Hotel room tariffs high on Phu Quoc Island

Room tariffs of three to five-star hotels on Phu Quoc Island off mainland Kien Giang Province are way higher than in Danang and Nha Trang, according to a report of property service provider Savills Vietnam.

The report puts the average tariff of a hotel room on the island at US$153 per night but it is only US$80 in Danang and US$68 in Nha Trang.

Savills said hotel room numbers on the country’s largest island have grown sharply in the past three years. It had only 1,000 rooms in 2010 and the figure rose to 1,400 rooms in 2014 and nealy 3,000 rooms last year.

The strong upsurge in hotel rooms led to a decline in the average room occupancy ratio on the island last year compared to previous years. The ratio dropped to 64% in 2015 from 72% in 2010.

Property experts said that in addition to rocketing supply, the high room tariffs make Phu Quoc less competitive than other tourist destinations in the country.

Savills Vietnam forecast Phu Quoc would have 4,300 rooms in 2017, equivalent to half of the hotel room number in the central coastal city of Nha Trang last year and below 7,000 rooms in Danang.

More investors have carried out new hotel projects on Phu Quoc to enjoy financial incentives including a land rent waiver, a zero tax on fixed assets, a 50% reduction in personal income tax and a 10% corporate income tax compared to the nation’s general rate of 22%.

Airport, seaport, power supply and other infrastructure facilities have been improved in recent years.

The number of visitors to Phu Quoc has grown strongly in the past three years.

The report said many more housing projects have been up and running on Phu Quoc in the past three years. There were 120 land lot transactions on the island in 2012 but housing transactions including of villas and departments reached 2,500 last year.

Slight advantage decides Vinamotor race

Vietnam N.A Motor Co., Ltd (N.A Motor) has overtaken TN Development Joint Stock Company (TN) in Vietnam Motors Industry Corporation (Vinamotor)’s second auction to purchase the state’s 97.7 per cent stake.

On January 11, the Ministry of Transport (MoT) has conducted an auction to sell 85.6 million state-owned Vinamotor shares, equalling 97.7 per cent of the total stakes, at the initial price of VND14,612 ($0.64) per share.

Both N.A Motor and TN bid aproximately VND1.25 trillion ($55.8 million) for the whole batch of 85.6 million shares at the price of VND14,600 ($0.64), however, N.A Motor won by offering VND2 million ($89.2) higher thanTN.

N.A Motor and TN are the only two bidders meeting the MoT’s requirements to join in the auction.

Previously, Vinamotor failed painfully in its IPO in March 2014. It announced the auction of 51 million state-owned shares for an initial price of VND10,000 ($0.47) per share, however, only 3.1 per cent of the shares were taken up, falling incomparably short of its original expectations, acquiring only VND15.7 billion ($735,370).

Vinamotor’s second share auction was organised in the context of the auto industry’s accelerating development and the approval to sell the entire state-owned stake. The changes made the auction more attractive, despite the higher initial price.

Established in 2005, N.A Motor specialises in distributing cars and motorbikes, selling spare parts, vehicle insurance, as well as providing vehicle maintenance and repair. The company is currently expanding its operations to the real estate sector. N.A Motor, with its solid finances, commits to make Vinamotor the country’s leading car manufacturer and distributor. As of June 2015, the company has a total equity of VND1.11 trillion ($49.1 million).

Five-year bond yield seen rising

Yields of Government bonds with terms five years or longer will likely rise this year, VPBank Securities said in a report yesterday.

The research said the G-bond market experienced its most successful trading in the fourth quarter of 2015 with bonds sold at auction at between 70 and 90 per cent of. The Government mobilized VND131 trillion ($5.8 billion) in the quarter, thanks to the 3-year bond supply and newly launched products from the State Treasury in December such as long-term bonds and zero-coupon bonds that sold at 100 per cent.

The research said the sale of G-bonds was still growing from 2014 with a total issuance of VND243 trillion ($10.8 billion), up 2.8 per cent in G-bonds and government-guaranteed bonds

Despite good demand in the last quarter, the State Treasury, the largest G-bond issuer in Viet Nam, failed to meet their target for the year. The State Treasury issued VND196 trillion ($8.7 billion), completing 51.2 per cent of the year's target and a reduction of 7 per cent from 2014. Of the bonds, 3-year and 5-year bonds accounted for the highest proportion of sales.

At the same time, most of the bond yields rose higher than they were in 2014. By the end of the year, yields on 5-year bond in the primary market was 18 basis points higher reaching 6.58 per cent per year while the yield of the 10-year bond reached 6.95 per cent per year, up 76 basic points and yield of 3-year bonds rose 55 basic points to 5.74 per cent per year. As the only exception, yield of 15-year bonds fell 15 basic points to 7.65 per cent per year.

VPBank Security thought that the yield increased due to low demand for bonds and the fluctuations in the exchange rate and it believed that yields will continue to rise, estimating that 5-year (and more) bond yields could reach between 7 and 7.3 per cent this year.

The increase will be due to the large amount of the bonds offered to support the state budget. The National Assembly only approved the issuing of 3-year bonds, the most attractive bonds, to not exceed 30 per cent of the total issuance volume, so the last 70 per cent of the bonds will have a term of 5 years and more.

Most investors focus on 3-year bonds because of higher liquidity and lower risk, while the supply of longer term bonds was larger but demand for them was lower.

Meanwhile, downward pressure on the dong, the fear of a devaluation of the Chinese yuan and possibly more interest rate hikes from the US Federal Reserve System may make investors set aside a portion of their capital to hedge instead of buying local bonds.

Furthermore, local credit growth was expected to be as high as 18 or 20 per cent while the banking system will continue restructuring activities in 2016.

Residential market soars in 2015

The year 2015 showed a remarkable recovery in the residential market with strong launches, positive sales volume, and improved prices, particularly for mid- to high-end properties in both Hanoi and Ho Chi Minh City.

According to Lim Hua-Tiong, general manager of CapitaLand Vietnam’s North Office, despite a huge number of new units launched to the market in 2015, CapitaLand Vietnam sold more than 1,300 units from projects in both Hanoi and Ho Chi Minh City.

“This number is a solid result, and we are happy with it,” Hua-Tiong told VIR.

In mid-December of last year, CapitaLand announced that 100 units of its latest project, Seasons Avenue in Hanoi, were sold in only one day.

“The Vietnam real estate market has bounced back due to a stable economy, good control of inflation, favourable laws, including the allowance for foreigners to purchase properties in Vietnam. Our sales result could not be achieved without the CapitaLand team’s perseverance and effort in the past year, and we will continue to strive for future success moving forward,” Hua-Tiong said.

The owner of City Garden, another residential project located in Ho Chi Minh City, announced that the project reported more than 200 transactions for its Promenade, the second phase of the project. This figure is equivalent to 75 per cent of the total apartments for sale.

William Towne Baker, general director of City Garden, was also happy with recently-revised laws that encourage foreigners and Viet Kieu to buy properties in Vietnam.

According to Baker, a large number of buyers are foreigners taking advantage of Vietnam’s reformed regulations on foreigners’ property ownership.

Baker also noted that people saw a real advantage to investing in a growth area, particularly one that was the focus of so much infrastructure development.

Stephen Wyatt, country head of Jones Lang LaSalle Vietnam, commented that 2015 had some turning points in the real estate market.

“We have had a number of years of very soft market conditions. This year saw a lot of changes and more activity, and we expect that to continue in 2016. I think a number of factors need to be considered, especially in the banking sector,” he told VIR.

Wyatt added that the market really depended on how banks perform and continue to lend going forward. But credit has increased significantly, so developers have had more money to spend.

According to CBRE Vietnam, the residential sector shot up in 2015, with record figures, including the highest number of units on the market, and the highest number of units sold.

In Ho Chi Minh City, 2015 saw more than 41,900 units put on the market from 78 projects, mostly in the east and the south, an increase of 122 per cent year-on-year.

In Hanoi, more than 28,300 units were up for sale in 2015, an increase of 70 per cent compared to 2014, mostly in Hai Ba Trung and Hoang Mai districts, and the west of Hanoi.

According to CBRE’s figures, this year saw the highest ever number of units put on the market in a single year. This record is due to the introduction of the largest-ever project in Ho Chi Minh City, Vinhomes Central Park in Binh Thanh district, with over 7,500 units released for sale to date, and the second largest, Masteri Thao Dien in District 2, with over 3,700 units.

“The positive market momentum has boosted confidence for developers, with some even reformulating long-delayed projects and relaunching them back into the market with more capital, mixed-use integration, new unit layouts and sizing, and better price positioning or rebranding,” said Marc Townsend, managing director of CBRE Vietnam.

Overall, market sentiment remained encouragingly positive throughout the year. 2015 ended with a record high in sales volume for a single year: an estimated 36,160 units sold in Ho Chi Minh City, up by 98 per cent year-on-year, and more than 21,100 units sold in Hanoi, up by 40 per cent compared to the market peak in 2009.

In 2016, more than 45,000 new units from 90 projects in Ho Chi Minh City and more than 20,000 new units in Hanoi are expected to be put on the market.

Modern fruit & veg plant underway in Hai Duong

The Hung Viet Company put a fruit and vegetable processing, packaging, and preservation plant into operation on January 10 in Gia Tan commune, Gia Loc district, Hai Duong province.

Speaking at the opening ceremony, Deputy Chairman of the Provincial People’s Committee Nguyen Anh Cuong expressed his joy at the plant being officially put into operation, saying it will contribute to the promotion of agricultural production for supermarkets, wholesale markets, and workplace canteens. It will also improve the incomes of local farmers.

The plant is a key project for the province’s agriculture sector, with total investment of VND65.96 billion ($2.94 million), and will create a large-scale supply chain of raw materials not only for Hai Duong province but also the northern region as a whole.

With advanced equipment and an operating capacity of about 300,000 tons per year, the plant also has a cold storage system with the latest technology, such as rapid cooling, ensuring long storage times and high product quality.

“The plant has cooperation with foreign partners from China and South Korea as well as leaders of Cam Giang district and Gia Loc district to develop material zones and product consumption,” said Mr. Tang Xuan Truong, Director of the Hung Viet Company.

Gia Loc district is one of the largest vegetable-growing districts in the area. Provincial leaders expect the plant will continue to expand in scale and promote local agricultural products.

Banks to lend VND212 trillion to firms in city

Nearly 20 lenders last Friday clinched deals to provide a combined VND212 trillion (US$9.4 billion) in loans for participating businesses of the business-bank matching program in HCMC.

At a conference on plans for 2016, the central bank’s HCMC branch said small and medium enterprises (SMEs) and those in supporting industries will be able to benefit from low-interest bank loans in the program this year.

Until now, lenders including joint venture and foreign-invested banks such as VID Public Bank’s HCMC branch and Standard Chartered have pledged VND211.5 trillion and US$15 million in loans with annual interest rates of 7-10% for corporate borrowers.

Lenders will prioritize loans for enterprises active in five priority fields – agriculture, export goods production, SMEs, supporting industries, and high technology.

The program has been in place for four years as the outcome of cooperation between the HCMC government, the central bank’s HCMC branch, the municipal Department of Industry and Trade and relevant agencies.

This year, banks will provide more loans for participating enterprises of the program than in previous years and turn its focus to SMEs and enterprises in supporting industries.

Nguyen Phuoc Thanh, deputy governor of the State Bank of Vietnam (SBV), said following the success of the program in HCMC, SBV governor Nguyen Van Binh two years ago called for other cities and provinces in the nation to launch similar programs.

Banks have committed to lend over VND600 trillion at preferential interest rates to nearly 40,000 companies and 122,000 other borrowers in various sectors nationwide.   

Nearly 100% of customers have repaid loans on schedule and no bad debt has been reported so far. Therefore, the borrower-lender matching programs are considered a win-win solution for all stakeholders.

Thanh admitted big enterprises can easily borrow from banks while SMEs cannot due to their small-scale production, low competitiveness and high possibility of late loan repayment. Small companies have limited financial capacity and lack good corporate governance practices.

Banks usually ask for collateral when lending to SMEs. However, most small companies do not have as sufficient documents as required.

Thanh added that lenders should check and assist SMEs in terms of accounting to help them gain access to bank loans.

HCMC vice chairman Le Van Khoa urged support for SMEs which are grappling with a slew of woes in taking out bank loans.

Effective programs should be mapped out to help enterprises expand operations so that they can contribute more to economic growth in HCMC, Khoa said.

Tran Ngoc Dung, general director of An Thien Pharmaceutical Company and chairman of the business association in HCMC’s District 8, said banks pledged to lend to 82 firms and household businesses in District 8 last year. But a number of small enterprises do not have assets for collateral so lenders should evaluate customers on a case-by-case basis.

HCMC earlier targeted bank loans of VND60 trillion for the 2015 program but banks disbursed over VND173.18 trillion for corporate borrowers last year. Annual interest rates were 6-7% for short-term loans and 9% for medium- and long-term credit lines.

ODA for poor localities meager

A fraction of US$15.5 billion in official development assistance (ODA) has gone to programs and projects in poor provinces over the past 10 years while the rest has been channeled to developed localities, heard a seminar last week.

Figures released at the seminar organized by the Ministry of Finance showed two-thirds of ODA has been disbursed for major central-level programs and projects and the remainder for local-level projects with a small percentage for poor provinces.

Truong Hung Long, head of the Department of Debt Management and External Finance at the ministry, said investment needs and projects in each province are different, so ODA capital allocations are not the same.

Poor localities, particularly those in northern mountainous, Central Highlands, central and southwestern regions, have not implemented big-ticket projects, Long said at the seminar on an on-lending mechanism of the Government for cities and provinces.

Vinh Long, Bac Lieu and Hau Giang are among the provinces having no ODA-funded projects invested by local authorities.

To provide resources for poor localities amid high public debt, the State budget law, which was passed by the National Assembly last year and will go into effect next year, allows localities to take out ODA loans for their investment projects. This forces localities to work out viable loan repayment plans.

Long said Vietnam will no longer be provided with preferential loans and have to borrow commercial loans from 2017 instead. The total ODA capital towards 2017 is small, so it is used for infrastructure upgrades in poor localities.

“Big provinces and cities will have to take out commercial loans to finance their development plans,” Long said.

According to Nguyen Xuan Thao, deputy head of the Department of Debt Management and External Finance, irregularities have been detected during the implementation of ODA-financed projects in the past decade such as low investment efficiency, a lack of reciprocal capital and delays.

Some projects were initially scheduled for completion in five years but were actually put into use after 8-10 years and even 12 years. In addition, around 90% of projects have seen their completion schedule lengthened at least once.

The foot-dragging implementation process has resulted in investment cost overruns. The additional costs have amounted to billions of dollars each year.

Low efficiency of ODA funding is one of the reasons behind soaring public debt, with the ratio of government loans to budget collections reaching an alarming level of 13.4% in 2014 compared to the acceptable level of below 10%, Thao said.

Under the 2015 State budget law, the maximum outstanding loan ratio allowed for Hanoi and HCMC is 60% of the total budget collections they are allowed to keep for their own spending.

At the Government’s web conference late last month, HCMC chairman Nguyen Thanh Phong said HCMC needs more foreign loans in the coming time to invest in major infrastructure projects, and the city is unable to access new loans if foreign outstanding loans are included in the total outstanding loan ratio.

Sun Life Financial raises stake in PVI Sun Life

Sun Life Assurance Company of Canada (Sun Life), a wholly owned subsidiary of Sun Life Financial Inc., has completed a transaction with Vietnam’s PVI Holdings to increase its equity ownership in PVI Sun Life Insurance Co Ltd from 49% to 75%.

PVI Sun Life said in a statement released last Friday that the two sides closed the deal, which was unveiled last year, following regulatory approval in Vietnam and Canada.

The deal will enable the company to continue growing in step with Vietnam by leveraging Sun Life Financial’s global expertise in life insurance and pensions and PVI’s strong brand and local presence.

Kevin Strain, president of Sun Life Financial Asia, said in the statement that riding on a successful partnership and long-term commitment to PVI and Vietnam, Sun Life would help Vietnamese customers achieve lifetime financial security by offering a strong suite of insurance and wealth management products.

For PVI Sun Life, this is a significant leap forward that builds on successful start and will facilitate the next phase of its growth.

Michael Elliott, chief executive officer (CEO) of PVI Sun Life, said the company will further enhance its ability to serve clients and support the development of Vietnam’s life insurance and pension markets by drawing on Sun Life’s capabilities.

“By making use of our two shareholders’ respective strengths and with a shared vision to improve the lives of Vietnamese, PVI Sun Life will continue to offer and refine a range of tailor-made financial solutions. And as always, our underlying goal is to help more and more of our customers to achieve lifetime financial security,” Elliott said.

Since its launch in 2013, PVI Sun Life has established itself as the sixth largest life insurer in Vietnam and a market leader in pensions.

ITPC urged to support business

HCMC vice chairman Le Van Khoa has called on the city’s Investment and Trade Promotion Center (ITPC) to help local enterprises boost sales in the Mekong Delta region under a supply and demand connectivity program.

Speaking at a conference held last Friday to review ITPC’s operations last year and discuss its plans for 2016, Khoa said the program had enabled enterprises in the Mekong Delta to sell more products, especially farm produce, in HCMC. However, producers in the city also need support to boost sales in the region.

He told ITPC to join forces with provinces in the Mekong Delta region to organize programs to aid companies in the city to increase sales via different distribution channels including traditional wet markets.

Khoa said if effective measures are not quickly taken, goods from other ASEAN markets could flow into the delta as the ASEAN Economic Community (AEC) is now in place. He stressed that local enterprises should be supported to compete with their rivals on the home market given Vietnam’s deeper international integration as more free trade agreements (FTAs) will go into effect in the years to come.

Khoa urged ITPC to review and draw lessons from promotion programs for Vietnamese products in overseas markets and launch better programs this year. He noted the HCMC government aims to strengthen trade ties with the countries Vietnam has signed FTAs with as they will open up their markets.   

Khoa told ITPC to find major investors for HCMC, especially those having advanced technologies and operating in supporting industries like electronics, chemical-pharmaceutical, food-foodstuff and mechanical engineering.

The city government will exert greater effort to remove hindrances to business and regularly hold dialogues with business executives to find ways to improve the investment environment.

Khoa asked ITPC to coordinate with the promotion centers in other parts of the country to enhance promotion activities, help enterprises partner with foreign retailers and boost the development of supporting industries.

Pham Thiet Hoa, director of ITPC, told the conference that based on forecasts for HCMC’s gross domestic product (GDP) growth and socio-economic development in 2016-2020, ITPC would draw up trade and investment promotion programs.

Thai investors keen on stock market

Many individual investors of Thailand last year came to explore the Vietnamese stock market, according to Le Hai Tra, deputy general director of the Hochiminh Stock Exchange (HOSE).

Tra told a meeting with reporters last week that last year saw 43 international delegations visiting HOSE to learn about its activities and the domestic stock market.

With the assistance of securities companies, many groups of Thai individuals came to sound out stock investment prospects. Tra said these investors expressed keen interest and said they saw opportunities in the local market.

According to HOSE, the issuance of Decree 60 on foreign ownership increase at local firms has helped attract more indirect foreign investment into the stock market. In contrast to other Asian markets, foreign investors remained net buyers in Vietnam last year.

HOSE statistics showed that in 2015 foreign investors were net buyers like in 2013 and 2014. However, the buying value of foreign investors last year was lower while the selling value was higher than in 2014.

Last year, foreign investors net bought over VND2 trillion (US$90.29 million) worth of shares, while the figure in 2014 was VND2.87 trillion (US$130.29 million).

Overall, last year’s trading activities on the stock market were strongly affected by strong world market volatility. Local organizations and foreign investors tended to reduce spending in shares in the VN30 basket of the 30 largest stocks in terms of capitalization and liquidity. In the final months of 2015, the market saw more investment in small and medium-cap stocks.

Work starts on steel mill in Binh Dinh

Hoa Sen Nhon Hoi-Binh Dinh Ltd Co, a unit of Vietnamese steel manufacturer Hoa Sen Group, last week broke ground for a steel mill project worth a total of VND2 trillion (US$89 million) in Binh Dinh Province.

Hoa Sen Nhon Hoi facility is the third steel production project of Hoa Sen Group in the central province and one of the group’s new major projects this year.

The mill will cover 12.4 hectares in Nhon Hoi Economic Zone and start production early next year, with key products including galvanized and color-coated sheets, and cold-rolled steel.

The project is expected to generate jobs for around 400 locals. When the facility is fully operational in June 2017, it will turn out 180,000 tons of galvanized sheets, 90,000 tons of color-coated sheets, and 200,000 tons of cold-rolled products a year.

The new project will help increase Hoa Sen’s steel exports to Cambodia, Laos and Thailand.

Hoa Sen now has six large steel mills, and 190 distribution and retail outlets across the country, which is expected to rise to 300 in the next two years

Sagri backed to make high-tech farm produce

The HCMC government will support Saigon Agriculture Incorporation (Sagri) to grow vegetables and fruits for the city’s market using high technology, HCMC vice chairman Le Thanh Liem said.

Sagri now has 500 hectares of agricultural land and will collaborate with partners to apply high tech to cultivate vegetables and fruits in this area, the firm said at a recent review meeting on its activities in 2015 and its plans for 2016.

Liem said at the meeting that the city government would assist Sagri with policies and funds for high-tech vegetable farming.

In the coming years, HCMC will focus more on developing a high-tech agricultural sector, particularly seed and breeder production for domestic sale and export. Therefore, enterprises with agricultural strengths such as Sagri should draw up plans to benefit from this policy.

According to the HCMC Department of Agriculture and Rural Development, the value of agricultural production averaged out at VND158.5 million per hectare in 2010 and doubled to VND325 million in 2014.

Sagri posted revenue of over VND3.36 trillion and pre-tax profit of nearly VND184 billion last year, up nearly 16% over 2014. Sagri general director Le Tan Hung said this year the company targets revenue of VND3.52 trillion (US$156.7 million), up nearly 5% year-on-year and pre-tax profit of VND206 billion (US$9.17 million), increasing nearly 12% over 2015.

Sagri is active in cultivation, forestry, fisheries and livestock, and strong in making high quality products, seeds and breeders, fertilizer, animal feed, rubber and food, as well as slaughtering livestock and poultry.

Dairy investment project in Russia approved

The Prime Minister has recently approved an overseas investment plan on building a cow farming and milk processing complex in Russia .

The complex, invested by the Nghe An Sugarcane and Sugar JSC, has a total investment capital of 11.25 trillion VND (500 million USD). The project will be implemented in five districts of Moscow province, Russia.

The PM asked the Ministry of Planning and Investment to speed up procedures to grant an overseas investment registration certificate for the project in accordance with regulations.

The State Bank of Vietnam is requested to supervise and instruct the company, in correctly abiding by the current regulations on foreign exchange management.

The Ministry of Labour, Invalids and Social Affairs is asked to guide the company in sending Vietnamese guest workers to Russia to implement the project under the contract in accordance with regulations.

Long An leads Mekong Delta region in FDI attraction

Long An leads the Mekong Delta region in foreign direct investment (FDI) attraction, according to the Saigon Giai Phong (Saigon Liberty) newspaper.

The province granted investment licences to 105 FDI projects with a total registered capital of 904 million USD in 2015, an increase of 10 projects and 533 million USD in capital, compared to the previous year.

Long An currently has 28 industrial zones with a combined area of 10,000 hectares; 16 of the zones are operational with occupancy rates of 50 percent.

The province has attracted 680 projects from 34 countries and territories with a total registered capital of 4.5 billion USD to date.

Electricity sector fares well in 2015

The Electricity of Vietnam (EVN) led the power market in 2015 by supplying 23,580 MW or 60.8 percent of the country’s total power output of 38,800 MW, up 1.8-fold from 2010.

The State-run group generated and purchased 668.5 million MW from 2011-2015 at an average growth of 10.37 percent per year.

Retail electricity output rose by 10.84 percent annually over the past five years to total 587.5 million MW, 1.85 times higher than the GDP growth rate in the same period.

According to EVN National Power Transmission Corporation (EVN NPT), the firm has mobilised more than 14 trillion VND (624 million USD) in funding for 44 projects in the reviewed year, including about 6.43 trillion VND (286 million USD) from overseas investors.

The figure has brought the total funds for its investment in over 200 projects over the last five years up to approximately 77.2 trillion VND (3.4 billion USD), 55 percent of which were sourced from foreign investment.

It earned more than 14.5 trillion VND (647 million USD) in revenue, up 34.7 percent from 2014, and 315 billion VND (14 million USD) in profit as targeted.

Hospitality investment shakes up property market in Phu Quoc

Phu Quoc, 40 kilometres west of southern Kien Giang province, is the biggest island in Vietnam where hospitality investment has shaken up the emerging real estate sector here over the past few years.

In its latest report released on January 8, Savills Vietnam, a leading property service provider, said the hotel sector on Phu Quoc island saw a remarkable rise of 110 percent in supply from 2012-2015. Local developers, such as VinGroup, M.I.K Corporation, BimGroup, and Sun Group, make up a majority of the sector’s market share, 92 percent.

Average room rate on the island was around 153 USD per day, much higher than that in Nha Trang (68 USD per day) and Da Nang (80 USD per day).

Some 67 percent of all hotels are located in Duong Dong Town, accounting for 48 percent of all rooms on the island.

The residential segment, which only offered 120 units, mostly land plots, in 2012, had a total of 2,500 units launched in 2015, including condominiums, land plots and villas. Most of these projects are located on the beach with great ocean views.

According to Savills, VinGroup dominates the villa segment, holding 76 percent of the market share.

About 80 percent of buyers of Phu Quoc’s residential projects come from Hanoi, followed by 15 percent from Ho Chi Minh City.

The island is seen as an ideal destination for hospitality investment thanks to support policies from local authority, such as tax exemption, alongside rapid infrastructure development, notably Phu Quoc International Airport, An Thoi Seaport and Ha Tien-Phu Quoc underground electric cable.

Other major projects are also underway – Duong Dong International Seaport and a cable car system linking An Thoi and Hon Thom islands.

Phu Quoc is blessed with stunning beaches and rich biodiversity.

The island is home to a safari park, the second largest in the world and it has got the government nod for casino development, a great advantage to attract more and more domestic and international holiday-makers.

Toyota Vietnam sees record sales in 2015

Toyota Motor Vietnam Co., Ltd (TMV) sold 51,246 vehicles in 2015, an all-time record sales figure of the automobile manufacturer in its 20-year operation in Vietnam, the company announced on January 9.

TMV said that the sales in 2015 posted a year-on-year increase of 24.4 percent and increased the accumulative sales to 357,021 units.

The Vios model took the crown as top selling brand with 13,761 cars sold, doubling the figure in 2014. Corolla, a line of subcompact and compact cars, also recorded a year-on-year rise of 10 pecent with 5,926 cars.

Some 4,679 customers chose Camry, making accumulative sales of this model escalate to over 42,300 cars.

Meanwhile, Innova and Fortuner also made great contribution to Toyota’s car sales in 2015 with 9,985 and 9,780 units, up 28 percent and 14 percent, respectively, from 2014.

Sales of the completely-built-up (CBU) imported cars, distributed by the TMV, stood at 6,150 units, up 21 percent from 2014. Yaris took the lead with 2,796 units, followed by Hilux with 1,597 units.

PVN encouraged to expand gas, oil exploration activities

Deputy Prime Minister Hoang Trung Hai requested the National Oil and Gas Group (PVN) to continue to search for new sites, and produce more oil and gas in 2016.

He described these activities as a key task for the sector in 2016.

Speaking at a conference in Ha Noi on Saturday, the Deputy PM praised the group for its achievements during the last five years, and suggested that an even greater future effort will see greater results.

He said PVN also needed to keep a close watch on market developments to provide reasonable forecasts of oil prices for 2016 and in the future, adding that the group should pay attention to cutting expense to optimise its operation.

PVN was also advised to focus on expanding scientific and technological applications, and fully taking advantage of its high-quality workforce.

Hai asked PVN's subsidiaries to make concrete plans for the group's business management, and to improve the qualifications of its staff.

PVN's General Director, Nguyen Quoc Khanh, reported that the group still earned VND560.1 trillion (US$25.56 billion) in revenue in 2015, in spite of falling oil prices, representing a rise of 4 per cent against the set target, and 2.4 times higher than earnings from 2006-2010.

Also, the group contributed VND115.1 trillion ($5.2 billion) to the State budget this year, up 19.8 per cent against the year's target.

PVN also fulfilled its plan to increase reserves for the two months ahead of schedule, reaching 40.5 million tonnes of oil equivalent, 8 per cent higher than its yearly target.

Further, its exploitation output reached 29.42 million tonnes, exceeding 10.6 per cent of the plan set by the Government. Of this number, crude oil reached 18.75 million tonnes, while gas exploitation hit 10.67 billion cu.m, respectively up 11.6 per cent and 9 per cent against its yearly plan.

Petrol, electricity and nitrogen production also recorded high growths, exceeding the set plan by 10 to 24 per cent.

Khanh stated that PVN would continue accelerating its restructuring and divestment capital, while increasing investment for its key business and production projects in 2016.

It will also expand coordination with relevant agencies in exploring and developing deep water and offshore areas, he said.

US leading trade partner of Dong Nai

The United States was the leading trade partner of southern Dong Nai Province in 2015, Deputy Director of the provincial Industry and Trade Duong Minh Dung said.

Last year, the province exported more than US$4 billion worth of goods to the US while its imports from the country hit $1 billion. That had resulted in a significant trade surplus of $3 billion, Dung said.

During the reviewed period, Dong Nai's trade turnover with Japan and six ASEAN countries including Indonesia, Thailand, Cambodia, and the Philippines, apart from Singapore and Malaysia, reached approximately $1.9 billion and over $2.1 billion, respectively, making them become the region's two other major trade partners, besides the US.

Dung told vietnamplus.vn that the global economy's recovery would further facilitate Dong Nai's exports, which was expected to grow by 10 per cent this year. However, he forecast that the province trade surplus might not increase as many foreign-invested projects here were yet to be operational.

Director of the Bien Hoa City-located Ho Nai Limited Co Nguyen Van Quy said the turnover from exporting furniture to the US made up more than 90 per cent of his company's revenue in 2015. He added that his company was inviting some other enterprises in the province to co-ordinate and fulfil large orders from the US' partners in the future.

Meanwhile, Vietnamese Commercial Counsellor in the US Dao Tran Nhan said the Trans-Pacific Partnership (TPP), which would be inked in the future, would create great opportunities for businesses in this southern province to expand their exports to not only the US but also other TPP nations.

Nghe An sees investment of $6.6b

The central province of Nghe An attracted a positive investment flow totaling VND150 trillion (more than US$6.6 billion) during the 2010-15 period.

This was announced by the director of the provincial Department of Planning and Investment, Nguyen Van Do.

In the 2010-15 period, levels of investment capital registered in the province more than doubled the figure seen in the two previous years, with some large-scale projects licensed, such as Hoa Sen steel sheet factory, Quynh Lap 1 thermo-electricity plant, the Song Lam cement factory, the Vingroup trade and service complex, and the Viet Nam-Singapore Industrial Park (VSHIP) Nghe An, according to the director, as quoted by baodautu.vn.

He attributed this encouraging performance to greater efforts by local authorities and other sectors in accelerating administrative reforms, especially reducing the time and expense required to complete investment procedures, in order to better assist investors.

In the future, the province will focus on attracting projects that can use high-end technology and create more local jobs, while seeking investors with sufficient financial capacities and a commitment to corporate social responsibility, he added.

Earlier, the central province said it had set a target of attracting some VND100 trillion (more than $4.44 billion) in investment from now until 2020, including VND50 trillion in foreign direct investment (FDI).

To achieve this aim, the province will carry out measures to lure investment, as Nghe An considers it a key task in spurring local socio-economic development.

Besides facilitating the operations of investors by zoning land for them, offering them incentives and assisting them in recruiting workers and sourcing building material, the province will continue improving its investment environment with the aim of becoming one of the top 30 provinces and cities in the country, based upon the provincial competitiveness index.

Motorcycle output down sharply in Vinh Phuc

Production of motorcycles, which is a key industrial product of the northern province of Vinh Phuc, decreased sharply in 2015 after several years of strong growth.

According to the provincial Planning and Investment Department, in 2015, Honda Viet Nam and Piaggio Viet Nam factories in Vinh Province produced 1.91 million motorcycles, a decrease of 15 per cent compared to last year, of which Honda Viet Nam manufactured 1.795 million units, a year-on-year decrease of 16 per cent.

Experts were concerned that the decline would have a negative impact on the provincial budget which is sustained mainly by the motorcycle sector.

Long An leads in attracting FDI

Long An leads the Cuu Long (Mekong) Delta region in attracting foreign direct investment (FDI).

The province granted investment licences to 105 FDI projects with a total registered capital of US$904 million in 2015, an increase of 10 projects and $533 million in capital, compared to the previous year.

Long An currently has 28 industrial zones with a combined area of 10,000 ha. Sixteen of these zones are operational with occupancy rates of 50 per cent.

The province has attracted 680 projects from 34 countries and territories with a total registered capital of $4.5 billion to date.

Government to rein in ODA for infrastructure

From July next year ODA (official development assistance) funds received by the country will only be allocated to provinces facing difficulties and for programmes to improve public welfare and eliminate hunger and poverty rather than for large infrastructure projects, according to the Ministry of Finance.

Head of the ministry's Debt Management and External Finance Department, Truong Hung Long, said the use of ODA by many faced shortcomings like lack of counterpart capital and slow progress.

Ninety per cent of projects were extended at least once, leading to cost overruns — of billions of dollars in some cases — he told a seminar in HCM City on Friday.

Therefore, a sound legal framework for managing and effectively using foreign loans by localities would be created soon, he said.

An official from the HCM City Department of Finance said with the limited funds provided by the Government, it is imperative to mobilise domestic and foreign funds for infrastructure development.

The city wants a separate mechanism for capital mobilisation and favourable conditions for the issuance of government bonds in foreign currencies, he said.

Nguyen Xuan Thao, deputy head of the Debt Management and External Finance Department, said only 13 localities can balance their budgets while the remaining 50 get funds from the Government.

In the decade since 2004 the Government allotted 35 per cent of ODA and preferential loans, or US$15.5 billion, to provinces and cities, who used 38 per cent of it to develop infrastructure, she said.

Cu Lao Cham to get national grid access this year

State-run Vietnam Electricity (EVN) and the People’s Committee of central Quang Nam province held a ground-breaking ceremony for the project that provides electricity access from the national grid to Cham Island (Cu Lao Cham) on January 9.

The project involves the installation of approximately 15.5 kilometres of 22kV submarine power cable and more than 17 kilometres of 22kV inland cable alongside the construction of six 22/0.4kV transformation stations with total designed capacity of 900 KVA.

It has an investment of nearly 485 billion VND (21.5 million VND), 85 percent of which was sourced from the State budget while the remaining comes from EVN Central Power Corporation (CPC).

It is expected to be operational on June 30 this year.

According to EVN Chairman Duong Quang Thanh, the project is intended to boost the tourism industry on the island and Hoi An Ancient Town and contribute to the protection of the country’s sovereignty.

Located 15 kilometres east from Cua Dai Beach in Hoi An city, Cu Lao Cham is a complex of eight small islands and a UNESCO-recognised Biosphere Reserve.

The island has a population of nearly 2,550 people living in four villages who live off aquatic farming and tourism.

It welcomes over 50,000 tourist arrivals every year. However, electricity generators have been only source of power in the island, causing many difficulties for locals and tourists.

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