VAMC splits banks’ positions

Banks are coming out of the closet to reveal different Vietnam Asset Management Company feelings.

The Vietnam Asset Management Company (VAMC) could radically attack banks’ bad debts (NPLs). However, a number of banks are sitting on the fence as when selling bad debts to VAMC to get special bonds in return, each year they need to make provision at least equal to 20 per cent of the bond value.

Banks argued that under current regulations they must make provisions only when bad debts appear on their balance sheets. But, if banks sell bad debts to VAMC, these debts will be removed from the balance sheets and why do they need to make provisions?

Mekong Bank chief executive officer Tay Han Chong assumed banks selling bad debts to VAMC was only a way to extend debt payment. After five years, if the VAMC failed to settle these bad debts, banks must repurchase these debts using special bonds and incur main responsibility for the bad debts.

A Ho Chi Minh City-based bank director said bad debts would no longer be ‘an epidemic’ after the VAMC came into operation and brought forth effects. The VAMC would be an active supporter to credit organisations in settling bad debts.

The director, however, admitted the regulated 20 per cent, per year provision rate would make banks carefully about selling debts to VAMC.

“Banks must deduct their profits for making provisions. Therefore, selling bad debts to VAMC could not help them much,” said the director.

Sacombank’s deputy chairman Nguyen Gia Dinh said banks needed to ramp up efforts to combat bad debts as the VAMC would only help banks through extended payments, not radically settle bad debts.

National Financial and Monetary Policy Council member Cao Sy Kiem assumed the birth of VAMC helped ensure banks and businesses’ benefits, while not creating a precedent for using state budget capital to rescue firms.

“At least this measure helps extend debt payment by five more years instead of clearing bad debts at once, albeit banks would not be happy with the 20 per cent provision rate requirement. To weather hardships, banks and firms need to collaborate, but not overestimate VAMC performance,” Kiem said.

NPLs continue to climb north

Vietnam’s bad debt ratio averaged 3.94 per cent per month in the first four months of 2013, according to statistics reported by credit institutions a dramatic slowing compared to the same period in 2012.

Overall, until the end of April 2013, banking system non performing loans (NPLs) reached VND137.1 trillion, up by 15.8 per cent compared to the end of 2012.

However, NPLs grew on average 3.94 per cent a month in the first four months of 2013, down significantly from roughly 9 per cent during the same period of last year.

Many experts noted that although the growth of bad debts had been curbed, the NPL ratio had increased continuously due to slow credit growth. The veracity of debt statistics are a source of frequent debate, with some private institutions saying the NPL rate is much higher than state bank estimates.

By the end of April 2013, the bad debt ratio was 4.67 per cent, higher than the ratio of 4.08 per cent in late 2012 and 3.07 per cent in late 2011.

Meanwhile, according to the State Bank, the bad debt ratio as of December 31 2012 stood at 7.8 per cent, down from nearly 9 per cent in September 30, 2012.

Seafood group to help exporters

The Viet Nam Association of Seafood Exporters and Producers (VASEP) has promised its members that it will help them increase export volume for the rest of the year.

Speaking at a VASEP meeting in HCM City yesterday, General Secretary Truong Dinh Hoe said that seafood firms were facing several problems, including a shortage of raw materials, a drop in overseas demand and high input costs.

Technical barriers set by importing countries have also created problems for exporters, he told the meeting that was organised concurrently with the 15th anniversary of the association's founding.

Nguyen Hai Trieu, director of Gio Moi Company, noted that shrimp exporters a few years ago "faced raw material shortages for two to three months, but in recent years, that has increased to five months or more."

Shrimp demand in the US and EU has dropped, while the depreciation of the Japanese yen has adversely affected consumption of imported seafood in that country, according to Trieu.

"Input costs also keep increasing, reducing the competitiveness of Vietnamese seafood products," he said.

Hoe said VASEP would conduct research on the status of raw materials in an effort to develop more sources in a reasonable way, and maintain a balance between supply and demand.

It will also co-operate with agencies and institutes to deal with diseases that affect shrimp rearing, he said.

In addition, the association has mapped out programmes to promote brand-building for the industry, he said.

Vu Van Tam, Deputy Minister of Agriculture and Rural Development, said that Vietnamese seafood quality was high, meeting the requirements of choosy markets like Japan, the EU and the US.

To enhance quality management of input, he said the ministry would issue official documents to manage brood-stock quality and the use of several substances in aquaculture.

Tam suggested that seafood firms should focus more on producing items with high added value, and build their brands as well.

He urged seafood processors to link up with farmers to make high-quality products that meet both local and international standards.

The ministry plans to work closely with VASEP to solve difficulties related to trade barriers set by importing countries and to help businesses expand their export markets.

Tam praised VASEP's efforts in the past years, saying that it had greatly contributed to the development of the country's seafood industry.

VASEP, which was founded n 1998, has received yesterday the Second-Class Labour Medal from the State President for its contribution to the socio-economic development.

Dao Thien Hai, VASEP chairman, said Viet Nam grew to become the fourth-largest seafood exporter in the world.

In recent years, the seafood industry has increased its exports by an average of 13 per cent a year, with products now available in 150 countries and territories, he said. In the late 90s, it exported to only 50 countries.

The seafood industry earned US$6.1 billion from exports last year, and is hopeful of achieving the export target of $6.5 billion this year. Seafood exports reached $2.28 billion in the first five months of the year, down 2.6 per cent over the same period last year.

NPL problem on back burner

The State Bank is sticking to its guns despite foreign investors’ frustration over a year-long delay of the application of new debt classification regulations.

According to the State Bank’s Circular 12/2013/TT-NHNN dated May 27, the Circular 02/2013/TT-NHNN dated January 21 regulating debt classification and bad debt provisioning by credit institutions will take effect from June 1, 2014, instead of June 1, 2013 as previously ordered.

Speaking at the Midterm Vietnam Business Forum (VBF) last week, State Bank deputy governor Le Minh Hung said the delay was designed to support enterprises to access credit, boost lending and reduce lending interest rates amid economic hardships.

“The State Bank expected to release an instruction requiring credit institutions to implement Decision 780/QD-NHNN dated April 23, 2013 on debt classification as well as set up a road map for Circular 02 and other solutions to address bad debts and raise credit quality,” said Hung.

At the forum, the foreign business community showed disappointment about the delay of Circular 02.

VBF co-chairman Alain Cany said investors felt frustrated after the State Bank decided to postpone the application of new debt classification regulations by one year.

According to a report by the working group, Vietnam’s banks have long ceased to report the true extent of their bad debts. One reason for this was the previous regulations on bad loans which allowed banks to enjoy flexibility in classifying the same debts into standard or bad categories.

“The delay of Circular 02 may setback transparency, an essential factor in solving problems in the banking sector quickly,” the report said.

Brett Krause, representative of VBF’s Banking Working Group, said Circular 02 would ensure that banks produce more realistic reports on provisioning and would increase investors’ confidence in the transparency of the banking system.

“Therefore, we encourage banks voluntarily abide Circular 02 as soon as possible and begin to address their shortcomings indicated by the Circular,” said Krause.

Addressing bad debt is considered an urgent task for Vietnamese government when it saw the non-performing loans (NPLs) at 7.8 per cent of the total loans in late 2012. By the end of March 2013, the NPLs rate reduced to 4.51 per cent, according to the latest government’s report sent to the National Assembly. The accuracy of that figure, however, is widely questioned.

Moreover, many experts said if Circular 02 was applied, the NPLs rate at some commercial banks would raise from the current level of 3-4 per cent up to 10-20 per cent, even much higher. This means that these banks would have to make higher provisions, tighten lending conditions which would make it hard for enterprises to access bank’s capital and impact on the economy’s credit growth.

D1’s The One to connect with metro station

There will be a tunnel linking the 55-storey twin tower project ‘The One’ with Ben Thanh central metro station of HCMC, said Le Hong Ha, deputy head of the HCMC Management Authority for Urban Railways.

This is the second commercial building in the city to obtain a license to build the tunnel. The first tunnel of this kind will link the Vincom Center A with the Opera House station.

Bitexco Group broke ground for The One building in April, 2012 with invested capital of nearly US$500 million. The project is expected to be completed in 2015, having two towers of 55 and 48 stories overlooking the landmark Ben Thanh Market and surrounded by Calmette, Le Thi Hong Gam, Pho Duc Chinh and Pham Ngu Lao streets.

Ha told the Daily that work on the Ben Thanh central station is expected to begin in 2015 and will be connected to The One after completion. The Opera House station will be built in 2014, while tunnel construction of the Vincom Center A has been completed.

The metro line No. 1 running from Ben Thanh Market in District 1 to Suoi Tien in outlying District 9 would be completed in 2017. The route will serve 186,000 passengers by 2017, 620,000 passengers by 2040 and over one million by 2040.

Ha said the railway authorities will give support to commercial building investors who wish to connect their projects with the metro line so that citizens will enjoy advantages in reaching both the metro route and commercial centers.

The Ben Thanh metro station will be built 40 meters underground, including a station surrounded by a shopping area.

Hydropower project owners must plant forests

Those wanting to cut down forest trees to make room for their hydropower or mining projects will have to replant a corresponding area when Circular 24 of the Ministry of Agriculture and Rural Development takes effect on July 1.

The prevailing Government Decree 13/2006/ND-CP on forest protection requires those chopping plantations of farmers to compensate them with new plantations. Those cutting down natural forests, however, do not have to replant.

However, quite a few forests have been converted into other purposes, causing the natural forest area to dwindle. Therefore, Circular 24 is aimed at forcing project owners to develop new forests in exchange for the areas they chop, said Nguyen Quang Duong, head of the planning and finance department, formerly the department of forest development, at the agriculture ministry.

It costs VND15-20 million to plant a hectare of forest. Whether the time for trees to fully grow is long or short depends on each species, but on average it takes four years, he told the Daily on the phone.

The fact that owners of hydropower projects cut down forests without replanting was put on the discussing table at the National Assembly (NA) meeting late last year.

Back then, the Ministry of Industry and Trade proposed hydropower projects without land for afforestation should not be allowed to get going. Circular 24 is made in response to this proposal and it will come into force on July 1.

If project owners cannot replant forests for some reason, they will have to pay for the central Forest Projection and Development Fund to do the job on their behalf, said Duong.

As for the hydropower and mining projects converting forest land prior to the effective date of Circular 24, their owners must complete schemes for afforestation no later than 2014, he noted.

By the end of 2012, about 20,000 hectares of forest had been converted mainly to serve hydropower developments. Some areas of forest were submerged in reservoirs while others were cleared for road construction.

Some 1,100 hydropower projects are under preparation with a combined capacity of nearly 26,000 MW, according to the General Department of Energy under the Ministry of Industry and Trade.

Thai firms set up shoe distribution channels in Vietnam

Many leather-footwear enterprises from Thailand are coming to Vietnam to establish their distribution channels, going ahead of local companies, said Diep Thanh Kiet, vice chairman of the Vietnam Leather and Footwear Association (Lefaso).

Vietnamese leather-footwear makers mainly sell their products to foreign brands and importers. Meanwhile, Thai producers not only sell their products to foreign markets, but also set up their distribution channels in such markets, said Kiet.

He was talking to the media on the sidelines of a meeting between Vietnamese and Thai footwear firms in HCMC last Thursday. The event was held by the Vietnam Chamber of Commerce and Industry in collaboration with the Association of Thai Footwear Industrial Promotion.

On this occasion, about 30 Thai leather-footwear producers met local firms to look for buyers or distributors. Besides, some Thai businesses sought to buy leather-shoe products from Vietnamese companies.

Nguyen Van Khanh, general secretary of the HCMC Shoes and Leather Association, said Thai leather-footwear producers in the future would buy products from Vietnamese firms.

“They will not make shoes anymore because the industry requires too many workers,” he said, adding that this is a chance for Vietnamese enterprises.

Aside from the advantages offered by the Trans-Pacific Partnership (TPP) agreement, local footwear companies will face challenges. Many shoe products from TPP members will be sold to Vietnamese market and thus local producers will go into a fiercer competition, said Kiet.

Another coal price hike in sight

The ministries of industry-trade and finance are considering another increase in the price of coal sold to power plants to match the coal production cost in 2013, said Minister of Industry and Trade Vu Huy Hoang

The Prime Minister earlier told relevant ministries and Vietnam National Coal and Mineral Industries Group (Vinacomin) to adjust prices of coal sold to power producers, said Hoang in a report sent to the National Assembly (NA) last weekend. Thus, prices of coal sold to the power sector were increased on April 20.

The new price is able to cover the cost of producing coal in 2011. Prior to the price hike, the price of coal sold to power plants stood at 71-73% of the production cost in 2011.

However, the new coal price is still equal to only 85-87% of the production cost in 2013. If coal prices were not raised further, revenue from coal sales to the power sector would be some VND6 trillion lower than the total production cost in 2013, said Nguyen Van Bien, deputy general director of Vinacomin.

Previously, the amount of coal sold to power producers accounted for only 10-15% of the total output. However, it has surged in the last two years.

In 2012, coal sold to the power sector made up 30% of the total output. In the first quarter of 2013, over 50% of coal output was sold to power plants.

The situation now is not as favorable as in 2011 or before that, when coal exports generated large revenue, offsetting the losses at home, Bien noted. Due to the global economic downturn, coal prices have dropped 30% against late 2011.

In the report to the NA, the trade ministry said it and the finance ministry would consider an appropriate time for a coal price hike. The rise in coal prices will be carefully calculated to avoid pushing up the power production cost, said the trade ministry.

The trade ministry is collecting opinions on its draft regulations on power price management and adjustment. The draft says EVN can raise power prices if input costs pick up 2-5%.

Lack of security rules exposes local entities to cybercrimes

Vietnam is becoming a destination for cybercrimes while authorities and enterprises are lacking regulations on information security, with only 41% of them having internal regulations on this matter last year.

According to the Vietnam Computer Emergency Response Team (VNCERT), the highest rate of information security regulations belonged to ministries and equivalent agencies with 57.9%. Meanwhile, the respective figures of State enterprises, private enterprises, local authorities were 57.1%, 46.2% and 35%.

It is notable that the rates have not changed much in the past three years.

Regarding infrastructure, nearly 70% of agencies and enterprises used firewall, but most of them were not equipped with equipment which can detect and prevent illegal infiltration. Besides, 100% of State agencies used antivirus software while some still used software having no copyright or downloaded free from the Internet such as Bkav Home and Symantec.

Vu Quoc Khanh, director of VNCERT, said that ensuring information security for State agencies and local authorities were facing many difficulties.

One of the difficulties is information technology (IT) staff’s limited abilities such as lacking IT system management skills and a good command of IT, he added.

To increase information security at governmental agencies and enterprises, the Ministry of Information and Communications is collecting opinions about the draft information security law last month.

An important point of this draft law is that State agencies are required to build a process of ensuring information security with compulsory security standards.

DongA Bank lends VND10 billion to fishermen

DongA Bank inaugurated a new office of Chu Lai transaction office in Quang Nam Province last week and made VND10 billion worth of preferential loans available to local fishermen.

The lending program aims to create conditions for local fishing households to invest in facilities, repair boats, homes and cover fuel costs. The lender will apply an interest rate of 10% per annum for all tenors.

Nguyen Thanh Vinh, director of DongA Bank’s Quang Nam branch, said in a statement that the bank had offered VND7 billion worth of loans in last year’s program, which brought about positive effects. This year, the program offers VND10 billion, enabling each fishing boat owner in Tam Quang, Tam Giang and Tam Hai communes to borrow as much as VND500 million.

DongA Bank launched the loan program for fishermen in 2011 with the initial loan value of VND20 billion. The program is co-organized by the lender, the High-quality Vietnamese Product Business Association, Leading Business Club and the Education Development Foundation.

Gov’t to issue 15-year bonds

he State Treasury will issue VND1.5 trillion worth of 15-year government bonds on June 30 through an underwriter, the first issuance of this type of bond since 2006.

This is also the first time the Government will have its bond issuance underwritten this year and the third time since May, 2012, when the Ministry of Finance’s Circular No. 17 providing guidelines on issuance of government bonds in the domestic market took effect.

The State Treasury on Monday signed an agreement in principle with Bao Viet Securities Joint Stock Company to underwrite this bond sale.

A representative of the firm said it had had to guarantee this 15-year bond issuance with a total value of VND1.5 trillion.

The bond coupon has yet to be decided because the underwriter needs time to learn about an average interest rate expected by investors. The State Treasury and the company will negotiate to reach an agreement on the bond coupon in the final week of this month.

Nissan assembly plant opened in Danang

Nissan and its partner Tan Chong Motor (TCM) on Tuesday opened an assembly plant in Danang City and launched Nissan’s best selling global sedan Nissan Sunny.

The plant, the first of this kind in Danang, has an investment of US$40 million and a capacity of 6,500 cars per year.

Nissan Sunny has three versions with four colors-brown, white, silver and black. Its selling price will be announced in Hanoi next Monday.

The new plant is the first facility owned and run by TCIE Vietnam, a unit of TCM in Vietnam. The plant has an area of 129,500 square meters and is operated under the production model of Nissan.

“The plant will first focus on assembling Sunny sedans for domestic sale, and 2,000 Sunny sedans will be assembled in the first year of operation,” said Takayuki Kimura, Nissan’s regional vice president.

Tan Chong Motor has been the official distributor of Nissan for over 50 years in Malaysia and Singapore and also distributes Nissan products in Cambodia, Laos and Vietnam. The group has made many investments in Indonesia, Thailand, Taiwan, Hong Kong, China and Australia.

Some 800,000 Nissan Sunny sedans have been sold worldwide since December 2010 when it was launched.

Although there are more and more small tourist boats with capacities of 100-200 visitors and yachts wanting to arrive at new ports in Vietnam, infrastructure and services still fail to meet the demand.

Vu Duy Vu, deputy general director of Saigontourist Travel Service Company, said that yacht tourism, a segment of cruise tourism, was promising, but Vietnam has yet to cash in on the potential.

Tourists from the U.S. and Europe have the demand of dropping by Vietnam on their journeys between Hong Kong and Singapore and even visiting Vietnam with the shortest stay of five days and the longest of three weeks.

Yacht owners normally have crewmembers sail their yachts to Vietnam first and then fly here with family or friends. They will leave Vietnam by plane after their journeys end.

Journeys of such tourists are not fixed, and they often select destinations after arriving in Vietnam, Vu said.

“We have received many requests from owners of luxury yachts, but the number of yachts arriving here is still low due to Vietnam’s poor infrastructure and inadequate services,” Vu said.

According to Vu, a shortage of tourist ports and complicated procedures at ports are among reasons for the low number of yachts arriving in Vietnam. Yacht owners do not want to dock at cargo ports which have unhealthy environment and can damage their yachts.

Yacht tourists prefer docking at new ports such as Cam Ranh and Van Phong in Khanh Hoa Province. However, such ports are domestic ones, and thus foreign boats have to seek permission at international ports first.

Sharing the same opinion with Vu, experts in Singaporean cruise tourism in a report mentioned that despite huge potential of this tourism model, Vietnam was losing the market due to many problems including too high fees.

Currently, Vietnam has yet to issue any regulations on yacht tourism activities, and cruise tourism regulations have not been standardized among cities and provinces. As a result, yachts wanting to dock in Vietnam have to pay several high fees, and most of them choose not to visit Vietnam.

In related news, a working team for cruise tourism which has the participation of customs officers, border guards and travel firms will be established to handle issues related to cruise tourism, according to the Vietnam National Administration of Tourism at the seminar on cruise tourism held in Khanh Hoa Province’s Nha Trang City on Sunday.

Seafood firms suffer high costs of safety testing

An optimal solution to reduce the volume of seafood exports being returned home has yet to be found, while short-term measures are costing local exporting enterprises dearly.

Ca Mau Province has the advantage of processing and exporting seafood products with big enterprises like Minh Phu Corp, Phu Cuong Group and Ca Mau Seafood Processing and Service Corp. Seafood products accounted for up to 99% of the province’s total exports in the first five months with over US$304 million, but its seafood exporting activities still carry many potential risks.

According to statistics of the provincial Department of Industry and Trade, there was 159 tons of seafood products worth over US$500,000 of five exporters returned by importers in May, raising the total volume of returned seafood exports in the five-month period to 536 tons worth US$3.65 million.

Returned shipments are mainly frozen processed shrimp which are violating food safety and hygiene requirements as they contain antibiotics exceeding the permitted levels of importing countries.

The National Agro-Forestry-Fisheries Quality Assurance Department (Nafiqad) also reported three more exporting firms having export shipments which were warned to contain high Ethoxyquin and Trifluralin residues by Japan.

It is noteworthy that after the warning from importers in the January-February period, the situation has improved.

Japan is Vietnam’s biggest shrimp importer, but last year it erected a barrier of Ethoxyquin, an oxidant, and after tests of Trifluralin, an algae herbicide, against Vietnamese shrimp. The shrimp exports to Japan reached US$353 million from January 1 until May 15, dropping 2.5% year-on-year.

Nguyen Nhu Tiep, head of Nafiqad, said that Japan officially removed all Trifluralin tests on shrimp imported from Vietnam last month after nearly three years of application. Vietnam has also proposed Japan to consider removing Ethoxyquin tests on all seafood shipments, he added.

“However, Japan requires Vietnam to prepare reports and have measures monitoring food hygiene requirements. If Japan finds it reasonable, the stringent residue monitoring will be removed,” Tiep said.

To avoid food hygiene violations, several measures have been taken such as controlling residue of antibiotics, preservatives and especially input materials and tightly inspecting every shipment before exporting.

In fact such measures have been implemented for many years and cost enterprises money, time as well as human resources. However, the risks of having shipments returned are still there.

Speaking at a workshop held recently by the Ministry of Agriculture and Rural Development, Phan Thanh Chien, general director of Ba Ria-Vung Tau Province-based Hai Viet Corp., said that the cost to reduce shipment returns amounted to dozens of billion of Vietnam dong per year. The firm paid VND3 billion per year to Nafiqad’s testing activities last year while its antibiotic testing cost was VND6 billion.

“Despite such costs, we still fail to eliminate all risks such as antibiotics and residue used in farming which are contained in materials provided by farmers. That we cannot control,” Chien said.

According to Tran Van Linh, vice chairman of the Vietnam Association of Seafood Exporters and Producers (Vasep), measures Nafiqad and firms are employing are only short term. The agricultural industry should focus on monitoring farming areas, especially those of shrimp, instead of only paying attention to processing and production stages which have already met strict requirements of importers.

Ha Noi promotes trade in bid to boost exports

The capital city plans to promote trade activities to boost exports this year and beyond, said an official from the Ha Noi Industry and Trade Department.

Phan Tien Binh, deputy director of the Ha Noi Industry and Trade Department, said trade promotion programmes for new export markets would be bigger and better in coming years.

Trade promotion programmes were scheduled to focus on markets in South America, Central America, Europe and Asia, said Binh.

The greatest focus would be on Japan, ASEAN, South Korea and China, which would continue to be the major export markets for Ha Noi due to their geographic proximity and high demand, he said.

Additionally, Ha Noi would continue expanding the export of goods and services to the Middle Eastern and African countries.

The city would also better ensure the quality of enterprises that join trade fairs abroad and promote advertising of products at the fairs to improve quality of the trade promotion programmes, he said.

The department would enhance co-ordination between local enterprises and foreign partners in Ha Noi. The city would give priority to foreign importers and foreign enterprises that import goods from villages, while also helping to develop supporting industrial facilities and consulting enterprises.

It also planned to increase investment capital in trade promotion programmes for export products.

The city expected to increase the export of processed farming products, interior decoration products, packaging, software and logistics products.

Binh said the plans would help Ha Noi increase exports, especially at a time when the global economy was recovering.

The department reported Ha Noi gained a slight rise of 0.2 per cent in export value to US$4.17 billion for the first five months this year compared with the same period of last year.

Key staples included textiles, garments, handcraft articles, coal and farming products. The major export markets were ASEAN, China, Japan, the EU and the US.

Small hydro plant plans scrapped

About 42 small hydro-electric projects planned for the Central Highlands province of Lam Dong have been scrapped because of their environmental impacts.

The provincial People's Committee is also checking the feasibility of six other small projects and two big hydro projects in the area, Dong Nai 6 and Dong Nai 6A.

Meanwhile, the province plans to go ahead with 79 other small hydro projects with a total of 600MW capacity on the Da Dang, Da Nhim, Krong No, Da Huoai, La Nga, Dong Nai, Luy and Quao rivers. Nearly 40 have been funded.

Vietnamese products seek foothold in world market

Policymakers, experts, economists and local authorities have discussed measures to promote Vietnamese trademarks in the world market at the Vietnamese Trademark Forum in Hanoi on June 12.

The forum is part of the 2013 National Trademark Programme co-organised by the Trade Promotion Agency under the Ministry of Industry and Trade, the programme’s Secretariat and the Vietnam News Agency’s Tin Tuc newspaper.

Over the past time, Vietnamese businesses have made progresses in building and developing their trademarks and raising the competitiveness of their products, especially those operating in garments and textiles, leather and footwear, and farming products, said Do Thang Hai, Head of the Trade Promotion Agency.

However, Hai and other delegates at the event cited the lack of experience and limited capacity of domestic businesses as factors lowering their products’ competitiveness.

According to Hai, apart from product quality, businesses should pay attention to the distribution system.

At the event, Vietnam’s marine trademark, a tool to promote the country’s image and sea-based economy was put on the table.

Pham Quang My, deputy head of the Office of the Vietnam Administration of Sea and Islands under the Ministry of Natural Resources and Environment, described the marine trademark as a tool to lure investment and boost cooperation in maritime economic development.

Marine trademark also makes it easier for localities to access the external world in the context of integration, he added, noting it is expected to contribute to fulfilling targets set in the Vietnam Marine Strategy by 2020.

The delegates suggested localities put forth long-term strategy in building their trademarks, citing Da Nang central city’s tourism programmes as an example in this field.

Nguyen Duc Loi, General Director of the Vietnam News Agency, called on localities, businesses and entrepreneurs to conduct practical activities in order to preserve the quality, prestige and competitive edge of Vietnamese services and products.

Local leaders, managers, experts and businesses also engaged in discussions focusing on relations between regional, national and marine trademarks.

Production stimulus moves take effect

A string of measures to resolve difficulties to boost production and spur growth have proved effective, according to a Government’s report at an interpellation session of the 13th National Assembly’s on-going fifth session.

The Government conducted tax breaks and exemption; continued to reduce lending interest rate by around 3-4% against December, 2012; provided preferential credits for agriculture, rural areas, small-and-medium-sized enterprises (SMEs), auxiliary industry, export production and high-tech applications.

A series of solutions were introduced by the Government to accelerate production of key industries such as steel, mechanics, garments and textiles and mining, and consumption of their products.  

Meanwhile ministries, agencies and localities launched trade promotion activities; speed up the “Buy Vietnamese goods” campaign and bring goods to rural and remote areas.

The Government has also implemented the 2013 National Trade Promotion Program to seek more export markets. In the January-May period, exports stayed at around US$50 billion, up 15.1% against the same period last year while imports were on the rise.

Plus, the Government gave priority to social housing development. So far, 58 projects were proposed to construct 33,000 social apartments destined for low-income earners.

Especially, the preferential credit package worth VND30,000 billion (US$1.5 billion) was disbursed,  bringing initial positive effects on the domestic estate market.

So far, nine badly-performing commercial banks were handled properly so that their payment capacity was considerably improved and depositors’ rights were guaranteed.

The equitization process of commercial banks was fundamentally finalized, expecting to help raise charter capital for them.

As of April, 2013, the rate of non-performing loans stood at 4.67%, lower than 7.8% of late 2012.

VinGroup sets high business target

Property developer VinGroup (VIC) said it was commited to delivering 8,000 apartments in the Royal City and Times City projects in Ha Noi this year despite low demand given the sluggish real estate market.

At the company's annual meeting of shareholders on Saturday, VinGroup chairman Pham Nhat Vuong said VinGroup would not reduce the prices of their apartments as had other companies, but would keep the old prices to protect the interests of the customers who had purchased their apartments.

"There are many ways to raise capital given difficult conditions, so slashing apartment prices when the market is in a downturn can affect other clients' interests," Vuong said.

The Times City project has completed the first phase with 12 towers, nine of which have been sold while the other three are still not open for sale.

VinGroup also plans to launch its two major shopping malls in Ha Noi this year, Vincom Mega Mall Royal City in July and Vincom Megal Mall City Times in December, while seeking new promising projects in Ha Noi, HCM City, Nha Trang and other localities for investment.

"There will be many opportunities for investors with cash in the current context," Vuong said.

Last year, VIC's net revenue was over VND7.9 trillion (US$376.2 million), an increase of 242 per cent over the previous year. Its after-tax profit also jumped 72 per cent over 2011, totalling nearly VND1.85 trillion ($88.1 million).

In the financial sector, VinGroup successfully issued international convertible bonds worth $300 million while attracting another $200 million from the global private equity fund Warburg Pincus into Vincom Retail.

This year, VIC projects planned to earn a pre-tax profit of around VND10 trillion ($476.2 million) and to have net revenue of VND12.2 trillion ($581 million). The group has also approved a plan for debuting shares overseas through an initial public offering on an international stock exchange in the future.

Two foreigners were elected to VIC's board of directors during this meeting. They were Joseph Raymond Gagnon, managing director at Warburg Pincus, and Marc Villers Townsend, managing director at CBRE Vietnam, an independent board member.

VIC shares rose slightly yesterday, closing at VND70,000 ($3.33) a share.

Food seminar highlights role safety plays in brand-building

A seminar on safe food production and the role it can play in making food trademarks more commercially viable was held yesterday in Ha Noi.

Deputy Minister of Industry and Trade (MoIT) Ho Thi Kim Thoa acknowledged the food sector's two decades of success in manufacturing a wide variety of highly competitive products meeting both domestic and export demands.

The sector now contributes nearly 20 per cent of the country's GDP.

According to Deputy Head of MoIT's Viet Nam Competitive Authority (VCA) Nguyen Phuong Nam, the food sector has also attracted impressive foreign investment in recent years and hundreds of food processing factories meeting international standards have opened across the country.

However, due to the high competitiveness in this sector, many enterprises engage in unhealthy actions to cut costs – compromising food safety.

Nguyen Van Viet, chairman of the Viet Nam Beer-Alcohol-Beverage Association (VBA), said that food safety is always the leading concern of consumers, so it plays a key role in the success of any food trademark.

To help the industry shore up sustainable development domestically and expand into global markets, MoIT is supporting businesses in promoting, registering, and protecting their trademarks, training human resources, updating themselves on the latest economic, environmental and legal information and applying cutting-edge technological advancements.

The seminar was co-organized by Cong Thuong Newspaper and the Ministry of Industry and Trade's Department of Light Industry and Department of Science and Technology.

Viet Nam earns tidy profit from trade surge with Spain

Two-way trade between Viet Nam and Spain hit more than 533 million euros in the first quarter of this year, a year-on-year increase of 9.23 per cent, according to Spanish customs.

In the reviewed period, Viet Nam earned over 477 million euros (US$634.41 million) from exports to Spain and imported 55.91 million euros ($74.36 million) worth of commodities from the European country, up 9.46 and 7.31 per cent respectively.

Viet Nam mainly ships machinery, electricity equipment, footwear and accessories, coffee, garments and aquatic products to Spain while buying airplanes and their parts, seafood, chemicals, pharmaceuticals and animal feed from the European country.

ARINC to provide Noi Bai Airport systems integration

The US-based ARINC Incorporated announced that it was awarded a contract to provide systems integration for the new terminal at Ha Noi's Noi Bai International Airport.

ARINC was selected as the subcontractor for this project by the Taisei-Vinaconex Joint Venture (TVJV), the company overseeing the construction of the new terminal.

ARINC will be deploying its industry-leading CUPPS compliant vMUSETM workstations at Terminal 2, together with SelfServTM Common Use Self Service kiosks, VeriPax Passenger Reconciliation Services and Flight Information Displays.-

Mekong Delta expands area of specialty fruit trees

The Mekong Delta has additional 20,000 hectares of specialty fruit trees than they did three years ago, according to the Southern Horticultural Research Institute.

Areas under speciality fruit trees in the provinces of Tien Giang, Ben Tre, Dong Thap, Vinh Long, Hau Giang and Can Tho have increased to 83,000ha, accounting for 29 per cent of the total fruit tree area.

The increase indicates the growing demand for safe, high-quality fruit, which is now being produced on a large scale to meet demand and improve export competitiveness.

SBV restructures huge bad debts

Non-performing loans (NPLs) of commercial banks were estimated at VND137.1 trillion (US$6.53 billion) by the end of April, accounting for 4.67 per cent of total loans, according to data from the State Bank of Viet Nam (SBV).

The NPLs in late 2012 and 2011 were respectively 4.08 per cent and 3.07 per cent of total loans.

However, SBV said if debts had not been dealt with and restructured in accordance with Decision 780/QD-NHNN on classification of rescheduled loans, NPLs may have reached VND362.8 trillion ($17.2 billion), or 11.5 per cent of total loans.

SBV said that by the end of April this year, a total VND284.4 trillion debts had been restructured in accordance with the decision.

About VND76.7 trillion of bad debts were tackled through loan loss provisions last year and the January-April period this year. Provisions for loan losses increased to VND73.6 trillion ($3.5 billion) as of April 30, up 14.6 per cent from last December.

SBV Governor Nguyen Van Binh expected Viet Nam Asset Management Company (VAMC), which was due to officially go into operation next month, would help resolve roughly VND40-70 trillion of NPLs this year.

According to a newly issued decree on NPLs, banks with NPL ratios of 3 per cent or more would have to sell the loans to the VAMC.

Banks that failed to comply with the regulation would be inspected by the central bank or they would have to hire an auditing company or independent evaluation firm to assess the quality and value of their assets, equity and charter capital at their own expense.

Based on the auditing results, banks would have to sell their NPLs to the VAMC to ensure NPL ratios stayed at a safe level, while also restructuring under plans approved by the central bank, the decree stated.

Forum promotes brand VN

The development of national brands was critical for the country's economic development during the international integration process, experts said at a forum held yesterday in Ha Noi.

The Viet Nam Value Forum, held jointly by the Viet Nam Trade Promotion Agency, Vietnam News Agency and Hoa Sen Group, saw participants discuss measures to push up the national branding programme in line the Government's economic goals.

According to Le Phuoc Vu, chairman of Hoa Sen Group, better branding was crucial in enhancing the competitiveness of Vietnamese products and services at a time when the country was integrating more deeply into the world economy, especially the Asian Economic Community to be established in 2015.

Despite its importance, developing national brands received little attention from both Government agencies and enterprises, he said.

Vu said he was worried about the domination of foreign-invested companies in the country's export sector, as capital for national branding development was limited.

"This rings an alarm bell," he said, adding that Viet Nam would be at risk of falling too far behind other countries and failing to grasp the opportunities that integration would bring unless competitiveness was improved, he said.

Nguyen Thi Tuyet Mai from the National Economic University said a survey by a US professor found that products from Viet Nam were poorly rated by young US consumers, reflecting that national branding needed to be improved.

According to Duong Quoc Xuan, deputy head of the South West Steering Committee, the Cuu Long (Mekong) Delta did not have strongly-recognisable brands for many of its leading products such as rice, fisheries and fruit.

The region was in urgent need of a strategy for brand development, he said, stressing that the regional link would play an important role.

Experts at the forum said the lack of protection measures for existing products that were tied to specific areas with geographical indicators meant some of these brands were at risk of disappearing or having their market share taken by foreign companies who were more savvy in marketing their brands.

Tran Le Hong, director of the Information Department at the National Office of Intellectual Property, said poor management of Vietnamese brands linked to specific parts of the country was partly to blame, along with concerns over quality of products and services.

According to the director of the Trade Promotion Agency, Do Thang Hai, co-ordination between ministries, local authorities, enterprises and the media should be enhanced to make the national branding programme more effective.

Also at the forum, Pham Quang My from the Viet Nam Administrations of Seas and Islands, stressed the importance of the marine sector, which would help boost sea economic development.

My said Viet Nam had great sea potential with more than 3,260kms of coastline, 1 million square metres of sea water and 3,000 islands.

Under the Viet Nam's Sea Strategy to 2020, the coastal and sea-born economy would make up from 53-55 per cent of the gross domestic product, partly thanks to breakthroughs in sea-related economic sectors such as oil drilling, seafood processing and tourism.

The National Branding Programme was approved in 2003, and it focuses on improving quality, innovation, creativeness and leadership.

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