HCM City extends FDI project licences

The HCM City People's Committee on Wednesday approved the increase in investment capital of two foreign direct investment (FDI) projects.

The investors are Worldon Viet Nam Co, Ltd of the United Kingdom's Gain Lucky Corporation, and Nobland Viet Nam of South Korea's Nobland International Inc. The committee granted investment certificates to the two companies, with an additional investment capital of US$178 million.

Worldon Viet Nam will build a centre for fashion design and produce high-quality clothing products in an area of 52ha, and provide housing for workers in an area of 7ha. The investment of the project has increased by $160 million to touch $300 million. The centre will be constructed in the Dong Nam Industrial Zone in Cu Chi District's Hoa Phu Commune.

Nobland Viet Nam revised its investment capital from $43 million to $61 million to expand the scale of production in its three factories in the Tan Thoi Hiep Industrial Zone in District 12. The firm produces more than 74 million garment products per year, and employs more than 8,000 workers.

Tat Thanh Cang, vice chairman of the committee, said that the city appreciates the efforts and contributions of international enterprises to bring advanced technologies into Viet Nam, as well as provide jobs to the local people. He said that the committee will create the most favourable conditions for companies through administrative procedure reform and infrastructure construction. In 2014, HCM City attracted newly registered and additional investment of $3.2 billion. There are currently 523 FDI projects in industrial zones and processing zones with a total investment of $5 billion.

National agency to check SOE health

The National Financial Supervisory Commission (NFSC) will supervise several State-owned enterprises (SOEs)'s financial health this year to ensure efficiency.

The proposal, currently in its initial stage, has been sent to the Prime Minister for consideration, the NFSC's Chairman Vu Viet Ngoan said on Wednesday, during a meeting to discuss the implementation of 2015's goals.

The monitoring of the financial health of SOEs is aimed at enhancing their management and transparency.

Ngoan said restructuring the SOEs is crucial for reforming the country's economy, due to which keeping tabs on the financial health of large SOEs, is critical.

The supervision will also help determine whether the restructuring process is on the right track of eliminating risks in the financial system.

Ngoan revealed that some eight or nine corporations will be placed under supervision in 2015, but their names will remain a secret, online newspaper Infonet reported.

The NFSC's Chairman pointed out that the criteria for supervision is based on international standards, adding that 2015 will be the first year in the NFSC's three-year plan, where it applies new methods of financial analysis, following in the footsteps of international standards.

The new method will also help provide a more comprehensive and precise evaluation of the financial health of SOEs, which can be used for making adjustments in the restructuring process.

During 2015, the commission will also continue to enhance the efficiency of financial supervision while implementing deeper analysis of the stock market, insurance market and potential risks in the financial market.

Ministry steps in on dairy dispute

The Ministry of Agriculture and Rural Development (MARD) yesterday ordered local departments to ensure that dairy companies honoured contracts with farmers.

"Dairy companies should sit down and talk with farmers to reach mutual understanding about problems experienced by both sides. In the meantime, they must honour the contracts they have signed," said Hoang Thanh Van, head of MARD's Department of Livestock Production.

Dairy farmers in Ha Noi, Lam Dong, Long An and Soc Trang recently reported that local dairy companies did not fulfill their contracts to buy milk from them, even if the milk was of acceptable quality.

Earlier this month, Kinh Te Nong Thon (Rural Economy) reported that Dalat Milk JSC, a dairy company based in the central highlands province of Lam Dong, had put a quota (16kg per cow) on the amount of milk it would buy – although the company had already agreed to purchase everything farmers produced.

Farmers were disappointed since some of their cows produced up to 20kg of milk and they did not know what to do with the surplus. Some were so upset they decided to spill the milk in front of the dairy company as an act of protest against the quota.

The dairy company's representative said the quota was necessary to prevent farmers from buying milk from elsewhere at a cheaper price, then selling it to them for a profit. The company was also having trouble dealing with its own surplus.

The quota was removed on Tuesday after a meeting between the agriculture ministry's representative and Dalat Milk JSC.

Local departments were told to improve the supply chain for dairy products, starting with building support policies and mechanisms to help dairy companies purchase milk produced by farmers, Van said.

National Assembly should tighten Uber taxi controls: Ministry

The Ministry of Industry and Trade wants an agency of the National Assembly to tighten controls over the operation of Uber taxi in Vietnam to protect consumers from payment risks.

In a recent report sent to the National Assembly’s Economics Committee, the ministry called Uber taxi “unlabelled taxi” as it was merely a mediator, and not an owner of taxis or employer of drivers.

The Deputy Minister of Industry and Trade, Cao Quoc Hung, said Uber Company is not a passenger transportation company but just a technical solution provider, and as such was obliged to comply with regulations on e-commerce business in Vietnam.

If it were recognised as a transportation firm, its business model would still make it high-tech support, a new area in Vietnam and lacking regulations to control operations.

“The Ministries of Finance, and Transport should cooperate in streamlining a solution to manage Uber’s fee calculation as well as its commission policies for involved transportation firms in order to ensure healthy competition with other transporation firms,” the Ministry of Industry and Trade said.

As Uber applies payments by international bank cards without any signature by the card holders, the ministry is worried about possible risks for customers using Uber services.

The State Bank of Vietnam should issue regulations on such transactions and take measures to control the flow of funds in the Uber’s system in Vietnam, the ministry said.

HCMC reduces prices of several subsidized items

Prices of several food items under Ho Chi Minh City’s price subsidization program will be reduced from VND100 to VND3,000 a kilogram from January 19, said head of the Price Division under the city Department of Finance Nguyen Quoc Chien yesterday.

Normal rice price will slide to VND9,800-VND10,700 a kilogram and Jasmine rice price will drop to VND13,400-14,700 a kilogram.

The price of slaughtered industrial chicken will drop from VND46,000 to only VND43,000 a kilogram. A pork kilogram will cost VND74,500-99,500.

According to Mr. Chien, the reduced price will be fixed from January 19 to March 19 to stabilize the market and stimulate shopping demand in Tet holidays.

Vietnam fines Lotteria store in capital over tainted drinks

Two samples of drinks taken from a store under South Korean fast-food chain Lotteria in Hanoi have been found to be contaminated, with the restaurateur required to pay VND4 million (US$186) in fines, according to the Vietnam Food Administration (VFA).

The Hanoi unit of the VFA collected four samples of food and beverage at the Lotteria store on Nui Truc Street in Ba Dinh District on December 23, following complaints from local customers that the place serves unhygienic food, the administration said Wednesday.

Test results found that the lemon tea sample was tainted with coliform, whereas the cacao milk had an excessive amount of enterobacteriaceae. Both of the bacteria could cause diarrhea, according to the VFA.

The food safety watchdog thus levied administrative penalties totaling VND4 million on the store for selling substandard food.

The lemon tea and cacao milk were still available at Nui Truc Lotteria normally on Thursday, one day after the store was penalized, according to newswire Kien Thuc (Knowledge).

The drinks are especially preferred by young customers, the Hanoi-based news site said.

The store attendants told Kien Thuc they had no idea about the issue as they “have not been informed by the managers,” so the products were on sale as normal.

“I was wondering if the products are safe to drink or not,” a 25-year-old customer was quoted as saying. “I’m also concerned that the attendants are in the dark about such a big issue.”

Lotteria, a subsidiary of multinational food and shopping corporation Lotte Co. Ltd., was founded in February 1972 in Tokyo by Korean entrepreneur Shin Jun Ho. The franchise is now present in China, Myanmar, Taiwan, and Vietnam.

Its menu includes typical fast-food items such as burgers, French fries, fried chicken, chicken wings, and chicken fingers.

Lotteria has expanded across Vietnam, with 92 stores in Ho Chi Minh City and 41 in Hanoi, according to its website.

Banks lower borrowing rates

A number of banks have cut their borrowing rates amid ample liquidity though experts said the rates are unlikely to dip further this year.

The Bank for Investment and Development of Vietnam has adjusted down the deposit rates of under-one-year tenors by 0.15 to 0.55 percentage point, and lowered the annual rates for one-month and six-month deposits from 4.55% to 4% and from 5.55% to 5.3% respectively.

However, the bank maintains the rates of deposits with terms of more than 12 months.

Starting from January 5, the one-month deposit rate at Eximbank fell from 4.7% per year to 4.5%, while the rate at VIB dropped from 4.7% to 4.25%.

On December 22, Vietcombank lowered its borrowing rates, with the rate for one-month deposits slashed to 4% per year.

State banks like BIDV, Vietcombank and Agribank offer the lowest rates for one-month deposits, around 4% per year. The rates are higher at banks such as OCB with 5.3%, HDBank 5.8%, DongABank 4.8% and Techcombank 4.6%.

But Sacombank on January 14 slightly increased the rates of short-term deposits, from 4.65% to 4.7% for one-month deposits and from 4.7% to 4.75% for two months.

Though the one-month deposit rates are low, BIDV and Vietcombank offer the rates of three-month and six-month deposits higher than those at other commercial banks. OCB and HDBank still offer the highest borrowing rates. The six-month rates at OCB and HDBank are 6.3% and 5.92% per year respectively.

The overall mobilization rates of 12-month, six-month and one-month deposits are 6-7%, 5-6% and 4-5% respectively.

Tran Hoang Ngan, vice president of the HCMC University of Economics and member of the National Advisory Council for Financial and Monetary Policies, said the deposit rates could hardly go down further but the lending rates need to be lowered to buoy enterprises.

According to Nguyen Thanh Minh from the Banking University of HCMC, the central bank buying stakes and joining the restructuring of commercial banks may not be a right decision. At weak banks, the most important thing is to reshuffle management, especially risk management. Such a task is suitable for foreign banks which are good at managing risks.

As a result, letting foreign banks get involved in the restructuring process will be an appropriate solution. The number of banks to be restructured is small and it is unlikely that foreign investors will dominate the local banking system.

Meanwhile, when changing the way risk is managed at weak banks, the central bank will apply the Vietnam risk management model and thus foreign investors may not want to get involved.

According to Minh, after restructuring, it is likely that the central bank will divest and sell shares to domestic investors rather than foreign ones.

Meanwhile, according to a source from the central bank, if the central bank does not intervene in restructuring weak banks via share purchases, losses would be huge as depositors would be affected.

Deputy PM urges faster SOE restructuring

Deputy Prime Minister Vu Van Ninh told relevant ministries and local authorities to speed up the restructuring of State-owned enterprises (SOEs) in order to realize the target for the 2014-2015 period, according to a recent statement of the Government Office.

The Deputy PM demanded that priorities of the restructuring would be to equitize SOEs and force SOES to divest from non-core business operations.

SOEs should complete establishment of their steering committees for equitization and asset evaluation in the first quarter this year for announcement in the second quarter, and will have their equitization plans approved in the third quarter.

For the enterprises which have already had such committees, the Deputy PM requested them to conduct evaluations for announcement in this quarter and have their equitization plans passed in the second quarter.

The Deputy PM also set the deadline for the SOEs which have publicized their value to submit their equitization plans to relevant agencies and the Government for consideration this quarter.

SOEs should launch their initial public offerings (IPOs) in line with current regulations when conditions are ripe, or prepare procedures for transformation into joint stock companies with shareholders being the State, the State Capital Investment Corporation (SCIC), labor unions, employees, and investors to diversify share owners and provide more shares for the stock market.

Deputy PM Ninh also requested relevant ministries, local authorities, and leaders of corporations to take full responsibility for realizing the SOE restructuring target in the 2014-2015 period. Strict punitive sanctions will be taken against enterprise leaders who do not fulfill the tasks of restructuring, equitization and divestment.

The Steering Committee for Enterprise Reform and Development has to cooperate with the Ministry of Finance to enhance the SOE restructuring management of relevant agencies, local authorities, and corporations.

The Deputy PM noted that eligible enterprises would have to list on the stock market after they go public. Those SOEs that have launched IPOs but have not been able to sell as many shares as expected are required to draw up plans to boost their share sales.

Relevant ministries and localities need to pick more SOEs subject to equitization and divestment this year and sent the lists of those entities to the Government within the first quarter. They should also submit general plans for restructuring SOEs in the 2016-2020 period no later than the third quarter.

According to the Steering Committee for Enterprise Reform and Development, 143 SOEs went public last year, doubling the number of 2013. The equitization target for the 2014-2015 period is 432 SOEs.

The committee said the equitization process is progressing well at major State business groups and corporations such as Vietnam Electricity Group (EVN), telecom group Viettel, Vietnam National Textile and Garment Group (Vinatex), Vietnam Posts and Telecommunications Group (VNPT) and Vietnam National Chemical Group (Vinachem).

SOEs had divested a total of VND8 trillion (US$374 million) from 233 non-core businesses as of December 25, or nearly VND2 trillion higher than book value, according to the committee. Of the total amount, VND204 billion was from securities, VND297 billion from insurance, VND185 billion from real estate, nearly VND1.5 trillion from finance and around VND1.3 trillion from banks.

First desalination system exported to Chile

Doosan Heavy Industries Vietnam (Doosan Vina) has shipped the first ever sea water reverse osmosis (SWRO) desalination system made in Vietnam to the Escondida water supply project in Chile.

The 1,705-ton shipment is for the Escondida Copper Mine located in the Atacama Desert of northern Chile.

The company said in a statement that the second shipment to Chile is planned on January 18, and the final components of the SWRO system will be exported between February 15 and April 30 in four other shipments.

The SWRO desalination system will supply 220 million liters of water per day when it is in operation.

Doosan Vina is the first company in Vietnam to produce scalable SWRO desalination filtration systems. The products made by the company in the Dung Quat Economic Zone in Quang Ngai Province include boilers for thermal power plants, heat recovery steam generators, desalination plants, material handling systems like the cranes and chemical processing equipment.

State Treasury raises VND3 trillion from G-bond sales

The State Treasury mobilized VND3 trillion (US$140.7 million) from Government bonds via an auction at the Hanoi Stock Exchange (HNX) on Tuesday.

The agency put up for tender five-year G-bonds worth VND3 trillion and ten-year G-bond worth VND1 trillion.

As many as 22 investors bid for five-year bonds with a total registered volume worth over VND11 trillion and an annual coupon of 5.9-7%. Closing the auction, the State Treasury mobilized VND3 trillion from five-year G-bonds with the winning coupon of 6.01% per year, 0.18 of a percentage point lower than the previous winning coupon at the auction on December 29.        

However, ten-year bonds found no buyers at the first auction held by the State Treasury this year.

Businesses called to invest in telemedicine

Deputy Prime Minister Vu Duc Dam has called on businesses to take the lead in e-health investment with its high potential as a large and sustainable market.

Speaking at a conference in Hanoi on January 15, the leader described the application of information and technology as a significant, long-term task for the health sector.

Investments can be used to build electronic queue systems, clinical records, and conducting online consultations, he cited as examples.

To this end, the Deputy PM asked the Ministry of Health and the Ministry of Information and Communication to allow IT services provided by businesses to be utilised within the sector.

All medical examination and treatment facilities across the country must be connected and managed to ensure total access to health insurance cards and accurate health status records, he added.

Last year, every hospital at the central level had clinical software applications, but only 68 percent of provincial level facilities and 61 percent of district level facilities had used the solution, Deputy Head of the Ministry of Health’s Information and Technology Department Nguyen Hoang Phuong reported.

The Ministry of Health is piloting a project to upgrade software management for six hospitals, the National Hospital of Paediatrics; Thanh Hoa Paediatrics Hospital; National Hospital of Obstetrics and Gynaecology; National Hospital of Traditional Medicine; and General Hospitals of central Ha Tinh and Thua Thien-Hue provinces.

Establishing a software connection between clinics and insurance companies is central to improving the quality of medical services, reforming administrative formalities, and offering adequate health insurance.

The Ministry is also holding a number of telemedicine activities, including online consultations, teleradiology, and health check-ups and treatment from a distance, he said.

Japanese Hashima opens factory in Vietnam

Hashima Vietnam, a 100 percent owned affiliate of Japan’s Hashima Sewing Machine Corporation, opened its first factory in the northern province of Ha Nam on January 15.

The factory will specialise in designing and producing automatic machines and spare parts for the apparel industry. It also produces and assembles other machines and equipment.

In the first phase of development, the factory covers an area of 6,500 square metres and is expected to generate an output of around 2,500 products, including press machines for garment companies and metal-detectors.

The full-scale completed factory will extend across 18,000 square metres.

Dutch, Vietnamese localities eye fruitful partnership

Officials from the Dutch city of Eindhoven had a working session on January 15 with authorities of Vietnam’s southern province of Binh Duong, seeking a cooperation deal for both localities’ socio-economic development.

Eindhoven Vice Mayor Mary-Ann Schreurs said her city will cooperate with Binh Duong in fields of its strengths and share its city-building lessons, expressing the wish for the early signing of a partnership document.

In 2014, the Vietnamese province attracted 1.65 billion USD in foreign investment, which came from 151 new and 126 existing projects. The figure exceeded the yearly target by 65 percent, reported the provincial Department for External Relations.

It has housed 2,375 valid FDI projects worth 20.38 billion USD so far, becoming one of the five localities receiving over 20 billion USD in foreign investment.

The Netherlands currently ranks eighth among 39 countries and territories doing business with Binh Duong, with 20 projects totaling 478.5 million USD.

Vice Standing Chairman of the provincial People’s Committee Tran Van Nam said Binh Duong is partnering with seven foreign localities such as Japan’s Yamaguchi prefecture, the Republic of Korea’s Daejeon city, and Italy’s Emilia Romagna region. It is to step up investment attraction and its connection with more countries.

The province gives priorities to projects with cutting-edge technology that produce competitive and environmentally friendly products, he noted, adding that it also pays attention to simplifying administrative procedures in order to facilitate businesses’ operation.

Nam said he believed that cooperation between Binh Duong and Eindhoven will be successful.

Also on January 15, the Eindhoven delegation had working sessions with executives of the Binh Duong-based Becamex Company and the Eastern International University.

Vietnam on right track for tax reform

Vietnam is making appropriate strides in tax administrative procedure reform, said Joanna Nasr, a World Bank expert, at a workshop in Hanoi on January 15.

Deputy Head of the Reform Department under the General Department of Taxation, Hoang Thi Lan Anh, stated that tax procedures have been regularly renewed in recent years, with simplified policies and paperwork and additional software and tools supporting tax declaration available.

She shared that the General Department had proposed amending several legal documents of the Government, National Assembly and Finance Ministry in order to reduce the time lost for tax procedures. It will also speed up the implementation of e-tax services on enterprises nationwide.

To decrease the duration of tax payments, the WB official suggested simplifying regulations imposed on declaring and submitting value added taxes (VAT), obligatory insurance, and corporate income tax, as well as designing new tax software compatible with existing business accounting software.

Reports released at the workshop reveal Vietnam is now one of the nations with the greatest time spent on tax procedures, with 872 hours annually for each enterprise. This figure is four times higher than that of many Southeast Asian countries, with Indonesia at 259 hours, Thailand at 264 hours, Malaysia at 133 hours, and Singapore at 82 hours.

Vietnam ranks 149 th out of 189 nations in terms of time required to complete tax payments.-

HCM City exceeds 2014 budget collection goal

Ho Chi Minh City’s budget collection in 2014 reached 252.1 trillion VND (over 11.8 billion USD), 111.44 percent of the yearly estimate, and 11.4 percent above the 2013 collection, as released at a conference in the city on January 15.

Speaking at the event, which was held to review the state of the city’s financial sector in 2014, Deputy Director of the municipal Department of Finance Tran Nam Trang said relevant agencies enacted a series of measures to achieve the elevated level.

Management and supervision were intensified for import-export tax collection, while administrative reforms in tax and customs fields were also enhanced, noted Trang.

Nguyen Thi Hong, Vice Chairwoman of the municipal People’s Committee, spoke of efforts made by the Department to realise the sector’s 2014 targets, saying that these contributed significantly to the city’s overall socio-economic development.

She also reminded the Department to focus on solutions to handle advance budget loans and recovery capitals to add to the city’s sources for investment and development.

She stressed the necessity of providing increasing support to local businesses to help overcome difficulties and contribute to the State budget.

Hong urged the Department of Finance to team up with the Department of Tax, the Department of Customs, and the State Bank of Vietnam to swiftly and effectively implement the 2015 state budget collection towards achieving the 265.7 trillion VND yearly estimate.

Vietnam-Brazil trade revenue surpasses 3 billion USD

Bilateral trade revenue between Brazil and Vietnam reached 3.17 billion USD in 2014, representing an annual increase of 36 percent and exceeding the 3 billion USD mark for the first time.

Last year, Vietnam exported 1.58 billion USD worth of commodities to Brazil while simultaneously importing goods valued at 1.59 billion USD from its biggest South American partner, according to a statement from the Brazilian Ministry of Development, Industry and Foreign Trade on January 14.

Vietnam mainly sold electronic products, footwear, frozen fish fillets, and man-made fibre to Brazil and purchased agricultural products, raw materials and spices.

Brazil’s total revenue from foreign transactions declined in 2014, down 5.7 percent from 2013 to 454.2 billion USD.

Honda Vietnam achieves new record on auto sale in 2014

Honda Vietnam (HVN) sold as many as 6,492 automobiles in 2014, up 41 percent from 2013, according to D irector of the Automobile Division at Honda Vietnam Tomohiro Maruno.

The figure is the highest number of annual auto sales in Vietnam since HVN was established, bringing the company to the fourth highest touring car sales rate among leading auto businesses.

From the outset of 2014 , HVN boosted sales by offering promotional programmes and launching catalogue products such as new generations of the City and Accord as well as new versions of the Civic and CR-V.

Accordingly, the fourth generation of Honda City and CR-V 2015 were the two best selling brands of HVN in 2014.

With 2,944 cars sold, sales of Honda City’s in 2014 were more than double those of 2013, with an additional 2,918 CR-V’s sold, up 34 percent from 2013.

In December alone, consumers bought a total of 837 vehicles, an 18 percent increase from the same period last year.

Osaka businesses interested in HCM City’s climate

Japanese businesses, including those in Osaka city, are interested in studying the investment climate in Ho Chi Minh City, especially in the fields of infrastructure, economy and education.

So said Osaka Vice Mayor Seigo Tanaka at a meeting with Chairman of Ho Chi Minh City People’s Committee Le Hoang Quan on January 15 during his working visit to Vietnam’s southern economic hub.

Chairman Quan briefed his guest on HCM City’s socio-economic situation and highlighted the fine cooperation between his city and Japanese localities including Osaka, particularly in economy and education.

Over the past ten years, the two cities have organised a number of mayor-level policy dialogues to boost their relations, he added.

Japan is now one of the leading foreign investors in Vietnam, with 2,300 projects worth over 35 billion USD. The country is also the largest provider of ODA for Vietnam.

Foreign food, sweets favoured for Tet

Foreign foods and confectionery products are proving tough competition for local products in the run up to this year's Tet festival due to higher quality, more diversity and increasing purchasing power of consumers, and unless local producers work harder and smarter, they will continue to lose market share.

“We’re selling both domestic and foreign products, but imported products are better selling thanks to the wider diversity of flavours and packaging," said Thu Thao, owner of a store at Nguyen Binh Khiem Street in Hanoi’s Hai Ba Trung District said.

Bich Khue, a small trader at Dong Xuan Market in Hanoi, said, “Our store’s candy and jam revenues have reached nearly VND10m a day, mainly foreign products, because they are becoming cheaper and are better quality."

Groceries along several streets in Hanoi, such as Hang Buom, Ba Trieu, and Tay Son, are seeing a rise in confectionery products, beer and wines for the traditional holiday, mostly from Thailand, Malaysia and South Korea.

Major supermarkets such as Co.op Mart, Fivimart and Lotte have few locally made products, in part due to the sale of two locally famous confectioners -- Kinh Do and Bibica -- to US and South Korean investors.

Economist Nguyen Minh Phong said local confectioners were failing to compete because they were not diversifying products despite higher prices. “If the situation does not improve, more Vietnamese confectionery trademarks would be sold to foreign investors in the time to come.”

Australian beef is proving to be popular this year at such big supermarkets as Big C, Metro and Lotte. An official from Lotte said Australian beef is priced about the same as Vietnamese products and is being preferred because of its better quality.

Nguyen Dang Vang, chairman of the Vietnam Association of Animal Husbandry, said the country imports some 100,000 tonnes of meat annually, mainly fresh beef, a year. The Ministry of Industry and Trade statistics show Australian beef priced at VND70,000 a kilo at slaughterhouses, including taxes and fees while Vietnamese beef was VND80,000 a kilo.

“Domestic beef supply is failing to meet rising demand. Vietnamese beef may fail to compete with imported products unless the country modernises the animal husbandry industry to increase productivity and lower selling prices,” Vang said.

Eight firms under health ministry to go public

The Ministry of Health plans to organize initial public offerings (IPOs) for eight 100% State-owned enterprises under its management from the second quarter to the last quarter of this year.

They are Vietnam Pharmaceutical Company, central pharmaceutical companies No. 1 and No. 2, Vietnam Medical Equipment Corporation, DK Pharma Company under Hanoi Medical University, companies for vaccine and biological production No. 1 and No. 2 and Dalat Vaccine Company.

According to the ministry, the equitization is aimed at improving issues such as corporate governance, finance and human resources at the companies.

Last year, the ministry established a steering committee for equitization of nine companies. It also held an IPO for Central Pharmaceutical Company No. 3 and approved corporate value assessments of central pharmaceutical companies No. 1 and No. 2.  

Mong Duong 1 starts power generation

Vietnam Electricity Group (EVN) has announced that the first generator of Mong Duong 1 thermal power plant in Quang Ninh Province is supplying electricity for the national grid.

Mong Duong 1 thermal plant project is worth VND33.62 trillion and comprises of two generators installed by Hyundai Engineering and Construction Co. Ltd. (Hyundai E&C). Each generator has a designed generation capacity of 540MW.

The thermal power station will supply about 5.8 billion kWh of electricity a year for the Northern Key Economic Zone when the second generator comes online in June this year.

EVN statistics showed about 128 billion kWh was consumed last year, up 12.3% against 2013. Power consumption grew 15.25% in northern Vietnam, 11.12% in the central region and 9.41% in the south last year.

The electricity consumption growth rates were an important indicator of industrial and trading development in the regions.

EVN has projected electricity consumption this year at 142 billion kWh, up 10.4% compared to 2014. The group pledged to meet the demand.

Mexico imposes high import duties on Vietnam rice

Mexico on January 9 starts to impose tariff rates of 20% and 9% respectively on rice and paddy imports from Vietnam, and local rice exporters said these high duties would affect their sales this year.

Although Mexico is not a major market for Vietnam’s rice, the high import tax rates will make life hard for local rice exporters at a time when competition on the global rice market has turned fiercer, according to representatives of rice export firms in the Mekong Delta.

Lam Anh Tuan, director of Thinh Phat Co. Ltd. in Ben Tre Province, told the Daily that the high import tariffs would force local rice and paddy export companies to lower their prices if they want to compete with rivals from other countries also selling products to Mexico.

Tuan gave an example that if firms used to sell rice to Mexico at US$400 per ton, they now have to slash the prices by 20% in accordance with the new tax rates to retain old customers and attract new clients.

Tuan said what local rice export firms are concerned about is that rice export prices have decreased sharply before the 2014-2015 winter-spring harvest comes. There has been an intense price war from other rice exporting countries such as India, Thailand and Pakistan.

“So I think the situation will be very tough in the coming time,” Tuan said.

Figures of the Vietnam Food Association (VFA) indicated that Vietnam’s rice exports to Mexico surged last year. In the January-September period, Vietnam shipped more than 65,000 tons of rice to that market while the exports by the U.S. were 59,410 tons, Uruguay 46,720 tons and Thailand 31,480 tons.

According to the Mexican Rice Council (CMA), the area under rice production in that country has declined sharply, from nearly 270,000 hectares in 2005 to more than 32,700 hectares in 2012, and its paddy output fell from 145,000 tons in 2012 to 807,000 tons in 2005.

Mexico imports rice from Vietnam and Pakistan at a price US$100 per ton lower than from the U.S.

Sugar, poultry egg imports to rise in 2015

The Ministry of Agriculture and Rural Development (MARD) has agreed with the Ministry of Industry and Trade (MoIT)’s 2015 plan on import quota of sugar, salt and poultry egg as part of efforts to realise WTO commitments.

Accordingly, Vietnamese companies will be allowed to import 81,000 tonnes of sugar, 102,000 tonnes of salt and 555,600 poultry eggs this year.

Among 102,000 tonnes of salt, the same volume as last year, 2,000 tonnes and 40,000 tonnes will be imported by firms operating in the medical and chemical sectors, respectively. Chemical businesses are encouraged to use domestically-produced salt for their production activities.

The MARD asked the MoIT to roll out measures to create transparency and justice among importers.

Last year, the country bought 77,200 tonnes of sugar and 529,2 00 poultry eggs from overseas markets.

Hanoi property market to rebound

Experts at foreign property consulting firms expect the property market in Hanoi to rebound strongly this year, owing to robust sales of apartments during the last quarter of 2014.

The Savills Vietnam Ltd Company pointed out that six new housing projects, with approximately 2,900 units, have been launched recently. This reflects the highest number since the second quarter of 2013.

"The ‘apartments for sale' segment is recovering. Since the first quarter of 2014, the number of apartments placed on sale has jumped, while the inventory level has decreased," Do Thu Hang, the Head of Research and Consultancy, Savills Hanoi, said on January 11.

"The number of sold apartments during the last two quarters is at its highest since the second quarter of 2011. The total number of sold apartments in 2014 was the highest since 2009."

There is continuing demand from end-users and investors on projects with the following characteristic: good construction progress, convenient accessibility and strong developer reputation, Savills Vietnam revealed.

Some projects in the foundation stage are also reporting a strong absorption rate due to the participation of speculators and real-estate agents stepping up the premium on off-contracts.

Meanwhile, the CB Richard Ellis Vietnam (CBRE) Ltd Company said sales momentum for condominiums has continued to grow firmly and steadily. The market absorbed an estimated 3,990 units during this quarter alone, which was reflected in the 47 percent growth from last quarter.

In total, 10,700 units were reportedly sold in 2014, which was a 60 percent increase from 2013's record.

"With the market's recovery, the real-estate risk level has decreased. Along with the disbursement from banks and other investors, the real-estate M&A activities will become more intense," said Nguyen Hong Son, Head of Savills Hanoi's Valuation and Feasibility Study and Valuation.

"The property market in 2015 has been on the road to recovery since 2014, and is expected to see a significant increase in the residential sector. Also, the market should get a new target when the new housing law becomes effective," Son noted.

"Moving forward, it is expected that the market will continue to look positive in 2015," said Nguyen Hoai An, CBRE Hanoi's Senior Manager.

Sales are expected to remain strong, while more launches of new projects and re-started projects will be announced in the market, especially during the first half of 2015, she added.

Luxury and high-end products will be sought-after as stock for these products is diminishing, said An, adding that while foreign ownership will be expected to stimulate demand, activities on this front will be slow in near-term as new players take their time to assess the market's movement.

By the end of 2016, about 14,200 apartments from 25 projects are expected to come online, Savills Vietnam predicted.

The revised Housing and Real Estate Business Laws are also expected to boost demand from foreigners and Vietnamese residing abroad.

The market is expected to grow in 2015, but could be hurt by strong speculation.

Dong Nai Customs to speed up administrative reforms

Dong Nai Customs plans to contribute VND14.7 trillion (US$700 million) to the State budget this year, about VND1 trillion ($47.62 million) more than the amount last year.

Procedures are processed at a Dong Nai Customs office. The agency plans to contribute $700 million to the State budget in 2015. - Photo vccinews.vn

The head of the agency, Huynh Thanh Binh, said that customs officers of the southern province will speed up administrative reforms and intensify supervisions against smuggling and trade fraud to achieve the target.

He added that the agency has collaborated with 12 banks to collect taxes, while all its branches have implemented electronic customs systems, which serve 97 per cent of the enterprises involved in clearance, and that 98 per cent of the value of goods are declared here.

VNPT ties up with phone retail giant Mobile World

The Gioi Di Dong (Mobile World) Joint Stock Company and Viet Nam Posts and Telecommunication have entered into an agreement under which the former's stores will offer VNPT's Vinaphone services while the latter's outlets will sell Mobile World's phones and other products.

Last year the retailer had inked a similar deal with the State-owned VNPT only in HCM City.

Now, following strong support from customers, the two have decided to take their co-operation country-wide.

Banking sector to see major mergers in 2015

Vietnam’s banking sector will step up restructuring measures in 2015, with the expected merging of several major banks, such as Vietcombank with Saigonbank, and PGBank with Vietinbank, building on a succession of mergers that have strengthened the banking system.

The new mergers follow the successful merger of PVFC and Western Bank to make a new bank, PvcomBank, in early September 2013.

The State Bank of Vietnam said eight of nine weak banks have merged or been acquired by a larger bank and their operations have been significantly improved.

New customs rule causes cargo backlogs at HCMC ports

Cargo backlogs at the ports in HCMC mounted last week as new customs regulations, which came into force on January 1, require further inspections of import and export goods, thus slowing down the customs clearance process.

An officer at Tan Cang-Cat Lai Port said backlogs had occurred at the port in District 2 since January 7 and container trucks had had to wait in long lines to pick up goods after animal health and food safety inspections are complete.

Container trucks caused congestion on the streets leading to the port over the weekend such as Mai Chi Tho, Belt Road No. 2, Dong Van Cong and Nguyen Thi Dinh. Container trucks were seen in lines that were hundreds of meters long in front of the road leading to Gate A of the port on Saturday morning.

However, congestion had eased as of Saturday afternoon.

A leader of the HCMC Department of Customs attributed the situation to certain kinds of goods subject to animal health and food safety inspections. Enterprises are requested by the customs to leave their goods at the ports for checks.

Article 35 of the Customs Law allows enterprises to have their goods transported to designated places before inter-disciplinary inspections are conducted, but the customs still wants to inspect goods at the port due to unclear guidelines.

“Due to unclear guidance, customs officers do not allow firms to transport goods away from ports because the customs has no sufficient manpower and equipment to inspect goods outside the port,” he said.

Vu Viet Tien, head of the management and inspection division at the Customs Department, told a review conference on the city customs sector on January 9 that local customs offices had found it difficult to implement Article 35 due to a lack of specific guidelines.

The article requires goods to be kept at the port for inspections until customs clearance procedures are finished or enterprises transport their goods to designated warehouses. Enterprises should take full responsibility for keeping their goods in good condition before customs clearance.

To solve the situation, the HCMC Department of Customs has written to the General Department of Customs to report the situation and seek coping solutions.

Vietnam, Italy boost banking and finance ties

Senior Vietnamese finance and banking officials recently met with representatives from Italy’s Central Bank and Ministry of Economic Development in Rome to discuss policies supporting small and medium-sized enterprises (SMEs).

Representatives from the host country’s Central Bank shared their experience in financing SMEs as well as in building a standard legal framework for banking operations.

Officials from the Ministry of Economic Development suggested close coordination between banks, enterprises and relevant agencies to the development of SMEs.

Besides sharing practical experience, the hosts and guests discussed measures to fortify collaboration between the banking and financial sectors and to work towards realising the bilateral strategic partnership, which was agreed in 2013.

Vietnam’s consistent policy to deepen bilateral ties with Italy was reiterated by Prime Minister Nguyen Tan Dung during his reception in Hanoi on January 9 for former Prime Minister of Italy Enrico Letta.

Dong Thap: Rural sanitation improves through CHOBA programme

The People’s Committee of the southern province of Dong Thap held a workshop on January 12 to evaluate the implementation of the Community Hygiene Output-Based Aid (CHOBA) Programme in the locality.

As many as 7,300 sanitary toilets have been built under the programme since 2012 in 45 communes of the province, accounting for 76.6 percent of the target.

Speaking at the event, Chairman of the provincial People’s Committee said the project, which will run through this year, not only helps the poor to improve hygiene but also has a deep social and economic meaning, especially in building new-style rural areas.

CHOBA project, funded by East Meets West foundation, assists poor, nearly poor, and disadvantaged families in building new sanitary toilets to improve the environment, reduce waterborne diseases, and change the people’s sanitary habits and behaviours.

The project does not support finance directly for the households, but via award packs for families, which are delivered after they build hygienic toilets with preferential loans. Communes with an increase of 30 percent in the number of sanitary lavatories will be presented with 64 million VND.

So far, the project has been conducted in 496 communes in 10 provinces nationwide, aiming to better hygiene conditions for 1.4 million people in rural areas.

Vinafood 2 pledges to buy all flood-season paddy

Vietnam Southern Food Corporation (Vinafood 2) has announced a plan to purchase all the flood-season paddy (unhusked rice) in the Mekong Delta.

Huynh The Nang, general director of Vinafood 2, said in An Giang Province last week that the flood-season paddy is a rare type listed in the Red Book of Vietnam, so developing this rice variant in An Giang Province’s Tri Ton District is important to its preservation.

Rice experts regard the paddy produced in the flooding season as a kind of organic product which is good for the health of consumers.

Nang said HCMC Food Co. Ltd. and An Giang Food and Foodstuff Co. under Vinafood 2 will collaborate with Ecofarm to purchase all the paddy produced during the flooding season.

“We will distribute the organic rice at the stores of Vinafood Mart from Danang southward to HCMC and Ca Mau Province,” Nang said.

Nguyen Minh Triet, general director of Ecofarm, said the company would buy the paddy grown on 100 hectares this year at a price of VND12,000 (56 U.S. cents) per kilo.

An Giang Province plans to expand the area for growing the paddy during the flooding season by five times until 2020.

Nguyen Van Kien, head of the center for rural research and development under An Giang University, said Dong Thap Province has asked the center to help it produce the rare paddy.

VAMC to buy VND100trn in bad bank debt

Vietnam Asset Management Company (VAMC) plans to buy from VND70-100trn (USD3.3-4.7bn) bad debts this year to help reduce the banking sector's bad debt level to three percent of outstanding loans.

The State Bank of Vietnam (SBV) reported that, as of November 2014, Vietnam's lenders were carrying bad debt estimated at VND161.86trn, accounting for more than 3.8% of total outstanding loans.

The SBV said it would make an official report on bad debt levels for 2014 at the end of January.

Nguyen Quoc Hung, chairman of VAMC’s member board, said that in 2014, the VAMC had bought VND81.6tr worth of bad debt, and would buy VND70-100trn more bad debt in 2015.

VAMC has asked the government to let it increase its registered capital to VND2trn (USD92.3 million) so that it can issue convertible bonds to increase its ability to acquire bad debt.

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