SBV: Deposit rates stable

Deposit rates were stable in the last week of May though inter-bank interest rates continued to decrease at most key tenors, according to an updated report of the State Bank of Vietnam.

Deposit rates in Vietnam dong were almost unchanged from a week earlier, Vietnamplus reports. These rates hovered around 0.8-1% a year for demand deposits and those with a tenor of less than one month, 4.5-5.4% for one month to less than six months, 5.4-6.5% for six months to under 12 months and 6.4-7.2% for over 12 months.

Meanwhile, interest rates for borrowers in priority sectors now stand at 6-7% a year for short-term loans and 9-10% for medium and long-term loans. For normal sectors, borrowers are subject to short-term rates of 7-9% and medium and long-term rates from 9.3-11%.

According to the central bank, annual inter-bank rates in U.S. dollar inched up at most tenors under one month, standing at 0.29-0.54%.

Deposit rates in the U.S. dollar are at the ceiling levels imposed by the central bank (0.25% for institutional depositors and 0.75% from individual depositors). Lending rates in the greenback range from 3% to 6.7%, in which short-term rates are 3-5.5% and medium and long-term rates from 5.5-6.7%.

Green light given to dairy farming project

Binh Ha Livestock Investment Co. has got the go-ahead from the government of Binh Dinh Province to implement a cow farming project worth VND3.6 trillion (US$165.4 million) in the province.

A major shareholder of Binh Ha is Hoang Anh Gia Lai Joint Stock Company, which has already partnered with a number of companies to develop a chain specializing in producing beef and milk in and outside Vietnam, according to the provincial Investment Promotion Center.

Binh Ha plans to raise up to 100,000 cows on 5,080 hectares in Van Canh, Hoai Nhon, An Lao and Hoai An districts of the province. This will be the biggest livestock project in the central coast province.

The investor is completing procedures so that work on the project can start this year. The company will import pregnant Brahman cows and carves from Australia for cultivation at the farm in Binh Dinh Province in the initial stage. The enterprise will apply Israel’s drip irrigation technology to water grass to feed cows.

According to the center, this cow farming project will create many jobs for local people and turn out products for domestic consumption and export.

Last year, the government of Binh Dinh Province completed a master zoning plan for livestock farming until 2020 with a vision toward 2030 and a scheme to produce quality beef until 2020.

The province will improve its native breeder cows and produce high-quality beef, pig and poultry meat in order to create more value-added products for local consumption and export.

Apart from Binh Dinh Province, domestic enterprises have spent big on cow farming in Dak Nong, Daklak, Ha Tinh, Gia Lai and Quang Ninh provinces.

Techcombank acquires VCFC

The State Bank of Vietnam has allowed Vietnam Technological and Commercial Joint Stock Bank (Techcombank) to acquire and transform Vietnam Chemical Finance Joint Stock Company (VCFC) into a limited liability company, VietnamPlus reports.

Under the central bank’s Decision 1108/QD-NHNN, Techcombank will be responsible for all assets, legitimate rights and responsibilities of VCFC.

The two sides must conduct procedures to transform VCFC and register to form and publicize information about the new business in line with the existing regulations.

According to a report of VCFC released early this year, Techcombank acquired over 53.92 million shares (89.87%) of VCFC to raise its holding to 99.87%.

Techcombank is the fourth bank to get approval for merger and acquisition deals related to finance companies in Vietnam.

Earlier, HDBank bought Société Générale Viet Finance (SGVF) and VPBank took over Vietnam National Coal - Mineral Finance Company. SHB merged Vinaconex-Viettel Finance Joint Stock Company (VVF) while Maritime Bank purchased Textile and Garment Finance Joint Stock Company (TFC).

India probes wood panel imports from Vietnam

The Directorate General of Anti-Dumping and Allied Duties (DGAD) under India’s Ministry of Commerce and Industry has begun an anti-dumping investigation into Plain Medium Density Fibreboard (MDF) imports from Vietnam and Indonesia, according to the Vietnam Competition Authority.

The DGAD has initiated the probe after Indian enterprises Greenply Industries Ltd. and Mangalam Timber Products Ltd. filed against MDF imports from the two ASEAN countries. The Indian agency probed the imports between October 1, 2013 and September 30 last year.

The Vietnam Competition Authority quoted data of the International Trade Center (ITC) as showing that Vietnam exported some 28,800 tons of MDF worth US$13 million to India last year and was the second biggest exporter of the product to this market.

Figures of the Vietnam Trade Promotion Agency (Vietrade) under the Ministry of Industry and Trade showed India’s wood imports increased from US$630 million in 2003 to US$2.7 billion in 2013 as demand for materials in the real estate and furniture production sectors surged. The country spent US$96 million buying MDF in 2013 alone.

According to the Vietnam Competition Authority, Turkey is also looking into a possible avoidance of anti-dumping tax of plywood imported from Vietnam and Bulgaria since 2010.

Turkey’s General Directorate of Imports has launched the investigation to see if plywood is shipped from China to Vietnam and Bulgaria for export to Turkey to avoid anti-dumping tariff that Turkey is imposing on China’s plywood.

According to the Turkish Ministry of Economy, imports of plywood from Vietnam grew sharply to 24,065 cubic meters last year from only 3,250 cubic meters before 2010 and 10,052 cubic meters in 2013.

Da Nang airport draws domestic investors

A number of domestic businesses have come forward to invest in building a new terminal at Da Nang International Airport in the central city of Da Nang.

The Airports Corporation of Viet Nam (ACV) had proposed the Transport Ministry to set up a joint venture of domestic businesses to invest in the project.

The joint venture comprises the ACV, which will contribute 10 per cent of the total investment capital, Thang Long Air Services Corporation, AOV Investment Corporation, and Ha Noi Construction Corporation.

The Imex Pan-Pacific trading group has also sought the Transport Ministry's permission to invest in the project on Build-Own-Operate (BOO) basis.

Although no official investor has been selected for the project, the new terminal will be built by domestic investors, an official from the Transport Ministry was quoted as saying by Dau Tu (Investment) online newspaper.

The construction of the new terminal is estimated to cost around VND3.2 trillion (US$147.4 million).

The construction is scheduled to start by January next year at the latest and is expected to be completed by June 2017.

Spread across 40,000sq.m., the new terminal is expected to serve 2.3 million international visitors to Da Nang by 2022 and four million passengers by 2030.

The new terminal will come up next to the existing terminal.

1.9 million shares of Thuong Dinh footwear bought

Three private investors have bought 1.9 million shares of Thuong Dinh Footwear Company during an initial public offering at the Ha Noi Stock Exchange (HNX) on June 8.

The shares were sold at an average price of VND48,177 (US$2.2) each, nearly five times higher than the offering price, reaching close to VND91.7 billion ($4.2 million).

The auction attracted the participation of 32 investors who had earlier registered to buy more than 22.1 million shares, 11.5 times higher than the volume of company shares offered on auction.

As part of the company's equitisation plan, the State will own 3.3 million shares, while its workers are allowed to buy more than 2.1 million shares, or 36 per cent and 23.5 per cent of chartered capital, respectively.

The remainder of 1.8 million shares, or 20 per cent of chartered capital, will be sold to strategic investors.

Japan grows kaoliang in Vietnam

A pilot kaoliang growing project by Japan- wholly invested Sol Holding Vietnam Company is underway in Dong Nai and Dak Nong provinces.

The project showed that kaoliang can grows well producing higher yield, even in severe weather condition in Vietnam, and creating much higher income than paddy, corn and cassava.

Sol Holding Vietnam plans to transfer technology and provide seeds for farmers to help them plant kaoliang on a large scale next year, said the company’s general director Nguyen Thai Son.

The company will also build an animal food and biological tablet processing factory and propose the Government for building a bio-fuel processing factory, said Son, noting that food for cows is in dire shortage while biological tablet products will be assured for consumption by Japanese partners within 20 years.

Corn imports up 30%

Vietnam imported 2.87 million tonnes of corn valued at US$622 million in the first five months of this year, up 30% in volume and 17% in value over the corresponding period of last year.

The Vietnam Food Association (VFA) attributed the domestic growing demand for processing animal food to a sharp increase in corn imports over recent years, principally from Brazil, Argentina, India and the US.

Businesses also imported more than 730,000 tonnes of soybeans and US$1.38 billion worth of animal food and other materials in the foresaid period.

Meanwhile the VFA reported that Vietnam only exported nearly 2 million tonnes of rice as businesses found it difficult to win new contracts from major export markets while the price of rice for temporary stockpiling remained high.

Hong Kong stops importing poultry products from Vietnam

Hong Kong has temporarily stopped importing poultry and poultry products from Vietnam for fear of the avian flu (H5N1 and H5N6) that is occurring in Dak Lak and Dak Nong provinces.

The Ministry of Industry and Trade has been informed by the Hong Kong Food and Environmental Hygiene Department that announced the decision.

The decision, which came into effect as from May 22, 2015 bans all poultry and poultry products from all Vietnamese localities.

Liquidity shortage pressurises rates

Improving credit growth, an active secondary bond market, and volatility in the foreign exchange market has combined to reduce trading volume in the primary bond market.

According to a report from the State Bank of Vietnam (SBV), the total trading volume for the first quarter reached US$54 billion, down 17.81% from the previous quarter and 5.3% over a year. Short tenors were more active than long-term maturities.

Overnight bonds recorded VND476,018 billion (US$22 billion) of trading, accounting for 41% of the total, while one-week tenors posted at VND418,109 billion (US$20 billion) and contributed to 36% of total traded value. Banks conducted lending and borrowing transactions via the interbank market in order to meet the minimum reserve requirement and avoid a shortage of short-term liquidity.

Strong credit growth was a leading factor in the decline in bond trading as banks diverted funds from the bond market to make loans. Year-to-date credit growth reached 1.91% through March-end. This was a substantial improvement over the period from 2011 to 2014, when credit growth was abnormally negative during the first quarter of the year.

As described in the report on macro-economic conditions in May and for the first five months released by the National Financial Supervision Commission, as of May 20, credit of the whole market grew at 4.26%, which was nearly four times higher than last year.

During 2014, banks mobilized funds in the interbank market to invest in the bond market for gains. This method of making money continued into 2015. Although the primary bond market deteriorated, with issuance volume declining 14% to only VND69,941 billion (US$3.3 billion), the secondary market still experienced a bright note.

Total trading of government- and guaranteed-government bonds in the secondary market reached VND236,628 billion (US$11 billion), surging 64% year-over-year. Bond yields followed the downtrend during the first quarter, which attracted investors. This had negative impacts on the supply side in the interbank market.

The supply side in the interbank market was limited, which was caused by the strength of the US dollar making the foreign market upbeat. Signs of US economic recovery and the possibility of the FED raising interest rates boosted the dollar against other currencies.

At the same time, Vietnam’s trade balance retreated to a deficit during the first three months. The trade deficit in March reached nearly US$1.4 billion, which expanded the total of deficit for the first quarter up to US$2.4 billion. This, consequently, increased the demand for such notes.

Strong credit growth and the active foreign exchange market restricted the supply of lending in the interbank market.

At the same time, borrowing demand increased to meet the needs of customers during the long-term holidays and put pressure on interest rates to increase.

MoIT seeks gov't nod for more coal exports

The Ministry of Trade and Industry has asked the Government to allow coal exports to solve inventories, said an official with the ministry's Power Department.

Nguyen Khac Tho, Deputy Head of the Ministry's Power Department, told Hai Quan (Customs) newspaper, that coal depots are overloaded following the government's policy to limit exports in a bid to ensure national energy security and domestic demand; this has also resulted in a decrease in coal export turnover.

The ministry's Export-Import Department has pointed out that Vietnam's coal exports in May, as well as during the first five months of this year, saw a sharp decrease in both volume and value.

The country exported 150,000 tonnes of coal last month, earning US$19 million in turnover. The figure dropped 40% in volume and 22% in value compared to the previous month and 72% in volume and 50% in value compared to the same period last year.

The country exported 895,000 tonnes of coal in the first five months of this year, earning US$100 million, down by 77% in volume and 65% in turnover compared to the same period last year.

Meanwhile, coal production has increased compared to last year, reported the ministry.

The production of clean coal reached 3.67 million tonnes last year, marking a year-on-year increase of 0.8%.

The country's total coal production during the first five months of this year was 17.58 million tonnes, up 4.5% year-on-year.

Tax revenues up despite hit to crude oil revenues

The country's tax revenues in the first five months of this year continued to grow despite reduction in tax collection from crude oil, according to the General Department of Taxation.

During this period, domestic tax collections were estimated to total VND283.2 trillion (US$13 billion), representing an increase of 16.3% over the same period last year, including VND42.4 trillion (US$1.94 billion) in May.

Taxes from crude oil, however, dropped by 34% against the same period to VND30.3 trillion (US$1.39 billion), reaching only 32.6% of the target for the full year.

Meanwhile, in the first five months, tax collection from other export and import activities gained a year-on-year surge of 6.5% to VND66 trillion (US$3.03 billion).

According to the Ministry of Finance, the domestic economy has reacted positively recently, but the economy is still faced with difficulties that could affect tax collections.

Therefore, the ministry would track the economic development in the near future to manage tax collection activities for reaching the yearly target.

The ministry would also implement solutions to increase tax revenues and prevent individuals and corporates from evading taxes.

The General Department of Taxation is also required in June to implement measures to collect more tax revenues and promote inspection of tax payment and after customs clearance.

The department will implement solutions against pricing transfers and tax arrears.

The tax revenues are expected to reach VND167.6 trillion (US$7.7 billion) in the second quarter and VND345.9 trillion in the first half of this year, the ministry said.

The tax sector planned to collect VND731.6 trillion (US$33.56 billion) this year, of which VND93 trillion (US$4.27 billion) would be from crude oil.

Saigon Port to upgrade facilities for faster cargo handling

Saigon Port on Thursday announced to review its organizing activities and invest in facilities to ensure highest loading capacity in the future, following outcries from goods owners over the port congestion.

Till the end of this year, the port will be equipped with more devices to load and pack loose cargoes, transport trucks, and other kinds of vehicles, Saigon Port’s general director Le Cong Minh said at a meeting with the city’s government.

However, Minh did not elaborate on invested capital for the facilities.

The HCMC government on Thursday held a meeting with Saigon Port management to seek solutions for the current congestion at Saigon Port’s piers. The city’s vice chairman Nguyen Trung Tin asked the port to boost manpower and facilities to cope with the problem which has caused heavy losses to many enterprises.

The sudden increase in loose cargoes arriving at the port last month over the past few weeks was confirmed as main cause of the congestion. Nearly three million tons of sand was cleared at the port in April alone while the port received no sand cargo in the same period last year.

Saigon Port’s administration manager Nguyen Manh Ha said that enterprises have strongly pushed up good imports due to easier capital under the Government’s lending rate subsidy program. Besides, the volume of fertilizer, bran, and cassava has increased due to the harvest season.

Workers of the port have to spend more time to load the loose cargo due to lack of specialized equipments, Ha explained.

Many other enterprises are packing sand at the port to export to Singapore that has also worsened the congestion.

Tens of ships are still waiting at piers of Saigon Port as of on Thursday afternoon while many other ships are loading goods. Workers of the port are struggling to handle the huge amount of goods and clear the congestion as soon as possible.

Vinalines to upgrade Cam Ranh into key port in central region

Ba Ngoi Port in Cam Ranh township in the central coastal province of Khanh Hoa was put into official operation on Thursday under the new name Cam Ranh Port Ltd. Co., one year and a half after the port was transferred from Khanh Hoa Province’s government to the Stated-owned Vietnam National Shipping Lines (Vinalines). Vinalines said it had plans to upgrade Cam Ranh into a key container port in the south-central region.

Under a plan prepared last year, Vinalines would spend VND700 billion (US$41 million) upgrading Cam Ranh Port to meet the increasing demand for goods transportation between central coast provinces and the Central Highlands.

In the first phase of 2009-2010, the developer will build a wharf for both general cargoes and containers. The new wharf, 230 meters long and 30 meters wide, can receive ships of up to 50,000 DWT.

Besides, the company is also investing in new equipment for the port such as cranes and new warehouses.

The plan is aimed to raise the port’s capacity to three million tons next year compared to the current throughput of 1.2 million tons of goods, which is still much higher than the port’s designed capacity of only 700,000 tons.

In the second phase from 2010 to 2020, the company will build more wharves at the port, comprising container wharves and multi-purpose wharf to better serve the needs of larger vessels, said a top official of Vinalines. The port should be able to handle five million tons of goods per year by 2020.

Besides, another plan has been drawn up to build a railway section connecting the national railway system to the port to facilitate the transportation of containers and cargoes via railway.

Ba Ngoi port was built in 1949, and has become deteriorated despite its convenient location and natural conditions for a deepwater port. In October 2007, Khanh Hoa Province decided to transfer the port to Vinalines.

Spanish firm sets up branch in town

Spanish-based company Global Architecture Local Office, better known as Galo Architects, on Thursday launched a branch office in HCMC, officially marking its presence in the market with services of architecture and town planning.

Carlos Garcia Lorente, general director of Galo Architects, said that what made the company choose HCMC to set up office in the Asian region was the high potential in the property market here in Vietnam.

Lorente said the Galo Asia office, which is located on Nguyen Van Huong Street in HCMC’s District 2, would facilitate its business as an architecture company, which is active in urban planning, office and apartment building, as well as developing tourism facilities such as hotels, resorts, golf courses and amusement parks among others.

“We are going to make especially town planning and housing, maybe some hotels and resorts but not too much office buildings because it’s a bad moment to invest in this kind of projects due to the world crisis,” Lorente said.

He added Galo Architects last year made a tour to Vietnam to sound out business opportunities and collaboration in future projects with Vietnamese architectural, construction and development companies.

The Spanish architect disclosed that Galo Architects had been asked to search for locations for a Spanish company which is looking for opportunities to develop two hotels in Vietnam's market.

Sparton Corp. increases business in Vietnam

The U.S.-based Sparton Corporation is increasing business in its Vietnamese subsidiary, Spartronics Vietnam, through new market growth and installation of more equipment to boost production, the corporation’s top executive said on Thursday.

Cary B. Wood, president and CEO of parent company Sparton Corp. and also general director of Spartronics Vietnam, told the Daily that more investment would be made for Spartronics Vietnam to expand its manufacturing scope.

Wood and other senior managers of the parent firm were visiting the Vietnam subsidiary in Binh Duong Province to review operations and to meet with his team to discuss future programs in Vietnam.

Spartronics Vietnam, housed in a new 5,500 square-meter plant at the Vietnam-Singapore Industrial Park (VSIP) in the southern province, manufactures and assembles printed circuit boards, enclosures and black box solutions in various electronic segments.

The only facility of the corporation in Asia, Spartronics Vietnam is an electronics manufacturing service provider, with a focus on the aerospace, transportation, communications, industrial and medical industries. All of the products made in Vietnam of the corporation have been exported, Wood said.

The parent firm has closed down a plant stateside and transferred equipment and production lines to the Vietnam subsidiary, according to Wood

“We’ve been fortunate to have expanded manufacturing at Spartronics Vietnam because it makes sense logistically and economically for us and for our customers,” he said in a statement.

Wood added: “We’ve worked diligently to ensure that we provide our customers with the highest quality electronics at the lowest cost, regardless of where they’re produced. It’s part of our continuing effort to ensure the viability of our company in the near-and long-term.”

Sparton Corporation has also appointed Drew Richmond as deputy general director to oversee the day-to-day operations at Spartronics Vietnam. Richmond previously served in the capacity of vice president for business development at Sparton of Canada, Ltd.

The company has previously stated its facility in Jackson City, Michigan State in the U.S. will be closed down in June, and facilities there are being shipped to Vietnam.

“We’re already well underway with the transfer of production to Vietnam… using advanced product planning tools to ensure a smooth transition,” added Wood.

Spartronics Vietnam on Thursday also marked four years operation.

Sparton Corporation, established 109 years ago, is a broad-based provider of electronics to technology-driven companies in diverse markets. The corporation provides its customers with sophisticated electronic and electromechanical products. Headquartered in Jackson City, Michigan, Sparton currently has five manufacturing locations worldwide.

AEC could spell trouble for the furniture industry in Vietnam

Furniture executives from around the globe are knocking at the door of Vietnam, a rapidly emerging supplier for high quality and some of the least expensive woodwork exports on the global market.

With goods at prices competitive with those made in neighbouring China, Vietnam is being courted by US manufacturing and retail executives looking to purchase inexpensive desks, chairs, and household items made from pine, cajuput or rubber wood.

As a result, Vietnam currently ranks fourth in the world, second in Asia and first in Southeast Asia in exporting wood furniture and furnishings and is rapidly becoming a leading exporter to the US, according to official sources.

However, despite all the successes in the overseas markets – domestic businesses have only managed a 40% market share in the local market – which leading market analysts believe should be much higher.

Vo Van Quyen from the Ministry of Industry and Trade (MoIT) said imports account for 60% of the local market with the nation importing on average nearly US$2 billion annually— 40% for the real estate industry and 60% to meet domestic consumer demand.

Quyen, who is in charge of domestic trade affairs at the MoIT, said Vietnam has roughly 4,000 companies in the industry, primarily very small and medium sized businesses located in trade villages.

They will face increasing difficulties competing at home Quyen stressed, as Vietnam joins trade pacts and lowers import duties in line with its obligations under the ASEAN Economic Community (AEC) early next year.

Huynh Van Hanh, deputy head of the Handicraft and Wood Industry Association (HAWA) of HCM City in turn echoed Quyen’s concerns and said domestic companies are sure to face increasing difficulties when the lower tariffs under the AEC kick in.

Hanh said domestic companies need to take heed and should make plans to shore up market share in the domestic marketplace with increased brand recognition for customers or they’ll lose out from the AEC formation.

For its part, the Vietnam Wood and Wood Product Association said it is aware of no less than 26 countries that are planning, or have made moves, to expand into Vietnam’s furniture industry –  including China, Thailand, Japan, the Republic of Korea (RoK) and the UK.

According to the HAWA, the local market has been neglected as domestic companies have focused on pursuing big orders from foreign partners.

As a result they have failed to meet domestic customers’ tastes, establish distribution networks and develop brand names recognition.

There is near unanimity among the experts that limits in connectivity, trade promotion, and establishment of distribution networks have led to domestic companies and craft villages neglect of the domestic market.

This is the major cause that sales of imported goods have taken off and cornered the market in Vietnam.

It is time for companies in the industry to pay more attention to the domestic market, they advise adding that focusing on the domestic market helps businesses avoid overdependence on certain foreign markets.

In addition, it also helps businesses minimize risks in the integration process.

HAWA cautioned that though Vietnamese woodworks are exported to many countries in the world including demanding markets like the US, Japan and EU – it does not necessarily follow that they meet with the domestic demand.

Businesses must conduct market research, develop value chains for production and distribution along with good marketing and promotion policies to meet the domestic demand—or else AEC will spell trouble for the domestic market.

DHL Express provides express delivery services to Vietcombank

DHL Express – the world’s leading logistics company on June 4 announced that it will provide express delivery services to the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank).

Vietcombank Deputy General Director Pham Thanh Ha said by partnering with DHL Express, Vietcombank can deal with the current challenges to provide their customers with better services.

Ms Yasmin Aladad Khan, Senior Vice President of South East Asia and South Asia Region at DHL Express underscored the importance of the DHL Express global network and Vietcombank’s comprehensive access to the local market and highlighted the effective cooperation between the two sides in offering high quality express delivery services.

Director Commercial at DHL-VNPT Express Ltd, Md. Miarul Haque has pledged to provide maximum support for human resources training and expertise to help its partners maintain and expand business activities.

Eurasian trade will open new page

The free trade agreement (FTA) between Vietnam and the Eurasian Economic Union (EEU) will create more export opportunities for some of Vietnam's agricultural, industrial and processed products.

Vietnam will also have to open its market for steel products from EEU countries, which will influence the country's steel sector.

According to Tran Thanh Hai, deputy head of the Import-Export Department under the Ministry of Industry and Trade, domestic steel producers would face difficulties competing with a large steel maker like Russia.

We have to adapt to the rules of a market economy in the current context of globalisation, Tran Tuan Anh, deputy minister of trade and industry, told Hai Quan (Customs) newspaper.

Measures taken by the Government and management agencies could assist enterprises, but they would only be effective for a certain period, so enterprises had to accept the competition from other economies, added the deputy minister.

Support policies would remain in place for the domestic sector, including import controls and technical barriers. However, the most fundamental problem was that enterprises had to enhance their competitiveness and effective management, he said.

Vietnam and the EEU began negotiations on the bilateral FTA on March 28, 2013.

The Eurasia Economic Union comprises Russia, Kazakhstan, Belarus, Armenia and Kyrgyzstan.

The two sides signed the FTA after two years of negotiations with a comprehensive scale, high level of commitment and benefit balance.

The agreement opens a new page in co-operation between Vietnam and the Eurasia Economic Union.

Lychee sales take off in the RoK

Fresh lychee produced in Vietnam is selling well in markets throughout Asia and Europe, especially in the Republic of Korea (RoK).

The information was unveiled June 5 at a Trade Promotion Conference organized jointly by the city of Hanoi and Hai Duong province.

However, Vietnamese growers and producers need to boost their advertising efforts to create brand awareness and increase sales in the markets, speakers at the conference underscored.

Recently, Vietnam successfully exported lychee to France, which is a positive development for the industry.

Freight firms need upgrade

Local logistics companies must upgrade their operations to increase their competitiveness in the future as many free-trade agreements (FTA) have been signed, experts said.

Deputy Director of Avina Logistics Joint Stock Company Le Hoang Oanh said the signing of many FTAs, and especially the establishment of the ASEAN Economic Community (AEC) by the end of this year would bring challenges in terms of higher demand on import and export activities as well as investment of foreign logistics firms in Vietnam, including ASEAN companies.

Foreign companies in Vietnam would have more opportunities to use the logistics services of companies coming to Vietnam from their own countries, and would not use local logistics companies as before, Ngo The Hung, deputy director of Thang Loi Logistics Joint Stock Company, said.

That would put pressure on the local logistics firms to compete with the foreign rivals, Tran Huy Hien, general secretary of the Vietnam Association of Logistics Enterprises, said. He said the local firms must upgrade their logistics facilities and services to improve their competitiveness in the future.

Gemadept, a large logistics joint-stock company in Vietnam, had invested VND340 billion for building a logistics centre in the Song Hau industrial zone, in the southern Hau Giang Province, to expand its business, the Hai Quan newspaper said.

Meanwhile, Thang Loi Logistics had added VND3 billion to VND4 billion in investment capital to upgrade and seek warehouses in order to have more customers, Hung said.

The company had invested in the development of land transport vehicles to improve transport services from Thailand, Laos and Cambodia to Vietnam and China, he said, because there would be more trade opportunities under the AEC and transport over land would be cheaper and faster than air or sea transport.

Avina Logistics would also focus on developing land transport services, Oanh said. Her company would improve the staff abilities and management technology, and even co-operate with other logistics firms to increase competitiveness.

However, Hien said almost all local logistics firms would face several difficulties in upgrading their operations and business because they were small and medium-sized enterprises that lacked capital, technology, skilled staff and experience.

To deal with these challenges, according to Hien, the enterprises need to co-operate among themselves and get state support. This support includes policies to help logistics enterprises get loans, and a strategy for improving linked factors such as transport infrastructure and ports and customs procedures to reduce the cost of logistics service.

Small firms struggle in tough market

Small companies are finding it hard to compete with technological and product diversity as they struggle to gain a foothold in the marketplace.

Vietnam Chamber of Commerce and Industry (VCCI) statistics show small-sized enterprises were in trouble in the first four months of 2015. Medium and big-sized enterprises' grew, but orders and revenues of small-sized firms declined, forcing many to lay off workers.

Of the enterprises that had to halt operation in the first four months, 76.5% were small businesses, unable to compete with medium and big-sized companies to find outlets for their products.

Small firms are easier to established, but often lack technology and most of the equipment is old and obsolete, lack skilled personnel, have problems negotiating polices and laws, leading to low production.

Bui Thu Thuy, an official from the Ministry of Planning and Investment, said small-sized enterprises often have trouble accessing credit from banks.

But Tran Thi Hong Hanh, general secretary of Vietnam Banks' Association, said many of the firms fail to meet financial requirements for loans, and banks were reluctant to lend for fear of default.

Despite the difficulties, many firms show optimism for the second half of 2015.

Pham Thi Thu Hang, general secretary of VCCI, said firms should diversify their products and find several different markets.

"They should focus on new potential markets and build effective distribution channels to deal with high inventory," she said.

First lychee shipment heads for the US

The first batch of fresh lychees, cultivated in accordance with strict Viet Gap regulations, have been readied at a packing facility in Thanh Ha District, Hai Duong Province.

Visiting lychee farms yesterday, where fruits are picked for no-pedestrians site packaging, Robert Guillemot of the United States Department of Agriculture signed an approval allowing the fruits to be packed for exports.

The first lychee shipment of 2 tonnes shall be irradiated in the country's only facility in HCM City and, if approved, shall be transported by air to the United States.

Further inspections will be carried out in the US, before the fruits are made available for US customers. Initial steps have so far been positive.

Investors in need of land for new projects

Ha Noi authorities have asked the Ministry of Natural Resources and Environment (MONRE) to forward their request to the Government to allow them to help investors secure land for projects.

Their request noted that whenever investors fail in negotiations to secure land from all the residents of a block, projects languish for more than ten years or so, even though investors have secured 70 per cent of the land needed.

It is often seen that residents who refuse to yield live scattered across a block. This makes it impossible for investors to start any part of their projects. As a result, whatever land investors managed to secure until then lie wasted for weeds to claim.

In their proposal to the MONRE, the city authority has said that in cases where investors have managed to secure 70 per cent of the land required for projects, it will help hold meetings and negotiations with residents who refuse to let go of their land.

If residents refuse to give their land even after 30 days since the meeting, the authorities will seek the Government's permission to allow it to direct the city's Land Stock Development Organisation to clear the remaining land (from residents who are unwilling to give them) and pay them compensations.

The city authorities have mentioned other issues as well in their document.

It has proposed that while granting land-use rights certificates and registering changes in land-use rights, the city's Office for Land Use Right Registration should be appointed as the authority that measures lands.

The document also touches upon conflicts in certain laws. The recently-issued Land Law 2013 says that the lease and allocation of lands for economic development projects must be done through auctions to select investors and not through the appointment of investors.

However, Government regulations hold that the results of the selection of investors shall be the premise for allocating and leasing land.

Homebuyer support package launched

A credit package worth some VND20 trillion (US$952.38 million) will be released to support homebuyers interested in commercial and urban housing projects, reported Xay Dung, the Ministry of Construction's e-paper.

The ministry made the announcement in a document sent to the government office, whereby it approved the lending programme suggested by the State Bank of Viet Nam.

The central bank will disburse the fund through commercial banks in which it has controlling stakes. They include Vietcombank, VietinBank and BIDV, along with Agribank and Viet Nam Development Bank.

Deputy Minister of Construction Pham Hong Ha said the programme was aimed at boosting the real estate market while helping lending institutions speed up bad debt settlement.

Savills Vietnam's managing director Neal Macgregor recently told the press in HCM City that Viet Nam's social and economic factors were supporting the growth of its real estate market, which had bottomed out.

He emphasised that the amended Law on Housing, effective from July 1, 2015, which will enable overseas Vietnamese and foreigners to own houses in the country, is expected to attract a new wave of investment.

Viet Nam was among the top foreign remittance recipients globally, with last year's remittance reaching $12.5 billion, and the inward flow of capital had recently accelerated, noticeably from Singapore, Korea, and Japan.

The country's urbanisation rate, from less than 20 per cent in 1995 to 34 per cent last year, and its rapidly growing middle class — expected to reach 33 million by 2020 from 12 million in 2012 — were positive factors for the property market.

High-end real estate sales pick up speed

The high-end property segment is warming up along with the recovery of the realty market this year.

Many high-profile projects have started construction or have been released for sale, attracting a large number of buyers due to the promise of profits.

From the beginning of this year, Vingroup has sold hundreds of villas developed under Vinpearl Premium brand in Nha Trang, Da Nang and Phu Quoc.

Recently, more than 300 villas in the FLC Samson Beach and Golf Resort complex in Thanh Hoa Province were sold in the first sale. Last month, FLC Group launched the construction of a seven-star beach golf resort in Quy Nhon City, Binh Dinh Province.

Villas of Naman Residences and The Point projects in Da Nang City were also released for sale.

Nguyen Ngoc Thanh, deputy president of the Viet Nam Real Estate Association (VNREA), said high-end properties, especially luxury resort projects in tourist cities and provinces, were making strong recovery with a large number of successful transactions.

Ngoc said resort projects were expected to boom when the amended Law on Housing, allowing foreigners to buy houses in the country, took effect on July 1.

Experts said an increasing number of investors were pouring money into high-end projects as long-term investments, as the property market emerged as a more attractive investment channel when compared to deposits, the stock market and gold.

An expert from VNREA said that a number of investors were seeking high-end projects with promising profits, such as villas in luxury resort projects along the beach.

Buying property and then leasing it out would generate greater profits than keeping money in savings when the interest rates were about four to five per cent per year, analysts said, adding that more people were adopting this kind of investment method.

For example, Vingroup promised a lease profit of at least eight per cent per year for 10 years for Vinpearl Premium villas. IDJ Investment also pledged a 10 per cent profit in the first 10 years for investments in the A-class Chamvit Tower.

An individual investor in Ha Noi said he had recently bought a villa on Truong Sa Street in Da Nang with the expectation of making large profits from leasing the villa.

A representative from the Thanh Do Investment Development and Construction JSC., the developer of Naman Residences, was quoted by as saying that more than half of the orders for purchasing its villas came from investors in Ha Noi and HCM City.

Christopher Piro, director of Viet Nam Sotheby's International Realty, was quoted by the newspaper as saying that property investors had shifted to long-term investments for profits.

The latest report by the construction ministry said the real estate market was on the path to recovery in the first five months of this year, reflected in stable prices, high liquidity, gradually appropriate product structures and falling inventories, as well as improved confidence.

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