Foreigners grab bigger stakes in HHS

Two foreign investors recently purchased a 11.45 per cent stake in Hoang Huy Investment and Service Joint Stock Company (HHS).

The Ton Poh Thailand Fund last week bought more than 5.9 million HHS shares, amounting to a 5.32 per cent stake.

Established in Bangkok 10 years ago, the Ton Poh Fund has invested in companies that show potential to achieve high and sustainable long-term returns. Recently, it bought 2.5 million shares and became the largest shareholder of the local firm Coteccons Construction JSC (CTD).

At the same time, Finland's Mutual Fund Elite bought 897,670 HHS shares to increase its total holdings to 6.08 million shares, or a 6.13 per cent stake.

HHS, which was established in the northern Hai Phong City in 2008, has a charter capital of VND573.6 billion (US$26.55 million). It specialises in manufacturing and importing medium-size and heavy trucks of the DONGFENG – Hubei brand.

In the real estate market, HHS owns the Golden Land Building in Thanh Xuan District in the capital city.

HHS earned its largest-ever revenue of VND1.123 trillion ($51.9 million) and after-tax profit of VND246 billion ($11.38 million) in the first four months of 2015.

The group said it would hold the general meeting of shareholders on May 18 in Hai Phong City.

HHS share, which was listed on the HCM City Stock Exchange in 2012, yesterday closed at VND22,900 ($1.06).

Syrena Viet Nam wins Asia-Pacific award

Syrena Viet Nam, a BIM Group member, has won "the Best Mixed-Used Development of Viet Nam" – one of the Asia-Pacific Property Awards' most prestigious categories – for its Little Vietnam project at a ceremony in Kuala Lumpur, Malaysia, last Friday.

Little Vietnam, which covers 3.3 ha in the Halong Marina Urban Area and features linked infrastructure with the central city of Ha Long-a popular tourist spot in Quang Ninh Province, has a unique architectural design which replicates Ha Noi's Old Quarter and Hoi An's Ancient Town but is still in harmony with contemporary designs.

The project, expected to be put into operation in November this year, attracted a large number of investors for its comfortable accommodation and promoting profits, with all of the units it released for sale being bought within two months.

"Winning this Asia-Pacific property award will help to showcase our ongoing efforts to provide real estate products that meet the highest international standards and quality measures," Syrena Viet Nam's Deputy General Director Le Minh Dung said.

Dung said the award would provide an impetus to Syrena Viet Nam to develop its projects in Ha Noi, Phu Quoc and Laos, with the expectation that its projects would contribute to treasuring life's values and improving living standards in urban areas.

PVGas appoints new general director

The PetroVietnam Gas Joint Stock Corporation (PVGas) has appointed Duong Manh Son as its general director and a member of the management board of the company.

Son, who holds degrees in mechanical engineering and business management, had been the deputy general director of the firm since 2009. He has been working in the oil and gas sector since 1994.

The company said in an online statement that Son had "well accomplished heavy responsibilities in the business activities of PVGas, in particular, and the gas industry in general."

In April, the firm said it had earned nearly VND73.65 trillion (US$3.51 billion) in total turnover and VND14.37 trillion ($684.28 million) in after-tax profits – the highest profit among businesses listed on the domestic stock market – last year.

Lam Dong, Japan discuss hi-tech agriculture

Authorities of the Central Highlands province of Lam Dong and Japanese Ambassador Hiroshi Fukada discussed local hi-tech agriculture development during their working session in Da Lat city on May 12.

The provincial People’s Committee, the Japan International Cooperation Agency and the Vietnam Academy of Social Sciences are conducting a project to assist Lam Dong in developing its multi-sector farming approach and improving its business climate, said Vice Chairman of the provincial People’s Committee Pham S.

It is focused on establishing an agriculture zone, a post-harvest centre and a flower wholesale market in Da Lat while modernising vegetable and flower cultivation, marketing and workforce training as well as increasing studies for mid and long-term development.

The Japanese ambassador and accompanied economists and enterprises pointed out local strengths and weaknesses including limited access to capital, sporadic production and weak brand protection and recognition.

Minister of Agriculture and Rural Development Cao Duc Phat asked for Japanese support in applying Good Agriculture Practice standards and improving food hygiene.-

Ha Giang businesses attend customs dialogue

The first 2015 customs-business dialogue in the northern boder province of Ha Giang on May 12 enabled local firms to talk face-to-face with customs officials about questions or concerns.

Since last year, the provincial Customs Department has streamlined customs bureaucracy in an attempt to stimulate export-import activity, said Deputy Head Le Ngoc Hieu at the dialogue, adding that Ha Giang, which shares a borderline with China, targets 880 million USD in annual trade by 2020, representing an average growth of 17 percent.

It also consulted with the provincial People’s Committee on infrastructure upgrades in border and wholesale markets, especially those in rural areas as well as in the Thanh Thuy, Xin Man and Pho Bang border economic zones.

Participants were also updated on new legal regulations at the event.

From 2011-2014, the locality recorded cross-border trade worth over 2.1 billion USD.

From January-April 2015, total export-import value approached 60 million USD with nearly 40 billion VND (1.9 million USD) contributed to the State budget.-

Finance Ministry proposes inspection of essential commodity prices

The Ministry of Finance has sent a document proposing authorized agencies nationwide to intensify inspecting the price of essential commodities and relevant taxes and fees, aiming to prevent them from irrationally rocketing after petrol and electricity price increases.

Average electricity price has moved up while petrol price has also hiked twice since early this year, which might affect production costs and prices of some goods and services.

Therefore, the ministry proposed the agencies to keep a close eye on goods supply, demand and prices in local and international markets in order to stabilize prices and curb inflation across the country.

Relevant agencies should strictly handle those raising their prices unsuitable with input costs and market prices. Names of the violators will be publicly announced on the media.

Vietnam police help foreign tourists get back tour deposit

Vietnamese police have demanded that two local men refund an advance of $415 to two Dutch travelers who canceled a tour offered by the men, local media reported.

Police officers in the central province of Thua Thien-Hue on Monday said they had obliged two men, Tran Van Vinh and Le Van Thanh, both 31, to return VND9 million ($415) to Susan Reiniera Erna, 25, and Lisette Dollekamp, 23, two women of Dutch nationality.

According to their May 3 complaint to police, the Dutch women hired Vinh and Thanh to drive them from Hue to Hoi An in Quang Nam Province by motorcycle on May 1.

During the trip, Vinh offered to the foreign guests a five-day tour from Hoi An to Nha Trang, a seaside town that is the capital of the south-central province of Khanh Hoa, for VND9 million per traveler.

Both the Dutch women agreed and each of them paid VND4.5 million as a deposit to the two men, the portal of Thua Thien-Hue police said.

The foreign tourists informed Vinh over the phone later the same day that they wanted to cancel the tour, as they would be unexpectedly busy during the duration of the tour.

Vinh replied to the women that he would repay only VND2 million to each of them and requested that the women return to Hue to get the reimbursement, according to the news portal.

On May 2, the two women came back to Hue and phoned Vinh many times but he did not answer, so they had to resort to intervention by the police.

After an investigation, police officers summoned Vinh and Thanh for questioning and they then handed in VND9 million to police to return to the foreign tourists.

The T&T Group has requested the transport ministry to allow it to invest in the Ha Noi Railway Station.

The group said it would abide by current regulations and ensure a construction schedule to meet the travel requirements of the local people and tourists.

Ha Noi Railway Station was established in 1902 by the French colonialists. It was rebuilt in 1976 and has become one of the largest train stations of the country.

Earlier, property giant Vingroup offered to buy Ha Noi, Sai Gon and Da Nang railway stations and replace them with modern stations elsewhere in the three cities, to ease pressure on their downtown areas.

The plans by private companies to invest in the railways are in response to the government's policies, which allow various economic sectors to invest in the rail sector to modernise it and ease the burden on public funds.

Transport Minister Dinh La Thang had asked the Vietnam Railway Corporation (VRC) and related entities to plan a road map for selling the operational rights of railway stations, to attract more investors and to issue bids to choose the best offers.

VRC said it had to spend VND7 trillion (US$322.58 million) in the 2011-15 period to upgrade the network and introduce new technologies to manage the operations.

By 2020, an estimated VND2 trillion ($92.2 million) more will be needed for continued implementation of these plans, and VND60 trillion ($2.79 billion) for 12 projects to modernise the main routes.

Earlier this year, the T&T group also requested the ministry to allow it to buy Phu Quoc international airport in the southern province of Kien Giang.

Established in 1993, T&T group operates in the fields of finance, industry, minerals, real estate and export. It has a charter capital of VND2.5 trillion ($115 million).

GE expertise, technology strengthens Vietnam’s electricity backbone

GE’s Digital Energy, part of US-based energy giant General Electric, today announced it successfully upgraded and energised 14 of the 18 series capacitor banks at the Da Nang–Ha Tinh, Phu Lam–Pleiku and, most recently, the Nho Quan–Ha Tinh transmission lines.

The upgrade marks the latest project milestone for the company, which has continuously been advancing Vietnam’s 500-kilovolt (kV) transmission lines- the “backbone” of Vietnam’s north-to-south power transmission- for four years.

“Increased energy demand is putting increased stress on the grid – both in Vietnam and globally,” said Bob Turko, general manager of GE’s High-Voltage Solutions business.

“By collaborating with local companies and leveraging our history and expertise providing advanced series compensation systems to our customers, we’re able to relieve Vietnam’s grid stress and increase overall reliability, ensuring the well-being of the country’s economy and residents in the process,” Turko added.

In 2011, electricity demand in Vietnam- largely driven by steel and cement industries- was growing at double the country’s gross domestic product (GDP) rate.

With demand expected to escalate an additional 16 per cent over the next four years, electricity shortages were virtually unavoidable.

Understanding the implications to its economy and its 89 million citizens, the country has created a long-term plan to address electricity shortage, centering on Vietnam’s 500-kV transmission lines.

To support necessary growth in the existing transmission system, Electricity of Vietnam (EVN) and the National Power Transmission Corporation (NPT) needed 18 series capacitor banks throughout the country in a tight timeframe. Based on its proven expertise in the design and deployment of Flexible AC Transmission Systems (FACTS) within the region, GE’s Digital Energy business was chosen by EVN and NPT to install and upgrade these capacitor banks.

Key to GE’s success is its focus on localisation. To better understand Vietnam’s electricity issues, GE works closely with a local partner. The company has also hired local Vietnamese engineers and provides regional job opportunities to assist with technical support.

“We take pride in our ability to use local companies and resources,” said Turko. “By combining our knowledge with that of Vietnamese resident experts, we’ve successfully been able to navigate local challenges and strengthen the country’s electricity – together.”

GE shares a long history energising Vietnam. It installed the first GE series capacitor banks in Vietnam in the 1990s.

GE’s Energy Consulting arm, along with the Electricity Regulatory Authority of Vietnam (ERAV) and Ministry of Industry and Trade (MoIT), also recently completed a year-long “renewable energy integration study” aimed at developing wind power as a reliable energy source into the national grid.

The project was funded by the US Trade and Development Agency (USTDA) under the Grant Agreement between the US government and the ERAV.

AusCham to host HCMC urban development seminar

The Australian Chamber of Commerce (AusCham) Vietnam will hold a seminar reviewing Ho Chi Minh City urban development on Friday this week, May 15.

The seminar’s keynote speaker, Nguyen Thanh Nha- vice director of Ho Chi Minh City Department of Planning and Architecture- will deliver speech on the department objectives as well as how it believes it can lead the city’s growth in a stable and positive manner.

Nha will also discuss other related issues such as the effect of climate change from a local and global perspective, the role of heritage buildings in a development city, zoning and legal changes that may impact developers and project owners.

The seminar will also offer perspectives from highly regarded industry representatives.

For example, Khuong Van Muoi, a renowned architect and vice president of the Vietnam Architectural Association, will speak on the role of green architecture in the city’s development whereas Nguyen Ha Trang, deputy director of APAVE Asia Pacific, will speak on practices and techniques to effectively tackle risks facing projects in Vietnam.

Deputy general director of Saigon CO-OP Investment and Development, Pham Trung Kien will share the needs and experiences from the part of a leading local retailer.  

The seminar offers AusCham members and partners great access to government and industry leading experts who are key decision makers and influencers in the local market.

It also promises to be an important opportunity for attendees to gain understanding and insights into the ongoing and fascinating urban development of Ho Chi Minh City.

Japanese stationery firm to build third factory

Japanese stationery supplier King Jim Co. Ltd planned to build its third plastic paper file factory in Viet Nam by late 2016, the firm said.

The 9,000-square-metre plant is expected to be built at a cost of 700 million yen (US$5.88 million) near the existing factories in Binh Duong Province.

In addition to facilities in Viet Nam, King Jim also has a factory in Indonesia and has authorised a China-based company to produce 4 million products a year.

It is set to reduce the manufacturing of 3 million products in China when the new plant—capable of producing 14 million paper files a year—becomes operational.

A King Jim representative said Vietnam's labour costs were one third of China's, adding that the new factory would help improve its competitiveness.

In the Japanese market alone, paper file sales in 2014 rose by 20 percent from the previous year to 53 billion yen ($445.37 million), indicating a need for the company to expand its operations to meet domestic demand.

VietinAviva opens first agent office in Hanoi

Life insurer VietinBank Aviva (VietinAviva) on May 9 officially opened an agent office in Hanoi more than three years after starting operation in Vietnam by selling its product through bancassurance.

VietinAviva, which started operation in October of 2011, is a joint venture between Vietnam’s VietinBank and the UK insurer Aviva plc.

“VietinAviva inherits the value of Aviva and the prestige and support of Vietinbank,” said VietinAviva’s general director Nguyen Ngoc Trang at the opening ceremony.

In 2015, VietinAviva is going to open agent offices in Ho Chi Minh City and Danang. The company plans to soon have a network of agent offices throughout the country. All of VietinAviva’s existing sales points are equipped with the mPOS, one of the newest ways to pay insurance fee. Customers can also pay using their smart phones.

In 2014, VietinAviva’s premium grew by 264 per cent on year. The company is one of the three life insurers with the highest growth in the year.

Singapore company seeks to expand Vung Ang Port

Freight Link Capital based out of Singapore has submitted a US$114 million investment proposal to the Ministry of Transport to construct two additional wharfs at the Vung Ang Port area of the Ky Anh district in the central province of Ha Tinh.

As proposed the wharfs would be operated by a 100% foreign owned entity. The venture to alleviate the overcrowded port has already been given the green light by the management board of the Vung Ang Economic Zone.

Once constructed the two wharfs would span a total length of 500m capable of handling vessels of up to 50,000 DWT with the added capacity to service cargo and containers for not only the Formosa Ha Tinh Steel Complex but the entire region.  

Li Weimin, Freight Links Capital President said the two additional wharfs are needed to meet the future projected demand for unloading cargo, machinery and equipment and clear congestion due to increasing cargo volumes.

The 38th Annual Meeting of the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) is scheduled to be held in Nha Trang, in the Central Coastal province of Khanh Hoa from May 13-15.

Themed ‘DFIs and Sustainable Infrastructure: Policy Framework, Operational Best Practices and Challenges’, this year’s meeting is hosted by the Vietnam Development Bank (VDB). The event expects to welcome hundreds of delegates, mostly CEOs and senior officials, from over 30 countries.

According to Nguyen Quang Dung, Chairman of the VDB Board of Management, the conference aims to provide a good opportunity for ADFIAP members to exchange experience as well as seek opportunities for co-operation to overcome challenges, to develop towards a green economy, to improve institutional capacities and maintain sustainable development for the common benefit of the respective nations.

Other highlights of the annual meetings include the 21st Ordinary Meeting of the General Assembly, the 81st Board of Directors Meeting, the Conference Proper, Delegate-Meets-Delegate session, the ADFIAP Awards 2015 and the Fellowship Tour.

ADFIAP is the focal point of all development banks and other financial institutions engaged in the financing of development in the Asia-Pacific region. Its mission is to advance sustainable development through its members. Founded in 1976, ADFIAP currently has 131 member-institutions in 45 countries.

ADFIAP is also a founding member of the World Federation of Development Financing Institutions, comprising of regional associations in Africa, Asia-Pacific, Latin America and the Middle East. ADFIAP is an NGO in consultative status with the United Nations’ Economic and Social Council.

Techcombank lends VND2 trillion to VNPT

Vietnam Technological and Commercial Joint Stock Bank (Techcombank) last week struck a deal to make a loan of over VND2 trillion (US$92.3 million) for Vietnam Posts and Telecommunications Group (VNPT) to fund its operations.

The credit is part of a comprehensive cooperation deal between Techcombank and VNPT. The lender will offer 40,000 staff of VNPT banking products and services with preferential policies and help collect telecom charges via its nationwide network for the group.

In addition, VNPT will get consulting from Techcombank on cash flows and payment management to save costs and optimize the efficiency of its operations.

Meanwhile, VNPT will assist Techcombank’s branches and transaction offices nationwide in telecom and information technology services, including data transmission within Vietnam and between Vietnam and other countries, online receipts, database and customer support switchboard.

VNPT will also design products and services appropriate to Techcombank’ employees including those for mobile phones and the Internet MyTV.

Sai Gon home furnishing fair comes to Hanoi

The 2015 Vietnam furniture & home furnishing fair (VIFA HOME Sai Gon) will come to Hanoi for the first time from August 6-9, bringing about 110 exhibitors with 418 pavilions.

The fair will be a networking venue for industry stakeholders and consumers, making it easier for them to extend distribution channels as Vietnam joins the ASEAN Economic Community, Vice President of the Handicraft & Wood Industry Association (HAWA) of Ho Chi Minh City Huynh Van Hanh told a press conference in Hanoi on May 12.

On display will be interior and exterior decor, wooden toys and furniture for offices, restaurants, hotels, resorts, condominiums and design consultation services.

For the first time, the organising board will launch an online showroom where exhibitors can introduce their products and services at the lowest possible costs.

Head of the Ministry of Industry and Trade’s Domestic Market Department Vo Van Quyen said the domestic wood industry is worth 2-2.5 billion USD annually.

The event is hosted by the HAWA, Lien Minh Wood Handicrafts Jsc, the Ministry of Agriculture and Rural Development’s Agro-Forestry-Fisheries Processing Department and the Vietnam Wholesale.    

Tra Vinh to enhance SME management

Result-based management (RBM) of small- and medium-sized enterprises (SME) is the focus of a training course that kicked off on May 12 in the Mekong Delta province of Tra Vinh province.

The three-day training course, part of activities of the Canada-funded SME development project, aims to enhance the capability of project management staff in applying RBM tools.

Dr Ngo Tho Hung from the Asian Institute of Technology in Vietnam highlighted RBM application in international projects and organisations.

The project was launched earlier this year with a total investment of 11.7 million USD, 11 million USD of which was sourced from the Canadian Department of Foreign Affairs, Trade and Development.

It will be carried out over six years with three major components: developing major local products, improving local infrastructure facilities and enhancing the capacity of public management staff.

It targets 200 local enterprises and more than 194,000 residents in 20 remote communes across the province.

The Central Highlands province of Dak Lak is hosting 10 foreign direct investment (FDI) projects totalling 173.7 million USD, revealed a senior provincial leader.

The projects are mainly in agricultural products and animal feed processing, bio fuel manufacturing, trade and services, said Y Dham Enuol, Deputy Standing Chairman of the provincial People’s Committee.

An Indian-invested coffee processing factory with a capacity of 10,000 tonnes per year is now the biggest and most effective FDI firm in the locality, he said.

Dak Lak also has 23 ODA projects worth a combined 8.3 billion VND (382,381 USD) together with a number of grants worth 23.89 million USD from non-governmental organisations for poverty reduction and social welfares.

However, the official held that the investments are still modest and make limited contributions to the socio-economic growth of the locality.

Enuol said the province will urge local Departments of Foreign Relations and Planning and Investment to provide information on local projects and policies to call for more investments.

The province will also propose the Foreign Ministry help introduce Dak Lak’s potential to foreign investors while supporting the locality in choosing suitable partners for long-term partnerships.

Meanwhile, the province will organise trade promotion programmes to fully tap its potential, contributing to improving local living conditions, added the official.

Trade cooperation boasts huge potential for Vietnam, RoK firms

Enterprises from Vietnam and the Republic of Korea are expected to expand cooperation and trade exchange opportunities in the manufacturing, food, cosmetics and consumer goods distribution sectors.

This forecast has arrived after the Vietnam Chamber of Commerce and Industry on May 12 held a meeting with the Korean companies and signed a cooperation agreement with Daegu Technopark .

Hee Jun Cho, from the research institute Deagu Technopark, said that RoK enterprises have recently shown great interest in Vietnam and are seeking opportunities to penetrate into the market.

He hoped that with support and cooperation from the two countries’ governments and business communities, the two sides will realise their potential in trade and investment exchanges.

Pham Quang Thinh, Deputy Head of the VCCI’s International Relations Division, said the RoK is one of Vietnam’s most important partners both in terms of investment and trade.

Thinh said besides many bilateral and regional trade and investment agreements, the two countries recently signed the Vietnam-RoK Free Trade Agreement (FTA), providing a legal framework for policy enforcement and trade exchange.

The RoK has 4,140 valid projects in Vietnam with a combined capital of 37.43 billion USD. Its leading corporations, including Samsung, LG, Hyundai and Lotte, have their manufacturing facilities or services in Vietnam.

Quang Tri to foster community involvement in state budget management

An 810,000 EUR project will be implemented in central Quang Tri province to encourage the local community’s participation in State budget management.

The project was launched at a conference on May 12 in Quang Tri by the provincial Women’s Union, the People’s Council and the Centre for Development and Integration.

The project, funded by the European Union, will be carried out from April 2015 to March 2018. In that time it aims to enhance awareness about the issue for more than 6,000 women and disadvantaged people living in six communes in Gio Linh and Hai Lang districts.

It also aims to strengthen the role, competency and responsibility of People’s Councils – which directly represents local residents - at all levels in supervising public budget usage.

Under the project, beneficiaries are expected to get deeper understanding about public budget collection and spending, and involve themselves in the process via local programmes on poverty reduction and development.

Meanwhile, People’s Committees at grassroots and provincial levels are to facilitate the practical participation of civil social and community organisations in the development of the public budget and monitoring the financing of social programmes.

Participants have suggested a number of approaches for the project implementation, including ranking the transparency of public budget users.

Dong Thap: 24 billion VND mobilised to support farming conversion

The Mekong Delta province of Dong Thap has mobilised 24 billion VND (1.1 million USD) to help local farmers shift the use of 14,000 hectares of ineffective rice-growing land to other crops.

Accordingly, the province will support farmers with up to 2 million VND (95 USD) each hectare to buy seeds for the summer-autumn, autumn-winter and winter-spring harvests.

The province has requested authorised agencies to instruct farmers on cooperating with enterprises to boost consumption while encouraging production in accordance with Vietnam Agriculture Practice (VietGAP) certificates to ensure safe farm products.

The Lap Vo, Hong Ngu and Cao Lanh districts have transferred over 4,000 hectares of ineffective rice-growing areas to planting sesame, increasing local income to 10-20 million VND (476-952 USD) per hectare.

Farmers in Hong Ngu district earned nearly 40 million VND (1,900 USD) per hectare after switching to other crops.

Local farmers are encouraged to forgo ineffective rice-growing areas to plant other geographically suitable crops in order to boost production and meet market demand in terms of both quality and quantity.

French, Vietnamese scientists talk construction

The French-Vietnamese Conference on Innovation in Construction (CIGOS 2015) took place at the French ENS Cachan University on May 11 and 12, drawing many scientists and experts from the two countries.

President of ENS Cachan University, Pierre-Paul Zalio said the event, part of a series of French-Vietnamese scientific workshops, is a good opportunity for scientists from the two countries’ universities and research establishments to share their research and experience.

Ha Minh Cuong, a lecturer at Cachan, said the goal of the conference was to recommend ideas and development projects to minimise pollution, preserve energy, ensure sustainability and promote the environment.

The conference also discussed the training cooperation between Vietnam and France in construction, with a particular focus on ways to create new programmes that are more effective and better meet the demand of Vietnamese undergraduate students and postgraduate students.

The CIGOS was organised for the first time in 2010, and the second time in 2013.

Vietnam aquatic products exports dipped 17.4% to US$1.36 billion for the first quarter of this year.

This resulted in farmers wavering breeding shrimp and fish and shortages of materials for seafood processing.

Vietnam Seafood Exporters and Producers (VASEP) Vice Secretary General Nguyen Hoai Nam, said aquaculture areas are showing a trend of decline, especially for shrimp products, leading to a shortage of supplies for exports.

Nam added that shrimp breeders face a number of disadvantages, such as rising shrimp food prices, increasing loan rates and the retail prices remaining the same.

This year, the world’s supply increases as shrimp producers in Thailand and India resume production, not mention to anti-dumping taxes on Vietnamese shrimp, which results in shrinking market shares in some areas, especially the US.

The results of the US Department of Commerce (DOC)’s anti-dumping duty review in January 2015 signified that anti-dumping taxes were higher than previous ones, causing more difficulties for tra fish exporters. Moreover, the US Agricultural Act of 2014 partially affects Vietnamese tra fish exports to the highly lucrative market.

Foreign exchange rates also hinder Vietnam seafood exports as more than 90% of import-export contracts use US dollar for payment.

Thailand’s plastic leading producer opens branch in Vietnam

SRITHAI SUPERWARE, Thailand's leading producer of melamine and plastic tableware, plans to invest US$44.5 million in expanding its business in India, Indonesia and Vietnam as its foresees strong demand in those markets, while expecting domestic sales to account for a smaller proportion of its revenue in the coming years.

Sanan Angubolkul, chairman and president of the listed company, said Srithai Superware would focus on expansion via new overseas factories this year in light of strong export growth to key target markets.

In expanding its business overseas, Sanan explained that the company would concentrate on building up its manufacturing presence largely via mergers and acquisitions, as such a strategy would enable it to generate income in the short-term.

"As a result of or planned expansion abroad, our target is to double sales to Bt20 billion by 2020, from this year's expected Bt10.05 billion. This year's estimated sales will be 7% higher than the value achieved in 2014, while volume will rise by 10%. Also, sales from overseas investment will increase significantly compared to the Thai market," he said.

Currently about 22 per cent of the firm's sales are from direct exports, and 20% from regional investment, mainly from Vietnam and Indonesia, while the remainder is from the domestic market.

Sanan said the share of the company's income from overseas sales would increase over the next five years, under its firm strategy of focusing on expanding investment in other countries.

Income from its Vietnamese business is expected to exceed that generated in Thailand within the next 10 years, he added.

Under the investment plan, Srithai Superware will spend about US$14.8 million in establishing a third Vietnamese factory, in the city of Hanoi.

The new plant is expected to start a test run with an annual capacity of 6,000 tonnes of plastic products in the fourth quarter of this year.

Srithai Superware currently has two plants for plastic products and bottle production in Ho Chi Minh City, with an annual capacity of about 20,000 tonnes.

Soaring bank provision anticipated for bad debt control

Loan-loss provisions of local banks are expected to mount up in the upcoming months to reach the goal of driving the banking sector’s bad debt rate to below 3 per cent by the end of year.

To facilitate the sector’s objective, the central bank has required local commercial banks to scale up efforts in dealing with bad debts, engaging in mergers and acquisitions to bolster business efficiency and selling bad debts to the state-owned Vietnam Asset Management Company (VAMC) to ensure healthy operations. Their provisions would, thereby, increase remarkably.

According to Do Minh Toan, general director of Asia Commercial Bank, this year the bank aims to achieve a credit growth of 13-15 per cent and sell about VND1 trillion ($46.7 million) bad debts to VAMC.

The bank has also made plans to tackle VND1.6 trillion ($76 million) in bad debts and set aside VND2 trillion ($93 million) to make provisions, striving to bring bad debt below 3 per cent before the end of this year.

Standard Chartered Bank (SCB), an influential banking entity based in Ho Chi Minh City, has sold about VND11.4 trillion ($532 million) of bad debts to VAMC, in the course of the past three years, bringing its ratio to just 0.5 per cent by the end of last year.

This year, SCB is set to continue curbing bad debts to ensure healthy finance.

Along with using drastic measures, the bank’s provision will also increase.

At Vietnam International Bank (VIB), one of the leading joint stock commercial banks, though by the end of last year bad debt was kept at 2.51 per cent, well below the regulated level of 3 per cent, its cumulative provisions have surpassed VND2 trillion ($93 million).

According to the bank executives, this year VIB is set to tackle VND3.83 trillion ($179 million) in bad debts, ensuring to maintain its bad debt around 2.5 per cent.

The bank’s bad debt is forecast to swell by around VND300 billion ($14 million) this year, leading to its rising debt provision.

At Eximbank, one of largest banks in total asset value, last year approximately VND3 trillion ($140 million) was put in provision, leading to a sharp drop in profits to just VND68 billion ($3.1 million).

This year, the bank plans to sell around VND1 trillion ($46.7 million) bad debts to VAMC and put into provision 20 per cent of the sum to receive special bonds from VAMC in return.

Bank provisions are forecast to shoot up this year as each bank must fulfil the goals of selling the bad debt amount assigned by the central bank (SBV) to the VAMC.

Banks have, therefore, proposed the central bank to scale down the required provision amount for their bad debts when selling to VAMC from the current 20 per cent to 10 per cent only.

The bank proposal was advocated by Tran Du Lich, member of the National Financial and Advisory Monetary Council, who said that lower provision rates would help alleviate bank pressures in a time of difficulties.

Government confirms bank guarantee for house buyers

The guarantee fees to be paid on real estate development projects will have to be borne by the project’s developers who incorporate this sum into the house price.

At a Government regular meeting held recently in Hanoi, governmental spokesperson, Minister and Head of Government Office Nguyen Van Nen said that the level of guarantee fees will depend on the capacity and prestige of every developer.

The above reflection from the government was released as a reaction to concerns from developers and buyers on the detailed guidelines and exact percentage figures regarding bank guarantees to be paid on real estate development projects.

“The implementation of guarantee payment to the bank from real estate developers has been regulated in the amended Law on Housing which will be come into effect this July to ensure the right of the buyer,” Nen stressed.

Specifically, when the developers sell or lease an unfinished project guaranteed by bankers, but fail to hand over the units to buyers according to the agreed schedule, then the banks would be responsible for repaying this guarantee for the buyers.

Nen stated that the State Bank of Vietnam is currently framing the guidelines for the details-related issues. These frame guidelines will be sent to the related bodies very soon.

However, the exact percentage to be paid by the developers has yet to be revealed as of yet.

According to many developers, this obligatory guarantee will bump up the overall unit price of properties.

Although the bank guarantee has not been revealed yet, industry insiders expect that it will be between 1 to 2 per cent of a project’s total investment capital, or around VND600,000 ($28) per square metre.

However, as Nen stressed, the guarantee will be tied to the reputation of the developer and so the guarantee fee could change from one developer to another, depending on their record.

This information has received varying reactions from buyers. Hoang Manh Hung, a real estate agency in Lieu Giai Street in Hanoi said that it will be hard for buyers to take on any additional financial pressures.

“Developers are now doing their best to reduce the price of every square metre of housing as much as possible in order to attract customers, they would not be happy to add this sum into the value,” Hung said.

Meanwhile Nguyen Thi Hoa, a buyer from Thang Long Number 1 project in Hanoi said that she was happy enough with this bank guarantee.

“Even that we [buyers] have to pay more for every square metre of the house, our right will be ensured by the bank and this is fair enough for us,” Hoa said.

However Hoa is still concerned over what actual price hikes will result of the guarantee and whether developers will abuse this.

“We hope that the State Bank’s guidelines will solve all remaining outstanding issues related to the bank guarantee,” Hoa said.

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