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BUSINESS IN BRIEF 10/3

Sharp rise seen in VN consumer confidence; VN-EU pact to deliver the goods; Steel industry seeks more Gov't help; Budget revenue up, oil down; Hanoi seeks to attract more investors; Number of new realty companies surges

Sharp rise seen in VN consumer confidence

Consumer confidence rose sharply in February to 142.3 from a month earlier, an ANZ report says.

In terms of personal finances, 38 per cent of Vietnamese – up 5 percentage points – said their families were "better off" financially than a year ago compared to 21 per cent (unchanged) who said theirs were "worse off."

Fifty eight per cent of respondents expected their families to be better off this time next year, compared to 7 per cent (up 1ppt) who expected to be worse off.

Over the next 12 months 58 per cent (up 8ppts) said their country would have "good times" financially while 13 per cent (down 1ppt) expected "bad times."

Viglacera expands granite tile factory in Thai Binh

Viglacera Corporation, one of the leading companies in the building material industry, on March 6 began the expansion of its high-quality Granite tiles factory at Tien Hai industrial park in the Mekong Delta Province of Thai Binh.

The expansion is scheduled to complete in the third quarter, lifting the total capacity of the factory to 3.5 million tonnes as well as creating more 150 jobs.

In particular, the new facility will operate in line with the ISO14000 standards on environment and will be issued a certificate of a "green factory" in the second quarter of this year.

The factory's tiles products will be sold on the domestic market and exported to Europe, Taiwan, and Indonesia.

VN-EU pact to deliver the goods

Viet Nam is a friendly and reliable partner of the EU and the Free Trade Agreement being negotiated will promote growth for both sides, a senior European Commission official has said.

Joseph Waldstein Wartenberg, spokesman for the EC's Trade Office, told the Vietnam News Agency reporter in Brussels that the signing of the Agreement of Partnership and Cooperation and the FTA negotiations are positive signs in bilateral ties as Viet Nam and the EU celebrate the 25th anniversary of diplomatic ties this year.

Viet Nam and EU are set to continue the 12th round of negotiations on the EU-Viet Nam Free Trade Agreement on March 24 in Ha Noi.

It is scheduled to be the last session before the negotiations are concluded and the agreement signed.

Wartenberg praised Viet Nam's young and abundant population and its economy, which he said was among the fastest-growing in the Southeast Asian region.

EU is the second largest trade partner of Viet Nam behind China, with Viet Nam-EU trade reaching 27 billion euros in 2013. Viet Nam is the fourth largest trading partner of EU in ASEAN and the 30th in the world.

Vietnamese exports to EU increased by 28 per cent during the 2009-2013 period.

Warternberg said that besides tax and trade barriers, negotiations would focus on legal issues, competitiveness and other issues related to intellectual property rights.

To prevent Viet Nam from becoming a low-skilled labour market after signing the FTA, he said there will be a chapter on sustainable commerce and development, including commitments under norms set by the International Labour Organisation.

Other regulations on the labour and investment environment as well as a legal framework involving civil organisations will also be negotiated.

Alongside these, Viet Nam needs to be committed to protecting and managing sustainably its biodiversity and its forests, preventing illegal logging as part of its efforts to fight climate change, he added.

Steel industry seeks more Gov't help

The Viet Nam Steel Association (VSA) has demanded aid for overcoming difficulties, such as excess supply and growing competition from cheap imported steel that has hit the industry hard.

Demand for steel in the domestic market has been slumping for the last few years, exerting considerable pressure on steel companies, the association said.

While the total annual production capacity for construction steel has reached 11 million tonnes already, demand for construction steel is projected at around 6 million tonnes this year, according to the Ministry of Industry and Trade's estimates.

Steel companies said new investments in steel production should be given careful consideration and must be based on market demand.

According to Pham Chi Cuong, president of the Viet Nam Scientific and Technical Association of Metallurgy, given the current excess of supply over demand, clubbed with the 10 per cent growth rate per year, it might take a decade to balance supply and demand.

This calculation does not take into account the increase in imported steel in line with the participation in free trade agreements, which could boost supply further.

The import of cheap alloy steel containing Boron from China is another headache for the industry as this kind of steel faces zero tariff and offers lower prices than domestically-produced steel.

According to VSA, many steel companies have had to cut their production by up to 60 per cent or will even face closure if they failed in the competition.

Do Duy Thai, general director of Pomina Steel Corporation, was quoted by Tin Tuc newspaper as saying that while steel demand is low, the influx of steel containing Boron has made competition extremely hard for the domestic industry.

Still, this remains controversial. A representative from the General Department of Customs said competition should spur Vietnamese firms to enhance quality and quote more reasonable prices.

Previously, the Ministry of Industry and Trade had forecast that steel consumption during the first several months of this year will remain slow. — Steel firms continue to seek aid.

Budget revenue up, oil down



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Viet Nam reported an upsurge in the State's budget revenue, but saw a strong reduction in budget collections from crude oil products during January and February, the Ministry of Finance said.

The total budget revenue during the first two months of this year reflected a year-on-year increase of 17.3 per cent to VND151.87 trillion (US$7.1 billion), the ministry reported on its website on Thursday.

Domestic revenue touched VND117.5 trillion during the first two months, a rise of 24.7 per cent against the same period last year.

The growth in the total state budget revenue during these months was due to recovery in the local economy and growth in the purchasing power of society, the ministry pointed out.

Budget collections from production and business activities still saw strong growth, with 29.3 per cent collected from the state-owned enterprises, 16.1 per cent from foreign-invested enterprises and 20.1 per cent from private enterprises.

However, the budget collection from crude oil indicated a year-on-year drop of 20.2 per cent to VND11.6 trillion ($542.1 million).

The ministry also reported that total state budget spending rose 11.3 per cent year-on-year to VND77.6 trillion ($3.69 billion) during the first two months of this year.

Vietnamese furniture on display in Singapore

Eight Vietnamese furniture designs chosen among other winners in the Hoa Mai Furniture Design contest from 2010 to 2013 will be displayed at the International Furniture Fair of Singapore (IFFS) from March 13-16, said Nguyen Quoc Khanh, chairman of the Handicrafts and Wood Industry Association of HCM City (HAWA).

In addition to HAWA representatives and businesses, the young designers of the winning items will participate in the show, Khanh said.

They will also take part in the Singapore Design Business Summit 2015, where designers and businesses will present their new projects. Having Vietnamese furniture designs on display at the fair will help promote local furniture design industry, which has proven domestic firms can make products of their own designs instead of producing products following foreign buyers' designs only.

IFFS is one of Asia's premier design-led exhibition shows, featuring a large selection of furniture from diverse exhibitors. The fair last year attracted nearly 22,500 visitors from 115 countries and territories.

Credit growth sees Tet spike

Credit activities have developed strongly in the first months of the new year, a positive sign for the economy's recovery, independent market observers have said.

The economy's credit growth as of February 24 rose by 0.96 per cent compared with the figure recorded late last year, according a source from the Ministry of Planning and Investment.

Meanwhile, another source said the credit grew by 1 per cent by February.

Analysts said these were surprising changes because the country showed negative credit growth in the first few months of previous years. For instance, credit growth decreased by 1.67 per cent in February last year.

Senior economic expert Dr. Vo Tri Thanh explained that many enterprises had been expecting economic recovery.

A leader of the Viet Nam International Bank (VIB) told Dau Tu newspaper that many sources had predicted that economic performance would improve this year, so the bank expected good credit growth.

Both lending and deposit rates are at stable and low levels, which has also helped credit growth.

Meanwhile, the State Bank of Viet Nam's governor has asked the banking sector to seek ways to further cut the interest rate on long and medium-term loans by 1 or 1.5 per cent.

The central bank's new policy of allowing lenders to use up to 60 per cent of short-term deposits for long- and medium-term loans has also contributed to credit growth.

Decreased oil prices, low interest rates and economic recovery are other reasons behind the current growth.

Although the growth is a good sign, analysts warned lenders of the risks of rapid credit growth.

One of the banks' biggest risks is bad debt. Some banks may try to increase credit growth to hide their bad debts, analysts have said.

A source from Dau Tu said that PTBank, for example, increased its credit growth to reduce its bad-debt ratio.

In 2014, the bank's credit increased by 50 per cent while its bad-debt ratio fell to only one per cent.

Nam A Bank and VPBank also face a similar situation as their credit growth reached 32 and 35 per cent, respectively, in last year's third quarter.

Because of this, analysts said credit should not be extended too quickly, and that lenders should focus their resources on developing their services.

Tools for assessing business association’s capacity announced

The Vietnam Chamber of Commerce and Industry (VCCI) in conjunction with the Asia Foundation announced a survey report on good practices of business associations and tools for assessing a business association’s capacity at a ceremony in Hanoi on March 6.

Accordingly, through interviews with 16 business associations in 7 provinces and cities nationwide, the survey summed up their good experience and initiatives, focusing on service provision for members, how to develop effective revenue generation model, the application of information and communication technology (ICT), association administration, feedback on legal policies, and international cooperation.

VCCI Vice Chairman Hoang Van Dung underscored the need to improve capacity of Vietnam’s business associations in the context of increasingly integration, saying that Vietnamese enterprises should further enhance links so as to raise competitiveness, enabling them to join global value chains.

The building of tools for assessing a business association’s capacity aims to help associations to evaluate their own capacity and compare their operation practices with international standards, said Pham Ngoc Thach from VCCI’s legal department.

On the occasion, the Asia Foundation announced its funding programme to assist business associations in improving their performance through applying good practices and initiatives. The one-year programme is scheduled to begin in June 2015, with each aid package valuing from 15,000-20,000 USD.

Asia-Pacific consumers have high shopping expectations

Consumers in the Asia-Pacific have high expectations of the overall shopping experience, a survey by CBRE has found.

The region shared very similar preferences, with all age groups ranking affordability, cleanliness and security as the main factors.

However, unlike other countries where price was the most important factor, Vietnamese consumers prioritised security and cleanliness over price.

Though Vietnamese appreciated a wide range of retailers at a shopping destination, the presence of specific retailers, department stores or foreign brands was less important.

Entertainment facilities turned out to be less important than the "basic" ingredients of price, cleanliness and security. Given that contemporary shopping centres increasingly focus on food and entertainment services and events designed to create compelling experiences for shoppers, this outcome might seem disappointing.

Nevertheless, the survey found that more than 50 percent of respondents aged between 18 and 34 felt that such facilities are fairly or very important in their decision.

"The rapid growth of young Vietnamese consumers highlights that a strong experiential offering consisting of leisure (including food and beverages) and entertainment will be a powerful tool for shopping centres to ensure long-term competitiveness and thus the increased value of retail real estate," Richard Leech, executive director of CBRE Retail Services, Southeast Asia, said.

Seventy-eight percent of surveyed respondents were willing to travel up to 30 minutes to get to their preferred shopping centres. "The completion of metro lines in the next few years will certainly shorten the travelling time that customers are willing to spend," Duong Dung, head of CBRE's research and consulting department in Vietnam, noted.

In the next two years 25 percent of respondents expected to shop less often in a store, with 45-50 percent saying they would shop online via desktop/laptop or smart phone/tablet more often than they did now.

Surprisingly, an even greater proportion of consumers (69 percent) aged 55-64 thought they would use their smart phone/tablet more frequently to buy non-food items.

Done in August 2014, CBRE's first ever consumer survey polled 11,000 consumers in 11 major cities across the Asia Pacific, including 1,000 aged 18 to 64 in Hanoi and Ho Chi Minh City.-

Hanoi seeks to attract more investors

Hanoi is becoming an increasingly attractive destination for foreign investors thanks to the city’s efforts to improve its investment environment, according to Director of the Vietnam Chamber for Industry and Commerce Vu Tien Loc.

The city has been valued for its efforts in administrative reform and modernisation, business support, and enhancing information transparency, Loc said at a working session with municipal leaders on ways to advance the local investment environment and competitiveness on March 5.

According to the municipal People’s Committee, the city’s provincial competitiveness index was raised 18 spaces to rank 33 rd out of 63 localities nationwide in 2013, while the administrative reform index rose by two to stand at 5 th place.

Hanoi also ranks second in the IT application index, reported the committee.

Nguyen Ngoc Tuan, Vice Chairman of the Committee, said in a bid to build a positive image and attract investors, the city will renovate its administrative system alongside drastic changes in taxes and customs, among other fields.

The city has been a pioneer in shortening the duration of business licence granting to three days from five days previously, he noted.

At the same time, Nguyen The Thao, Chairman of the municipal People’s Committee, said careful consideration is essential in choosing suitable investors, requiring transparency and comprehensive renovation from processing investment procedure to supporting investors.

Binh Duong records 415 million USD trade surplus in early 2015

Southern Binh Duong province recorded nearly 2.94 billion USD in export revenue within 2015 first two months, an annual increase of 14 percent.

According to the municipal Statistics Department, foreign investment contributed 2.38 billion USD to the sum, a 15.1 percent increase from 2014.

Major exports reflecting significant growth include woodwork products, apparel, footwear, phones and electronic devices.

During the same period, the province imported commodities valued at 2.52 billion USD, a 14.7 percent annual increase and marking 415 million USD of trade surplus.

Also in the January-February period, Binh Duong attracted nearly 180 million USD in foreign direct investment (FDI). This year, the province aims for 1 billion USD in FDI attraction.-

Number of new realty companies surges

The number of new property trading firms established during January and February this year surged 88.8 percent from the same period last year, according to the General Statistics Office.

The real-estate sector also saw a large number of firms resuming operations, up 52.8 percent from a year ago.

The property sector was also the second most attractive destination for foreign direct investment (FDI), reporting an influx of 111.43 million USD, accounting for 9.3 percent of the total FDI into the country during that period, according to the Foreign Investment Agency.

HCM City continues to be engine of national growth

Ho Chi Minh City is to continue playing its role as an engine of Vietnam’s growth and a nucleus of development in every aspect in the southern key economic zone, experts agreed at a March 6 workshop in the city.

At the event, which was held to scrutinize a blueprint on the city’s economic restructuring for 2013-2020, Deputy Director of the HCM City Institute for Development Studies Tran Anh Tuan said the economic restructuring scheme has improved the quality of economic growth based on the effective use of resources, especially capital, labour and land.

The scheme is aligned with a national economic restructuring project that targets public investment, credit organisations, and State-owned enterprises.

To Duy Lam, Director of the State Bank’s Ho Chi Minh City branch, described the restructuring of credit organisations as a cornerstone and driving force that has brought about improved financial capability and risk management, ensuring the stable growth of the banking sector and monetary market in particular.

Within the city’s industry and trade sector, restructuring should be focused on stimulating production in tandem with fostering innovations and human resources, particularly in mechanical manufacturing, electronics, information technology, chemicals, pharmaceuticals, rubber, and food processing, experts suggested.

They also recommended developing support industry, raise the rate of local contents in products, and join the global supply chain.

According to the Department of Industry and Trade, the technology, processing and manufacturing sectors account for 68.26 percent of the city’s exports.

About shifting the structure of tourism sector, a representative from the municipal Department of Tourism talked about plans to promote competitive tourist products and boost marketing in major markets, domestically and globally.

Throughout 2015, the sector is continuing building up the HCM City tourism brand while working for the targets of a 8-10 percent yearly increase in foreign arrivals and a 15-20 percent rise in domestic visitors.

Participants also discussed policies impacting the city’s economic restructuring in services, industry, agriculture, and land, among others.

Phu Yen’s filled estuary cleared, opened to fishing boats

The southern central coastal province of Phu Yen officially re-opened the Da Dien estuary at 16:00h on March 5, allowing local fishermen to sail to sea for the first time since the lunar New Year.

The estuary has been clogged with silt, preventing nearly 350 ships of local fishermen from sailing while the tuna catching season has started.

The local authorities have employed a company to open a new estuary about 80m to the north from the existing Da Dien rivermouth.

The new estuary is nearly 150m wide and 4m deep, allowing large fishing boats to pass safely.

Phan Thuan, chairman of the local fishermen’s association said local fishermen normally set out for tuna fishing on the sixth day of the lunar year, which fell on February 24 this year. He added that the fishermen were relieved when the new estuary was opened.

Provincial fishermen currently operating at sea informed that they had a good catch with between 1.5 tonnes to 3 tonnes per boat.

The tuna fishing season usually lasts from the first to the fourth months in the lunar calendar.

So far this year fishermen in Phu Yen have caught nearly 570 tonnes of tuna.

Vietnam targets additional 2,500km of highway by 2020

Vietnam has targeted to have 2.500 kilometers of highway completed in the next five years, the medium scenario in an ambitious plan that the state budget cannot cover, according to the Ministry of Transport.

With such a goal, the participation of the private sector is necessary to help realize it, according to information posted late last month on the official portal of the ministry, mt.gov.vn.

According to a three-scenario plan set out by the ministry, the Southeast Asian country would have an additional 2,300km of highway following the first scenario, and over 2,700km of highway in the most optimistic scenario.

The state will have to spend over VND181.2 trillion (US$8.52 billion) building a total of 2,708km of highway from now to 2020 if it follows the most optimistic scenario, according to the ministry.

The remaining capital, around VND213.3 trillion (US$10 billion), will be invested by various sectors, including the private one, the ministry said.

Regarding an investment plan to realize the 2020 target, the ministry said it has so far put into operation 567km of highway.

In addition, around 457km of highway is under construction.

The ministry has also identified three sources of investment capital for three highway projects, including a section of Mai Dich-Nam Thang Long in Hanoi, Dau Giay-Phan Thiet linking the southern province of Dong Nai and the south-central province of Binh Thuan, and a section of Tan Van-Nhon Trach in Ho Chi Minh City, with a total length of 120km.

For investment projects following the previous plan that should be materialized before 2020, there are investors planning to build around 508 kilometers under Build-Operate-Transfer or Build-Transfer mechanisms for seven projects throughout the country, said the ministry.

Thus, by the end of 2015, there will be 700km of highway completed, 457km under construction, 120 km about to be built, and 508km seeking investors, with a total length of 1,785km.

Many BOT projects in transport like the Trung Luong-My Thuan Expressway in the southern region, Bac Giang-Lang Son Highway in the northern region, and the My Thuan Bridge 2 in the Mekong Delta province of Vinh Long, have been initiated following a new law paving the way for public-private partnership (PPP) mechanisms in investing in such projects.

Decree No.15 of the government, regulating investment in the form of PPP, was issued late last month, opening up more opportunities for the participation of the private sector in many fields previously capitalized only by the state like infrastructure, transportation, electricity, water, education, transport, health, and the environment.

According to experts, the decree is a prerequisite for infrastructure projects, particularly in the area of transport, to be developed more strongly with firm commitments from the government.

The VND14.6 trillion (US$686.3 million) Trung Luong-My Thuan Expressway project that has just been started by a venture of six private contractors is expected to be completed in 2018.

Construction sector's production value rises

The construction sector's production value reached VND11 trillion ($516.4 million), equivalent to 116 per cent of the same period last year, according to the Ministry of Construction's report.

The value in January made up for 7.6 per cent of the target value for the full year, which was set at VND150.4 trillion ($7.06 billion) or 101 per cent of the value reported in 2014.

Capital shortage delays Tay Ho project

The construction of Starlake – also known as the Tay Ho Tay project – a mega urban area project close to West Lake, is stagnating due to capital shortage for infrastructure development.

This was revealed by the Deputy Chairman of Ha Noi People's Committee, Nguyen Ngoc Tuan.

The municipal People's Committee said the mega project spread over 207 ha, will play an important role in the city's socio-economic development.

The committee has also ordered the relevant organisations to hasten the construction and report on the project's progress before March ends.

The first phase of the project was started in January 2014, but the project has been stalled due to slow land clearance.

HCM City to ensure safety of apartments

HCM City plans to monitor the current situation in apartment buildings in the city, with the aim to improve living conditions and ensuring the safety and security of residents.

Checks will be carried on the management, maintenance, power and fire safety provisions in these buildings, as well as for the accountability of investors.

Results will be reported to the city and the Department of Construction before June.

Contrasting export performance in the first two months

The first two months saw contrasting performance among Vietnam’s major export items, with the textile-clothing and footwear sectors producing upbeat earnings while other major items- e.g. seafood and coffee- saw a flat business.

In January-February, despite the long Tet holiday, the apparel sector still recorded a 17.7 per cent on-year growth in export value to reach $3.42 billion, with exports to the US market accounting for 44 per cent of the total, according to the Vietnam Textile and Apparel Association (Vitas).

Last year Vietnamese firms raked in nearly $10 billion from exporting textile clothing to the US, producing a 12.6 per cent increase on-year, whereas most other heavyweight rivals just registered slight growths or even contractions in export values.

For example, China’s textile garment export value to the US rose less than 1 per cent, India increased by 6 per cent while Indonesia, Bangladesh, Pakistan and Cambodia saw negative growths.

This year, Vitas expects the Vietnamese textile garment export to the US market to surpass $11 billion, a 13 per cent jump compared to last year.

Besides the apparel industry, the footwear sector has also registered a two-digit growth in the first two months with the aggregate export value exceeding $2 billion, signifying a 23 per cent increase on-year.

According to the Vietnam Leather and Footwear Association (LEFASO), Vietnam’s footwear export to the US is rising quickly and is forecast to obtain a bigger slice in the market, mostly expanding on the declining share of Chinese-made footwear items.

These performances are in contrast with those of the two other major export items, coffee and seafood.

Accordingly, the seafood sector saw a 9.4 per cent decline in export value falling to $907 million while coffee producers could only ship a total of 241,000 tonnes at $511 million, recording a 25.3 per cent fall in volume and 16.4 per cent in value.

In January 2015, total seafood export value to the US market dropped by nearly 37 per cent to a mere $90 million against January 2014.

The Vietnam Association of Seafood Exporters and Producers (VASEP) stated the Vietnamese shrimp and Tra fish export items have been heavily disadvantaged by targeted US anti-dumping tariffs since late 2014, an effect which is expected to continue exerting pressure this year.

Japan wants to build underground trade center in Saigon subway station

Japanese businesses are interested in developing a trade center in the underground part of the under-construction subway system in Ho Chi Minh City, an envoy from the Japanese Embassy in Vietnam told the city’s leader on Thursday.

The proposed shopping mall should be built along with the development of the subway station at Ben Thanh Market in District 1, Katsuro Nagai, head of the embassy’s Economic Board, told chairman Le Hoang Quan during a reception at City Hall, according to the municipal website.

Implementing both projects simultaneously will yield the best economic effectiveness and will not affect the environment, the Japanese diplomat said, adding Japan hopes to receive support from the city.

The Ben Thanh-Suoi Tien metro system, the first of its kind in Ho Chi Minh City, requires a total investment of US$2.49 billion, with $2.2 billion from Japanese assistance loans whereas the city’s administration will cover the remaining $290 million.

The subway line, which has a total length of 19.7km, including 2.6km underground, will run through 14 stations, with three underground ones, and connect Ben Thanh Market and Suoi Tien Amusement Park in District 9.

Construction of the Ben Thanh-Suoi Tien metro line began in August 2012.

The megaproject is scheduled for commission in 2020, according to the envoy.

Nagai said the participation of Japanese investors in the trade center project will help Vietnam with Japan’s experience in building underground constructions.

The Japanese diplomat also revealed that a Japanese group, the Tokyu, is looking to cooperate with Vietnam’s SAMCO to conduct research for the development of satellite projects surrounding the Suoi Tien Terminal.

Chairman Quan said the city is putting all of its effort into completing the subway project soon.

As for the proposal to set up an underground trade center and other projects in the metro terminals, Quan said the city will prioritize Japanese investors to join them.

According to the subway project’s master plan, an 18,000-square meter area underneath Le Loi Street is zoned for the construction of commercial facilities.

The metro train will have a maximum speed of 80kph underground, and 110kph aboveground, allowing passengers to travel from Suoi Tien to the downtown area in around 29 minutes.

Acronis to penetrate Vietnamese market

Acronis, the world leader in new generation data protection based in Russia, has announced its expansion plans in Vietnam.

This information was shared by Acronis CEO Serguei Beloussov within the framework of the conference on ERP (Enterprise Resource Planning) revolution held in Ho Chi Minh City last week.

Acronis has provided reliable cloud backup for financial institutions, banks, multinational corporations, SMEs and individual customers. The company’s customer base includes some of the leading firms operating in Vietnam, such as Korean tech giants Samsung and LG

In the course of the enterprise, technical administrators or system experts will interact mainly with Acronis’ products. Meanwhile, individual customers are required to have a relatively good command of IT knowledge to use the products. Therefore, common clients only account for 20 per cent of the company’s customer portfolio.

When being asked about Acronis’ market penetration, Serguei Beloussov said that Kaspersky Lab, the Internet security company has developed a successful business strategy in Vietnam so his company will follow in its footsteps.

Under the plan, Acronis will cooperate with Nam Truong Son Co., Ltd, the sole distributor of Kaspersky software in the country.

He noted that his company would pay attention to all key customer segments, while Nam Truong Son will develop the approach and support for each customer group in Vietnam.

The representative of Nam Truong Son revealed that their main target customers for the distribution of Acronis products are SMEs and proficient Internet users.

Beloussov also stated, that, “backing up to the cloud requires a fast and stable internet connection, so our company intends to open more new data centres in Asia to increase speed besides main data centres based in the US and Europe.”

Based on the implications of this statement it can be speculated that Vietnam could be on his list of suitable locations, because the country is more comfortable than China in terms of internet content control.

Founded in 2002, Acronis has established itself as a global provider of leading backup, disaster recovery, and secure file sharing and file access solutions.

Vingroup to commence construction on Vu Yen Island

Vingroup plans to commence construction of a US$1 billion ecological complex on the Vu Yen Island in Hai Phong soon.

Vingroup reports its plan to commence construction of a US$1 billion ecological complex on the Vu Yen Island in Hai Phong on March 5. Photo haiphong.gov.vn

This was announced during a meeting in the northern port city of Hai Phong between local authorities and Vingroup leaders on March 5.

City Chairman Le Van Thanh spoke about the scale of the project, which will turn the island into an accommodation, entertainment and ecological complex.

Thanh said given the prime location, the complex will lure more tourists to the city.

The Vu Yen Island is spread over a total area of 872 hectares in the districts of Thuy Nguyen and Hai An and crisscrossed by three different rivers of Ruot Lon, Bach dang and Cam.As per the design, the island will be developed into an ecological zone with villas, a 36-hole golf course, and amusement parks with an investment of VND22,700 billion (more than US$1 billion).

It was also suggested at the meeting that a luxury marina, dock, five-star hotel and a casino should be added to the construction plan to attract more visitors.

The Chairman urged all parties to speed up the work of planning and investment for a complete project to be submitted to the Ministry of Construction and to the Prime Minister.

Once approved, the project will be started in April and the Vu Yen Island Golf Course is expected to be finished in 2016.

Microsoft continues to be ICT industry’s best place to work

Microsoft is honourably listed among Vietnam’s 100 best places to work and is the leading company in IT solution sector in a joint survey conducted by Anphabe and Nielsen.

Microsoft Vietnam continues its second consecutive year ranked the top of Technology Companies. At the same time, Microsoft Vietnam was also voted Top Employer Branding in the Leadership category.

The ‘Vietnam’s 100 Best Places to Work’ survey is the first and the most professional one in Vietnam specializing in measuring Employer Branding (EB) attractiveness of large enterprises in the market. The joint survey is annually conducted by Anphabe – the company specialized in EB solutions, and Nielsen – a reputable market research company, to provide thorough measurement and constant update. Apart from delivering career dynamic trends and EB in Vietnam, the survey also offers detailed results of Vietnam’s  Best Workplaces according to each sector, aggregation for all industries and each main group.

Not only being honored in Vietnam, in the world’s ranking, according to different statistics, Microsoft - also known to be the best environment to work  - is continually honored as one of the best working environment in consecutive years, from 2009 to 2014 in Europe and worldwide, voted by the Great place to work Institute ...

According to Microsoft partners and employees, Microsoft deserves this title since there always exists a sustainable trustful culture, which facilitates opportunities to support the development in a creative environment. Microsoft has been creating work environment where employees can contribute their own ideas and share the common passion: creating technology to change the world.

In addition to be topped in the ICT industry, Microsoft also occupied the double award – the top in Leadership category in the survey. Microsoft Vietnam’s Leadership team are proactive, flexible and always head toward human, particularly, Microsoft leaders’ investment in staff and facilitating opportunities for them to gain further development. Microsoft Vietnam leadership team seamlessly strives to increase flexibility, diversification of career opportunities and develop a roadmap for self-development training for staff in order to meet the changing needs of work and properly develop in accordance with the shifting of society.

Soaring credit triggers warning

Bank credits rose sharply in the second month of this year which would pose a threat for a hot credit growth in the months ahead.

According to recent figures published by the Ministry of Planning and Investment (MPI), bank credit expanded by 0.96 per cent as of February 24, 2015, while credit growth was reported to surpass 1 per cent by the end of the month.

This came unusual as February credit has shown tendencies of contraction in the previous years. For example, bank credit dropped 1.67 per cent in February last year.

Earlier, credit reportedly contracted 0.5 per cent in January this year, matching the patterns set by recent years.

Vo Tri Thanh, deputy director of the Central Institute for Economic Management under the MPI has attributed February 2015’s positive credit growth to firms’ high expectations on economic rebound.

Besides, this year’s Lunar New Year (Tet) took place in February leading to soaring demands for capital.

Another important factor was the low and stable rates of bank interest.

The State Bank Governor has instructed banks to ease lending rates by 1-1.5 per cent for medium and long-term loans whereas a new recent regulation has enabled banks to use as much as 60 per cent of their short-term capital for medium and long-term lending, as opposed to the previous rate of 30 per cent.

Rising credit is allegedly a good news within the current context of continuing economic vulnerabilities, although experts issued a warning that soaring credit could risk bank operations and drive up banks’ bad debts.

Last year, the market saw scores of banks achieve escalating credit growths of 30-50 per cent at the same time as claiming the volume of bad debt rates sank to just 1-2 per cent of their total outstanding loans.

Experts, however, argued these banks’ bad debts could be doubled or tripled if their credit growth stood only at the banking sector’s average level of 14 per cent, instead of the achieved 30-50 per cent.

Furthermore, economists also assumed credit growth in the range of 30-50 per cent could lead to a hot-paced growth threat as it has happened in the previous years with the resultant repercussions’ impact still perceptible.

Banks, therefore, should not over-focus on boosting credit growth, but promoting service segments instead to deepen bank operations and to reduce risks.

State Bank Governor Nguyen Van Binh has also stressed that the credit growth being set at 13-15 per cent for this year was not a target to achieve but the cap for this year’s credit increase.

“Credit must be kept at a certain level to ensure security. Banks could not develop sustainably if they were to chase after credit growth while neglecting the development of other banking operations,” Binh said.

Construction bank needs $1.9 billion to restructure operations

Viet Nam Construction Joint Stock Commercial Bank (VNCB) needs VND40 trillion (US$1.9 billion) to restructure its operations, said Deputy Governor of the State Bank of Viet Nam Nguyen Phuoc Thanh.

A customer does transactions at a branch of Viet Nam Construction Joint Stock Commercial Bank (VNCB). The bank needs VND40 trillion (US$1.9 billion) to restructure its operations, said Deputy Governor of the State Bank of Viet Nam Nguyen Phuoc Thanh. Photo vnexpress.net

Speaking with local media at the ceremony to announce the change of VNCB's operating model into a one-member limited company whose equity will be acquired by the SBV on March 5, Thanh said the capital would come from various sources, including the VNCB's sale of bad debts for the Vietnam Asset Management Company and the SBV's refinancing loan.

Thanh noted that with the SBV's ownership, people will feel more secure when transferring their money to the bank. Meanwhile, several major banks have also promised to support VNCB by sending the bank their money. Thus, the VNCB will receive the capital it needs for its operations.

The VNCB was established by Trust Bank in May 2013. Trust Bank was operational for 23 years, with charter capital of VND3 trillion ($142.85 million).

In mid-2014, the SBV appointed new officials to the VNCB after some former top executives at the bank were arrested for allegedly violating state regulations.

The VNCB, which is set to be restructured, signed a comprehensive cooperation agreement with Vietcombank to facilitate growth and sustainability last August. Its current chairman is Nguyen Van Tuan, who reportedly resigned from his post as Vietcombank Deputy General Director and was appointed by the central bank on March 5.

According to the central bank, its takeover of the VNCB will terminate all statuses, including the rights and interests of existing shareholders in the construction bank. However, the legal rights and interests of depositors at the bank will be preserved.

Companies tackle post-Tet labour shortage

Many industrial companies are facing problems recruiting new workers after large numbers of staff quit over the Tet holidays, some offering sign-up bonuses and other inducements to attract the necessary skills on salaries of VND4-5.5m.

Panasonic in Vietnam in Hanoi is looking for 200 female workers, while Indoac Company needs 100 new workers, and Sumitomo Electric Industries plans to hire 1,500 female workers. Denso Manufacturing Vietnam Co. has not said how many workers it needs, but a name, address and phone number is enough to get a job interview.

In Thai Nguyen Province, Samsung Electronic Vietnam said it is looking for 10,000 workers on its manufacturing and assembly lines, and has gone to the local Department of Labour, Invalids and Social Affairs for help in recruiting.

"It's good that many enterprises are hiring new blood. The workers can choose the right job for themselves," said a spokesman for the Hanoi Department of Labour, Invalids and Social Affairs.

Managers in Hanoi's industrial zones say companies are offering various inducements to attract new workers prepared to stay with the job. Suncall Technology Vietnam is offering full health insurance and a pension plan. Sumimoto Heavy Industries said it will increase financial support for travelling, housing and seniority.

Denso Manufacturing Vietnam Co. is offering assistance for workers needing help caring for children or elderly relatives.

After Tet, many labourers quit their urban jobs to stay home, while others want to start a new year with a new job, hoping that it will fare better that the last. Tran Van Phu, a guard at Thang Long Industrial Zone in Hanoi, said that after Tet, the number of job-seekers increased by six times the usual daily rate.

Nguyen Kim Tung from the Huong Moi Career Counseling Centre said they are busiest during university graduation season and after Tet.

Tung said several companies had cut off bonuses and rewards this Tet because of economic problems, leading workers to look for more stable jobs with better companies.  

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

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