Vinmec injects in public health care

Vingroup, a leading domestic real estate developer, last week inaugurated the country’s largest private international hospital in Hanoi, built in a record 10 months while other private-invested ones remain delayed.

Vingroup, a leading domestic real estate developer, last week received the congratulatory flowers from Prime Minister Nguyen Tan Dung as the firm inaugurated the country’s largest private hospital in Hanoi.
Vinmec International General Hospital has been built in a record 10 months while other private-invested ones remain delayed.

The $100 million Vinmec International General Hospital will ease pressure on the overloaded health system and offer high-quality healthcare services for locals and foreigners.

Vinmec is located on a 2.5 hectare campus nearby Vingroup’s Times City Urban Complex, comprising two basements, seven ground floors with 600 patient beds. It is six-fold bigger than the French Hospital of Hanoi.

The hospital has 19 departments with 31 intensive high-tech units and offers single patient rooms, including 25 VIP rooms and two president suites, furnished to five-star standards. The recorded construction time surprised Hanoi People’s Committee chairman Nguyen The Thao as many private hospital projects have been delayed for years.

The projects include the $50 million International American Hospital, licenced in 1997 and the $198 million Kwang Myung Hospital, which is now transferred to domestic Intraco Corporation.

“The development of Vinmec is not simply an investment, it plays a profound social role, represents a practical action in implementing the policy of the Party and state in the socialisation of public health care and helps improve social welfare and development of the heath care industry in Vietnam,” Le Khac Hiep, deputy chairman of Vingroup, said.

Hiep said Vingroup is determined to develop Vinmec to be the top international hospital in Vietnam and South East Asia. Minister of Health Nguyen Thi Kim Tien said Vinmec was a milestone for encouraging other private investors to enter the healthcare sector.

Blue chips rises lift shares on both exchanges

Stocks on the two national stock exchanges advanced steadily this morning, with the two benchmark indices increasing in value.

On the HCM Stock Exchange, the VN-Index closed today higher at 344.68 points, a gain of 1.58 per cent over yesterday's session.

Trading value declined by a whopping 81 per cent over yesterday, however, totaling nearly VND500 billion (US$23.8 million), while volume of today's trades also decreased nearly 79 per cent to over 36.5 million shares.

Gainers overwhelmed losers by 168-48, of which 73 codes hit the ceiling prices.

Blue chips continued to perform well as eight of the 10 leading shares posted gains, of which insurer Bao Viet Holdings (BVH) soared to the ceiling after four consecutive falling sessions. Most others rose 1-3.6 per cent.

Property developer Vincom (VIC) and dairy giant Vinamilk (VNM) closed unchanged.

Sacombank (STB) continued to be the most active code in HCM City with 2.77 million shares changing hands, gaining another 3.6 per cent to close at VND17,400 ($0.83).

On the Ha Noi Stock Exchange, rebounds of speculative shares such as VNDirect Securities (VND) and Kim Long Securities (KLS) both hit the ceiling, helping buoy shares in Ha Noi. The latter was the most heavily-traded stock with a volume of 2.35 million changing hands.

The HNX-Index increased 1.59 per cent to finish today at 56.15 points. Market value soared over 61 per cent to nearly VND255.4 billion ($12.2 million) as more than 28.2 million shares were traded.

Advancers edged decliners by four-to-one overall.

Sacombank trades lift market
 
Trading exploded on the HCMC Stock Exchange yesterday – driven largely by soaring trades in Sacombank (STB) shares and halting the recent decline of the VN-Index. However, stocks continued to slide on the Ha Noi bourse due to weak demand.

On the HCMC exchange, the value of trades skyrocketed to nearly VND2.6 trillion (US$125 billion), while volume reached a whopping 171 million shares.

Negotiated transactions accounted for 151 million shares, worth nearly VND2.4 trillion ($114 million) – and most of these were shares of STB, which saw trades totalling VND2.34 trillion ($111.4 million) and a volume of 148 million shares. Analysts reckoned these were unloaded by ANZ Bank and Refrigeration&Electrical Engineering Corporation (REE) as the negotiated sales were equivalent to amounts ANZ and REE had registered to sell.

Through order-matching, STB was also the most-active share in HCM City, with 3.5 million shares traded before they hit their ceiling price of VND16,800 per share.

The market actually remained in its habitual downtrend during the first hours of yesterday's trading but made a turnaround after investors witnessed the incredible volume in the STB code, an FPT Securities Co analyst wrote on the company's website.

"Most investors had thought it was just another day of declines before Sacombank began trading heavily," he said.

The VN-Index ended four sessions of consecutive declines with a gain of 0.77 per cent, closing yesterday at 339.32 points. Advancers edge decliners by a margin of 110-91, with eight out of the 10 leading shares by capitalisation posting gains. Along with STB, real estate developer Vincom (VIC) also hit its ceiling price.

On the Ha Noi Stock Exchange, the HNX-Index declined by 0.29 per cent from the previous session to close at 55.27 points. Volume rose slightly to 22.3 million shares but the value of trades decreased by nearly 8 per cent to just VND158.5 billion ($7.5 million). As in HCM City, however, advancers outnumbered decliners by a narrow margin of 101-91.

VNDirect Securities (VND) was the most-active share, with nearly 2.7 million traded, but the code lost 1.6 per cent to close at VND6,000.

Foreign investors were net sellers in HCM City of shares worth a net of over VND1.8 trillion ($85.7 million), but they were net buyers on the Ha Noi bourse, picking up a net of VND2.8 billion ($133,000) worth of shares.

Seminar discusses Japan’s development experiences

More than 400 representatives from different central and local agencies, universities and research institutes gathered for a seminar in Hanoi on January 9 to learn about Japan’s development experience and possibly making adjustments and applying it to Vietnam.

The event was co-organised by the Central Party Committee’s Organization Commission and the Japan International Cooperation Agency (JICA).  

JICA Chief Representative in Vietnam, Tsuno Motonori, said that Vietnam has gained remarkable achievements in economic development since it implemented its Doi moi (Renewal) policy. Now that it is considered a middle-income country, Vietnam should restructure its economy and improve its competitive edge to achieve deeper international integration.

He emphasized that Japan is willing to share experience and support Vietnam in its renewal process in order to help the country become an industrialized nation before 2020.

JICA has also provided technical and financial support for Vietnam and worked together with Project 165 office to train Vietnamese managers in macro-economic development, knowledge-based personnel management, and improve the management capacity of local authorities as well as preventing natural disasters.

Tet promotion flights with VietJetAir

Vietnam’s new budget airline VietJetAir is offering promotion seats priced from only VND250,000 for all flights from Hanoi to Ho Chi Minh City within January 10-23, 2012.

The promotion is to facilitate travelling of passengers in the capital who want to celebrate Lunar New Year and/or visit relatives in the bustling southern city.

Promotion tickets can be booked at VietJetAir’s website www.vietjetair.com starting now until 5pm on January 8, 2012. Passengers can settle payment directly on the website by Visa or Master card or pay later at VietJetAirs’s official ticket agents or HDBank transactional offices nationwide.

With new aircrafts, comfortable leather-covered seats, on time schedule, professional and friendly flight attendants, flexible airfares, safe flights, VietJetAir has seen all recent flights being fully loaded.

VietJetAir will also increase flight frequency between Ho Chi Minh City and Hanoi to three return daily flights from January 10, 2012 in a bid to meet the increasing travelling demand of Vietnamese and international tourists in the future.

Carmakers fume over fees

Vietnam-based car-makers are feeling the heat after Hanoi and Ho Chi Minh City lifted automobile ownership registration tax rates.

These higher fees are part of the cities’ efforts to reduce chronic traffic congestion but industry players are crying foul.

Toyota Motor Vietnam (TMV) general director Akito Tachibana, who is also chairman of Vietnam Automobile Manufacturers’ Association (VAMA), told VIR the two cities’ higher automobile ownership registration tax rates coupled with raised fees for number plates, “will undoubtedly affect the local auto market [which] inherently depends on consumption in these two biggest cities”.

Ownership registration fees in Hanoi for vehicles with fewer than 10 seats have soared to 20 per cent on January from the former 12 per cent. Meanwhile, the rise in Ho Chi Minh City will be from 10 per cent to 15 per cent. In addition, the cost of number plates has doubled in Hanoi.

The TMV general director said: “This means there is a high possibility of reduced market demand. Certainly, we will have to reconsider plans for our next year. Moreover, TMV’s production plan until 2018 – when the Common Effective Preferential Tariff Scheme inked between the ASEAN countries is officially applied – will be the great challenges for TMV”.

Industry insiders from Honda Vietnam and Mercedes also said this new tax regime would affect these two auto-makers. A source from GM Vietnam told VIR this new policy would likely place greater burdens on local manufacturers.

“It indirectly affects companies’ production and business, as consumer demand for automobiles will decrease. They will have to make think long and hard about buying cars if registration fees stay this high,” he said.

Meanwhile, a Mercedes insider said to cope with the increased automobile ownership registration tax rates, Mercedes had last week launched a programme in which it would support customers by paying 3 per cent of their registration fees.

“We want to bear part of our customers’ registration fees. In the long term, we will have more policies to support customers, depending on market developments,” the source said.

Tachibana said the new ownership registration fees for automobiles along with the government’s set economic indicators in 2012 meant TMV was forecasting that 2012 would be “a very difficult year and VAMA’s estimated sales will fall about 20 per cent against 2011’s”.

The European Chamber of Commerce in Vietnam recently recommended avoiding any increases or tax changes and suggested that the government keep all tax policies affecting the automotive sector stable.

“Frequent and drastic changes in taxes including registration tax significantly disrupt production lines, supply chains and retail operations of automotive players by creating artificial peaks and troughs in market demand,” the peak body said in its White Book.

Vinatex to stitch up equitisation move

Vinatex’s equitisation is now expected to occur in 2012 after numerous delays.

Nguyen Phuong Mai, director of Vinatex’s equitisation board, said the state-run textile and garment group was waiting for the corporate valuation report.

“The report will be available in January or February 2012. After that, we will set up a detailed equitisation plan to submit to the government for approval,” Mai said.

“We will try to operate as a joint stock company from January 1, 2013. However, that will depend much on the market situation this year,” she added. After equitisation, the state will hold the controlling stake of 60-70 per cent and then gradually decrease its holding to 51 per cent.

Vinatex’s equitisation plan, first put on the table in 2008, has been delayed till now due to unfavourable market conditions. Le Tien Truong, Vinatex’s deputy general director, last year said the group had yet to equitise due to global and Vietnam’s economic difficulties, high inflation and sharply declining purchasing power against increasing prices of input factors such as production materials and electricity.

Mai said the group’s plan to equitise this year followed the prime minister’s Decision 14/2011/QD-TTg which stipulates the ratio of charter capital that state will hold in state-owned enterprises (SOEs). Accordingly, textile and garment firms are excluded from the list that the state must hold controlling stakes in.

The decision was issued amid slow equitisation progress which saw only 144 equitised SOEs in 2010 and just six SOEs having completed equitisation in 2011. According to a Ministry of Planning and Investment report, 5,856 SOEs had been transformed as of December 20, 2011, including 3,951 enterprises equitised.

Currently, there are four member companies under Vinatex Group which have not been equitised. They are Dong Xuan Knitting Company, March the Eighth Textile Company, Dong Phuong Knitting Company and Vietnam Fashion Company.

In 2011, Vietnam’s garment and textile sector posted a trade surplus of about $6.5 billion and its localisation rate was estimated to be 48 per cent, up 2 per cent from 2010.

Vinatex is one of 12 state-owned economic groups. In 2011, the textile and garment sector with the revenue of $12.8 billion is one of five sectors which exceeded the revenue of $5 billion.

Therefore, many experts said Vinatex’s equitisation in 2012 was a big event to attract attention of its member companies, its partners and investors.

Baskin-Robbins opens 3 ice-cream stores in HCMC

The US-based Baskin-Robbins, the world’s largest chain of ice cream specialty stores, has just hosted a opening event for 3 flagship stores in Ho Chi Minh City’s downtown area.

The 3 stores are located at 424A Nguyen Thi Minh Khai Street in District 3, and 1 Truong Dinh Sreet and B55 Nguyen Trai Street in District 1.

The stores will serve customers in Vietnam with a wide selection of the brand’s premium-quality, imported ice cream, including world-classics and brand signatures such as Mint Chocolate Chip, Pralines’n Cream and Chocolate Mousse Royale.

Blue Star Food Corp, the only ice-cream icon’s franchisee in Vietnam, plans to open 50 Baskin-Robbins stores in Vietnam over the next several years.

With the opening in Vietnam, Baskin-Robbins now has over 6,600 locations in nearly 50 countries.

Baskin-Robbins last July celebrated the opening of its 4,000th location outside the US with its first shop in Singapore.

HCM City aims for more exports

Export restructuring will continue in HCM City until 2015, with an emphasis on more service exports, according to officials speaking at a seminar held yesterday in HCM City.

Huynh Khanh Hiep, deputy director of the city's Department of Industry and Trade, said by the end of 2020, the city aimed to have service exports to be 60 per cent of total export turnover.

The city targeted an average export growth of 17 per cent per year in the 2011-15 period, with total export turnover by the end of 2015 of more than US$100 billion (excluding crude oil).

More staff would be trained for service export activities as well.

Export support programmes on software products and services will be continued, with the aim of enhancing added value, from software outsourcing to production activities.

Many export support programmes will be implemented, including the expansion of e-custom procedures, support-industry development, and the construction of an export-goods introduction centre.

In general, the city's export turnover is on a recovery trend and has had a fairly good growth rate.

Last year, despite economic difficulties, the city's export turnover (excluding crude oil) reached $19.73 billion, an increase of 21.7 per cent compared to 2010.

The US, ASEAN, the EU, Japan and China were still key markets for the city's key export items, such as agricultural, textiles and garments, seafood, computers and electronic parts, Hiep said.

In 2010, the Asian region accounted for a large proportion (62.6 per cent), thanks to a Free Trade Agreement between ASEAN and China. This was followed by Europe (33.52 per cent) and the Americas (20.53 per cent).

Nguyen Cam Trang of the Ministry of Industry and Trade's Import-Export Department said Vietnamese exporters should create more innovative technology products to increase productivity and quality.

"Viet Nam should increase exports of industrial goods, together with exports of processed agricultural products, instead of exports of more agricultural raw materials," she said.

The country should also focus on developing a supporting industry to add more value to export commodities. Infrastructure and logistics development were also critically important.

Exporters should expand beyond traditional markets, she said, adding that more trade promotions should be held to help domestic businesses set up distribution channels and build networks.

Bui Thi Thanh An, head of the HCM City office for the Viet Nam Trade Promotion Agency, said exporters should be more active in participating in international exhibitions and seek partners to increase business transactions.

Companies should also schedule more business trips to survey foreign markets.

An said that companies should also focus on ASEAN member countries, China, Japan, the US, Europe, the Middle East, Africa and India.

For Japan, they should increase exports of seafood, textiles and garments, furniture, footwear and agricultural products.

At the seminar, Prof Dr Vo Thanh Thu, a member of the Viet Nam International Arbitration Council, noted that one of the major challenges for the export industry was to redue its heavy dependence on imported raw materials.

The textile and garment sector imports nearly 60 per cent of its raw materials, and the footwear and electronic industry imports 90 per cent.

Every year, the seafood sector spends about $500 million for raw material imports.

Each key sector exports to more than 100 countries, but the US, the EU and Japan account for more than 60 per cent of export turnover.

If these markets applied strict trade protection measures or trade barriers, the country's exports would be damaged heavily.

Another challenge for the export sector is the small scale of many companies, which makes it difficult to access the world market and hinders the development of the support industry.

Thu said that Viet Nam should pay more attention to forecasting, including demand-supply, price fluctuation, the world economy, and the impact of free trade agreements on domestic trade activities.

Hiep also said that a large number of primary commodities were exported as raw materials, and Viet Nam's outsourced-based exports had low added value.

High interest rates and an unstable exchange-rate policy were also worrisome issues for Vietnamese exporters.

Poor land management wastes public funds

At least VND1.55 trillion (US$76 million) has been used incorrectly in master-planning and land-use activities in six HCM City districts.

"Violations were found in every procedure, from settings, exams, approval and deployment of the master plan, to land-use plans and management," Le Sy Bay, vice head of the Government Inspectorate's Department of Industrial Economy.

During the 2001-2005 period, HCM City did not submit a master plan for land-use, and during the 2006 –2009 period, no district had approved a land-use plan.

From 2001-2010, departments and industries suggested that the city grant and lease land for house construction, public spaces and production activities for 758 projects, covering 5,078 hectares.

"All 758 projects have violated the Land Law 1993. This led to spending a total of VND42 billion for such works," Bay added.

The inspection report also pointed out that master planning for construction was very weak, and that State management in general and construction master planning has been poorly carried out.

For example, the general master plan for the southern urban area was approved by the Prime Minister in 1994, but it has yet to be readjusted.

From 1994 to 2001, the city did decide to readjust several function areas, including public and green spaces, as well as projects, without permission from the Government.

The Department of Planning and Architecture submitted master plans for 169 projects, but 46 of them could not be used and financial waste amounted to VND7.3 billion.

The inspection found that the 30-50 per cent of procedures were delayed at the Natural Resources and Environment Department and related departments.

The report also revealed that during the 2001-2010 period, the city carried out ground clearance and gave unoccupied land to 804 projects with a total of 7,517 hectares. But 69 of those, covering 690 ha, have not paid money for their land-use rights.

Many investors have also tried to submit payments lower that what is required by regulations, according to the report. They do this by giving false figures on land-use rights.

Since 2002, land plots of many projects have been sold, but 60 – 80 per cent of the land has not been used for building.

The inspection team has asked HCM City authorities to withdraw 48 ha of land from poorly operating projects and to take back VND555 billion that was lost by incorrect calculations of land-use rights.

It also asked the authorities to collect VND692 billion from companies that have not paid land-use rights and to impose fines on the delayed payments, which total VND260 billion.

In 2012, Government inspectors will review natural mineral exploitation and management, construction investment, finance, State budget, banking and national goals programmes.

PM Dung says State construction projects require better planning
 
Prime Minister Nguyen Tan Dung yesterday urged the Ministry of Construction to pay special attention to improving the efficiency of State construction planning.

In a meeting with the ministry to discuss the tasks set for the construction sector this year, Dung highly appreciated the efforts of the sector to overcome the challenges posed by the economic downturn, particularly its success in developing low-income public housing.

However, he also noted the sector's shortcomings, including low-quality construction and planning that failed to meet the requirements of development.

To address these shortcomings, Dung asked the ministry to review its regulatory scheme and endeavor to make detailed plans suitable to the actual conditions of each locality as well as to continue studying new systems of construction management to ensure the safety and quality of construction works.

The ministry was requested to study and build strategies for developing and more closely supervising the real estate market, creating favourable conditions for construction enterprises to adapt to the fierce competition arising in the context of international integration.

Dung also asked the ministry to audit State-owned enterprises under the ministry's management, hasten their equitisation and devise solutions for enterprises posting long-term losses.

Minister of Construction Trinh Dinh Dung acknowledged the existing weaknesses of the sector, noting that some construction projects were still behind schedule, the real estate market was developing unstably, and the exploitation of natural resource to produce building materials was wasteful.

The ministry was determined this year to complete a regulatory structure for urban areas, housing and real estate businesses, he said. It would adjust overall urban plans through 2025 and the national urban development programme for 2010-15, as well as implement the national housing development programme through 2020.

The ministry would also continue to review implementation of construction projects in new urban areas, detecting shortcomings and working out measures to ensure technical infrastructure in these new urban areas is co-ordinated with the regional and national infrastructure, the minister said.

The ministry would also commit to improving the quality of human resources training to satisfy the demands of the construction sector, while boosting research and development in the production of construction materials.

Drastic measures would be taken to hasten the progress of key national projects, the minister vowed.

Vietnam leads ASEAN timber exporters

Vietnam tops ASEAN in timber exports worth US$3.9 billion in 2011, followed by Thailand with US$1.1 billion.

Dhanakorn Kasetruwan, Vice President of the ASEAN Furniture Industries Council (AFIC), said Thailand has proposed establishing a timber production zone in the region to improve efficiency, productivity and competitiveness for ASEAN producers before the ASEAN Economic Community is set up.

He added that when ASEAN becomes a single market in 2015 the region will be more open for capital flow, information and labour forces. If regional producers can cooperate with each other and keep prices at competitive levels, total sales revenue in the region will increase.

The AFIC comprises Thailand, Malaysia, Singapore, Vietnam, Myanmar, Indonesia and the Philippines.

Meanwhile, according to the Bangkok-based Kasikorn Research Centre, FDI into Thailand has dropped significantly over the past five years and now equals only 8 percent of total FDI in the ASEAN market.

Singapore led the bloc in attracting FDI, accounting for nearly half the total amount in the region. Malaysia and Vietnam represented 11 percent and 10 percent, respectively, while FDI in Indonesia increased from 13 to 17 percent in 2011.

Japanese investment in Thailand fell 21 percent in the first 10 months of last year, while it rose significantly in Indonesia and Vietnam.

Hanoi’s office buildings see record-low occupancy rate

Around 28 percent of total leasing areas of Hanoi’s office buildings have yet been occupied, a record-low rate, said realty consultancy firm CB Richard Ellis.

The unoccupied rates for A-grade and B-grade buildings were 34.5 percent and 24.4 percent, respectively.

The leasing price for A-grade buildings remains unchanged, while a price cut only came for B-grade building in western Hanoi due to oversupply.

In the last quarter of 2011, new supply outpaced demand by 5.72 times, with 143,000 square meters coming online, only 25,000 square meters of which was leased.

The new supply, 80 percent of which was located in the western region, mainly came from 4 projects: the A-grade Landmark 72, and 3 B-grade - VA Tower, Detech Tower, and Mipec Tower.

To attract new customers, investors have offered many new add-on services, including free logo and hanging services, and longer free-of-charge periods for long-term deals.

Those who lease an area in central Hanoi for at least three years will be exempt from rental rates for 3-6 months, which will be lengthened to 8 months-1 year for 5-year or longer rental contracts.

With a number of new projects to be completed this year, including Western Bank, Licogi 13, Vicem Tower, Indochina Plaza Hanoi, and Apex Tower, lessees will have more chances to negotiate for reasonable prices, said CBRE.

With only 4,500 new apartments supplied to the market in Q4/2011, the segment saw a move contrary to that of 2006-2010, when new supply of apartments often surged by the year-end, said CBRE.

Liquidity shortages, especially at high-end projects, are the main problem, which has forced investors to adjust the speed of the offerings, Minh Son, an expert at CBRE, said.

The new products launched in the last months of 2011 tended to be more affordable, for example up to 45 percent of new apartments are offered at below VND 25 million per square meter for primary buyers.

This number can be considered a benchmark between projects with good and bad sales capacity.

For secondary buyers, the offering price fell 3.5 percent on average for the entire apartment segment.

In addition, investors also launched several promotional programs to encourage people to buy, such as those offered by the Golden Palace and Ecopark, which inlclude free furniture, or cars and early payment discounts for those who buy two apartments at the same time.

However, compared to early in 2008, prices at the end of 2011, excluding the inflation rate, still increased by 76 percent for the low-price segment, 43 percent for the medium-price segment, 20 percent for the premium segment and, 5 percent for luxury apartments.

The housing market in Hanoi continued the trend of offering discounts on the secondary market in Q4/2011.

Some 40 percent of houses and land that have been completed in new urban areas in 14 districts of Hanoi were offered at a reduced price, ranging from a few million dong to VND10 million per square meter by quarter.

Compared to early 2011, about 70 percent of the projects had a secondary offering at reduced prices, with the common price cut being 10-40 percent.

In the near future the market place will depend on the economic recovery, so secondary buyers will still be under the pressure to cut prices, said CBRE.

While pledged foreign direct investment (FDI) in Vietnam fell 26 prevent year on year to $14.7 billion in 2011,FDI in the real estate sector declined much more sharply, to around $852.6 million, plunging 72.3 percent compared to the peak of $23.6 billion in 2008.

The prospect for FDI in the sector in the future remains gloomy, said Nguyen Minh Tuan, Deputy Director of CBRE.

As the US economy has yet to escape recession and the fate of the EU is still unknown, global cash flows are still very scarce, so capital flows into Vietnam’s real estate sector are likely to see a decrease, he added.

"Prices increasingly reflect the actual supply and demand. Now, the tension between the seller and the buyer continues.”

“So, projects for which the investors have the financial resources, and completed on time as committed, will maintain the confidence of buyers and will probably have more transactions starting Q3 of 2012 " he said.

Total outstanding loans for the real estate sector as of December 2011 are around VND203.6 trillion, of which non-performing loans account for about 4.14 percent, or about VND8,400 trillion, according to the Ministry of Construction.

The rates represented a year-on-year decrease of 13.46 percent, accounting for 9.25 percent of total outstanding debt of the whole Vietnamese banking system.

Of the total outstanding loans to real estate, short-term loans were VND40.89 trillion, while medium and long term loans were VND162.7 trillion, accounting for 20.08 percent and 79.92 percent, respectively.

Outstanding loans secured by assets accounted for about 97 percent, while loans without collateral account for 3 percent.

Outstanding loans for the real estate sector decreased by around VND31 trillion year on year, said the ministry.

Emirates Airlines to open direct flight to Vietnam

The United Arab Emirates’ (UAE) Emirates Airlines will open direct daily flights to Ho Chi Minh City on June 4.

Emirates Airlines President Tim Clark said these flights aim at both tourists and businesspeople from the Middle East, Africa and EU.

The opening of these air routes will provide a gateway for tourists to discover the wonders of Vietnam, including the beaches of Nha Trang and the floating markets of the Mekong Delta, as well as its UNESCO World Heritage sites such as Hoi An ancient town and Halong Bay, he said.

HCM City will be the 124th global destination for Emirates Airlines. Clark said he believes that the opening this direct flight will strengthen the partnership between the UAE and Vietnam.

The establishment of the new air route is the part of an agreement on bilateral aviation cooperation signed by the two countries in April, 2011.

Two-way trade turnover between Vietnam and the UAE in 2010 exceeded US$24 million. Through its cargo transportation, Emirates Airlines made significant contributions to increasing trade between the two countries.

 Vietnam strives for trade balance by 2020

Vietnam, in its 2011-2020 strategy, sets a target of achieving a balance of trade in 2020, Minister of Industry and Trade Vu Huy Hoang said.

“It will require great efforts from both Government and businesses to reach that goal,” Hoang said at an online dialogue via the Government Web Portal on Jan. 6.

According to the minister, in 2011 Vietnam ’s balance of trade was remarkably improved with an export turnover reaching US$96.3 billion, up 33 percent against the previous year.

The country’s trade deficit was over $9.5 billion, down 25 percent compared to the previous year and equivalent to 9.9 percent of total export revenues.

This is an encouraging result, however, it will be difficult to maintain this figure in the coming years, Hoang noted.

He said that Vietnam has always been a country suffering a trade deficit, as it has to import machinery, equipment, fuel and materials and other essential goods for daily use.

“We will have to continue imports if we don’t have a strong enough manufacturing and mechanical industry, lack support industries and prefer foreign goods to locally made ones,” he said.

Shrimp exporters face shut-down due to antibiotic residue

Many local seafood exporters are on the brink of halting operation, or even bankruptcy, as their shrimp exports to Japan have recently been found to contain excessive levels of the antibiotic enrofloxacin.

According to the Ministry of Agriculture and Rural Development, Vietnamese shrimps  bound for Japan last year were 56 times detected to be tainted with enrofloxacin residues exceeding limits .

Consequently, Vietnam had to re-import the aquatic products, which the ministry said not only created adverse impact on the reputation of the local industry but could also cause some foreign markets to turn back on Vietnamese seafood.

Hoang Thanh Vu, an employee in charge of quality at a frozen shrimp exporter, said his company had been three times warned by Japanese importers about the antibiotic residue.

Should the business receive one more warning, the National Agro-Forestry-Fisheries Quality Assurance Department (Nafiquad) will suspend its exports, driving the company to a tough spot, he lamented.

Meanwhile, although most local seafood exporters are aware of the consequence of having their shrimp exports containing excess levels of antibiotic, and have spent billions of dong on input material testing, they still failed to detect all of the contaminated products before exports.

Tran Van Pham, CEO of seafood company Stapimex, said the company last year spent VND11 billion for antibiotic test on the shrimps right at the company’s facility before exports.

“There were times when our containers were held at the Japanese or Canadian ports for up to 10 days, burdening our pressure of clearing bank loan interests, and warehouse leasing costs,” Pham said.

Similarly, Vu said his company had to earmark a total of around VND6.75 billion on enrofloxacin tests.

Nguyen Nhu Tiep, head of Nafiquad, said his institution had fostered checks and tests on seafood exporters prior to their shipment.

However, most exporters said such strengthened inspections would only exacerbate the difficulties of exporters with the hefty costs for antibiotic tests, rather than helping increase the export quality.

For his part, Truong Dinh Hoe, General Secretary of the Vietnam Association of Seafood Exporters and Processors (VASEP), conducting tests on the processed products prior to exports would not be a comprehensive solution to the issue, since farmers still continued to use enrofloxacin in their shrimp feeding.

“Meanwhile, asking farmers to stop using the antibiotic before reaping the crop is out of exporters’ control,” Hoe said.

“Thus, VASEP have repeatedly urged the General Seafood Department to consider prohibiting the use of enrofloxacin in shrimp feeding, while providing guidance for farmers to use alternative chemicals to completely curb this issue.”

However, Pham Anh tuan, deputy head of the General Seafood Department, said the department has yet to be able to ban the use of enrofloxacin, since many exporting markets such as Japan and the US only limit the levels of this antibiotic, rather than prohibiting it.

However, he added that the department will petition for the enrofloxacin prohibition in aquaculture.

“We are reviewing all of the drugs used in aquaculture, and will eliminate all that contain enrofloxacin from circulation on the market,” Tuan said.

EVN reporting huge losses, asks for price hike

The Electricity Group of Vietnam (EVN), the country’s power monopoly, yesterday repeated its demand for a power price hike, after reporting massive losses from operations in 2011.

At the meeting held to review last year’s operation, EVN CEO Pham Le Thanh said the company’s total loss amounted to VND3.5 trillion (US$ 168 million), adding that the unchanged power prices was the main culprit.

“There were times when our selling prices were even lower than the cost prices,” Thanh said.

Thanh said the losses were earlier last year expected to be VND11 trillion, but the company had “exerted effort to reduce losses.”

EVN thus urged the government to stay firm in implementing the plan to allow the power sector to operate according to market forces.

The government should also order the press to increase its dissemination of information so the public can understand the necessity of hiking power prices, it urged.

For his part, Deputy Minister of Industry and Trade Vu Huy Hoang affirmed that power prices will be adjusted.

“What matters is choosing the right time,” he said.

On the sideline of the meeting, Dang Hoang An, deputy CEO of EVN, affirmed with Tuoi Tre that there will be no power shortage in 2012.

“Except in cases related to natural disasters, EVN is confident it can maintain adequate power supply for the economy, the public and enterprises,” An said.

Local wind-turbine tower maker faces US suit

An alliance of four US wind-turbine tower manufacturers have recently pressed lawsuits against the Vietnamese manufacturer UBI Tower Co, and some other Chinese companies, for selling the towers below cost in the US market.

According to the Competition Management Agency under the Ministry of Industry and Trade, four US manufacturers, namely Broadwind Towers Inc, DMI Industries, Katana Summit LLC, and Trinity Structures, have asked the US Department of Commerce and the International Trade Commission to inspect and impose anti-dumping tariffs on towers imported from China and Vietnam.

The Trade Remedy Division under the agency said the US businesses accused the Vietnamese-made products of having the dumping margin of 59.1 percent. The rate is 64.37 percent for Chinese towers.

Nguyen Van Thu, chairman of the Vietnam Association of Mechanic Industry (VAMI), told Saigon Tiep Thi newspaper that UBI Tower Co, based in the northern province of Hai Duong, is the second only manufacturer operating in Vietnam capable of making wind-turbine towers.

The other company is a Vietnam-Korea joint-venture based in Ba Ria – Vung Tau Province.

The charges came after UBI won an international tender worth US$14 million for wind-turbine tower supply, Thu said, adding it was none other than the losers of the tender that brought the Vietnamese manufacturer to court.

“We have so far only been informed of the suit by UBI Tower Co, rather than from the Ministry of Industry and Trade, and the Competition Management Agency,” Thu said.

“It took me by great surprise to learn that such a high-quality mechanical product could be involved in an anti-dumping lawsuit.”

He said that his association had been baffled by this unprecedented anti-dumping lawsuit in the mechanic industry.

“We do not know what to do, and have not figured out a solution yet,” he admitted.

He called on the government, and the Ministry of Industry and Trade, to verify the information and provide guidance for VAMI.

“Otherwise, we hope that the Vietnam Chamber of Commerce and Industry should also take action.”

Meanwhile, Nguyen Phuong Nam, deputy head of the Competition Management Agency, told Saigon Tiep Thi that the lawsuit could only be a warning from the US manufacturers, since the US authorities have yet to slap any anti-dumping tariff on wind-turbine towers imported from Vietnam.

Nam said he would have everything verified during his business trip.

“However, even if the lawsuit is real, the Competition Management Agency will cooperate with relevant agencies to figure out a solution,” Nam promised.

According to the US OregonLive newswire, the US alliance claimed that Chinese manufacturers operating in Vietnam had benefited from Chinese government’s subsidies, which it said had allegedly allowed the companies to engage in predatory pricing in the US.

However, the newswire also stated that the complaint covers metal towers that hold the wind-turbines aloft, rather than the actual turbines or blades.

Small banknotes scarce ahead of Lunar New Year

There will be a short supply of new dong banknotes, especially those with low face values, against rising demand for them for the coming Lunar New Year, local banks have said.

As a Vietnamese tradition, adults will grant “li xi,” or lucky money, which is new Vietnamese small bills, to children on the first day of the Lunar New Year (which falls on January 23) as a wish of luck. Some also use the small change to donate to pagodas after worshipping.

Hence, demand for exchanging the old bills for new banknotes with face values of VND200, VND500, and up to VND20,000 always soars in the few weeks ahead of Tet.

However, many banks said that, since they do not have a large supply of such banknotes this year, they cannot meet all of the demands of customers wishing to exchange the money.

An executive of Vietnam International Bank’s branch in Ho Chi Minh City’s District 1 told the Saigon Times Online that her bank will prioritize the exchange of small bills to customers who already have accounts at the institution.

She said the supply of bills with face values of VND1,000-2,000 this year is adequate, while there are not many notes of VND20,000-50,000, due to low allocation from the State Bank of Vietnam.

Many other banks also said they can only exchange a limited amount of small bills and new banknotes for customers due to the short supply.

Thus, many people have turned to the unofficial market, where money exchangers offer exorbitant exchange rates for the notes.

With the small bills of VND200 and VND500 experiencing the most severe scarcity, black market exchangers now charge customers a rate as high as 65 percent for the VND200 notes, newswire VNExpress reported.

One such exchanger in Hanoi’s Gia Lam District charges customers VND600,000 (US$28.8) for a sum of VND200,000, entirely consisting of the VND200 banknotes, and VND700,000 for a sum of VND500,000, with VND500 bills.

Exchange rates have surged by 150 percent compared to last year, while the rate applied for banknotes with face values of VND1,000 and above remain unchanged at 10 percent.

According to a source from the central bank, since banknotes of different face values will be put into circulation in this Lunar New Year in quantities as earlier allocated, it is illogical that there is a scarcity of banknotes of a particular face value.

Meanwhile, former central bank governor Cao Sy Kiem was quoted by VnExpress as saying that the 65-percent exchange rate for small change is too high.

However, he admitted that there will be a short supply for the VND10,000 and VND20,000 notes this year.

“Exchange rates are expected to soar even further, since demand keeps rising, while the central bank has limited the printing of banknotes with small face values,” Kiem said.

2012 Business Startup festival launched

The Vietnam Chamber of Commerce and Industry (VCCI) launched the 2012 Business Startup Festival in Hanoi on January 7.

The program is to honour young people who have developed the best business projects and call for investment in these projects.

VCCI President Vu Tien Loc stressed that since its launch in 2003 the Business Startup Festival has helped promote creativity and arouse passion for business among young people in order to build a socially responsible and highly competitive business community.   

“To meet the target of developing Vietnam into an industrial nation by 2020, we need more new entrepreneurs, and we have high hopes for university graduates who will have the chance to become successful entrepreneurs in the future,” said Loc.

He expressed his hope that the 2012 festival will attract more young people to show their passion, share ideas and stimulate their innovations to set up highly practical projects.

Over the past 9 years, the Business Startup Festival has attracted tens of thousands of students developing more than 1,700 projects.

At the ceremony, the organization board presented first, second, third and consolation prizes to 11 best projects in 2011.

Vietnam sets up first special economic zone in Laos

The Lao Ministry of Planning and Investment and Vietnam’s Golf Long Thanh Trade and Investment JSC signed an agreement in Vientiane on January 7 to upgrade the Vientiane golf course and real estate complex to a special economic zone.

Both sides agreed to amend and supplement the complex project in line with Laos’ Special Economic Zone development policy.

Signatories to the document were Lao Minister of Planning and Investment Somdy Douang and Golf Long Thanh CEO Le Van Kiem.

The signing was witnessed by Deputy Prime Minister Somsavath Lengsavad and his Vietnamese counterpart Nguyen Xuan Phuc who was in Laos for the 34th session of the Vietnam-Laos Intergovernmental Committee for Economic, Cultural, Educational and Scientific and Technological Cooperation.

At a reception for Kiem, Lao Deputy Prime Minister cum Foreign Minister Thoong lun Sisoulith appreciated Golf Long Thanh JSC’s long-term investment plan in Laos and said he believes that the special economic zone will operate efficiently and be a symbol of trade and investment cooperation between the two countries.

He thanked the company for carrying out charitable activities in Laos, including building schools, building houses for the poor, refurbishing cemeteries, supporting Lao war veterans and providing surgeries for 3,000 blind people with total capital of more than US$4.5 million.

Kiem, who was honoured with Vietnam’s Labour Hero title, vowed to build the special economic zone into a model for Vietnam-Laos cooperation ties.

Deputy PM visits Vietnamese businesspeople in Laos

The Vietnamese businesspeople who have been operating effectively in Laos have contributed to Laos socio-economic development, as well as created many jobs for workers in both countries.

Deputy Prime Minister Nguyen Xuan Phuc made the statement at a meeting with outstanding Vietnamese businesspeople in Vientiane, Laos, on January 7.

They included the Laos-Vietnam Insurance Joint Venture Company (LVI), Long Thanh golf course and sports complex, and An Phu Joint Stock Company.

He encouraged them to increase the quality of their products, promote their trademarks and strengthen the solidarity and multi-faceted cooperation between the two countries now and in the future.

On the occasion, Deputy PM Phuc paid a visit to the Vietnamese embassy in Vientiane. On behalf of Party and State, he wished the embassy staff a Happy New Year with good health and success in accomplishing their mission.