack of formal business plans and familiarity with requirements and procedures for obtaining mortgages, including the various types of credit available.

Tsurutani also suggested that banks should work closely with machinery retailers to clarify the various types and methods of obtaining appraisals to facilitate the processing of loan applications by SMEs.

Vinamilk imports 5,000 cows from Australia

Vietnam Dairy Products JSC (Vinamilk) received two hundred dairy cows from Australia on February 25, the first shipment out of a total of 5,000 it plans to import during 2014.

As part of its business strategy to deal with strongly fluctuating world milk prices Vinamilk has embarked on investments in dairy farms to supply its processing plants quality product and increase the rate of localization.

In the 2014-2015 period, Vinamilk will open a total of four additional dairy farms in Tay Ninh, Ha Tinh and Thanh Hoa, bringing the total to nine stocked with approximately 46,000 cows.

The strategy is expected to assist Vinamilk increase its output to around 50 million litres per year.

Dung Quat oil refinery celebrates five year anniversary

Binh Son Oil Refinery located in the central province of Quang Ngai celebrated its fifth anniversary of operations on February 25.

In the short five years since production began, its products have gained high stature and recognition by the Ministry of Science and Technology for outstanding quality.

So far, the plant has processed nearly 29 million tonnes of crude oil and sold over 26 million tonnes of a variety of products, fetching total revenue of nearly VND520,000 billion.

It has also contributed VND81,000 billion to the State budget.

Addressing the ceremony, Secretary of the Quang Ngai provincial Party Committee Vo Van Thuong applauded the contributions by the plant toward the province’s socio-economic development.

He pledged his best efforts to assist the refinery expand and transform the Dung Quat Economic Zone into the national oil refinery industrial park.

Vietnam helps Laos develop seed varieties

The Southern Seed Joint Stock Company on February 25 inaugurated a representative office in Laos as part of cooperation project with the Lao Ministry of Agriculture and Forest.

The inaugural ceremony was attended by Vietnamese Trade Counsellor in Laos Tran Bao Giam, leaders of the Southern Seed Joint Stock Company, and prominent officials from both countries.

Director General of the Southern Seed Joint Stock Company, Hang Phi Quang, said his firm has provided a variety of maize for Lao farmers since 1998.

Last year, the company supplied 20% of the total volume of maize varieties to Laos, and expect the figure to rise by over 30% in the next two or three years.

It also exported different types of seeds to the Lao market including rice, bean and vegetable, along with organizing training courses to help Lao farmers increase productivity.

Lao officials said they hope the newly-established representative office will make significant contributions to reducing the poverty rate in Laos and strengthening the bilateral time-honoured relationship.

Quang Nam intensifies investment to entice investors

The People’s Committee of Quang Nam province is investing more than VND360 billion in  upgrading the Tam Thang Industrial Park (IP) in Tam Ky city to attract investors to it.

Provincial People’s Committee Vice Chairman Huynh KhanhToan said that to raise the funds, the province had to mobilize capital sources from the State budget and Chu Lai Industrial Park One Member Co, Ltd, the primary investor in the park.

Additionally, the province has put legislation in place that provide a legal basis to control investment in the IP, lease lands in it as well as for granting licenses for construction projects.

Over 411,000 tonnes of rice shipped in first two months

Vietnam's rice exports during the first two months of the year surpassed 411,364 tonnes valued at US$206.568 million, according to the Vietnam Food Association (VFA).

Last year, the country exported 6.68 million tonnes, as exports lulled to their lowest level since 2010.

At present, the price of dried paddy at stores in the Mekong River Delta is hovering around VND5,450-5,600 per kilo while the price of long-grain paddy is holding steady at about VND5,750-5,900 per kilo.

The price of 5% broken rice ranges from VND8,200-8,300 per kilo while 15% broken rice varies from VND7,850-7,950 per kilo and 25% broken rice at VND7,600 -7,700 per kilo, depending on each locality.

Vietnam is forecast to export around 6.5-7 million tonnes this year.

Central Highlands region to build more irrigation works

The Tay Nguyen (Central Highlands) provinces will build about 950 irrigation works to 2020, according to the Central Highlands' Steering Committee.

The irrigation works include 670 reservoirs, 250 dams and 30 pump stations.

The region will also upgrade about 590 kinds of existing irrigation works by 2020.

The total investment capital for upgrading and building irrigation works is estimated to be VND79 trillion (US$3.7 million).

The capital will come from the State budget, Official Development Assistance loans, investors and local residents.

The upgrading and building of the irrigation works will help to increase the supply of irrigation water to more than 80 per cent of the region's farmland by 2020.

As of the end of last year, the region's irrigation works supply irrigation water for nearly 71 per cent of the region's farming areas that are in need of it.

To date, the region has built a total of 2,115 irrigation works, including 1,035 reservoirs, 970 dams and 110 pump stations, according to the steering committee.

Existing irrigation works have helped expand the region's farmland to nearly 1.9 million hectares.

Of the area's 561,534ha of coffee, 232,600ha have water accessed from irrigation works.

In these areas, farmers can grow two to three crops a year and achieve a yield two to three times higher than areas without irrigation works.

However, many small- and medium-size irrigation works in the region are in disrepair as they have not been maintained properly, according to several government agencies.

The region has a total area of 54,474 sq.km, accounting for 16.8 per cent of the country's total area. The area's soil and climate is suitable for cultivation of industrial trees like coffee and rubber.

US businesses keen on Vietnam market

High-level executives from 33 leading US companies, who are sanguine on prospects for doing business in Vietnam, attended the annual US-ASEAN Business Council (USABC) in Hanoi on February 24.

This year’s event saw an increase of 11 businesses compared to last year’s – a clear signal that the US business community views Vietnam as a lucrative investment location and they are waiting for the pending Trans-Pacific Partnership (TPP) to be signed.

USABC President Alexander C. Fedman explained one of the main reasons for the keen interest of the US businesses is that the macro-economy in Vietnam has improved significantly and the inflation rate and exchange rate has been kept in check.

When Vietnam signs the TPP agreement, US businesses will have added incentives to invest, he said, adding that a number of US businesses, currently operating in Vietnam, revealed that they will double their production capacity once the agreement is inked.

Vietnam- the most attractive investment destination in ASEAN

A representative from the Boeing Group said that the aviation market in Southeast Asia is exploding and that Vietnam has the potential for becoming the most competitive market in the region.

The President of Boeing Southeast Asia, Ralph L.Boyce, said Vietnam’s economy has turned the corner and is on a bright path to full economic recovery as evidenced by its high GDP growth rate of more than 5% last year.

Boeing is bullish on the Vietnam market and stands ready to fully support and back Vietnam airlines to obtain its targets, he said.

At the meeting, the US business representatives proposed the Vietnamese Government continue with measures to improve the banking system, restructure the macro-economy and deal with non-performing loans.

The US has high hopes of breakthroughs at the ongoing TPP ministerial meeting in Singapore, and TPP members expect to sign the trade pact in the fourth quarter of this year.

Central Highlands’ development plan given go-ahead

The Central Highlands region aims to achieve average annual GDP growth of 7.9% from 2011-2015 and 8.7% over 2016-2020.

The target was set in the region’s development plan for the 2011-2020 period recently approved by the Prime Minister.

The development plan is consistent with the national socio-economic development strategy and fully taps into the region’s strengths for rapid and sustainable economic growth.

It also specifically targets accelerating international integration as a key undergird to support economic growth, in addition to expanding cooperation with other localities and regions in the country.

The plan also addresses the need for a more effective growth model that harmonises the natural resources and the urban infrastructure of the region in an economical and effective manner .

Specifically the region aims to raise GDP per capital income from VND24 million in 2015 to VND46 million by 2020 and adjust the economic mix of agriculture-industry-services to 34.7%, 35% and 30.3% by 2020.

The target for annual average export growth is 17% for the 2011-2015 period and 15.5% for the 2016-2020 period.

It aims to reduce malnutrition for children under 5 years old to below 16% and maintain a 3% unemployment rate for those of working age, popularising junior secondary education for 50-60% of communes and raise trained employment rate to 50-55% and forest coverage to 59% by 2020.

The region strives to maintain security, political stability and social order, strengthen unity among ethnic groups, consolidate national defence and build provinces into firm defence areas.

The Central Highlands region will strengthen State management of land, natural resources, minerals and the environment, and ensure land use is in line with socio-economic development orientations and security and national defence tasks.

The provinces will better implement the agriculture and population resettlement program for ethnic minority groups, especially those vulnerable to natural disasters.

They will also concentrate on developing key industries, especially agro-forestry processing and rubber and coffee processing plants up to international standards.

Over 1 million tons of contracted rice yet to be shipped

Over one million tons of rice that has been contracted with foreign buyers has yet to be shipped though rice traders already exported 307,000 tons in January, according to the Vietnam Food Association (VFA).

Based on the preliminary statistics, the volume of pending contracts totals about 1.047 million tons, an increase of 39% compared to the same period last year. Of the amount, contracts signed directly with foreign traders total 763,000 tons and contracts under government-to-government 284,000 tons.

Some member enterprises of VFA noted that January’s exports were lower than the corresponding period as much of the volume was shipped to the Philippines under the government-to-government agreement signed in 2013 while exports to China and Africa dropped significantly over the past time.

VFA in a report confirms the situation, stating that January’s rice exports declined 24.11% in volume to 307,200 tons but tumbled 30.52% in value to US$127.5 million, with the average export value of US$415.14 a ton.

Speaking at a conference last week on rice exports in the coming time, a representative of VFA said the global rice market is unpredictable pending new factors.

According to VFA, some key factors with possible adverse impacts on Vietnam’s rice export include the political uncertainty in Thailand, the yield of the 2013-2014 winter-spring crop in the Mekong Delta, and China’s and Africa’s demand for rice.

Duong Van Men, a rice trader in Lap Vo District of Dong Thap Province, said local rice prices in the Mekong Delta ranged between VND7,150 and VND7,200 a kilo, while fresh paddy of the type IR 50404 were between VND4,700 and VND4,850 a kilo, a slight rise of VND50 – VND100 compared to last week.

According to www.oryza.com, a website on the world’s rice trade, the export rice prices of the three biggest suppliers namely India, Vietnam and Thailand remained stable. Particularly, the prices of 5%-broken rice fluctuated from US$390 to US$400, from US$415 to US$425 and from US$450 to US$460 a ton in Vietnam, India and Thailand respectively.

Shrimp exports see bright prospect

Shrimp exports are expected to rise strongly this year given positive signals from importing markets, prompting many households to keep on farming shrimps despite the threat of ongoing diseases.

According to the Vietnam Association of Seafood Exporters and Producers (VASEP), Japan’s Ministry of Health, Labor and Welfare last month announced to raise allowable ethoxyquin residue, an antibiotic substance used in feed production, in Vietnamese shrimps from 0.01 to 0.2 milligram per kilo.

In addition, Japan has also removed the regulation of ethoxiquin check on all shrimp shipments from Vietnam. This is an opportunity for Vietnamese firms to increase shrimp exports to Japan, said a VASEP leader.

Data of the General Statistics Office (GSO) showed that Vietnam’s seafood exports to Japan with shrimp being the key product hit over 108,000 tons worth US$1.1 billion in 2013, up nearly 3% against the previous year.

In addition, shrimp exports to the U.S. and the European Union (EU) have bounced back strongly in recent months. In the Jan-Sept period in 2013, shrimp exports to the U.S and EU reached US$543 million and US$264 million, up 63% and 15% year-on-year respectively.

Given the positive signs, VASEP expects the nation’s shrimp export value at US$3.5 billion this year. In 2013, shrimp exports generated over US$3 billion.

However, VASEP Chairman Tran Thien Hai said that the success largely depends on enterprises’ control over impurity injection problem. Exporters should also take advantage to boost exports while Thailand, China and Malaysia are facing shrimp diseases.

Sau Ngoan, a farmer in Bac Lieu Province, said that shrimp breeders earned VND100,000-120,000 per kilo of shrimp sold last year. Therefore, many households have rushed to continue farming despite warnings of disease outbreaks.

According to Tra Vinh Province’s Department of Agriculture and Rural Development, local farmers have begun shrimp farming on over 500 hectares in Duyen Hai and Cau Ngang districts. However, diseases have hit around 25% of the area, or around 125 hectares.

VSSA demands 500,000 tons of sugar exports

Although the Ministry of Industry and Trade has allowed enterprises to export 200,000 tons of sugar, VSSA continues to propose the exporting of 500,000 to 600,000 tons of sugar this year.

Also, VSSA has proposed the Ministry of Industry and Trade not to set out a particular deadline for export because buyers may take advantage when it comes to meeting the deadline.

VSSA says in order to facilitate exporters, regulatory agencies should limit sugar exports via only one border gate.

Among 200,000 tons exported prior to June 30 are mostly refined standard sugar (RS). Refined sugar (RE) for confectionary, beverages and other foodstuff is not included in this exportation.

VSSA adds that both RS and RE should be allowed for export. If enterprises stock RE or seek to stock materials to produce RE, it may be unfair to producers and businesses.

According to VSSA, there are 41 sugar mills nationwide, 10 of which specialize in RE.

Compared to the period three weeks ago, sugar prices at factories dropped by VND500/kg, from VND12,300 to VND12,900/kg. Illegally-traded sugar from Thailand is priced at VND12,600/kg.

Around 1.45 million tons of sugar was consumed in 2013 nationwide; however in the 2013/2014 harvest, plants are likely to produce 1.5 to 1.6 million tons.

The fact that supply is higher than demand still prevails in the market, decreasing the prices due to smuggled sugar into the Vietnamese market. This situation is predicted to continue this year.

According to calculations of the Ministry of Agriculture and Rural Development, the sugar amount supplied to the market is from 1.2 to 1.3 million tons after excluding the exported amount based on the Ministry of Industry and Trade’s quota. In other words, there is a surplus of sugar nationwide at the moment, around 300,000 tons.

Price no longer top concern of home buyers

Pricing is no more the top concern of home buyers as they now care more about who the investors are and their reputations.

This tendency which is recorded by market research and property brokerage companies through day-to-day contacts with home buyers in the past time is forecast to increase in the coming time.

Nguyen Van Tu, general director of Minh Khang Gia Real Estate Corporation, said that the top factor helping a project to find buyers is its investor’s reputation.

This could be seen on the market last year when many companies had to struggle hard while some others were successful in selling their apartments.

The next important factor is the real progress of projects. Those projects that are finished or are about to be handed over will have a big advantage in finding buyers. It is now difficult to convince home buyers to spend money if they do not know how the houses look like.

Such factors were also confirmed by the HCMC Department of Construction when looking back at last year’s market. The implementation of many projects had to be suspended due to the investors’ capital shortage as they failed to persuade home buyers who doubted the progress of their projects.

The selling price is the third factor home buyers care about but the price has to be competitive with that of other projects.

The payment schedule is also important. Buyers now only pay money following the implementation progress, not the schedules set by the investors like before.

In fact, many projects lack capital and cannot be constructed. Home buyers rescue the investors as well as rescue themselves by creating accounts to pay money and only disburse when the projects are finished.

According to statistics of market research companies, the volume of apartment inventories in HCMC is around 17,200 units, with high-end apartments mainly located in districts 2 and 7 and mid-end apartments lying in outlying districts like Binh Tan, Tan Phu and Binh Chanh.

Timothy Horton, general manager at Cushman & Wakefield, forecast that the apartment price might continue declining this year.

Banks seen lowering home loan rates this year

Some banks have announced to offer lower lending rates for homebuyers in 2014 but lending conditions would not be loosened.

Since late last year, local lenders have launched many loan packages focusing on consumers and homebuyers instead of attracting depositors like in previous years.

HDBank has offered the lowest rate of 6.8% per annum for citizens and family-run businesses through a special program that aims to serve customers who have demands to buy or repair homes, buy cars or supplement capital for their business.

The bank will apply the lending rate of 6.8% per annum in the first six months for loans of VND1 billion or higher, 8.6% per annum for those borrowing from VND500 million to less than VND1 billion and 9.6% for loans from VND100 million to lower than VND500 million. The program will run till June 30 with the total value of VND1.5 trillion.

BIDV has also offered a preferential home loan program for individuals and families with the total value of VND3 trillion. Customers will enjoy lending rate of 10% per annum in the first six months and will not pay the principal sum in three months from the date of disbursement.

HBSC Vietnam has also announced a program for homebuyers with lending rates of 9.5% annually or higher. The bank provides credits of up to 70% of the home value with a term of 25 years.

Nguyen Minh Tam, deputy general director of Sacombank, told the Daily that Sacombank’s total home outstanding loan at the end of 2013 had jumped 35% from a year earlier. The bank has deployed three property loan packages with VND2.8 trillion disbursed so far.

Real estate prices have declined while Sacombank has cooperated with investors to extend loans to customers with real housing demands. Therefore, the bank has seen credits moving up, Tam said.

In 2014, Sacombank will continue to boost home credits, launching more loan programs with competitive lending rates. Currently, it is applying a home credit program with the total limit of VND1 trillion.

If the central bank allows commercial banks to deploy the VND30-trillion credit package for the real estate sector, Sacombank will be ready to join hands. Currently, the VND30-trillion housing bailout program is open to only a few banks. With a wide network of banking units, huge number of clients and experiences in giving small credits, participation in the program will help the Sacombank reach out to more homebuyers and better transactions.

Pham Huy Thong, deputy general director of VietinBank, said that the lender will continue to focus on the VND30-trillion package. Disbursement has improved for both homebuyers and project developers. This year, when some budget home projects are launched onto the market, disbursement rate will increase.

For other ordinary customers, VietinBank has not given specific home loan programs but has cut lending rates to 11-12% per annum. The bank has plans to reduce lending rates further in the future.

Meanwhile, banks said they would not increase new loans for real estate enterprises.

A banker said that the property market has seen better signs as input costs of enterprises have declined. However, to prevent risks, the lender will appraise projects carefully and will only disburse for projects that would be finished soon.

Many projects launch apartment sales

With positive signals on the real estate market since last year’s second half, some property enterprises are preparing to launch apartments to grasp business opportunities in the early months of the year.

Phu My Hung Corporation said it would offer Green Valley apartments for sale this quarter. The Green Valley project consisting of four buildings of 20-27 floors supplies 546 apartments having an area of 88-194 square meters each.

Phu My Hung has not announced the selling price but said the apartments were for medium-income earners and affordable to buyers with financial supports from banks.

Also in Saigon South, The Park Residence located on Nguyen Huu Tho Street with around 1,000 apartments of 52-73 square meters each has been put up for sales. The selling prices of such apartments start from VND700 million per unit.

The Park Residence’s investor is receiving bookings and will finish the project in 2016.

Meanwhile, in District 6, Him Lam Land Company is about to sell apartments of the Him Lam Cho Lon project located near the district’s administrative center. The project supplying around 1,400 apartments is almost finished.

Khang Dien House Trading and Investment Joint Stock Company is going to launch the sale of Mega Residence townhouses in District 9.

Khang Dien will sound out the market by offering for sale around 160 adjoining houses at a price starting from VND13.5 million per square meter, or some VND1.99 billion per unit.

With its location near HCMC-Long Thanh-Dau Giay Expressway and the belt road and especially a price equivalent to that of an apartment, the investor expects to attract many buyers to Mega Residence in the coming time.

Besides, there are many other projects offering apartments for sale such as Lexington Residence in District 2 at around VND20.6 million per square meter, PARCSpring in District 2 at VND17.4 million, Sunview Town in Thu Duc District at VND11.2 million and An Phu 2 in District 8 at VND16.8 million.

According to Cushman & Wakefield, the apartment sales volume was better last quarter, mainly in the budget segment having selling prices hovering around VND15 million per square meter.

Cushman & Wakefield forecast the price might continue to decline this year.

In related news, property enterprises said they would develop projects based on their existing land and would not spread investments this year like before.

According to Nguyen Van Duc, deputy director of Dat Lanh Real Estate Company, the company will start the year with a small apartment project having around 150 units in Go Vap District and develop infrastructure for a townhouse project in Hoc Mon District.

Duc said that these were the two final projects on the company’s land left. More projects will be carried out when it can find partners with financial capabilities, he added.

Luong Tri Thin, general director of Dat Xanh Group, said Dat Xanh would not invest in individual apartment projects but develop clusters like small urban areas of 10-20 hectares each. It will be in charge of all investment stages, from investment to construction and distribution.

Dat Xanh earned VND66 billion in profit last year, doubling that of the previous year.

Statistics of the HCMC Department of Construction showed that around 5,000 among the apartment inventory of nearly 14,500 units found buyers last year.

According to market observers, the market will continue to incline towards buyers this year. Finished projects would be more attractive to customers than those under construction.

SBS to return to UpCoM

Having obtained profits in the previous year, Sacombank Securities Company, or SBS, has plans to soon debut on the UpCoM, the market for unlisted public firms, to facilitate trading of investors.

The enterprise will send listing application to the UpCoM. As planned, it will seek approval to list on the HCMC or Hanoi market early next year after posting up profits in two years in a row.

SBS will also open a branch in HCMC’s District 1 to lure more investors this year. Closing the shareholder list as of the end of last October, SBS had nearly 1,800 investors.

Last year, the enterprise announced a net profit of over VND440 billion compared to a loss of over VND135 billion in 2012.

Explaining the sudden improvement, SBS deputy general director Pham Quang Thanh said that the broker refunded VND239 billion to share price decline reserve fund and nearly VND90 billion to the provision for bad receivables while recovering the VND800-billion debt worth of convertible bonds.

Meanwhile, earnings from key business activities just rose slightly as SBS’s difficulties remained.

By late 2013, the broker’s financial safety ratio soared to 198% and stood at over 180% in three months in a row compared to a negative figure early last year. Therefore, SBS has been qualified to be removed out of the special scrutiny list.

However, it still has to wait for decision of the State Securities Commission to be put out of special scrutiny. The enterprise is making improvements to better financial situation in 2014, Thanh said.

He said that now is the strategic time for SBS as the stock market is recovering and investor confidence is strengthening. Listed enterprises have reported better business results than late 2012.

Besides, SBS has its own advantages with a large number of long-term investors. The enterprise currently is managing around VND130-134 billion worth of deposits of investors and VND5 trillion worth of share balance. The number of accounts has increased steadily every month while foreigners have still registered around 800 accounts.

“We have plans to continue the restructuring scheme, focusing on simplifying organization and cutting expenses. In addition, with around VND100 billion in cash at the end of 2013, we will have opportunities to provide better services for investors and make gains from brokerage service,” Thanh said.

No transfer pricing found with imported dairy products

Customs agencies have examined dairy product importers suspected to make transfer pricing to evade tax as requested, but no violations have been detected so far, an official said.

Luu Manh Tuong, deputy director of the Import-Export Tax Department under the General Department Customs, said that after the Price Management Department under the Ministry of Finance has proposed cooperation in inspecting the firms, the department has asked dairy makers overseas to provide related data.

Aside from some enterprises that have not replied, the department has compared prices of parent companies with those declared by importers. Basically, there have been no differences between prices announced by both sides.

In some cases, there have been minor differences due to transport charges or other costs.

Earlier, some importing firms have sent price declaration forms to the Price Management Department, seeking approval to revise up prices by 3-8% as input material costs have increased.

Therefore, the department has suggested customs agencies to join hands to detect possible transfer pricing acts of these importers.

Concerning State management over imported dairy product prices, Tuong said the products have been added to the list of commodities risk management since 2012.

Currently, dairy products are mainly imported to Vietnam through HCMC, Hanoi, and Haiphong.

Japanese firms to move labor-intensive projects to Vietnam

Many Japanese enterprises operating in Thailand facing rising labor cost there have tended to move labor-intensive projects to regional countries, including Vietnam, to cut costs, said a Japanese trade official.

Hirotaka Yasuzumi, managing director of the HCMC Office of the Japan External Trade Organization (JETRO), said last week that the worker wage in Thailand was twice that in Vietnam. Therefore, many enterprises in Thailand have moved part of their production activities to Laos, Cambodia and Vietnam, he told the Daily on the sidelines of a meeting between the HCMC government and Japanese enterprises.

A survey of JETRO showed that the number of skilled laborers in Laos and Cambodia was few and not as high as that in Vietnam. Therefore, JETRO often advises Japanese enterprises to move to Vietnam.

However, Japanese enterprises in Thailand have already enjoyed big markets and developed supporting industries for their production activities. Therefore, they will only move labor-intensive activities to Vietnam to reduce costs while those bringing in high added values are still maintained in Thailand.

The major challenge Japanese enterprises encounter when making investments in Vietnam is the lack of supporting industries, which Thailand can better meet.

With the ongoing political unrest in Thailand, media citing automakers have reported that the instability was threatening auto manufacturing in that country.

However, Yasuzumi told the Daily that the possibility of Japanese automakers moving from Thailand to Vietnam was unlikely as Thailand was an auto manufacturing center in Southeast Asia with developed supporting industries.

Besides, Vietnam’s auto industry can by no means be compared to Thailand’s as the auto manufacturing capacity in Thailand amounts up to 2.5 million units per year compared to only around 100,000 units in Vietnam.

Similar political unrest in the past and the recent historic flood in Thailand caused many difficulties for automakers. However, Japanese enterprises were determined to stay there and have expanded investments, according to Yasuzumi.

At the meeting, Yasuzumi said that Japanese enterprises operating in Vietnam were still facing many difficulties.

According to a survey of JETRO, Japanese investors concern the most over issues regarding taxes, unclear policies and lack of skilled workers.

Suppliers in Vietnam can meet only 28% of the materials demanded by Japanese enterprises, which have to import the rest, resulting in higher production costs.

According to a wage survey of JETRO, the worker wage in Thailand averages US$6,704 per person per year while that in Vietnam is US$2,602. For the managerial level, the respective figures are US$27,204 and US$12,245.

Businesses face low purchasing power in HCMC

Recovery signs of the economy in the end of 2013 prompted several businesses to increase stock yet purchasing power has not recovered as expected.

Several shops closed later and opened sooner than usual during the Tet holidays.  Many served until the afternoon on January 30 and reopened six days later.

Supermarkets and markets resumed operation as early as two days later.

Many companies launched promotional programs to stimulate commerce.  Electronic centers offered 30-40 percent discount on several products such as televisions, electric cookers and video recorders. Trade centers gave 5-49 percent discounts on hundreds of items.

Vissan Limited Company spent VND2.4 billion (US$114,000) to reduce Chinese sausage prices VND10,000 a kilogram, said the company’s director general Van Duc Muoi. That was one of their main products during the holidays.

The company also spent billions of VND on other items to boost purchasing, said Muoi.

Prices for chicken eggs in the city’s subsidization program were much lower than those sold in markets. It decreased VND 1,000-2,000 per pack of ten during the holidays yet failed to boost purchases, said Truong Chi Thien, director of Vinh Thanh Dat Company. 

The HCMC Department of Industry and Trade reported 10-15 percent increases in commerce after the festivals. This is believed to be the lowest growth rate compared to the same period in previous years.

The income growth rate of Saigon Co.op supermarkets reached only 15 percent during the holidays, said Director General Nguyen Thi Hanh. This is a much lower increase than that of previous years.

Several businesses express their anxiety about the decrease of sales this year. They believe that consumption will not rise considerably.

The government will continue several measures to curb Consumer Price Index to 7 percent in 2014 and consumers have tightened spending and purchased in moderation.

Textile exports up 10.6% in January

Export of textile hit more than US$1.9 billion in January, up 10.6% from December, 2013, and a year-on-year increase of 21.7%, according to the Viet Nam Customs.

The figure included US$1.13 billion attained by foreign-invested enterprises.

The US, the EU and Japan are three largest importers of Viet Nam’s textile with US$955 million (up 23.3%), US$302 million (up 26.4%) and US$228 million (up 10.4%), respectively.

The Ministry of Industry and Trade reported that many textile enterprises have secured the orders till the second quarter of 2014.

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

Farm exports, Viettel, EuroCham, support industries, Vinamilk
 
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