Few SOEs go public in 2015

The number of State-owned enterprises (SOEs) that went public last year nationwide was 173, less than 40% of the target, according to data of the Ministry of Finance.

Deputy Prime Minister Vu Van Ninh, head of the Steering Committee for Enterprise Reform and Development, earlier last year approved a plan to equitize 432 SOEs in all of 2015.

According to the ministry, there were 422 SOEs equitized in 2011-2015, meeting 78% of the five-year target.

For divestment from non-core business operations, SOEs last year withdrew more than VND4.9 trillion (US$217 million) from five sectors -- securities, banking-finance, insurance, real estate and investment funds.

The Government issued Decision 41/2015/QD-TTg on September 15, 2015 on sale of shares by lot to attract investors and boost the restructuring of SOEs. These businesses will have to divest over VND15.6 trillion from non-core operations this year.

For the Government, the equitization of SOEs is one of three pillars for economic restructuring and the Ministry of Finance has been assigned to implement it.

In a report presented at a recent review conference, the ministry said the restructuring of the State sector had made little headway.

The protracted economic woes at home and abroad, and the unwillingness of SOE leaders to move ahead with equitization plans, according to the ministry, affected the SOE restructuring process.

Backup fund for financing deficit unneeded

A VND10 trillion budget earmarked from the proceeds of share sales at State-owned enterprises (SOEs) to finance the State budget deficit will remain intact.

Minister of Finance Dinh Tien Dung said this backup source of funding is no longer needed to cover the State budget deficit. The global oil price plunge and falling import-export tariff collections were forecast two months ago to lead to a budget shortfall of around VND31 trillion.

The National Assembly then allowed the Government to use an additional VND10 trillion, which is sourced from the sale of State shares at SOEs, for spending this year.

However, according to Dung, the ministry has ensured good budget collections from domestic sources, cut budget revenue losses and collected more tax arrears, so the 2105 State budget collections picked up an estimated 13%.

Budget collections as of December 26 had amounted to VND911 trillion, 4.2% higher than estimated, and this year the figure is forecast to climb to VND973-976 trillion.

“With such a result, we might not need to use the VND10 trillion fund to finance the budget deficit,” the minister said.

Last year only eight of the nation’s 63 cities and provinces faced budget shortfalls which were not too high. In addition, ten cities and provinces reported their budget collections were 10% higher than expected.

Fusion Maia Danang invests in Mercedes-Benz V-Class

Fusion Maia Danang has become the first 5-star resort in Central Vietnam to buy Mercedes-Benz V-Class cars for its chauffeur service, with two units delivered by the authorized dealer An Du Danang in December 2015.

The V-Class is ideal for hotels to provide shuttle service for family as it offers a comfortable and roomy space for up to seven guests. Electric sliding doors on both sides make access as convenient as possible.

The THERMOTRONIC automatic climate control with air-vents for all three rows can refresh every single passenger as soon as they get in. The two individual seats of the second row are able to turn by 180 degrees for easier communication with other companions.

The EASY-PACK tailgate with convenient power opening and closing can be stopped in any position. Rooted in the core value of safety, the V 220 CDI is equipped with up to 10 airbags, with two in front, two on the front sides, and six at the windows.

“As we have finalized refurbishment and upgrades of both facilities and services, the V-Class just meets all of our expectations for a spacious and comfortable chauffeur vehicle yet reflecting our premium brand,” said Michelle Ford, General Manager of Fusion Maia Danang.

Dirk Adelmann, Managing Director of Mercedes-Benz, said Fusion Maia Danang is a trendsetter in the Central region, bringing an ideal transportation solution for their guests.

Fusion Maia Danang is 15 minutes away from Danang International Airport. It is located between three World Heritage sites, Hoi An, My Son and Hue, and three international golf courses.

Info-comm sector posts VND520 tril. revenue

Vietnam’s information and communications sector last year reported total revenue of VND520 trillion and paid an estimated VND63.88 trillion in taxes, shows data of the Ministry of Information and Communications.

The sector includes areas such as publishing, software, digital content, television and telecommunications.

The ministry said at a 2015 review meeting last week that the publishing field registered total revenue of VND5.1 trillion, export turnover of US$4.1 million, and imports of US$18.9 million.

Last year Tran Phu Printing Company alone achieved VND402 billion in revenue, with VND21 billion of it profit, and paid VND47 billion in taxes. The average monthly income was VND11 million per employee at the firm.

As of the end of last year, 63 publishing houses had created jobs for around 5,500 people, and published more than 24,000 books with over 270.4 million copies and over 22.4 million copies of other print products.

According to an FPT report sent to the ministry, its revenue last year picked up 113% year-on-year to around VND39.7 trillion. The firm, which is now present in 19 foreign markets, recorded a ratio of return on equity (ROE) of 22%.

Meanwhile, CMC Corporation expected to generate VND3.38 trillion in revenue, 9% higher than the full-year target and 4% higher than 2014, and obtained a ROE of 128%. It paid VND100 billion in taxes and fees, and employed nearly 2,000 people last year.

HiPT Group’s revenue amounted to VND600 billion while tax payments totaled VND5.6 billion.

According to software and digital content companies, their sales last year were good.

In particular, VTC posted VND3.5 trillion in revenue, up 9% against 2014, and VND123 billion in profit, up 60%. The company’s digital content business operations alone generated revenue of VND2.74 trillion and profit of VND202 billion.

Another firm earning high digital content revenue is VNG with VND1.7 trillion.

As of the end of last year, there had been 140 mobile phone subscribers and 8.2 landline broadband Internet subscribers for every 100 people. Especially, 52% of the population had access to the Internet and the mobile network coverage reached 94%.

Experts cite reasons behind more seafood rejections

Experts have pointed out a number of reasons behind a high percentage of seafood shipments which have been rejected and returned by importing countries last year.

Violations of food safety regulations, poor management of local agencies and sharp price falls are among the reasons, they said.

The number of seafood shipments refused by authorities in importing markets ran high last year as they were found to contain higher-than-permitted antibiotic residues, heard a recent conference on the safety of seafood in HCMC.

According to data of the National Agro-Forestry-Fisheries Quality Assurance Department (Nafiqad) released at the conference, seafood shipments failing to meet food safety regulations in the first nine months of 2015 numbered 165, up by six against all of 2014. Seafood shipments found to infringe chemical and antibiotic regulations totaled 78 in the nine-month period, up by 10 compared to last year.  

Nguyen Huu Dung, former vice chairman of the Vietnam Association of Seafood Exporters and Producers (VASEP), told the Daily earlier that the poor management capacity of local agencies is another reason behind the return of Vietnamese seafood.

Nafiqad, the agency responsible for inspecting seafood items, has not done its job properly. Small-scale farming and loose checks of products are also to blame.

Price reductions were also one of the reasons behind the return of more Vietnamese seafood shipments last year.

Le Van Quang, general director of Minh Phu Seafood Corporation, told VASEP’s recent review conference on 2015 seafood exports that shrimp prices on the world market had slid steadily. Until November, the price had plunged by 35% against the beginning of the year while shrimp in other exporting countries like Indonesia and India had a more competitive edge as their currencies weakened strongly against the U.S. dollar.

Quang said the price of Indonesian shrimp used to fall to fresh lows while that of Vietnamese shrimp were 20% higher than the world’s average as the Vietnam dong currency was devalued by just 5% against the greenback last year.

Therefore, Vietnamese shrimp turned less competitive compared to shrimp of other exporting countries in terms of price.

Quang said a contract was signed in March for delivery in September but shrimp prices dropped sharply during the six-month period, so the importer cited higher-than-permitted antibiotic residues as the reason to refuse delivery to buy shrimp from other exporters at lower prices.

Among the seafood shipments refused by importers, some met strict farming and processing processes, which were free from antibiotics, said Quang of Minh Phu, which is Vietnam’s leading shrimp exporter.

When shrimp prices fall significantly, importing enterprises will impose stricter requirements on antibiotic residues. That was why the number of seafood shipments returned was big last year, Quang said.

Some other local exporters bemoaned that shipments delivered at the end of 2014 were also refused by importers over antibiotic residues.

Last year, shrimp prices contracted 50%. According to enterprises, if prices continue to edge down in 2016, more seafood shipments could be returned.

Local seafood exporters are advised to be more cautious with the quality of their products and conditions in the contracts with importers given the International Monetary Fund’s forecast that shrimp prices will go down next year.

The IMF projected the world shrimp price would slide due to lower demand in major markets like Japan, the U.S. and the European Union besides an economic slowdown in emerging markets. Meanwhile, shrimp supply will continue staying high.

IMF predicted that the world shrimp price would dip 4% in 2016, 7% in 2017 and 13% until 2020 compared to the average in 2015.

Four firms under construction ministry to go public in 2016

The Ministry of Construction plans equitization of four large enterprises next year as part of its scheme to let all State-owned enterprises (SOEs) under its umbrella go public.

Dau Minh Thanh, head of the ministry’s Business Management Department, said the equitization of Song Da Corporation, Housing and Urban Development (HUD), Vietnam Urban and Industrial Zone Development Investment Corporation (IDICO) is set for completion in the second quarter of 2016. Meanwhile, Vietnam Cement Industry Corporation (VICEM) is expected to go public at the end of next year because of its restructuring of some cement factories.

Song Da, HUD, IDICO and VICEM have basically finished corporate evaluations. They are working with the State Audit of Vietnam to assess the value before the figures are approved and announced by the ministry.

Up to now, the ministry has almost finished its target of having all SOEs equitized, Thanh added.

Between 2011 and 2015, the ministry planned to equitize 14 corporations – Viglacera, Hanoi Construction, Bach Dang Construction, Viwaseen, Licogi, FiCO, CC1, LILAMA, COMA, Song Da, VICEM, HUD, IDICO and VNCC. Besides, some 14 subsidiaries will have to go public along with their parent firms and two others will undergo separate equitization plans, namely Housing and Urban Services Co. (HUDS) under HUD and Khanh Hoa Housing Development Co. under Song Da Corporation.

At present, Khanh Hoa Housing Development Co. is awaiting approval from the Government on share ratio offered to strategic investors while HUDS has finished corporate value assessment.

Meanwhile, Bach Dang Construction, Viglacera, Viwaseen and Hanoi Construction have completed equitization and are running as joint stock companies. Licogi has organized its first annual general meeting and is completing procedures for becoming a joint stock firm from January 1, 2016. Besides, LILAMA has launched its initial public offering (IPO).

The Government has approved equitization plans of CC1, FiCO and COMA and they are projected to become joint-stock concerns in the first quarter of this year. VNCC is waiting for approval for its equitization scheme.

Most enterprises under the ministry are large with some firms reporting total assets of over VND10 trillion (US$445 million) and State ownership ranging from VND1 trillion to VND15 trillion each. Many companies own land use rights, offices, workshops, urban areas, industrial zones and none-core businesses.

In a related development, the Ministry of Transport starts share auctions of Civil Engineering Construction Corporation No. 5 (Cienco 5), Cienco 6 and Vietnam Motors Industry Corporation (Vinamotor) on January 4 to divest around VND1.8 trillion from these firms.

According to a notice of the ministry, some 45.7 million shares, or a 92.88% stake, of Cienco 6 and nearly 10.2 million shares (out of 27.7 million shares, or a 63.18% stake, held by the ministry) of Cienco 5 will be offered in lots. Meanwhile, the ministry will offer nearly 85.6 million shares of Vinamotor on January 11, 2016.

Illegal business conditions still abound

Up to 2,833 out of 5,826 business conditions for 267 conditional business areas under the investment law still exist after they were issued by agencies and officials beyond their authority.

The Ministry of Planning and Investment reported the situation to the Government after reviewing legal documents containing business conditions. The report showed that a number of ministries have issued new business conditions in their circulars since the investment law became effective earlier this year.

In a recent talk with the Daily, Minister of Planning and Investment Bui Quang Vinh said only decrees issued by the Government and documents issued by higher authorities can set out business conditions for enterprises and individuals.

“Any conditions that illegally prohibit people’s business rights must be erased,” Vinh said. “Many sub-licenses have been issued, going against the liberal investment law.”

The Government has set up a team responsible for overseeing the implementation of the enterprise law. The team will do a review to see how many business conditions have been issued.

The report indicated many business conditions are unnecessary as they result in high compliance costs and hamper market participation of enterprises.

When reviewing business conditions, the Planning and Investment Ministry has found many problems with the implementation of the investment law and other laws relating to the authority of setting out business requirements.

Under Article 7 of the investment law, business conditions must be specified in laws, ordinances and decrees. Nevertheless, there are cases in which ministers and heads of ministerial-level agencies are assigned to issue regulations on business requirements.

“Consistency requires coordination among ministries and agencies,” Vinh said.

According to the ministry, the ministries of defense, public security, labor-invalids-social affairs, information-communications, education-training, science-technology, health, culture-sports-tourism, construction, natural resources-environment and industry-trade have not submitted their reports on business requirements following Decree 16/2013/ND-CP.

The ministries which have sent review reports are agriculture-rural development, finance, transport, justice and the central bank.

Regarding the issuance of decree regulating business requirements in conditional sectors, the ministries of public security, transport, information-communications and health are drafting conditions as required.

Retail sales near US$110 billion

Vietnam’s retail sales of goods are estimated at around VND2,500 trillion (nearly US$110 billion) this year, representing a 10.6% increase against 2014.

According to a report of the General Statistics Office (GSO), revenues in some sectors have seen a strong increase in 2015. Food and foodstuffs have registered an increase of 14.8%, household appliances up 15%, garments and textiles up 13.3%, and transport services up 10.4%.

2015 is regarded as a busy year for retailers as many local and international businesses have strongly expanded distribution networks in many parts of the nation, especially HCMC and Hanoi.

For the domestic group, the Saigon Union of Trading Co-operatives (Saigon Co.op) has launched its 80th Co.opmart store into operation. Saigon Co.op now operates two Co.opXtra hypermarkets, SC VivoCity commercial center, 96 Co.op Food stores and nearly 200 Co.op shops.

Although Vingroup is a newcomer in the retail market, it has swiftly expanded its business.

This year, Vincom Retail under Vingroup has launched 10 new Vincom shopping centers into operation, taking to 16 the total number of Vincom centers in nine cities and provinces nationwide. Vingroup is looking to have nearly 50 Vincom centers in the country by 2016.

Vingroup has strongly developed VinMart supermarket and VinMart+ convenience store chains. Marking the first anniversary of these two chains in November, the group has opened 20 VinMart supermarkets and hypermarkets, and over 200 VinMart+ convenience stores in Vietnam.

The group has plans to run around 100 supermarkets and 1,000 convenience stores by 2017 by building new outlets or undertaking mergers and acquisitions (M&A) deals.

International retailers have also been active this year as Vietnam is regarded as a key market within the ASEAN Economic Community (AEC) and has participated in the Trans-Pacific Partnership (TPP). Most enterprises have set up business strategies to gain bigger retail market share in the country.

Aside from 32 Big C supermarkets of France’s Casino Group and 19 Cash & Carry wholesale centers of Germany’s Metro Group planned for transfer, retailers such as AuchanSuper of France, Emart and Lotte of South Korea, Parkson of Malaysia, Robins of Thailand and Aeon of Japan are stepping up investment in this growing market.

Vietnam is seen as a potential retail market with a population of over 93 million, a majority of them young people, and with gross domestic product (GDP) per capita reaching over US$2,100. The retail industry is expected to grow further given rising GDP in the future.

According to the Ministry of Industry and Trade, the modern retail sector accounts for around 25% of total sales. The nation has seen some 724 supermarkets, 132 commercial centers and hundreds of convenience stores (with brand and chain operation). Most facilities are in big cities and inner-city areas.

In 2020, the sector is expected to boost its market share to 45% with around 1,200-1,300 supermarkets, 300 shopping centers and thousands of convenience stores.

According to the GSO, Vietnam’s retail sales of goods and services are estimated at VND3,200 trillion in 2015, up 9.5% against the previous year.

PV Gas revises down 2015 financial targets

PetroVietnam Gas Corporation (PV Gas) has revised down its revenue and profit targets for this year though the firm said earlier that it had met its full-year output and sales targets.  

PV Gas’s board of directors approved the revision at a meeting on Monday. Total revenue has been revised down to VND61 trillion (US$2.7 billion), 12.3% lower than the initial target. Pre-tax profit will be VND10.3 trillion, down 27.3%, and after-tax profit VND8.2 trillion, down 28.9%.  

The firm’s tax payments will drop by VND270 billion to VND4.3 trillion.

Meanwhile, the parent firm’s revenue has been adjusted down by 12.1% to VND54.5 trillion, pre-tax profit down 28.4% to VND10 trillion, after-tax profit down 29.5% to VND8 trillion and tax payments down by VND563 billion. Chartered capital will shrink 33.2% to some VND19.14 trillion.

All the falls boil down to the falling prices of crude oil and liquefied petroleum gas (LPG) this year.  

Le Nhu Linh, chairman of PV Gas, told reporters early this year that the firm’s financial targets were based on the world oil price forecast of US$100 per barrel. Those targets were set by Vietnam National Oil and Gas Group (PVN), which holds a 97% stake in PV Gas.    

He said the world oil price has fallen sharply compared to the time when the targets were set but they were kept unchanged.

Linh said the world oil price plunge would not exact a heavy toll on PV Gas as the firm has few products vulnerable to oil price volatility while others depend on long-term contracts.    

PV Gas in the middle of this month announced it already met production and consumption targets in November. It had produced and sold 9.77 billion cubic meters of gas as of December 3, meeting the full-year targets. The figure is forecast to jump to over 10.42 billion cubic meters in all of this year, up 7% against the targets.  

This year sees PV Gas’s output rising to a 25-year high while its sales exceed 100 billion cubic meters.    

Its Dinh Co plant in Ba Ria-Vung Tau Province had processed 233,000 tons of LPG as of November 9, meeting the year’s plan. This year, its output will reach 282,000 tons, surpassing the full-year target by 21%.    

LPG sales will hit 1.324 million tons this year, up 38% against the target or the highest in many years.

CAAV: Air passengers grow strongly

The number of air passengers nationwide had amounted to around 62.2 million as of December 20, a 22.7% rise against 2014, according to the Civil Aviation Authority of Vietnam (CAAV).

CAAV said the number was based on statistics of 52 foreign and four Vietnamese airlines which operate flights to and from airports in Vietnam as well as data on chartered flights and private flights.

However, there is a big gap between data of CAAV and the General Statistics Office (GSO) regarding the number of passengers Vietnamese airports have served this year.

The figure of the GSO is 20.7 million passengers, up 7.9% year-on-year, and excludes 7.9 million international visitors to Vietnam with most of them arriving by air.

Explaining the big difference, a leader of CAAV told the Daily that the aviation watchdog had counted the number based on detailed forms and guidelines of the International Civil Aviation Organization (ICAO).

In particular, data is collected from legal documents of both domestic and foreign airlines, including load sheets. All airlines must submit these documents to airports before take-offs and after landings.

Meanwhile, the GSO calculated the number mostly on reports of State and foreign-invested transport enterprises, so it only uses statistics of State-controlled Vietnam Airlines and VASCO as well as Jetstar Pacific Airlines with a 30% stake held by Australia’s Qantas. It does not cover statistics of 52 foreign airlines active in Vietnam and 100% locally-invested Vietjet.

“CAAV has many times worked with the GSO and the HCMC Statistics Office over the issue but they have yet to make changes,” the leader said.

When commenting on the Long Thanh international airport early this year, National Assembly deputies and scientists noticed big differences in data of CAAV and the HCMC Statistics Office about takeoffs, landings, passengers and cargo volumes at Tan Son Nhat airport in the 2005-2012 period.

At that time many said data was inflated to prove severe overload at the biggest international airport in Vietnam to support the Long Thanh airport project.

CAAV then said the HCMC Statistics Office solely included statistics of Vietnam Airlines and that was the main cause of the data difference.

Vietnam sees little chance of boosting exports within AEC

Vietnam would have little chance of stepping up exports to other member states of the ASEAN Economic Community (AEC) after it is in place early next year, an integration expert said.

Vietnam will remove 97% tariff lines on products imported from ASEAN markets in 2018 compared to the current 90%, according to Pham Binh An, director of the Center of Integration WTO Technical Assistance of HCMC.

Meanwhile, the ASEAN 6 bloc of Indonesia, Thailand, Singapore, the Philippines, Malaysia and Brunei have applied zero tax rates on 99.4% of products imported from Vietnam since 2010.

Therefore, Vietnam would not have many opportunities to boost its exports to AEC markets because of tax exemptions, An told a conference on the AEC and the Trans-Pacific Partnership (TPP) agreement in Can Tho City on Tuesday.

In addition, exports to other ASEAN markets only account for 12-14% of Vietnam’s total. An noted that other ASEAN countries can produce almost all products which Vietnam has at lower costs.

Vietnam and other ASEAN countries will have to focus more on cutting production costs and exporting products to the markets outside ASEAN, especially after the AEC becomes operational.

To help local businesses to make the most of opportunities from Vietnam’s deepened international integration, An said they should be allowed to take part in the process of drafting policies.

The existing policies of the State are not helpful for local enterprises to enter the global economy, An said.

An said that many enterprises complained they have not benefited from the current policies while experts said the policies are not suitable for the real situations of enterprises.

Therefore, it is important to let enterprises participate in the policy making process, An said.

An took Singapore as an example. The island state has its policies drafted by State authorities in cooperation with experts and businesses which are directly affected by such policies.

Vietnamese authorities can do that, An stressed.

He also called on enterprises to make their own preparations instead of relying on incentives and protections from the State because it is their job to find ways to integrate.

Pay at SOEs higher than FIEs

Employees at State-owned enterprises (SOEs) earn higher wages than their peers at foreign-invested enterprises (FIEs), according to a report by the Ministry of Labor, Invalids and Social Affairs.

The ministry produced the report after a wage survey of 2,000 enterprises including 100% SOEs, FIEs and local private enterprises in 2015. The survey found that wages and additional benefits of employees at these firms have risen significantly this year compared to last year.

According to the report, the monthly wage of laborers averages VND5.53 million in 2015, rising by 8% against last year. Particularly, employees of SOEs can get a monthly salary of VND7.04 million each, up 8%.

Workers of FIEs can earn VND5.47 million a month, up 9% year-on-year, while the respective figures of workers at domestic private enterprises are VND4.99 million and 6%.

As for total income, the ministry estimated the average monthly income of each laborer at VND5.91 million, up 7% compared to last year. Particularly, employees at SOEs received the highest, VND7.59 million per month, followed by employees at FIEs and local private enterprises with VND5.89 million and VND5.33 million respectively.

Nguyen Thi Lan Huong, head of the Institute of Labor Science and Social Affairs, explained that the average salary in the SOEs sector has been higher than others in recent years.

“In Vietnam, 97% of enterprises are small and medium and the remaining 3% are mainly SOEs. Therefore, SOE wages stay high though many of them reportedly do not run at a profit,” Huong said.

Moreover, SOEs have a large number of skilled laborers so wages of this sector are certainly high.

However, Huong said such high wages resulted from many SOEs operating in monopolistic industries and wages are raised regardless of employees’ productivity, leaving negative impact on the local labor market.

Vietnam has spent a total of US$6 billion importing completely built-up (CBU) autos and auto parts this year, a record high, according to the General Statistics Office (GSO).

Data of the GSO showed that nearly US$3 billion has gone to 125,000 imported autos, soaring 76.6% in volume and 87.7% in value year-on-year. The spending is much higher than US$709 million on imported vehicles in 2013.

Major auto suppliers of Vietnam this year are China, Thailand, South Korea, Japan and India. Most trucks and pickup vehicles are imported from China and Thailand respectively while passenger cars are from other markets.

Auto enterprises, especially joint ventures, have reported higher sales growth in 2015 than in previous years. The joint ventures have imported more parts to assemble vehicles to meet rising demand on the domestic market.

According to the GSO, import of auto parts has amounted to US$3 billion in 2015. In all, import of CBU cars and auto parts has amounted to US$6 billion this year, up a staggering 59% against last year.

According to the Vietnam Automobile Manufacturers Association (VAMA), 215,000 autos were sold from January to November, increasing 57% versus last year’s same period.

Auto firms hoped that total sales would reach 240,000 units in all of 2015, an all-time high.

Auto sales soared to a record high of 180,000 units in 2009 before declining in the following years. The domestic auto market rebounded strongly last year with 157,810 units sold.

Experts said imported autos will keep increasing in the coming years as tariffs on vehicles imported from Asian markets will be lowered in line with Vietnam’s trade pacts with partners in the region.

HCMC needs hefty funding for development projects

HCMC will need to invest over VND203.1 trillion (over US$9 billion) in development projects in the next five years but it will fall short of VND42.8 trillion, HCMC Finance and Investment Company (HFIC) said.

HFIC general director Pham Phu Quoc told the company’s review meeting last week that in the 2016-2020 period, the city would need VND124.14 trillion for projects aimed to ease traffic congestion and around VND79 trillion for flood control projects.

Nearly VND123.22 trillion of the total funding is expected to come from the State budget, official development assistance (ODA) loans and commercial loans and over VND37 trillion from the supporting fund for restructuring of 54 State-owned enterprises (SOEs) under the city’s management.

Therefore, HFIC will have to raise the remaining VND42.8 trillion from different sources, including public-private partnership (PPP), municipal bond sales and loans from local and foreign financial institutions, Quoc said at the review meeting on HFIC’s 2010-2015 operations.

HFIC operates as a State-owned financial institution and an investment fund so it is not required to undergo equitization. As the company is tasked with implementing a pilot plan to manage 54 SOEs in different sectors in the coming time, it has asked the city government to seek the Prime Minister’s nod to invest in multiple business fields including the banking and securities sectors.

HFIC is seeking approval to use proceeds from equitization of SOEs to increase its chartered capital so that it can better implement infrastructure projects and fulfill public tasks.

Under the existing regulations, HFIC can set aside a maximum of 30% of its after-tax profit for a development-investment fund and has to transfer the remainder to the State budget. Therefore, it wants to keep all the profit to invest in infrastructure projects and implement key programs of the city.

Currently, HFIC is in charge of managing State shares at eight SOEs in the city, including HCMC Lottery One-Member Limited Liability Co., Saigon Transport Works One-Member Limited Liability Co. and HCMC Public Lighting One-Member Limited Liability Co.

Tra fish sector still dogged by woes

The struggling tra fish sector should find ways to solve chronic problems with production of breeder fish, farming and processing, and consumption markets, said Vo Hung Dung, vice chairman of the Vietnam Pangasius Association (VN Pangasius).

Dung told a seminar held in Can Tho City on Monday that these are the challenges the sector would need to cope with immediately if it is to achieve sustainable development.

There are hundreds of breeder tra fish farms in the Mekong Delta region but they are not well managed, according to VN Pangasius.

Dung said at the seminar on results of a survey on the value chain for fisheries that some 20% of the farms met Vietnamese Good Agriculture Practice (VietGAP) and other equivalent standards in 2013 and the percentage has risen to 50%, but only one of the farms has gained GlobalGAP (Global Good Agriculture Practice) certification.

Investment in production of breeder tra fish remains meager though the sector earns annual export revenue of US$1.7-1.8 billion, he noted.

He said businesses now not only process tra fish but also produce feed for the fish and that rampant expansion has eroded their competitiveness. Some farming households said they must use the feed which the trading businesses sell; otherwise, they will not buy their fish. This explains why the price of feed for tra fish has not dropped though prices of feed materials like corn and soya beans have dipped sharply in the past time.

Regarding consumption markets, Dung quoted a market research firm as saying that Vietnamese tra fish exporters do not comprehend foreign consumers’ tastes and demands, so they cannot make products which meet the needs of foreign consumers and build strong brands.

In-depth surveys on markets are a must for enterprises to draw up product development strategies but Vietnamese exporters are weak in this area.

Dung said local processing firms have invested heavily in tra fish farming and feed production rather than expanding distribution channels in foreign markets. This has stoked competition and posed more challenges for the sector.

Dung warned that fierce competition among local enterprises would make all of them losers.

At a review meeting in HCMC over the weekend, the Vietnam Association of Seafood Exporters and Producers (VASEP) predicted that tra fish exports would reach US$1.5 billion next year, down about 5% compared to 2015.

The drop is attributable to the impact of anti-dumping taxes and the U.S.’s catfish inspection program. Moreover, Vietnamese tra fish products will have to compete with products of whitefish including cod and tilapia which may be selected by consumers as alternatives for tra fish.

VASEP estimates this year’s seafood exports at US$6.7 billion, down 14.5% over 2014, due to falling outbound sales of shrimp and tra fish.

Ngo Van Ich, chairman of VASEP, said the decline has resulted from weak demand and stronger devaluation of the currencies against the U.S. dollar in other seafood exporting countries in the region than the Vietnam dong. The depreciation of the euro and the Japanese yen has affected seafood consumption in the key markets of Vietnam.

VASEP forecast 2016 would continue to be a tough year for Vietnamese shrimp exporters due to fiercer competition. However, the association hoped there would be positive impact of free trade agreements (FTA) on Vietnamese seafood shipments to South Korea, Japan, the European Union (EU) and other ASEAN markets.

VASEP said shrimp, tuna and squid and octopus exports could reach US$3.3 billion next year, US$507 million and US$470 millions next year, up 12%, 8% and 10% year-on-year respectively.

New exchange rate mechanism has little impact on property market

The new exchange rate mechanism will not make any remarkable impact on the Vietnamese real estate market, assured an expert from the CBRE Vietnam.

The Vietnamese dong remains stable compared to other foreign currencies in the region, CBRE Vietnam Deputy Director Nguyen Hoai An explained, adding that Vietnamese still account for 90 percent of investors in the real estate sector, and domestic capital flows dominate the market.

According to the CBRE experts from Singapore and Hong Kong, Vietnam’s exchange rates remain stable and positive among other Southeast Asian countries’.

They attributed Vietnam’s property market attractiveness to growing population that leads to increased demand for housing.

The State Bank of Vietnam decided on January 3 that it will announce a central rate for the VND and the USD on a daily basis, serving as reference rate for credit institutions and foreign bank branches to set their own rates. Banks in Vietnam are allowed to trade the dollar within a three percent range above or below the central rate.

Bac Ninh grants licence to Singaporean apparel maker

The northern province of Bac Ninh authorities presented an investment licence to Singaporean apparel marker Maple on January 6.

The company will invest 110 million USD in building a factory on 11.1ha of land in the Vietnam – Singapore Industrial Park.

Divided into three stages, the plant is designed to annually produce 22 million units once it becomes operational in January 2018.

Chairman of the provincial People’s Committee Nguyen Tu Quynh said the project, the first licensed in the province in 2016, will generate jobs to workers in and outside the province and improve local industrial manufacturing value.

He asked departments and agencies to facilitate the project and expressed hope that Maple put the plant into operation on schedule, contributing to the province’s socio-economic development.

Can Tho urged to accelerate disbursement for WB-funded project

Can Tho city must pay more attention to disbursement for the World Bank-funded Mekong Delta Region Urban Upgrading Project, which is scheduled to finish in 2017, Hoang Thi Hoa, an expert from the bank, said on January 6.

Pressure is arising as the project almost comes to an end, she stated at a project mid-term review session in the city, adding that Can Tho should not only assign more staff for the project but also provide them with further training at home or even abroad.

The sub-project in Can Tho city, started in 2012, aims to upgrade technical and social infrastructure in low-income Ninh Kieu, Cai Rang, O Mon and Binh Thuy districts.

It has a total investment of 1.8 trillion VND (80.1 million USD), including 1.4 trillion VND from official development assistance (ODA) and 400 billion VND from local responding funds.

Its 62 components focus on improving local residents’ living conditions; upgrading valleys, drainage system, roads and canals; and preventing floods.

So far, the city has disbursed only 34 percent of ODA capital (24 million USD out of 70 million USD) and 75 percent of the local responding funds.

The 400-million-USD Mekong Delta Region Urban Upgrading Project has been implemented in Can Tho, Ca Mau, Cao Lanh, Rach Gia, My Tho and Tra Vinh cities to improve the living conditions of the urban poor.

It expects to benefit about 2 million people, both directly and indirectly.

Electricity and power market monitoring centre launched

Deputy Prime Minister Hoang Trung Hai cut a ribbon at the National Electricity Moderation Centre (A0) on January 6 to inaugurate a new centre for monitoring and operating the power system and market.

The centre is operated on the basis of the supervisory control and data acquisition and energy management system (SCADA/EMS), which has been put into operation recently.

The new monitoring system boasts a number of prominent features including sending capacity control signals of each turbine of the electricity system from the control room of the moderation centre.

It is able to assess and simulate supposed situations and problems based on the latest actual operating mode, while collecting information related to plans to repair equipment in the system and suggesting repair plans.

The system can also assess the level of ensuring security for the electricity system and possibilities of turbine breakdowns.

With these advantages, the operation of the electricity system and the transaction of the power market will become easier, contributing efficiently to evaluating, controlling and forecasting power consumption demand.

The launch of the system marks a breakthrough in applying scientific and technological advances in running the power system. It shows that Vietnam’s power industry catches up with not only other ASEAN member nations but also developed countries all over the world.

According to Director of the A0 Centre Nguyen Duc Cuong, in the past, the information systems of national and regional electricity moderation levels were independent ones that used various devices with an operational time of over ten years. These systems were operated by moderators through telephone or computer.

Meanwhile, the new system is a single one decentalised from the central to regional levels, resulting in more accurate and timely data exchange.

Apart from technologies already applied in the electricity industry such as automatic control station, repairs through hotlines, and electronic metres for households, the group will use more advanced technologies in the coming time to improve the quality of its services and ensure safety and efficiency in operating the power system.-

Minister urges top security in Dung Quat Oil Refinery

Minister of Public Security Tran Dai Quang urged joint efforts to be made to ensure top security for the Dung Quat Oil Refinery – a national work of economic, political and security significance - during a working session with the plant’s management board on January 6.

The Minister praised the cooperation between the plant’s staff and local law enforcement forces in ensuring security for the facility’s operation.

He stressed the need to strengthen monitoring and supervision while enhancing communication work and training to raise the staff’s awareness of observing relevant regulations to ensure safe and secure operation for the plant.

In the 2011-2015 period, the Dung Quat Oil Refinery produced and sold over 30.2 million tonnes of oil and petroleum products, exceeding its target by 9 percent.

It earned more than 700 trillion VND (31.25 billion USD), and contributed over 104.8 trillion VND (4.68 billion USD) to the state budget, 33 percent higher than its target.

In 2015, it produced and sold over 6.7 million tonnes of oil and petroleum products, a surplus of more than 909,000 tonnes over its set goal. The plant generated over 94 trillion VND (4.2 billion USD), and contributed more than 20 trillion VND (892.8 million USD) to the state budget, representing 27 percent higher than its target.

PetroVietnam Deputy General Director Le Manh Hung said the plant has provided over 30 percent of locally-made oil and liquefied products.

The expansion and upgrade to the facility is underway, Hung said.

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