PM green-lights construction corp listing

Prime Minister Nguyen Tan Dung has approved the privatisation plan of the Civil Engineering Construction Corporation No 8 (Cienco 8), according to the Government news portal.

The company is projected to raise VND350 billion (US$16.6 million) in charter capital, which is equivalent to 35 million shares at a value of VND10,000 (49 cents) each.

Of the total, 17.15 million shares or 49 per cent are the State's share, 10 million or 28.60 per cent are for public offerings, 7.35 million shares or 21 per cent will go to strategic investors, while the remaining shares will go to Cienco 8 employees at privileged prices.

The prime minister has authorised the Minister of Transport, Dinh La Thang, to determine the starting price of Cienco 8's initial public offering (IPO). This ministry will represent the State's capital at Cienco 8. No date was given for when the IPO would begin.

Incidentally, there will be four IPOs of Cienco brothers this month, all valued at VND10,000 per share.

On March 21, Cienco 1 will sell 16 million shares on the Ha Noi Stock Exchange (HNX), while Cienco 6 will offer 28.7 million shares, or 47.87 per cent of its stake, on the HCM City Stock Exchange.

On March 24, Cienco 5 will sell 14.2 million shares, or 32.38 per cent of its stake, on the HNX, while on March 25, Cienco 4 will sell 16.1 million shares there.

Besides these companies, the Ministry of Transport is also speeding up the equitisation of units controlled by Viet Nam National Shipping Lines (Vinalines). The parent company of Vinalines is expected to offer an IPO by the first quarter of 2015.

The subsidiaries of Vinalines, which will be equitised this year, include Sai Gon port, Cam Ranh Port, Nghe Tinh port, Can Tho port, Nam Can port, Vinalines Hai Phong, Vinalines Shipping Company and Vinalines Container Shipping Company.

Vinalines has successfully equitised two units, Quy Nhon Port and Khuyen Luong Port, while Nha Trang Port has announced it will perform an evaluation for equitisation.

A conference on restructuring State-owned enterprises, which was held by the government here late last month, estimated that 432 SOEs would be equitised in 2014-15, or 216 enterprises per year.

Vietnamese furniture companies expand overseas markets

Twenty-nine Vietnamese companies taking part in the International Furniture Fair Singapore 2014 and the 31st ASEAN Furniture Show (IFFS/AFS) in Singapore from March 13016 are all aimed at seeking more customers and expand markets overseas.

Phan Thi Thuy Hang, Director of Kien A Interiors Co. Ltd. said this is the first time the company participated in the IFFS/AFS. The company has shipped its furniture to New Zealand, the US and some European countries like the UK and Iceland and it has been planning to export furniture to other countries in Europe.

Also in the first day of the IFFS/AFS, Saigon River Factory Vietnam, a company run by a Belgian couple and specialising in creating handmade furniture and tiles for worldwide distribution, received orders for three containers of products.

Director Peter Arts said this is the fourth time his company has been exhibiting at the event. The company has about 160 workers and needs to expand.

Nguyen Thanh Tung, Director of Tan Phu Furniture Co. Ltd, said after each year of participation to the event, its market share increased and more and more overseas customers knew Tan Phu brand. This is the 11th time that Tan Phu has participated in the annual IFFS.

Tan Phu has exported furniture to Australia, New Zealand and European countries, worth from US$6-7 million a year.

According to Vietnamese Ambassador to Singapore Tran Hai Hau, many of Vietnamese companies displaying at the IFFS received export orders on the very first day of the show, which indicated that Vietnam’s furniture production technology has been on the progress and the country’s economy has been improved, including the furniture industry.

Last year, Vietnam exported US$6 billion worth of furniture, wooden, bamboo and rattan works, including US$20 million to Singapore.

French companies to attend HCM City livestock exposition

Seventeen French companies have registered to participate in the 5th international Livestock, Dairy, Meat Processing, Aquaculture and Bio-Energy Exposition (ILDEX Vietnam) scheduled for March 19-21 in HCM City.

The event will also be attended by UBIFRANCE, the French Agency for International Business Development

Visitors to the exposition will have the chance to get updated on the latest in state-of-the-art farming technology, cattle feed, cross-breeding, and animal health.

The exposition will also create favourable conditions for companies from all over the world to expand their production activities by cooperating with others in the field of livestock, seafood and processing.

The growth of Vietnam’s agricultural sector originates from the huge demand for domestic and international consumption of products thus requiring modernization to increase productivity and product quality.

The breeding sector now makes up 33% of the agricultural production value and is forecast to offer huge opportunities for French exporters.

ILDEX was considered Vietnam’s largest scale livestock industry exhibition with the participation of more than 180 businesses from 26 nations in 2012.

SBV asks for lending interest rate cut

Credit institutions should cut lending rates further by at least 1 to 2 per cent to meet the banking sector's growth rate of 12 to 13 per cent this year.

State Bank Governor Nguyen Van Binh said this, adding that credit institutions should make the cut right in the first quarter as it was reported that credit growth was negative 1.66 per cent as of February 20, while production was stagnant and capital mobilisation was steady.

According to the central bank's latest data, the average lending interest rates in Vietnamese dong for the past six months remained unchanged.

It said between mid-July 2013 and the end of February this year, at State-owned commercial banks, the average lending rates to priority sectors including agriculture, rural areas, supporting industries and exports ranged from 7 to 9 per cent yearly in the short term loans and 11 to 12 per cent yearly for medium- and long-term loans. The rates applied by normal commercial loans ranged from 9 to10.5 per cent for short-term loans and 11.5 to 12.8 per cent for medium- and long-term loans.

At commercial joint stock banks, the common lending rates to priority sectors were between 8 and 9 per cent yearly in the short term loans and 11 to 12 per cent annually for medium- and long-term loans. The interest rates at other commercial loans ranged from 9.5 to 11.5 per cent for short-term loans and 12 to 13 per cent for medium- and long-term loans.

To boost credit growth, besides the rate reduction, Binh said that credit institutions must also actively help firms to access credit.

He cited HCM City as an example. Thanks to the Capital Supply-Demand Linking Programme, credit institutions in the city lent VND13 trillion, or US$590.9 million, with the interest rates pegged between 8 and 9 per cent for short-term loans and 10 per cent for long-term loans.

The programme to establish stronger links between commercial banks and enterprises to facilitate access to preferential credit will expand this year to include small traders.

With its success, the programme is likely to be duplicated nationwide in a move to boost credit growth and help firms access credit.

Binh said that the banking industry would work with construction material firms to hold a conference to discuss measures to link the firms and banks in HCM City in a move to boost construction material consumption.

Israel companies look at promising local market

Viet Nam is considered to be a promising investment destination for Israeli enterprises which want to explore new markets besides their traditional markets in Europe and the US.

Federation of the Israeli Chambers of Commerce Vice Chairman Arie Zief said this at a seminar organised in Tel Aviv on Wednesday with the aim of helping Israeli companies learn more about investment opportunities in Viet Nam.

Over the past four years, Israeli businesses have been actively seeking opportunities to cooperate with Vietnamese partners, the vice chairman noted.

There is huge potential for the two business communities to accelerate economic and trade relations, he said, forecasting that the bilateral trade was likely to double in the next five years. Besides trade, he said, agriculture, water treatment, energy, high tech and biotech are also promising sectors for bilateral cooperation.

Director of the Israel-Viet Nam Corporation Rafi Kaufman agreed, saying that Viet Nam offered great investment potential for Israeli businesses due to the young consumer population, which would touch 17 million in the next 10 years, its lucrative retail market and the rising ratio of services compared with the agricultural sector.

During his speech at the forum, the Vietnamese Ambassador to Israel Ta Duy Chinh called on Israeli businesses to invest more in the country.

The bilateral trade reached US$604.29 million last year, a year-on-year rise of 38 per cent. Viet Nam's exports rose 44 per cent to touch $401.29 million. Among Viet Nam's main exports were agricultural products, seafood, garments and electrical equipment. The imported goods were fertilisers, machinery and equipment and electronics.

Meanwhile, Israeli firms have, till date, pumped $20.65 million into 16 projects in Viet Nam, giving Israel the 62nd rank out of the 101 countries and territories investing in the country.

These results, however, failed to match the potential and expectations of the two nations, Chinh concluded.

Private airlines urged to improve business model

The state had encouraged the development of private airlines, but these companies need to have a sustainable development model, according to experts.

Speaking at Viet Nam Television's Policy Dialogue Programme on Wednesday, the Director of the Aviation Department, Lai Xuan Thanh, said that the state had encouraged private firms to join the domestic aviation market to create fair conditions, reported online news website vnexpress.net.

However, if Air Mekong suspends flying operations at the end of this month, it will be the second private airline to close down, after Indochina Airlines, Thanh said.

These two private airlines, he added, had been unsuccessful because of management problems and the number of planes they had added to their fleets.

These airlines often leased aircraft and hired foreign firms to be in charge of maintenance, as well as the opening of new routes and management. This, said Thanh, prevented the state from supporting it.

Luong Hoai Nam, former director of Jestar Pacific Airlines, said private Vietnamese airlines were not attractive to investors. Aviation firms in other countries often lose money, but investors continue to back them and operations are able to continue. The aviation industry is an attractive sector, but Vietnamese firms had failed to create confidence among local and foreign investors because almost all of them had chosen the wrong operation model.

This could be deciding on whether to be a budget or traditional airline, or purchasing the wrong planes and adopting a weak business model, Nam said.

In addition, Viet Nam has not supplied trained manpower for the aviation sector, Thanh said, leading large aviation firms to hire foreign labour.

Another reason for private aviation firms being unsuccessful is that the market is facing an economic crisis, as well as due to various health scares, Thanh pointed out.

The local aviation sector is facing many challenges at present and is expected to face more difficulties in the future.

Also, beginning in 2015, Viet Nam will allow ASEAN countries to invest in its aviation market.

Before that happens, local aviation firms must reduce fares as low as possible, said officials, noting that it has among the highest ticket prices among regional countries.

Nam said aviation firms in Viet Nam have often bought fewer and costlier planes, as against more orders, and its fuel expenses were higher than that of Thailand and Malaysia. Landing charges and other taxes, too, had pushed up air fares.

However, experts said the local aviation industry had achieved some success, as its airfares had allowed farmers and other low-income groups the opportunity to fly.

Rice price drop concerns Mekong Delta farmers

Price of rice dropping continuously during the peak harvest season is concerning many farmers in the Mekong Delta.

A kilogram of dry rice is VND 5,250-5,350. The long-grain variety of rice is VND 5,500-5,600 per kilogram, a decrease of VND 200-300 since last week, according to the Vietnam Food Association.

The price of fresh rice also decreased VND 400 since last week, selling at VND 4,200-4,800 per kilogram.

Businesses expressed worry that abundant supply from Thailand and India will further reduce prices.

Deputy Prime Minister Hoang Trung Hai ordered the Ministry of Industry and Trade, Ministry of Agriculture and Rural Development and the Vietnam Food Association to keep a close eye on rice output and consumption to have suitable stockpiling policy.

Prime Minister Nguyen Tan Dung has approved the establishment of an inter-sectoral steering committee responsible for implementing schemes on restructuring the system of credit institutions and handling bad debts.

The committee is headed by Deputy Prime Minister Vu Van Ninh while State Bank of Vietnam (SVB) Governor Nguyen Van Binh serves as its standing vice chairman.

The committee is tasked with aiding the PM in directing the implementation of measures to restructure credit institutions and deal with their bad debts during the 2011-15 period.

It also proposes orientations and measures to handle important emerging issues during the execution of the schemes.

Bad debts in Vietnam’s entire banking system were 3.79 percent of the outstanding loans at the end of 2013, according to the SBV.

Last year, the SBV reached its initial target on settling non-performance loans, in which the State-owned Vietnam Asset Management Company (VAMC) bought nearly 40 trillion VND (1.88 billion USD) of bad debts from local commercial banks.

The bank continues to set bad debt settlement as a key target of its monetary policy this year. Its objective is to basically clear the current bad debts by the end of 2015.-

Leather producers offered assistance for environmental problem solving

The Ministry of Industry and Trade (MOIT) has vowed to tackle domestic leather businesses' difficulties in expanding their businesses, the Vietnam Economic News reported on March 13.

Building exclusive industrial zones with waste treatment facilities for leather businesses is one of the solutions to implement the master plan for Vietnamese leather and footwear sector development towards 2020 with a vision to 2025, which has been approved by the MOIT. So far, however, the solution has not been taken due to a lack of capital and environmental factors.

Former Deputy Minister of Industry and Trade Do Huu Hao said that leather production facilities create solid, liquid waste and exhaust fumes, the treatment of which requires specific technologies, therefore almost no province wanted to encourage investment in leather production.

Although leather production has grown in recent years, leather businesses still face numerous difficulties in expanding production due to the lack of exclusive industrial zones. Leather businesses still fail to cooperate with each other in dealing with environmental problems. Building its own wastewater treatment facility is beyond the financial capacity of a single leather business.

Bui Van Duc, Chairman of the Board at the Sagoda Leather Footwear Joint Stock Company, said: “We are seeking possibilities of investing in a leather factory. We have surveyed many localities but none of them supported our project, so we have not found a place to build the factory.”

Environmental problems have hindered the development of leather businesses. Specific environmental standards which can be applied to leather businesses are still lacking. Meanwhile, data from the Vietnam Leather, Footwear and Handbag Association (LEFASO) show that the whole country currently has 35 leather businesses, 62 percent of which are small-to-medium sized private companies which are financially incapable of investing in adequate waste treatment systems.

According to LEFASO Secretary General Phan Thi Thanh Xuan, leather businesses currently are capable to produce 350 million square feet (sqft) each year, meeting 40 percent of the amount required to make leather products for export.

It is expected that footwear businesses will need 700-750 million sqft of leather by 2015 and the demand will continue to increase in the ensuing years. Therefore, if domestic leather businesses do not invest in expanding production, they will be able to meet a lower percentage of the actual demand.

Developing the leather industry is necessary to increase the export value of Vietnamese footwear. Trade agreements, especially the Trans-Pacific Partnership Agreement (TPP), require export goods to meet specific requirements in terms of origin. So, Vietnamese leather and footwear businesses will be unable to make the most of advantages from these agreements if they fail to produce input materials required for production.

Aware of the important role of the leather industry to the development of businesses which make footwear and handbags for exports, the MOIT has taken the initiative in seeking solutions to boost domestic leather production. At a recent meeting held to discuss measures to develop the domestic leather industry, Deputy Minister of Industry and Trade Ho Thi Kim Thoa said that the MOIT would accompany leather businesses through difficulties and create favorable conditions for them to expand production.

Deputy Minister Ho Thi Kim Thoa required the Light Industry Department and LEFASO to accelerate the formation of exclusive industrial zones for leather businesses. She said that leather businesses should concentrate on creating products of high value.

She requested the Ministry of Natural Resources and Environment and the Ministry of Science and Technology to propose suitable environmental standards which can be applied to leather businesses and deal with problems currently facing them.

Exclusive industrial zones for leather businesses remain a desire which has not come true. The MOIT’s determination to untie these knots aims to promote the sustainable development of the entire leather and footwear sector.

VIFA EXPO features friendly wooden furniture products

Wooden furniture producers still have many advantages in cutting costs and improving product quality to sharpen their competitiveness in the international market, The Saigon Times Daily quoted a local industry source at a furniture exhibition in Ho Chi Minh City as saying.

Huynh Van Hanh, Vice Chairman of the Handicraft and Wood Industry Association of Ho Chi Minh City, said at the opening ceremony of the exhibition VIFA EXPO on March 11 that among the ten biggest wooden furniture exporting countries, Vietnam enjoys good conditions to boost competitiveness.

“Vietnam has many advantages in terms of production potential and opportunities. If there are right policies, Vietnam can raise its global market share from the current 1.5% to 5% in the next five years, meaning additional revenue of 15 billion USD,” Hanh said at the seventh Vietnam International Furniture and Home Accessories Fair (VIFA EXPO).

The total export turnover of Vietnam’s wooden furniture this year is predicted to reach more than 6.5 billion USD, increasing by 20% compared with nearly 5.6 billion USD in 2013, while domestic sales of the industry are estimated at 2 billion USD.

This year’s VIFA EXPO features many domestic wooden furniture producers with their newest indoor and outdoor products using environmentally friendly materials that can compete with products from Thailand, Malaysia and China.

The number of foreign viewers coming to the expo on the morning of March 11 is higher than expectation of the organiser.

“We have equipped six computers and four printers to give updated information about foreign customers visiting the fair but such machines are still overloaded as the number is big. In the next three days if foreign viewers continue to come like this morning then it would be a success that goes far beyond our expectations,” he said.

VIFA EXPO, held in four days at the Saigon Exhibition and Convention Center in HCM City’s District 7 by the HCM City Department of Industry and Trade, HAWA and HAWA Corporation, has seen participation of 141 enterprises with 625 stalls, up 3% over last year, of which 18% belongs to nine foreign countries and territories such as Belgium, Denmark, Australia, China, Taiwan, the Republic of Korea, and Japan.

The stall displaying products that won Vietnam’s Apricot 2013-2014 award, an annual wooden furniture designing contest held by HAWA, attracted many foreign customers as the products show unique designing ideas and is useful for houses in cities.

IFC recognises Techcombank as 2013 Global Best Issuing Bank Partner

Techcombank was recently was honoured with the Best Issuing Bank Partner award for its active participation in the International Finance Corporation (IFC)'s Global Trade Finance Programme (GTFP).

The award was announced at the closing session of the IFC's Global Trade Partners Meeting in late February 2014 in Lisbon, Portugal. This is the first time Techcombank has won such a title.

Techcombank won the Most Active GTFP Issuing Bank in East Asia title (from 2008 to 2010) and Best GTFP Issuing Bank in Asia" (in 2012) in the past.

GTFP, with more than 400 members all over the world, aims to extend and complement the capacity of banks to deliver trade finance by providing risk mitigation on a per-transaction basis in emerging markets. Techcombank has extensively expanded the relationship with IFC and has now become the most active and largest customer of IFC in its GTFP programme.

“Our annual conference provides an unparalleled opportunity for our partners to learn from global experts and develop business leads in all regions,” said Georgina Baker, global head of Trade and Supply Chain Solutions at IFC.

“We are pleased to acknowledge those banks that innovated or worked extensively with IFC last year to support the growth of emerging market trade and help more countries and firms integrate into global supply chains," Baker added.

The award, once again, honours Techcombank’s effort and success in efficient implementation of GTFP to finance enterprises in Vietnam, simultaneously, reaffirms prestige, competitiveness and risk management capability of Techcombank – one of leading joint stock commercial banks in Vietnam.

Vietnam’s rice exports in competition with Thailand

Vietnamese rice exporters are facing tough competition with Thailand and other suppliers as domestic supply has turned profuse while import demands stay low, according to the Vietnam Food Association (VFA).

A VFA representative said that Thailand offloaded its stockpile of 600,000 tons of rice last month and announced to sell 800,000 tons more in March. Therefore, Thailand’s rice prices are expected to drop further, causing impacts on rice exports of many countries, including Vietnam.

Food traders said that rice demands in the world are low as importers believe that rice prices would decline further. The combined rice export volume of Thailand, India, Vietnam, Pakistan and the U.S. has stood at around 4.1 million tons since early this year, down 7.2% year-on-year.

According to the Department of Cultivation under the Ministry of Agriculture and Rural Development, rice output in the Mekong Delta is estimated to increase strongly in 2014, putting more pressure on rice exports.

Lam Anh Tuan, director of Thinh Phat Company in Ben Tre Province, said that local enterprises are facing a tough situation. They will have to depend on export contracts to China, which imported around three million tons of rice from Vietnam last year.

Nguyen Thanh Phong, director of Van Loi 2 Company in Tien Giang Province, also said that exporters are facing huge pressure. It is still early to forecast Vietnam’s export volume this year, he said.

Meanwhile, farmers have also suffered challenges as rice prices have slumped over the past time.

Having dropped to a two-month low at VND6,800 per kilo, rice prices lost VND200-300 more per kilo last Saturday. Fresh unhusked rice IR 50404 also fell by VND200 to VND4,000-4,100 a kilo compared to two days ago.

According to rice traders in the region, IR 50404 material rice prices hovered at VND6,500-6,600 per kilo last Saturday. Meanwhile, fresh IR 50404 rice was around VND4,100-4,200 a kilo yesterday.

Farmer Nguyen Van Van in Long An Province told the Daily that a trader on February 25 deposited to buy a hectare of unhusked rice at VND94,000 per 20-kilo bushel. But on March 2, three days prior to the harvest, he asked Van to lower price by VND4,000 a bushel, otherwise he would cancel the contract.

After terminating the contract with the trader, Van has yet to harvest this paddy field so far as no traders have offered to buy it.

Handicraft exports to EU limited due to poor designs

The EU is a potential market for Vietnam’s handicraft products, especially ones made of bamboo and rattan, but the export turnover of such products is still low due to a lack of market information and creativity in designs, experts said at a seminar in Hanoi this week.

According to the Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salt Production, the handicraft sector has a large workforce with around 350,000 laborers. Handicraft products are not only supplied for the domestic market but also for export to 120 countries and territories with an average export turnover of US$200 million in recent years, with exports to EU ranking second.

However, the export turnover of US$200 million is too small compared to the world’s handicraft market of some US$12 billion recorded in 2009 and an estimated US$17 billion in 2017.

Speaking at the seminar on handicraft designs and accessing the EU market held in Hanoi, Ta Hoang Linh, deputy director of the Ministry of Industry and Trade’s Trade Promotion Department, said that the designs of Vietnam’s handicraft products were not eye-catching due to few designers and their poor access to new fashions.

With 14 years of experience of exporting handicraft products to EU, director of Lacquer World Co., Ltd Duong Thi Thanh Thuy said that weaknesses of enterprises producing handicraft products were their unwillingness to produce sophisticated products.

“EU is a picky market requiring creative and careful designs. Products exported to EU have to be made of natural materials, safe, useful, recyclable, have competitive prices and friendly to the environment. Besides, products need to be produced in a safe environment and do not use child labor,” Thuy said.

Meanwhile, to be successful in the EU market and achieve annual revenues of US$1-1.5 million, Duc Phong Co., Ltd has sought to enhance the skills, develop a stable product area, seek European designers, and cooperate with universities specializing in designing in developed countries, said director Thai Dai Phong.

According to Adam Thow, head of retail and buying at Southbank Center in the UK, a new trend in consuming woodwork and handicraft products in Europe is to use products with rare materials and special designs, which makes buyers feel like such products are specially designed for them.

In addition, European consumers now tend to favor furniture and decoration items featuring other cultures, opening up an opportunity for products from countries in Asia or the Middle East.

In a market where consumers no longer favor products with mass production and now prefer innovative designs, this is a chance for producers to export their products. Therefore, Vietnamese enterprises need to focus on producing products of high quality and useful for daily life, according to Adam Thow.

Vietnam seeks assistance for affordable housing plan

Vietnam needs domestic and international assistance to carry out its housing plan for low-income earners to improve their living conditions, says Construction Minister Trinh Dinh Dung.

Addressing a seminar in Hanoi on March 12, Dung noted people from all over the country including rural and mountainous areas all have concerns over the lack of affordable housing.

Housing prices in Vietnam are currently high compared to people’s income, and meeting their housing needs requires support from the State and even international resources, he said.

The government has approved the National Housing Development Strategy till 2020 with a vision for 2030. It is finalizing a housing policy to meet practical conditions, aiming to help low-income earners improve their accommodation.   

A number of legal documents have been issued to implement guidelines and mobilise resources for the development of social housing.

World Bank Country Director in Vietnam Victoria Kwakwa said Vietnam is in the process of rapid urbanisation and approximately 1 million people migrate to cities annually, placing immense pressure on housing demands.

Vietnam’s cities have redundant high-end apartment but are short of low-cost housing. The country does not have slums like other cities in the world but if the issue is not addressed promptly, slums are likely to grow in the near future, Kwakwa warned.

Vietnam aims to build 10 million sq.m of social housing, mainly apartment buildings by 2015, to meet low-income earners’ demands. It will provide support for 400,000 poor families in rural areas in need of houses.

International experts at the seminar shared valuable experiences in developing low-cost houses in their countries.

The seminar also provided a good opportunity for domestic researchers, managers and lawmakers to gain valuable information to complete a legal document system relating to building investment, urban and housing development, and real estate trading, especially low-cost house development policy.

Apartment selling prices tend to increase

As the long-sluggish property market has started showing signs of recovery this year, certain housing developers have hinted at price hikes in an apparent attempt to attract buyers who fear a price rise.

According to The Saigon Times Daily, Hoa Binh Co., Ltd, the investor of the Hoa Binh Green City project in Hanoi’s Hai Ba Trung district, is planning to increase apartment prices this month.

Nguyen Huu Duong, General Director of Hoa Binh, said the price hike may be around 10%. The company is quoting the price at 20.5 million VND per square meter for unfurnished units and 26 million VND for furnished units, VAT excluded. With such prices, Hoa Binh earns almost no profit due to higher investment cost and interest rate, Duong noted.

Hoa Binh Green City has 560 apartment units, with over one-fourth of them already finding buyers. The property market in Hanoi late last year was taken by surprise when the project’s investor announced the apartment building’s balcony rails, elevators and lobby were all gold-plated.

Early this year, Viglacera launched a sale of apartments in the Thang Long Number One project, which attracted attention of many customers as it is located near the city center. Then there was a rumor that the price of Thang Long Number One apartments could rise.

According to a report on apartment prices recently released by the Hanoi Department of Construction, the housing price fall has shown signs of easing since the final quarter of last year and some projects, especially high-end ones, have reported price rises of 1-3%.

Nguyen Quoc Khanh, Chairman of G5 property exchange, said some investors had raised apartment prices by 3-5%.

Some high-end projects at prime locations and those soon to be handed over to buyers have proven attractive to customers but supply is limited.

Investors and speculators have taken advantage of this to push up selling prices.

The price of Mandarin Garden apartments invested by Hoa Phat Group, for instance, has been increased by investors who can enjoy a profit margin of 300-500 million VND per unit. Similarly, Vinaconex 7’s project at 136 Ho Tung Mau Street in Tu Liem district has also seen prices surging 1-2 million VND per square meter from the original price.

According to Dieu Lanh at Thang Long property exchange, since early this year, a lot of customers have called to ask for information, leading investors to raise prices.

Explaining the price hike at Hoa Binh Green City apartment project, Duong said the announcement is aimed at prompting customers to quickly make decisions.

“The apartment segment is improving with many successful transactions reported by projects at good locations or with good progress. Therefore, price adjustments are unavoidable,” he said.

However, some have cast doubt over what might be apartment developers’ trick to lure customers as the property market is still in distress and transactions have improved at some projects with affordable prices and small apartment sizes.-

Banks prepare to face change-motivated shareholders

A tense agenda is expected at the annual general shareholder meeting of Ho Chi Minh City-based Sacombank scheduled to take place later this month, said a source familiar with the bank.

The source said a management shake-up is likely to be among the bank’s hottest issues. Another is its option being a merger with a smaller bank.

Sacombank has released its Board of Director Resolution covering issues like the 2013 dividend, use of fund certificates and capital surplus, and making space for a foreign investor.

Conversely, Southern Bank has yet to unveil the date of its annual GSM, only saying it would be released 15 days after the final shareholder list was released (February 26) of 2014 GSM attendees.

Last year Southern Bank saw poor results, only reaching 50 per cent of its profit target (VND650 billion or $31 million) for the first nine months of the year and bad debts rising to 4 per cent.

Similarly, Eximbank only achieved 30 per cent of its profit target (VND3.2 trillion or $152 million) last year, with large funds going to debt provisioning against mounting overdue and/or irrecoverable loans.

According to Saigon Commercial Joint Stock Bank (SCB) general director Vo Tan Hoang Van, the bank will put all its resources toward finalising its restructuring by the end of 2014.

When it announced its annual GSM would be held on March 17, SCB said it would seek shareholder approval to raise its chartered capital by around VND2 billion ($96 million) from VND12 trillion ($571 million) to accelerate restructuring.

Not only SCB, but other banks such as Navibank, Western Bank and Vietnam Construction Bank (VNCB) are slated for restructuring under State Bank (SBV) requirements.

These banks have worked on their reshuffling plans and got them approved by the SBV, but have not made public how they were implemented.

Capital hikes were reported to be a hot issue for many GSMs this year amid economic hardships and bank stocks tumbling during ongoing restructuring.

SBV governor Nguyen Van Binh said mergers and acquisitions are the only options for smaller banks to survive and ensure their development given current market conditions.

Absolute Hotel Services develops Vietnam-wide hospitality concept

Well-known hotel brand developer Absolute Hotel Services recently unveiled its plan to set up a hotel chain in Vietnam under the Eastin brand.

Samsung Vietnam’s 2013 exports generate US$24 billion

South Korean-invested Samsung Vietnam last year obtained colossal export revenue of US$23.9 billion, accounting for more than 18% of the country’s total, said a source from the electronics giant.

The amount is from exports of the company’s products at its Bac Ninh plant alone, said the source.

However, data from the General Statistics Office (GSO) showed that the total export revenue from cell-phones and components of the country last year reached US$21.5 billion, up 69.2% over the previous year.

Asked to comment on the different numbers, the source from Samsung Vietnam said that figure from the GSO does not frequently match with that of enterprises.

The US$1.5 billion factory of Samsung in Yen Phong Industrial Park in Bac Ninh Province has been operating efficiently since its debut in April 2009, and is the biggest mobile device production facility in Vietnam.

This factory in 2012 produced some 100 million products, over 95% of which were shipped to the EU, the Middle East, Russia and some Asian nations, bringing in some US$12.7 billion, or 11% of Vietnam’s total export revenue.

In addition to direct contributions to Vietnam, the projects of Samsung attract many other foreign investors who come with manufacturing facilities to supply components for Samsung. As many as 50 component manufacturers and suppliers, mostly from South Korea, have set up shop in Vietnam to supply Samsung.

Apart from this Korean giant, Nokia, a mobile phone producer, has also started its component factory in Bac Ninh Province since October last year.

With an initial investment of US$140 million, Nokia component factory in Bac Ninh, which has created jobs for more than 2,000 locals, would become a key manufacturing center of the firm in the South East Asia.

GSO confirmed that cell-phones and components are among products that have the highest export turnovers and growth rates in the last five years before ousting the apparel industry last year to become the biggest foreign currency earner. Textile and garment exports fetched US$17.9 billion in 2013.

Meanwhile, electronic products and components including computers made them to the third position among the top ten products that have the highest export turnovers, with a figure of US$10.7 billion, an increase of 36.2% compared to 2012.

Experts in the field predict that export of the cell-phone and component industry in Vietnam will grow stronger in the next few years when Samsung puts its second factory worth US$3.2 billion, which is now under construction in the northern province of Thai Nguyen. The industry will also get a major push when the facility of Nokia in Bac Ninh Province and the factory of South Korea’s LG in Haiphong are commissioned.

Despite the strong growth of the cell-phone industry in Vietnam, domestic suppliers and producers, however, have barely made their presence in the business.

According to Samsung Vietnam, among 52 suppliers for its factory in Bac Ninh Province, only four are from Vietnam, who supply simple products and services such as packaging and printing.

New road sends ferry crossings down

Cat Lai ferry station in HCMC’s District 2 has reduced the number of ferry services from 230-250 to 190 a day as the volume of four-wheel vehicles using this transport means has slipped a staggering 60%.

Tran Minh Thanh, director of the ferry station, told the Daily that two months after HCMC-Long Thanh-Dau Giay Expressway was opened to traffic, the number of automobiles taking the ferry has dropped from 5,000 a day to 2,000 while the number of motorcycles has increased by around 15% with 26,000-32,000 a day. This has caused the station’s revenue to fall over 20%, he added.

Each ferry can take all passengers waiting at the station.

Besides, a majority of vehicles at Cat Lai ferry station are light trucks. The driver of a truck from Vung Tau City said it is cheaper to use the ferry and more convenient than the expressway.

It is because bigger trucks are temporarily banned from the expressway, while light trucks have to observe the minimum speed requirement.

According to Thanh, the ferry service decline gives the station more time to repair and maintain ferries.

The station currently operates nine ferries, most of them 60 and 100 tons. The 200-ton ferries are only used in rush hours.

National fund helps to improve roads

The National Road Maintenance Fund disbursed VND7 trillion (US$332 million) last year to fix 200 roads in different parts of the country, the Tin Tuc newspaper has reported.

The report quoted Le Hoang Minh, chief of Secretariat of the fund's Central Council, as saying the disbursement had helped localities nationwide speed up work on degrading roads.

Over VND4.3 trillion ($204 million) was spent on regular road maintenance and management, VND135 billion ($6.4 million) on buying toll collection rights for the Phu Dong Road Toll Station on National Highway 1 from the project investor and VND27.3 billion ($1.3 million) on establishing mobile truck weighing stations.

Out of the nation's 63 provinces and cities, 62 have set up their own road maintenance funds and 47 have councils to manage the funds, the report says.

It cites Nguyen Duc Thang, acting general director of the Viet Nam Road Administration, as saying the fund has eased difficulties typically faced by localities in accessing the capital they need to maintain and upgrade roads.

Until 2012, provinces and cities nationwide had to rely on the State Budget for funds to maintain and manage about 205,000km of roads.

Normally, disbursement from the State Budget met less than 20 per cent of the demand, and it is even lower in remote, mountainous provinces, Thang says.

He says there is no doubt that "the Road Maintenance Fund helped improve transport network, especially in rural areas."

As of January last year there were more than 35 million motorbikes and 1.5 million cars, lorries and buses.

The amount of road maintenance fees that these vehicle owners are required to pay is decided by provincial or municipal People's Committees.

Their decision has to be made within the limits set by the Finance Ministry, under which the annual fees for motorbikes will range from VND50,000-150,000 ($2.3-7.1), and from VND1.5 million ($71) for cars with less than 10 seats to VND12.5 million ($600) for lorries and commercial vehicles of over 27 tonne capacity.

Ngo Huu Dung, transport department director in the central province of Quang Ngai, says in the report that in previous years, the province could only afford VND8-10 billion ($380,000 -476,000 ) each year for maintaining 172km of roads, 70 bridges and 223km of waterways.

"Last year was the first time its funding for road maintenance reached nearly VND20 billion ($952,000)," he says, adding that this has helped the province build five new roads and improve the quality of existing ones.

In a recent meeting held to discuss this year's operations, Transport Minister Dinh La Thang, who chairs the fund's management council, called for "drastic" measures to raise its effectiveness and ensure transparency.

Thang with the National Road Administration said his agency would give priority to the use of advanced equipment and methods as well as new materials to reduce road maintenance costs.

It would also open bids to select competent contractors for road maintenance projects, he said

Further allegations come to light in Rung Toan Cau case

Police in Hanoi and HCM City announced added suspicions of dubious activities at Phuc Thinh Company, a subsidiary of Rung Toan Cau.

All key positions of the eight joint-venture companies were found to be held by family members. Last year, the investigation team on economic crimes, the police of Binh Thanh District, HCM City and officials of the Tax Department investigated Rung Toan Cau and found that, since its establishment, the company has never been involved in any project or business activity there.

One of other companies in the group, Phuc Thinh, was also reported to not have conducted any business activities by the police in Hanoi. Tran Thi Thanh Hang was the CEO in name only, with all decisions made by Cao Van Xung and his wife.

Xung and his wife set up a forest product company in 1992. They were assigned over 7,000 square metres of land to build a factory by Khanh Hoa Province authorities. During this time, the Swedish International Development Agency (SIDA) introduced a loan program for developing countries. Xung used the land as collateral to borrow over USD220,000 for Minh Thang Textile Company. However, both of the companies failed to pay the debt and Vietcombank was authorised by SIDA to sue Minh Thang in 2000.

After authorities of Khanh Hoa Province seized the company's assets in 2003, Xung set up another company, Thinh An Khuong, in Binh Phuoc Province, taking out loans from banks and individuals for non-existent projects. They returned to Nha Trang in 2007 to set up yet another company called Hien Vinh. Even though the land had been seized, Xung still claimed to own it and used the land to acquire capital for Hien Vinh.

In 2009, they asked the Prime Minister for a loan for reforestation, but were turned down. However, they continued to claim that the project was in the process of being approved by the Ministry of Agriculture and Rural Development.

Authorities in Binh Phuoc Province warned agencies against having dealings with Thinh An Khuong in 2010, and the Directorate of Forestry reported Thinh An Khuong's illegal activities to the PM.

In 2011, the Directorate of Forestry, under the Ministry of Agriculture and Rural Development, sent official documents to other agencies, saying that they had never approved any project associated with Thinh An Khuong or Phuc Thinh.

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