US$2 billion to build Vinh Tan thermal power plant

The US$ billion Vinh Tan 1 thermal power plant has commemorated the signing of its Build-Operate-Transfer (BOT) contract.

The project is a collaboration between Chinese contractors operating as a joint venture and Vietnam National Coal-Mineral Industries Corporation (Vinacomin).

The Vinh Tan 1’s two turbines are designed to produce 1,200MW from domestic coal. When completed, the plant will generate an annual electricity output of 8 billion kWh.

Minister of Industry and Trade Vu Huy Hoang urged government agencies to process funding arrangements as soon as possible. Representatives of the plant’s primary investors have committed Vinh Tan 1 will incorporate advanced technology meeting international standards.

Economic experts expect a modestly positive 2014

The economy will gradually recover over the 2014–2015 period with inflation kept at a single digit.

The prediction was made at a scientific seminar in Hanoi on December 12 discussing Vietnam’s economic prospects for 2014.

The Ministry of Planning and Investment’s National Information and Socio-Economic Forecasting Centre predicts  the 2014 reduction in corporate income tax, from 25% to 22%, will be a boon to business activity upon taking effect.

Fiscal policies in 2014–2015 will focus on maintaining a low interest rate of 10–13% and creating favourable conditions for businesses to expand production.

Senior World Bank Economist Dr. Doan Hong Quang is optimistic about Vietnam’s 2014 after the country achieved macroeconomic stability, controlled inflation, regained the business community’s trust, pushed up its  Purchasing Managers' Index (PMI), and increased the number of newly-established enterprises.

He emphasised the Vietnamese economy’s dependence on a global economic recovery.

The seminar explored two 2014–2015 economic growth scenarios. In the first scenario, GDP grows at a rate of 5.67%, with the Consumer Price Index (CPI) climbing to 7%. The second scenario puts the GDP growth rate at 6.2% with CPI  reaching 7.5%.

Steel exports look beyond US$2 billion in 2013

Vietnam is expected to ship around 2.5 million tonnes of steel abroad by the end of 2013, earning more than US$2 billion.

The Vietnam Steel Association (VSA) reported its members’ 2013 steel output is an estimated 5 million tonnes, while consumption volume exceeded 4.6 million tonnes. Around 300,000 tonnes of steel are currently stockpiled.

The Association attributes low steel purchasing power to the frozen real estate market. The 2.5% increase in export volume came from customers in the US, Thai, Indonesian, Malaysian, and Cambodian markets.

VSA Vice Chairman Nguyen Tien Nghi forecast local steel demand will remain unchanged next year, edging up a negligible 2%–3% from 2013’s figure.

The challenges facing domestic steel producers and exporters require higher levels of competitiveness, better management, new technology application, and market expansion.

Auto sales to pick up at year-end

The auto market is expecting a busier end to 2012 as demand increases ahead of the Lunar New Year Festival (Tet).

November’s domestic auto sales dropped suddenly after several months of high growth.

Local auto traders are optimistic the biggest holiday of the year will boost their revenues. They are expected to benefit from Ho Chi Minh City’s decision to reduce registration fees by 10% for vehicles with less than 10 seats from January next year.

October auto sales were at record levels. Most of the month’s more than 10,000 units sold were from Honda, Toyota, Ford, GM, and Vinastar. The figure was 2,000 units higher than the same period in 2012.

The Vietnam Automobile Manufacturers’ Association predicts the domestic auto industry will have sold 109,000 units by the end of this year, the modest year-on-year increase credited to changes in tax policy and economic recovery.

GMS to invest US$50 billion in economic corridor development

Member countries of the Greater Mekong Sub-region (GMS) are unanimous in drawing up a list of potential projects worth US$50 billion under a new Regional Investment Framework (RIF) agreement.

Stephen Groff, Vice President of the Asian Development Bank (ADB) said that the next generation projects can help boost trade and investment cooperation among nations, and stimulate employment and growth.

The GMS program is focused on perfecting transport links with priorities given to improving knowledge and software, and facilitating the exchange and management of public goods in the region.

The RIF agreement was approved at the 19th Ministerial Conference of the GMS Economic Cooperation Program in Vientiane. It consists of sub-regional technical assistance and investment projects.

China and Vietnam also signed an agreement on developing cross border economic cooperative zones. The recent completion of a new bridge linking Laos and Thailand has helped improve transport on the North-South Economic Corridor of the GMS.

The GMS program is aimed at turning the transport corridors into economic ones to boost trade and investment cooperation among nations, as well as stimulating growth and employment while the RIF agreement is targeted towards multi-sector projects.

Along with developing urban areas and logistics centres, the focus will be on building an electricity market in the sub-region, meeting investment demand from member nations and enhancing their capacity to cope with climate change, improve the competitiveness of the agricultural sector and ensure food safety and hygiene.

Mong Cai hosts Vietnam-China trade fair

As many as 230 businesses from 30 Vietnamese and Chinese localities have their products displayed on more than 400 stalls at the 2013 Vietnam-China Trade Fair, which opened in the northern border city of Mong Cai on the evening of December 12.

The annual event, themed “Cooperation, Friendship, Integration and Development”, was jointly held by the Mong Cai city People’s Committee and China’s Guangxi province.

Among key export items are seafood, handicraft and timber products, machines, and electronics.

Participants are hopeful to seek trade and investment cooperation in both countries.

Nguyen Van Thanh, Vice Chairman of the Quang Ninh provincial People’s Committee, said the fair is a good chance to increase trade promotions and exchanges between local and foreign businesses, export market share, and mutual support for the benefit of long-term development.

FDI to Vietnam sharply increases

Vietnam created a breakthrough in attracting foreign direct investment (FDI) in the first 11 months of 2013, contributing to affirming attractiveness of the country's investment environment and efforts in the improving its environment.

According to the Foreign Investment Department, FDI has recovered strongly with nearly US$21 billion committed in the first 11 months. The country attracted nearly 1,200 new projects from 54 foreign countries and territories and permitted 450 ongoing projects to increase their capital in the first 11 months of this year.

This year work began on many large projects immediately after receiving licences, said head of the Foreign Investment Department, Do Nhat Hoang.

The northern province of Hai Duong has licensed projects worth around US$677 million.

"We believe that next year more FDI capital will arrive in our province because many investors have sent in applications," Mai Duc Chon, head of the province's industrial parks and processing zones management board, said.

At the Lai Vu Industrial Park, two major investors, Tinh Loi Garment and Pacific Crystal Textile of Hong Kong, are building plants, and by March next year plan to have 5,000 and 3,000 workers respectively.

Pacific Crystal, with a registered capital of US$425 million, is building a factory that will manufacture 360 million metres of cloth every year.

Tinh Loi Garment has invested US$120 million to produce 170 million pieces of garments a year. It plans to hire around 17,000 workers eventually.

Korean and Japanese investors are also exploring business opportunities in the province.

The Samsung High-tech Complex in another northern province, Thai Nguyen, is going ahead with construction of a US$2 billion mobile phone factory and hopes to begin production in March 2014. The complex received the licence in March and started construction just a week later.

The factory along with Samsung Electronics Vietnam (SEV) in northern Bac Ninh province will churn out 250 million mobile phones a year, making Vietnam the company's major production hub.

This year SEV is set to achieve US$23.5 billion in exports. The company will spend US$1.9 billion this year of its registered capital of US$2.5 billion, mainly on technology.

"No more workshop or factory will be built," said Kim Yong Seok, planning director of the Samsung High-Tech Complex, adding that "the most important thing is to invest in technology."

In the central province of Ha Tinh, work on the US$9.9 billion Formosa Steel project is progressing quickly.

The company plans to begin operation by the middle of 2015 and is set to hire around 1,300 workers at the first stage.

Seminar helps boost Vietnam-Laos-Cambodia border trade

Vietnamese exporters are suggested to sell products to Laos and Cambodia via international border gates in southern Tay Ninh province to save time and transport cost, it was heard at a seminar in Ho Chi Minh City on December 12.

According to Le Van Tuong, Deputy Director of the Tay Ninh province’s Centre for Trade, Investment and Tourism Promotion, a majority of southern businesses now export their products to Laos via the Lao Bao International Border Trade in central Quang Tri province – the route is 1,000 km.

If going through TayNinh’s Chang Riec and Xa Mat border gates to Cambodia before arriving in Laos, they can shorten travel length by one third, Tuong said, adding that the route was written down in a Memorandum of Understanding on road transportation signed by the three Governments in January, 2013.

TayNinh’s total import-export turnover was estimated at nearly US$930 million in the first nine months of 2013, a year-on-year increase of 16.15 percent. Of the figure, US$439.2 million came from exports.

The province mainly exports rubber, animal feed, foodstuff and consumer goods, while buying cassava, soybeans, cashew, and timber from other countries.

Themed “Tay Ninh – Gateway to develop Vietnam-Cambodia-Laos border trade”, the seminar offered a venue for delegates to consider the establishment of a multilateral coordination mechanism to support the three countries’ business communities, said Bui Ba Nghiem, head of the Vietnam-Laos-Cambodia Border Trade Department under the Ministry of Industry and Trade.

Vietnam’s total import-export turnover through border gates with Laos and Cambodia from 2008 to September 2013 valued more than US$20 billion.

New opportunities for retail industry

Expanded retail networks and increased service quality will offer the retail sector a wealth of opportunities for development.

The General Statistics Office (GSO) reports total retail sales in 2013 are expected to exceed VND2,617 trillion, 12.59% higher than 2012.

The US Business Consultancy Services RNCOS measured Vietnamese retail’s modernity at below 30%, much lower than regional ratings including 48% in the Philippines, 55% in Indonesia, 66% in Malaysia, 76% in Australia, 99% in Hong Kong, and 100% in Singapore.

Vietnam’s modest result both a limitation and a future opportunity for boosting the retail industry and economic development more broadly.

The Ministry of Industry and Trade (MoIT) predicts Vietnam will have 1,200–1,300 supermarkets and 337 trade and shopping centres by 2020, 550 more than currently.

Vietnam Retailers Association Chairwoman Dr Dinh Thi My Loan has underlined the need to embrace modern retail and e-commerce, noting Vietnam’s entry into the digital era opens a valuable avenue for proactive retailers to raise their individual contributions to national retail sale totals.

Vietnam E-Commerce Association Vice Chairman Nguyen Thanh Hung says Vietnamese e-commerce is developing steadily, with annual sales estimated at US$700 million based on online customer yearly spending averages of US$30.

A Mastercard representative believes that Vietnamese e-commerce sales could reach US$7–8 billion by 2017.

German market research company GFK says Vietnamese consumers are intelligent, discerning purchasers.

The number of Vietnamese consumers investing in prestigious healthcare products and services is on the rise, tightening connections between retailers and buyers.

To protect consumer rights, the MoIT has stipulated all supermarket and trade centre businesses must honour existing production and distribution contracts from now until 2020.

From 2015, approximately 40–50% of farm produce and fresh seafood, and 70–80% of handicraft products, will need to meet regulated quality standards.

The MoIT forecasts that modern retail and distribution will grow an annual 26–27% from 2015, rising to 29–30% by 2020.

HCMC hosts hi-tech agricultural exhibition

As many as 200 domestic enterprises have participated in the 2013 Hi-tech Agro 2013 exhibition in Ho Chi Minh City from December 11-15.

The event aims to connect business units through with scientific e and technological cooperation in production and circulation of goods in order to provide clean and safe products for the market.

Nguyen Thi Hong, Vice Chairwoman of the municipal People's Committee, said this is a good opportunity for domestic and foreign enterprises to improve their communications and information exchange as well as their product quality and trademarks, and attract more investment cooperation in the local agricultural and food processing sectors.

She urged local enterprises to cooperate closely with each other for the benefit of socio-economic development in the country.

Pho Nam Phuong, Director of Ho Chi Minh City's Investment and Trade Promotion Center (ITPC), described the exhibition as a practical contribution to implementing Vietnam's Economic Restructuring plan, promote the city’s agricultural development in the process of industrialization and modernization and turning the city into a high-tech agricultural of the country in the near future.

One-week term transactions overwhelm interbank market

One-week term transactions in Vietnamese dong dominated the interbank market during the first week of December, while the lending rate was down 0.49 percentage points against November to 3.26 per cent.

According to the central bank's weekly report released yesterday, total value of the week transactions in dong was VND93.96 trillion (US$4.4 billion) and the value in US dollar transaction was about $2.8 billion.

One week term transaction in the dong accounted for 33 per cent of the total value, followed by overnight term 32 per cent and two week terms 15 per cent. Corresponding interest was up to 0.54 percentage points lower than previous week to 2.56-3.62 per cent.

In the commercial market, lending interest rates were reported to have remained stable through the first week. For dong loans, privileged interest rates ranged from 7 per cent to 9 per cent per annum, while common lending rate were 9-11.5 per cent per year.

Dollar loans were charged about 4-7 per cent per year.

The State Bank of Viet Nam also warned that credit institutions offering loans at lower interest rates than deposit rates should be investigated.

Interest rates for dong deposits were reported to remain around 7.5-8.5 per cent yearly for more than 12 month terms; 6.5-7.5 per cent for six to 12 months, and 5-7 per cent for one to six month terms.

Trade with US continues to increase

Despite ongoing economic woes in Viet Nam, there has been an upswing in Viet Nam-US trade, as it continues to grow steadily.

According to the American Chamber of Commerce, the two-way trade is likely to reach about US$28.7 billion, indicating a year-on-year rise of 15.3 per cent.

Of the sum, Viet Nam's exports account for $23.7 billion and is up 16.7 per cent, while its imports contribute to approximately $5 billion, up 8.7 per cent.

The changes in the financial landscape will be most noticeable in the exports of Viet Nam's textiles and apparel to the US, which might reach $8.5 billion by year-end, with a sharp rise of 10.4 per cent against the $7.7 billion turnover that it saw one year ago.

Textiles and apparel currently account for about 36 per cent of the country's total exports to the US market.

According to the chamber, the escalation of the exports of Viet Nam's textiles, apparel, footwear and furniture to the US was poised to grow steadily. This is due to the slowdown of labour cost increases for 2014 when compared to previous years, and the increased FDI in textiles and apparel that support industries in anticipation of the Trans Pacific Partnership.

Viet Nam posted the largest surge in textiles and apparel exports to the US in September, compared to the previous year, as it continued to take business away from other Asian countries such as Indonesia.

On the other hand, Bangladesh showed signs of a slowdown in production, a report of the US Commerce Department showed.

"The overall apparel import growth used to come from China and Bangladesh, but today Viet Nam is the main driver. I don't think you will see this trend abate shortly," Nate Herman, Vice President of International Trade, American Apparel and Footwear Association, said.

Strictness rules timber exports

With the EU, US and Australia making import conditions more stringent, especially with regard to timber sources, Vietnamese exporters of timber products have to acquiesce to buyers' demand there, an industry meeting heard yesterday.

Under the LACEY Act in the US, all timber products must have certificates proving they were made from legally exploited wood without which they could be seized or destroyed.

The EU's Forest Law Enforcement, Governance and Trade that took effect last March has a similar requirement.

To Xuan Phuc, a policy analyst at global non-profit Forest Trends, told the 27th ASEAN Furniture Industries Council (AFIC) working committee meeting in HCM City: "Despite growing domestic supply due to rapid expansion of planted forests, the Vietnamese wood processing industry still relies heavily on imports, especially of timber."

Last year, the country import timber worth more than US$1.2 billion from many countries including Laos, China, the US, Malaysia, Thailand, Cameroon, New Zealand, Myanmar, Cambodia, and Chile, making it difficult to guarantee their legality, he said.

Nguyen Chanh Phuong, general secretary of the Handicraft and Wood Industry Association of HCM City (HAWA), told Viet Nam News, "Proving the legality of source requires many documents, including the timber's scientific name, the country of harvest, forest location, and shipment bill."

"If Viet Nam has an effective mechanism to ensure legal sources of timber, it can sustain and expand export markets in future," Phuc said.

He called for strengthening existing regional ties to compare notes and discuss measures to cope with the increasing requirements in international markets.

Heiko Woerner, technical advisor to the Vietnamese-German Forestry Prog-ramme, said a project is underway to develop a "due diligence system" to enable HAWA members to prove legality.

The Indonesia Furniture Industry and Handicraft Association and other associations at the meeting spoke about their experiences in setting up programmes to reduce illegal logging and implement the legal verification and other certification systems.

Viet Nam's wood processing industry has enjoyed strong growth in recent years, with exports rising at an average of 15.5 per cent per year since 2007.

Last year it earned $4.6 billion from exports mainly to the US, China, EU, and Japan.

It ranks first in Southeast Asia, second in Asia, and sixth in the world in terms of wood exports.

The AFIC was established in 1978 as a non-profit regional trade organisation to promote and strengthen ties within the ASEAN furniture industry.

Time running out for bank restructuring

The State Bank of Viet Nam (SBV) has discovered two more weak banks and six credit institutions to be restructured this year, along with nine other banks now being monitored.

The work to shore up these banks is likely to be hastened, as the central bank and the targeted institutions have only two weeks to complete this restructuring.

Under the banking restructuring plan, initiated last April in a move to improve the resilience of the money system, the SBV has received proposals from 24 of 25 joint stock commercial banks and has given its approval to 11 restructuring proposals.

The vulnerable banking system had been on the edge of a crisis after many years of excessive credit growth and easy lending to State corporations and cross-shareholding issues.

Bad debts currently is listed at VND142.3 trillion (US$6.78 billion), based upon bank reports, according to SBV Deputy Governor Le Minh Hung. By the end of September, Viet Nam's bad debt accounted for 4.62 per cent of total loans.

"All weak banks have been proactive in implementing measures to restructure and solve wrong-doings under strict supervision of the central bank. These banks now are more stable and operating effectively, in line with safety standards," the central bank reported.

For example, after restructuring and merging, SHB said it earned VND550 billion ($26.19 million) net revenues in Q3, up nearly 43 per cent year-on-year. Accumulated revenues for the first nine months increased 17.7 per cent to VND1.63 trillion ($77.62 million). Only securities investments suffered dual losses, slipping VND3 billion ($142,850) in Q3 and VND11.5 billion ($547,620) in three quarters.

Bad debt reached nearly VND5.1 trillion ($242.86 million) on September 30, representing 7.74 per cent of total outstanding loans – a reduction from 8.5 per cent at the end of 2012.

"The merger turned the bank into a much healthier credit institution. We assumed that the merger and acquisition was a must in the current context," said SHB general director Nguyen Van Le.

HCMC to cut fee for small cars

HCM City will reduce registration fees for vehicles with less than 10 passenger seats on January 1, 2014.

The new fee, calculated at 10 per cent of the car's value, is a reduction from the current fee of 15 per cent.

The city's current registration fee is the highest in Viet Nam. It is followed by Ha Noi (with 12 per cent), and central Da Nang City and some southern provinces such as Dong Nai, Binh Duong, Tay Ninh and Long An (with 10 per cent).

Meanwhile, for automobiles that are registered for the second time, they will pay a registration fee at the rate of 2 per cent, applied at the same rate as found throughout the country.

Car owners often flocked to other provinces to register their new cars at 10 per cent, then returned to HCM Ciy to make their second registration at 2 per cent, to take advantage of the difference.

Produce exports to China fruitful

Viet Nam earned US$262 million from exporting fruits and vegetables to China in the first 11 months of this year, an annual increase of 36.4 per cent.

The number accounted for 27.8 percent of the country's total value of exports for the commodity, the Viet Nam Fruits and Vegetables Association announced.

The association said that export of processed fruit products contributed significantly to the growth of export turnover of the produce to China in the period. —

Dak Lak honey enjoys success

Dak Honey Company in the Central Highlands province of Dak Lak announced that it exported more than US$20 million worth of honey in 2013.

This year the company bottled more than 8,000 tonnes of honey, accounting for half of the nation's honey output.

To date, the company has offered support to more than 1,000 households creating honey products to assure they meet the standards of many countries, such as Japan and the United States, as well as the European Union, whilst increasing its productivity by one and a half times over the previous period.

Belgium offers aquaculture support

Belgium would support Vietnamese businesses in aquaculture, the processing industry and scientific research, Vice Governor Marc De Buck of Belgium's East Flanders Province said.

At a seminar entitled "Preferences for Vietnamese businesses when investing in East Flanders", held in the Cuu Long (Mekong) Delta City of Can Tho on Tuesday, Marc reiterated that Viet Nam, especially Can Tho City, would remain Belgium's strategic partner.

Vietnamese Ambassador to Belgium Pham Sanh Chau described the seminar as a great opportunity for the city and the Cuu Long (Mekong) Delta region to explore what is available in East Flanders, as the region boasted a strong economic potential.

Japan’s retailers interested in Vietnamese market

The Japan-based Aeon Group is expected to inaugurate its first trade centre in Ho Chi Minh City early next year in a bid to establish an extensive retail system in Vietnam in the time to come, according to Investment newspaper.

The Japanese retail giant will open its second shopping centre in southern Binh Duong province next October and another centre in Hanoi by 2015.

The group, with its representative office opened in Vietnam in 2009, worked out its plan to invest in the Vietnamese retail market since 2011 and took steps right after that to realize its scheme.

FamilyMart is another Japanese investor that invested in Vietnam’s retail market.

The Japanese convenience store chain plans to launch a total of 20 stores in Ho Chi Minh City by the end of 2013 and expand its operation to Hanoi by late 2014.

It is currently seeking domestic partners to create a joint business for the expansion of the convenience store system.

In addition, last year, Japan ’s Sojitz Group purchased 51 percent of the shares of Huong Thuy Manufacture Service Trading Corporation that provides food and drinks for around 4,000 stores nationwide.

The move is considered as part of Japanese investors’ trend to shift their investment portfolios in Vietnam .

Japan now ranks first among 100 countries and territories investing in Vietnam.

As of the first 11 month of this year, Japanese businesses invested more than 5.6 billion USD in the country.-

Ways sought to awake Vietnam’s agricultural potential

Israeli Minister of Agriculture and Rural Development Yair Shamir has described Vietnam’s agricultural sector as brimming with potential, suggesting the country give more importance to high-tech in this sector.

At a recent agricultural business forum in Ho Chi Minh City, the minister said his country has recorded marvellous agricultural achievements, even on desert areas amid severe weather conditions, thanks to high-tech applications.

Last November, a Vietnam-Republic of Korea (RoK) agriculture research park was also launched at the Tra Noc Industrial zone in the Mekong Delta city of Can Tho.

The 21.13 million USD centre will assist businesses that process farm produce and seafood to access cutting-edge technologies while upholding the agricultural advantages of the Mekong Delta region.

At the same time, the enhancement of cooperation, investment attraction and technological transfer with other countries is seen as a necessary and urgent way to help Vietnam increase its scientific and technological applications in agriculture as well as the sector’s competitive edge.

The agricultural sector, which contributes over 20 percent to the national gross domestic product (GDP), dominates the livelihood of over 70 percent of Vietnam’s population.

However, low productivity, quality and competitiveness has characterised the country’s agriculture due to out-of-date technologies despite a range of efforts made by businesses and other stakeholders.

Research agencies have developed tens of varieties of flowers and vegetables that are out of season or suitable for early crops. Joining the efforts, Ho Chi Minh City has developed a high-tech agricultural area covering an area of 88.17 hectares.

Reality however, shows that most of high-tech agricultural zones still use seeds imported from foreign countries.

Moreover, many types of Vietnamese farm produce are unable to compete with those from China and India in terms of both price and the stability of supply.-

Banks buy over 88% of government bonds

Commercial banks have purchased 88.3% of the total amount of government bonds issued since the year’s beginning, according to the State Treasury and the Ministry of Finance.

Thirty-one Vietnamese banks and 12 foreign banks have spent VND105.414 trillion and VND23.307 trillion respectively buying government bonds, accounting for 72.3% and 16% of the total number sold by the State Treasury. Besides, the amount bought by 26 securities firms and investment funds is VND15.090 trillion worth (10.3%) and that of Vietnam Social Insurance is VND2 trillion (1.4%).

Major buyers of government bonds include Bank for Investment and Development of Vietnam (BIDV), Bank for Foreign Trade of Vietnam (Vietcombank), BIDV Securities Joint Stock Company, Vietcombank Securities Co., Ltd, Vietnam Bank for Agriculture and Rural Development, Vietnam Prosperity Bank, Saigon Thuong Tin Bank, Asia Commercial Bank, ANZ and Bao Viet Securities Company.

According to the Hanoi Stock Exchange (HNX), it is expected that VND25.2 trillion will be mobilized via auctions of government bonds in the fourth quarter.

The target is not easy to be achieved amid the current situation which is no longer as favorable as it was in the year’s early months. However, November proved positive with VND16.448 trillion worth of bonds sold.

The total amount from January to November 15 was VND170.56 trillion, equivalent to 88% of the year’s target (VND193 trillion).

According to the Ministry of Finance, capital mobilization results via government bonds are positive thanks to the slow credit growth of the banking system as the current capital amount is abundant.

In the January-September period, the State Treasury paid VND81,82 trillion worth of mature bonds, bond yields as well as fees for the issuers, with the value of mature bonds alone amounting to VND56.29 trillion.

On the primary market of government bonds, the volume bought in the past four years until this September was VND421 trillion. After many years of stopping issuing long-term bonds, the State Treasury has started issuing 15-year bonds this year, which shows the Ministry of Finance’s effort and determination of providing a variety of bonds of different terms.

According to HNX, the total transaction value on the secondary government bond market amounted to nearly VND690 trillion before September, 2013. Since 2011, foreign investors have rejoined the market with their stable transactions accounting for around 30% of the total value.

SHB teams up with construction firms

Saigon-Hanoi Commercial Bank (SHB) and Thang Long Construction Corporation and Civil Engineering Construction Corporation 8 (Cienco 8) clinched cooperation deals on Tuesday to reciprocally support business operations.

SHB and the two corporations pledged to facilitate cooperation programs among their affiliates, units and partners. The three sides will also prioritize products and services of each other and will cooperate to carry out investment projects.

SHB chairman Do Quang Hien said in a statement that the cooperation deals have given SHB opportunities to become a strategic shareholder of the two corporations when they go public in the coming time.

Since early this year, SHB has financed many large traffic infrastructure projects such as Dong Nai Bridge, expansion of the National Highway 1A in Khanh Hoa Province and an intersection project in Hue City. The lender has also entered comprehensive cooperation with large groups and corporations such as Vinacomin, Vietnam Rubber Industry Group, Viglacera and Binh Son Refining and Petrochemical Company Limited.

ACE Life opens new sales office in Vinh city

ACE Life Insurance Co., Ltd. (ACE Life Vietnam) announced the opening of a new sales office in Vinh City in north central province of Nghe An on December 11, marking a milestone in its expansion and growth strategy in the central region and the country.

The new office offers a spacious, professional and well-equipped environment that will increase convenience and service quality for customers.

Stretching to Vinh City is part of ACE Life’s development and growth strategy to build a strong distribution network that enables local residents to be better served by its agents with a wide range of products offered.

The office opening also bears testament to ACE Life’s long-term commitment to the Vietnam market.

“ACE Life’s new sales office opening in Vinh City is part of our business strategy for sustainable network development in Vietnam. In recent years, the strong economic growth of Vinh sets the stage for rapid and stable advancement of the service industry. With this new office in operations,” said Lam Hai Tuan, chairman and country president of ACE Life Vietnam.

“ACE Life Vietnam believes that we can meet the increasing demand of life insurance in the city and its surrounding areas, while fulfill the company’s commitment to customer service excellence,” Tuan added.

After more than eight years of effective operations, ACE Life Vietnam has consisted of 17 offices in 15 provinces/cities across the country.

With a strong, professional and ever-growing agency force of 10,000, ACE Life Vietnam has built its reputation as a reliable insurer characterised by its strong ethical culture, efficient operations and quality service.

ACE Life Vietnam is part of the ACE Group, one of the world’s largest multiline property and casualty insurers.

The company offers a comprehensive array of quality life insurance products to meet the needs of financial protection and security to a broad range of customers.

Assie cows still roam Vietnam market

Long An Province-based Thuy Ha Company yesterday took delivery of 5,000 cows from Australia, brushing off the rumor that Australia bans export of cows to Vietnam as covered in local media over the past ten days.

The Australian Trade Commission yesterday also confirmed to the Daily that the rumor is baseless and live cattle shipments are still coming to Vietnam.

Over the past two days, the cargo vessel Ocean Swagman has been docking at Lotus Port in HCMC’s District 7 to deliver over 5,000 head of cattle to Thuy Ha, which will then sell the cows to major slaughterhouses in Vietnam.

Luu Son Thuy, director of Thuy Ha, told the Daily that his company since June has imported 30,000 cows from Australia. Thuy Ha is one of three local importers of live cattle from Australia.

Thuy said the cattle after being imported will be isolated for one to two weeks for veterinary officers to conduct hygiene and disease tests, and if all cattle are confirmed heathy, they will be distributed to slaughterhouses.

Thuy Ha currently has three farms capable of accommodating 15,000 cattle under standards dictated by Australian suppliers.

Each day, the company supplies an average 350 cows to slaughterhouses in the southern region.

Van Duc Muoi, general director of meat processor Vissan as a key buyer of live cattle from Thuy Ha, said his slaughterhouse buys around 40 Australian cows each day on average.

Muoi said since October, his company has revised up cow meat twice by 2-3% only, but he stopped short of attributing the price hike to scarcity. However, he asserted that Australian suppliers have pledged stable supplies of live cattle for Vietnam and prices will be kept unchanged.

Meanwhile, the Australian Trade Commission (Austrade) yesterday asserted that a slight fall in supplies of live cattle from Australia to Vietnam is due to weather conditions, not intervention from the Australian Government.

“Australia has not temporarily stopped providing live cattle to Vietnam. To the contrary, Australian suppliers are continuing to support the growth of the Vietnamese market for live cattle,” Austrade said in an email sent to the Daily.

The agency said exporters have on-going shipments arriving in December and January. However, Austrade said there is a seasonal influence caused by the wet season between December and March when supply may fall due to rain and flooding.

Austrade expects around 60,000 Australian cattle will be exported to Vietnam this year compared to over 42,000 this year to date.

Deep-water ports grapple with oversupply

Deep-water ports in Vietnam are dealing with an oversupply and other challenges as highlighted in a first ever trade report on Vietnam released by Maersk Line yesterday.

“The market is currently plagued by an imbalance in supply and demand,” the liner shipping company said in the Vietnam Trade Report covering the first three quarters of 2013. This report cited the Cai Mep International Terminal (CMIT) in Ba Ria-Vung Tau Province as one of the ports that copes with this major challenge.

“The CMIT, the closest deep-water port to the manufacturing zones of southern Vietnam and the open seas, presently finds itself in a market that is operating at around 30% utilization (two million TEU moves a year), well below its six million TEU capacity. This compares poorly to terminals in Europe and North America where such utilization rates are typically well into the 80% and 90% figures,” the report said.

“The CMIT, along with other deep-water ports in Vietnam, is currently grappling with the challenge of oversupply due to the significant flooding of investment into the sector in the mid-2000s.”

Robert Hambleton, general director of the CMIT Co., Ltd., confirmed the current challenge with the Daily after Maersk announced the report. This is one of the major challenges that deep-water ports in Vietnam will have to face next year.

“I think it is not going to be much better than 30% next year,” Hambleton said.

In the report, Maersk indicated the pressure for deep-water ports resulted from a delay in closing some of the inner-city terminals of HCMC and moving the shipping services from these to the newly-constructed deep-water coastal ports as mapped out in the Government’s Port Master Plan.  

“As it stands, the deep-water ports are operating with unsustainably low container volumes. Yet at the same time, the shadow inner city ports continue to operate, only adding to the challenge of an over-supplied market,” the report said.

As a consequence, unsustainable pressure was exerted on the pricing for all terminal operators, and the Government therefore moved to impose a price floor rate of US$46 per 20-foot-container move.

“The price intervention from the Government was necessary in order to safeguard the whole terminal industry, since the low charges were reaching dangerous levels. Naturally, shipping line customers voiced concerns as their costs have increased compared to the past, but we are working with them to ensure they understand the rationale for this decision,” Hambleton said in the report.

Despite the challenges, CMIT is confident in Vietnam’s long-term potential, and that the oversupply issue will be addressed given the country’s growth, trade pacts such as the Trans-Pacific Partnership (TPP) and cascading of larger vessels.

Hambleton said as the CMIT currently served the routes linking the U.S., and any partnership that increased trade between Vietnam and North America would likely see a need for larger vessels to service those routes.

Maersk expected the TPP would set the path for the next phase of Vietnam’s economic opening journey as the manufacturing center of the Pacific Rim. It added that Vietnam’s economic outlook remained “broadly positive” with a steady flow of foreign direct investment (FDI) and increasing trade volumes.

Early start proposed for Trung Luong-Cai Lay expressway

The build-operate-transfer (BOT) model has been proposed for the Trung Luong-Cai Lay expressway section to reduce the traffic volume on National Highway 1A and shorten the traveling time between HCMC and Tien Giang Province.

According to a report of Cuu Long Corporation for Investment, Development and Project Management of Infrastructure (Cuu Long CIPM) sent to the Ministry of Transport, the Trung Luong-My Thuan Expressway project can be implemented under many investment models.

There are currently two investors interested in the project and wanting to develop the Trung Luong-Cai Lay section under the BOT model. After taking into account the feasibility, Cuu Long CIPM has proposed to soon start work on the section under this model while the remaining section between Cai Lay and My Thuan will use official development assistance (ODA) loans.

To seek more investors, the Ministry of Transport requested the Ministry of Planning and Investment to add Trung Luong-My Thuan Expressway to the list of projects implemented under the public-private partnership (PPP) model in August.

Earlier, Cuu Long CIPM proposed to borrow loans from some foreign banks and use its charter capital to kick off the project this year. However, there has not been any positive signal from foreign banks so far.

This expressway project was once assigned to Bank for Investment and Development of Vietnam and kicked off in November, 2009. Nevertheless, after two years of failing to mobilize capital, the bank returned the project which was then transferred to Cuu Long CIPM.

With a length of 54 kilometers, Trung Luong-My Thuan Expressway needs over VND22 trillion and has one end connected to HCMC-Trung Luong Expressway.

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