FOL to rise before Tet

The draft on expanding foreign ownership limit (FOL) in enterprises may be adopted before the Lunar New Year holiday, or Tet, according to a senior official of the State Securities Commission (SSC).

In the latest draft replacing Decision 55 stipulating foreign participation in listed enterprises, the rule of industry classification has been removed. State-owned enterprises where the State needs to hold a majority stake and special firms such as banks will follow private rules, the official told the Daily.

For remaining enterprises, the draft stipulates that foreign room will be increased to 60% with voting rights.

The draft has received support from the Government and SSC expects to release it before Tet.

After the draft is approved, listed enterprises will decide FOL for themselves. They will register the figures to SSC without the need to seek approval from the Ministry of Finance or the Government. Therefore, room expansion actually will be faster.

In addition, enterprises can decide on the foreign room issue during their annual general meetings or field suggestions of shareholders in writing. As some enterprises cannot organize shareholder meetings immediately, the latter way might be a wiser solution for them.

Meanwhile, some new foreign investment funds have been strongly disbursed into the market since earlier this month.

Dinh Quang Hoan, deputy general director of Viet Capital Securities Company, said that some foreign funds have opened accounts at the brokerage to acquire blue-chips, especially those in the oil and gas sector.

According to the Hochiminh Stock Exchange (HOSE), foreigners net bought VND422 billion in the first eight trading sessions of 2014, a record high over the past few years. This year is expected as a positive year for foreign indirect investment capital attraction, said a HOSE representative.

The general director of a large investment fund said that the stable exchange rate is a catalyst for indirect capital attraction. “The exchange rate had been stabilized in 2012 and 2013. If the forex rate continues to be stable this year, confidence of foreign investors will be strengthened,” he said.

The central bank’s governor Nguyen Van Binh recently told the Daily that the central bank has increased foreign currency purchase given strong supplies. Last year, overseas remittance into the country for the first time hit US$11 billion.

The central bank bought around US$20 billion in 2012 and net bought around US$7 billion last year. This year, the agency expects to increase purchases to improve the country’s foreign reserves.

Banks brace for high Tet cash demand

As demand for cash withdrawals from automated teller machines (ATMs) always surges in the lead up to the traditional Lunar New Year holiday, or Tet, banks have been taking measures to cope with forthcoming ATM overloads.

The head of an ATM service department of Vietcombank’s branch said the bank has around 5.5 million ATM cardholders nationwide. In previous years, cash withdrawals doubled around 10 days ahead of Tet and surged by two to three times thereafter.

Workers at industrial parks (IPs) and exporting processing zones (EPZs) always have strong demand for cash before they head home for family reunion. Therefore, Vietcombank this year has moved some ATMs from elsewhere to areas near IPs and EPZs, the bank said.

However, the bank can move a maximum of 10 ATMs to areas around IPs and EPZs, so overloads cannot be avoided shortly before Tet.

Vietcombank has written to its corporate customers and management of IPs and EPZs to seek cooperation to reduce pressure from massive cash withdrawals just ahead of Tet. The bank has suggested solutions such as scheduling wage and bonus payments in a way that prevents simultaneous withdrawals and arranging rotating breaks during the day to give workers time to get their cash at ATMs.

Chu Hong Minh, director of the ATM center of DongABank, said cash needs for wage payments and shopping between December and January usually surge three to four times compared to normal days.

DongABank plans to launch mobile ATMs to serve workers at IPs and EPZs. The bank will also double the number of technical staff to deal with technical problems with ATMs during Tet.

DongABank now has over 1,200 ATMs nationwide. Therefore, a customer who cannot withdraw cash at an ATM can find nearby machines following instructions posted at the ATM booth.

DongABank on Tuesday introduced new-generation ATMs that allow customers to perform various banking transactions 24 hours a day instead of going to a bank office. The bank plans to install 250 new ATMs in the country.

Unskilled labor market dreary ahead of Tet

ue to economic difficulties, the local market has seen a decline in unskilled labor demand these days when the Tet holiday is nearing while this is a good time for unskilled workers to look for seasonal jobs in previous years

Demand for workers running errands at wholesale markets in the final days before Tet is not as strong as it was in previous years.

Nguyen Van Tiep, an unskilled 55 year-old laborer specializing in opening cartons and cleaning fruits at Thu Duc farm produce wholesale market said: “This year’s commodity volume arriving at the market now is not as huge as last year. All traders tend to watch the situation until the 20th day of the twelfth lunar month to consider purchasing more commodities. Therefore, labor demand at the market does not increase and traders this year have only used daily workers instead of hiring more outside laborers.”

At Tet, many families often think of re-painting and repairing their homes. However, Ninh Van Duc, a construction contractor in Binh Thanh District, informed that this year’s home repair demand was not so high, which was only equivalent to 70% of that in the same period last year.

Vo Kim Long, a building worker in Binh Thanh, said he had worked for many construction sites before the previous Tet but he had no jobs to do for Tet this year.

Similarly, the local demand for domestic helpers for Tet was really huge in other years but Tran Thanh Duc, director of Hong Duc Family Service Company in District 7, said domestic helper demand for this year’s Tet was not high.

“As of now, our firm has only received about four to five orders registering for helpers during Tet. The expense for hiring one helper at the year’s end fluctuates between VND30,000 to VND50,000 an hour,” he aded.

Unskilled workers with unstable jobs always pin hopes on the days before Tet to get more income but given the current dreary labor demand, it would be not easy for them to find a job.

Keyword advertising grows well

Revenues of keyword advertising still achieved strong growth last year, despite multiple difficulties in the economy, industry sources said.

Google, the search engine accounting for up to 90% of the advertising revenues in Vietnam, has never announced its revenues as well as growth rates in the Vietnamese market. However, some experts and partners estimated Google’s revenues earned last year at some US$40 million compared to around US$25 million recorded in 2012.

Nguyen Khanh Trinh, director of CleverAds Co., said that CleverAds obtained revenues of US$6 million last year, up 160% year-on-year, with around 70-80% of the firm’s revenues sourced from advertising deals with Google.

According to Trinh, though CleverAds saw a 160% growth rate last year, such growth was lower than in previous years.

Google has two sources of advertising revenues in Vietnam, with around 80% of the revenues obtained from keyword advertising of enterprises on the Google website while the rest from advertising partners.

Keyword advertising growth in Vietnam is attributed to enterprises and individuals getting to know more about this advertising form whose cost is cheaper than advertising in print and on television, Trinh said.

According to a source, the social network Facebook has had the first advertising agent in Vietnam after having over 20 million users in the local market.

Meanwhile, the free text and call services supplier Viber is planning to seek an advertising partner in Vietnam.

HCM City’s banks to give VND25 trillion of soft loans

Banks in HCMC will keep on handing out preferential loans to enterprises and family-run businesses with a total value estimated at VND25-30 trillion this year, doubling that of 2013.

Nguyen Hoang Minh, deputy director of the central bank’s HCMC branch, said that the agency and the HCMC Department of Industry and Trade will cooperate to further boost the capital connection programs between enterprises and lenders across the city like what were done successfully last year.

In 2013, local banks disbursed around VND13.5 trillion to enterprises with lending rates falling following deposit rate ceiling reductions by the central bank. In the last quarter, preferential lending rates were only 8-8.5% per annum for short-term loans and under 10% for medium to long-term credits.

This year, the loans will be extended to all enterprises, not just those in priority sectors like before. The central bank’s HCMC branch will tell banks to focus on businesses in the supporting and high-tech industries.

Credit conditions are still subject to banks. However, banks are encouraged to give loans secured by accounts receivable instead of assets as collateral only.

This year, the city aims at credit growth rate of 12-14% against late 2013. This is a high target as local banks’ total outstanding loans in 2013 grew less than 9% compared to late 2012, Minh said.

HCMC has applied many solutions to speed up credit growth rate this year, including the VND30-trillion home loan package, bank-business connection programs and lending program for price stabilization sales.

SeABank, PVI Holdings in comprehensive cooperation

Southeast Asia Commercial Bank (SeABank) and PVI Holdings Company inked a comprehensive cooperation agreement last Friday to exploit advantages of both sides and better customer services.

Under the agreement, SeABank will become the main service bank for PVI Holdings, its staff, member units and customers for various banking services such as account, credit, international payment and currency trading. Meanwhile, PVI Holdings will provide suitable insurance products for SeABank and its staff and customers.

Both sides will also consider joining hands in some investment projects that they have advantages.

On this occasion, customers of PVI Holdings will receive preferential policies when using SeABank’s services.

S.Korea opens farm produce center in city

The Korea Trade-Investment Promotion Agency (Kotra) and Kyong Sang Buk Province of South Korea last week opened a farm produce showroom in HCMC.

According to Woo Wan Kook, head of marketing of the province’s Uiseong County, the number of South Koreans living in HCMC ranges from 90,000 to 100,000 people, so this is an business opportunity for enterprises of Uiseong County.

Apples, apple juice, red pepper paste, garlic and red pepper powder are among the produce on display at the new facility.

“In addition to supplying products for the South Korean community in Vietnam, we want to introduce South Korea’s farm produce to Vietnamese consumers via Kotra,” said Woo.

However, this farm produce center is just the beginning as Uiseong County will seek ways to cooperate with a Vietnamese locality to open a farmer training center and introduce farms in Uiseong to farmers, said Woo.

Uiseong has favorable farming conditions but faces a labor shortfall in the sector. The county expects to cope with the shortage by employing Vietnamese farmers in the coming time, according to Woo.

Aeon plans bigger presence in Vietnam

Positive feedback from local shoppers is an encouragement for Aeon Company Limited to quicken the pace of shopping mall development to meet the demand in Vietnam which the Japanese retailer sees as one of the potential markets in Asia.

Speaking at a news briefing last Saturday, Yasuo Nishitohge, general director of Aeon Vietnam, said the first ten days of soft opening saw around 30,000 people on weekdays and 70,000 on weekends thronging Aeon Mall Tan Phu Celadon in the outlying district of Tan Phu in HCMC, one of its first properties in Vietnam.

The number of shoppers is expected to increase further in the coming time as the retail giant on Saturday cut the ribbon to fully put into operation the US$100 million shopping mall after some 18 months of construction.

Located in the 82-hectare residential complex Celadon City, Aeon Mall Tan Phu Celadon has about 50,000 square meters for retail, with half for the commercial area and the remainder for lease with some 250 stands. The three-story building is seen as a one-stop shopping mall with five major sections that can cater to all the needs of buyers as it stocks some 12,000 daily-essential items.

After the grand opening of Aeon Mall Tan Phu Celadon, the company will continue its business expansion plan with two other projects in the pipeline. They are Aeon Binh Duong Canary in the southern province of Binh Duong, scheduled for opening in October 2014, and Aeon Mall Long Bien in the capital city of Hanoi expected for completion in 2015.

Nishitohge said Aeon will initially focus its business expansion on the two main cities, Hanoi and HCMC, and by 2020 its shopping malls across the country will rise to 20.

Motoya Okada, group chief executive officer, president of Aeon Company Limited, said there will be challenges ahead but the company will try to achieve its business target in Vietnam.

“Each retailer has its own strategy and anywhere we come we closely work with local partners, finding qualified ones, with whom we expand our business strategy,” Okada said, adding that besides building properties, training local people is one of the ways for Aeon to gain success in global markets.

In fact, Aeon began its Vietnam presence in 2008, when Aeon Credit Service Co. started business in the country by offering services and goods on deferred-payment terms. Three years later, Ministop Company, an arm of Aeon, launched its first store in Vietnam under the form of franchise, and now it has increased the number of stores to 17.

Talking about the development plan in the Asian region, Nagahisa Oyama, vice president, chief executive officer of ASEAN Business for Aeon Company Limited, said Asia is a key market for Aeon in its global retail market development. Aeon has a system of 250 subsidiaries with total annual sales turnover of 6,000 billion yen (around US$60.5 billion), earning total profit of some 200 billion yen (some US$2 billion).

Oyama said the company came to explore business opportunities in Malaysia in 1984, and realized the potential in developing markets. Now, Aeon is present at 14 countries and territories, including Vietnam.

In its mid-term plan from 2011-2013, Aeon set a business strategy named “Asia shift” to forward its business development to the ASEAN region. “Opening Aeon Mall Tan Phu Celadon has a great significance in business development strategy for us,” Oyama said, adding Vietnam is the third country after Malaysia and China Aeon has entered with big shopping malls.

Asked whether Aeon was planning to bring Vietnamese products to its retail stores outside the country, Oyama said some Vietnamese products worth some US$60 million have been put on the shelves of stores in Japan, and the company is mulling a plan to export local products to regional countries in the coming time.

Mai Linh revenue continues falling

Mai Linh Group told a reviewing conference on the group’s business performance in 2013 on Monday that the total net revenues of its subsidiaries were estimated at some VND4 trillion in 2013, slipping 5% from the 2012 figure.

However, the net revenues of VND4 trillion, as shown in the consolidated financial report of Mai Linh, were still 9.6% higher than the year’s target.

Mai Linh reported VND27.8 billion in its consolidated profits, meeting 41.6% of the year’s plan. Last year also saw a sharp fall in the number of taxi cabs of Mai Linh, as the company liquidated up to 1,300 vehicles while it only purchased more than 1,000 units.

Mai Linh had run a combined 10,900 vehicles as of December 31, 2013 compared to over 12,100 units as recorded at the end of 2012. The number of vehicles of Mai Linh only made up 33% of the city’s total vehicles, with its transport volume accounting for 25% only, showing a significant decrease compared to previous years, the city’s Department of Transport reports.

Ho Huy, chairman of Mai Linh, informed that his group’s losses had been reduced considerably thanks to the whole system restructuring last year.

As per the business plan for 2014, Mai Linh will buy about 1,400 vehicles and liquidate 560 units in the system, with those vehicles in operation prior to 2007 set to be replaced. Mai Linh has also set a target of obtaining an annual average profit of VND20 million per unit, with a combined profit of VND171.5 billion set for the whole group.

After the restructuring process, the firm’s workforce has been reduced strongly, with its staff members recorded at close to 25,000 persons as of December 31, 2013 compared to 28,000 in end-2012.

Mai Linh fell into serious business distress at the end of 2012, thus selling out real estate projects, a rest-stop system and many old vehicles to service bank loans.

Over the past time, many customers have kept complaining about the poor service quality of Mai Linh, from the attitude of drivers to the old vehicles resulting from poor maintenance.

At the meeting, Mai Linh admitted that owing to business difficulties, it sometimes had neglected management, especially in HCMC.

Upon complaints from customers, Mai Linh has organized training courses on customer service skills for drivers, which have contributed to improving its service quality, the group said.

Doosan Vina ships heat recovery generator to Mexico

Doosan Vina has just shipped a heat recovery steam generator (HRSG) weighing up to 1,418 tons to the Intergent Thermal Power Plant in San Luis Potosi in Mexico.

Production for the earth-friendly 200MW Intergent HRSG project began last July and after six months of fabrication and assembly the high tech equipment was loaded and shipped from Doosan Vina’s purpose-built port facility.

The equipment was designed, engineered and fabricated at the company’s 110-hectare complex in Dung Quat Economic Zone in the central province of Quang Ngai.

This equipment will help the Intergent power plant capture and recover wasted energy. A typical HRSG installation can increase the efficiency of a power plant by up to 30%, which saves money, reduces emissions and saves the earth’s resources, Doosan Vina said in a statement.

Since commencing operations in 2009, the HRSG facility at Doosan Vina has completed and shipped ten “Made-in-Vietnam” HRSG units to customers in Vietnam and around the world.

Honda Vietnam increases scooter exports

Honda Vietnam said that it will speed up scooter exports, including new PCX scooters launched onto the local market on Monday, to improve sales as domestic consumption is expected to stay low in the near term.

PCX scooters were first produced and exported by Honda Thailand. However, Masayuki Igarashi, general director of Honda Vietnam, said that PCX is now a global scooter version that can be produced and exported all over the world.

The enterprise has plans to export 30,000 PCX scooters annually. This is also the first time Honda Vietnam has exported PCX scooters after shipping other products such as SH, SH Mode and Lead to developed markets such as Japan, Europe and America.

Igarashi said that Honda Vietnam will export PCX scooters to 14 markets in Asia, Africa and Europe. With the localization ratio in the products of 95%, PCX scooters manufactured by Honda Vietnam can meet technical standards of Honda Japan and internationally.

The local motorbike market is forecast to see more difficulties, so Honda Vietnam targets to export 100,000 bikes in 2014 compared to last year’s export volume of 40,000 units. The enterprise will also increase exports of SH, SH Mode and Lead scooters.

With the new PCX product, Honda Vietnam expects to sell around 20,000 units per year. Retail prices are suggested at nearly VND52 million each scooter for the standard version and around VND54.5 million for the high-class version, VAT included.

Speaking at the PCX introduction ceremony on Monday, Igarashi said that motorbike sales in the country reached 2.79 million units last year, down around 10% against 2012. This was the second consecutive year that bike consumption in Vietnam saw a year-on-year decline.

Local producers launched new products and promotion programs in 2013 but consumption still decreased amid economic challenges. Honda Vietnam sold around 1.87 million bikes. In 2012, the enterprise sold around 1.97 million bikes, a 4% year-on-year drop, Igarashi said.

Other motorbike producers also saw a sales decline. Last year, Honda Vietnam held around 67.1% of the local bike market.

Honda Vietnam projects to launch a third factory into operation this year. With its two plants in Vinh Phuc Province, the enterprise has the capacity of two million units each year.

According to manufacturers, Vietnam’s total bike production capacity is around five million units each year while only 3-3.5 million units are consumed in the country. Therefore, the enterprises are seeking ways to expand export markets to improve sales.

Work starts on VND4.1-trillion highway upgrade

The Ministry of Transport on Sunday started construction of a project to upgrade a section of National Highway 20 going through Bao Loc City to Dran Town in Don Duong District in the Central Highlands province of Lam Dong.

The road extends to Dalat City with a total length of nearly 125 kilometers, excluding a section under upgrade now from Bao Loc to Dong Nai Province to serve alumina transport.

The section when complete will have a width of 12 meters including four lanes allowing for vehicular speed of 60 kilometers per hour.

Having a total investment of more than VND4.1 trillion, the project is divided into two components, one developed under the build-operate-transfer (BOT) format worth over VND1.3 trillion, and the other under the BT form worth more than VND2.7 trillion. The scheme is set for completion in 2015.

To recover the investment, the BOT investor will start toll collection from early 2016, which will last for around 21 years and 10 months.

Meanwhile, the BT investment will be advanced by the investor, with the Government set to repay the whole principal and interest sums from 2018 to 2022.

According to Deputy Minister of Transport Nguyen Ngoc Dong, as there are almost no waterways in the Central Highlands region while the railway system there is not yet available, roads will play an important role in transportation in the region.

National Highway 20 is currently the backbone route between HCMC and Dalat City and the major traffic route linking Dong Nai and Lam Dong provinces. It is expected to make a great contribution to local economic and tourism development when in place.

Leaders of Lam Dong Province earlier expressed their concerns that the slow-moving construction pace of National Highway 20 would discourage visitors from going to the province when tourism festivals took place at the end of last month.

At present, the construction on National Highway 20 is being implemented from Dau Giay T-conjunction in Dong Nai to Provincial Road 725 in Lam Dong’s Bao Loc with a total length of some 123 kilometers. The upgrade is conducted based on the BT format at a cost of roughly VND4.5 trillion.

The scheme’s completion was initially scheduled for late this year but it now is rescheduled for next year owing to capital shortage and slow site-clearance. Besides serving local travel, the route is also used for transporting alumina from Lam Dong to Go Dau Port in Dong Nai.

Fertilizer import surges in 2013

Last year’s fertilizer import jumped to 4.53 million tons compared to the initial estimate of 2.5 million tons as local production decreased in certain periods coupled with the low price of urea fertilizer in the global market.

The Ministry of Agriculture and Rural Development said in a report that the country spent US$1.65 billion importing 4.53 million tons last year, rising 14.3% in volume but down 2.4% in value compared to 2012.

The country imported 758,000 tons of urea fertilizer worth US$252 million, rising by over 50% and 20% in volume and value respectively. Meanwhile, 1.09 million tons of SA fertilizer was imported with a value of US$186 million, down 6.5% in volume and nearly 31% in value.

Fertilizer imported from China accounted for 49.5% of the total import.

Early last year, the ministry forecast that Vietnam would import nearly 2.5 million tons of fertilizer, with 850,000 tons of SA, 570,000 tons of DAP, 950,000 tons of kali, 100,000 tons of NPK but no import of urea as the domestic urea supply was sufficient.

However, the urea volume imported last year increased by over 50% over that in 2012.

Explaining the high import volume of urea, Nguyen Hac Thuy, chairman of the Vietnam Fertilizer Association, pointed to the shortfall in certain periods.

Though Vietnam has urea fertilizer plants whose output could meet the domestic demand, Ninh Binh plant was suspended in two months for repair and Phu My plant stopped operation in one month for maintenance last year, resulting in a shortfall of 200,000 tons of urea, he said.

Besides, the price fluctuation was also a reason for rising import of urea. The global urea price in mid-2013 was around US$100 per ton lower than that in the year’s beginning, prompting traders to import in bulk to enjoy the price difference.

According to Thuy, however, Vietnam exported hundreds of thousands of tons of fertilizers last year.

2013 a ripe year for garment sector

The textile and garment sector outperformed in 2013 with total export value more than $1 billion above the annual target.

The sector raked in more than $20 billion, rising 18 per cent on-year..

Of this, textile, garment, fibre and yarn exports brought in $19.7 billion, up 18 per cent; materials and accessories reached $700 million.

These buoyant figures have put the textile and garment sector among the country’s highest export earners.

The sector also saw sharp rises in key export markets including the US, EU, Japan, Korea, and ASEAN member countries.

An example of Vietnam’s rising competitiveness is that while US garment imports only rose by 3 per cent, Vietnam’s exports to the country jumped 13 per cent.

Last year, textile and garment exports to the US surpassed $8 billion, 45 per cent of the sector’s total export value.

Deputy chairman of the Vietnam Textile and Apparel Association Le Tien Truong said the achievements showed the sector had weathered the storm of economic difficulties by taking proper steps to boost competitiveness, diversify markets and deepen its reach into key markets.

“Solid forecasting on purchasing capacity and consumer trends this year will play a crucial role in organising production, satisfying customers, and supplying products in a timely manner to increase the appeal of made-in-Vietnam textiles and garments to global customers,” said Truong.

Truong said the sector’s exceptional growth in 2013 was greatly supported by firms’ expansion plans to boost production amid difficult market conditions.

In one example, last year Hue Textile Garment Joint Stock Company (Huegatex) posted 20 per cent revenue growth against 2012, reaching VND1.4 trillion ($66.6 million) and export values of $66 million, up 10 per cent on-year. It achieved profits of VND35 billion ($1.6 million)

According to deputy general director Ho Van Dien, despite the unstable market and rising input costs, Huegatex invested VND50 billion ($2.3 million) into procuring new equipment to diversify their product lines and increase production to tap opportunities of the Trans-Pacific Partnership, due to be signed this year.

Another firm, Hanoi Textile Garment Joint Stock Company inaugurated its Dong Van Fibre Plant, based in northern Ha Nam, with a total investment of VND420 billion ($20 million). The plant boasts 30,000 spindles.

Launched in April, by the end of last year the plant had exported 100 tonnes of fibre, making a remarkable contribution to the corporation’s total revenue of VND1.9 trillion ($90.4 million).

Ford Vietnam’s full-year 2013 sales soar 71pc

Ford Vietnam has announced full-year retail sales that jumped 71 per cent year-over-year to 8,177 units, representing a full-year market share of 7.4 per cent – a full 2.2 points better than 2012.

The exceptional performance made Ford in top 3 and being one of the fastest-growing automotive brands in the country last year and helped lead anoverall recovery of Vietnam’s auto industry in 2013.

Ford finished the strong year on a high-note year with December retail sales rising 39 per cent to 1,008 units – its best monthly performance since December 2011.

“We enjoyed sustained momentum throughout 2013 as we expanded our Vietnam showroom with even more global Ford vehicles, and we’re excited and proud to finish off the year with such a strong December performance,”said Jesus Metelo Arias, managing director of Ford Vietnam.

Exceptional demand for theFord Transit contributed to its best-ever monthly and full-year performances, andended the year as the leader of Vietnam’s commercial van segment. December sales of Transit rose 115 percent year-over-year to 290 units, and 2013 sales soared 172 per cent to 2,108 units -its best-ever full-year performance.

The rugged and versatile all-new Ford Ranger was also number one overall in its segment in Vietnam. Ranger achieved its best-ever monthly performance in December with sales that increased 88 per cent year-over-year to 278 units, while full-year sales rose an extraordinary 189 per cent year-on-year to 1,833 units.

“We’re proud of the segment leadership of both the Transit and all-new Ranger, and their success in 2013 shows how we’re connecting with and serving a wide range of new customers as wecontinue to build the Ford brand in Vietnam,” said Arias.

The technology-packed all-new Focus enjoyed its best month since its launch with sales of 113 units, as Vietnamese consumers discovered its advanced, segment-first technologies includingActive Park Assist, Active City Stop and Blind Spot Information System. For the full year, Focus sales rose 37 per cent year-over-year to 1,209 units.

The launch of the new Fiesta featuring Ford’s 1.0-litre EcoBoost engine – named “International Engine of the Year” for two consecutive years in 2012 and 2013 – helped to boost the appeal of this segment leading small car.The popular Fiesta delivered full-year retail sales of 847 units.

“Our aim with the new Fiesta was to take a popular car that was already a segment leader in fuel efficiency, performance and personality, and make it even better,” said Arias. “The new Fiesta continues to push the boundaries, sealing its credentials as the small car that truly stands out from the competition.”

Ford’s sales success in Vietnam extended to its growing range of SUVs, as full-year retail sales of the Ford Escape compact SUV increased 56 per cent to 845 units. The popular Everest family SUV achieved December sales that jumped37 per cent year-over-year to141 units, helping full-year retail sales rise 41 per cent to 1,319 units.

Ford will further expand its SUV lineup in 2014 with the launch of the all-new Ford EcoSport urban SUV.

“With the launch of the all-new EcoSport, we’ll be able to offer Vietnamese consumers an even wider lineup of SUVs, further expanding our showroom, and continuing our successful product-led transformation,”explained Arias.

Ford also continued to expand its nationwide dealer network in 2013, adding two new dealerships bringing the total number of dealer locations in Vietnam to 24.

The company also continued to further enhance its customer service experience last year with the launch of Quality Care for Body Shop, Quick Service and Schedule Maintenance Package initiatives.

“We’re absolutely committed to growing our business and welcoming more new-to-Ford customers to our dealers across Vietnam. By focusing on maintaining high quality while expanding our network, we’re working hard to ensure that our customers enjoy the best customer service experience,” said Arias.

SBV determined to enact bad debt decree

The State Bank of Vietnam has confirmed it will not delay the implementation of Circular 02/2013/TT-NHNN on the classification of debts slated to take effect on June 1, though banks have warned the move might create a domino-chain collapse of the banking system.

Industry experts say the circular would unveil the true level of banks’ bad debts and as such the central bank should be prepared for the worst.

Senior economist Nguyen Minh Phong said the SBV’s determination to enforce the circular is positive as it reflects Vietnam’s intention to manage debts following international standards.

“Banks are concealing their bad debts like camels with their heads in the sand. Circular 02 will uncover the truth behind Vietnam’s true levels of bad debts and this is sure to cause difficulties, but radical measures are needed,” said Phong, adding that to effectively enforce the circular, the SBV would need to divine diverse rectification plans for all potential scenarios.

“These plans will help avert shocks and any possible collapse of the banking system,” Phong proposed.

Agreeing with Phong, many experts are arguing that banks must be completely transparent regarding bad debts. The central bank has welcomed banks to divulge all information on their financial health prior to the circular taking effect and this is assumed to be towards its plans to avoid risks and tackle problems.

In regard to how banks feel about the upcoming circular, state giant VietinBank chairman Pham Huy Hung agreed that the circular was crucial to improving banks’ risk management to an international level.

“The impact of Circular 02 on us will be small as we have continuously bolstered our operational efficiency and risk management. We hold bad debts of a mere 0.9 per cent,” Hung said.

A source from Mekong Bank also said Circular 02 won’t be a problem for banks that are on a sustainable development path.

The SBV is expected to enact guiding documents on the implementation of Circular 02 within this month.

According to the central bank’s Chief Inspector Dang Van Thao, the circular will give the SBV the tools to curb what signs show to be fast rising bad debts.

One measure would be the division of bad debts into three groups.

The first would consist of customers who have reached bankruptcy or dissolution and for which there is no collateral. Banks would have to use their own resources to deal with these.

The second group is customers facing difficulties and the SBV will facilitate debt rescheduling and/or a lower interest rate.

The third group consists of dissolved firms with collateral, and banks will be allowed to form auctioneering councils to sell distressed assets.

Mid-price apartments overthrow low-price

Apartments for sale in Hanoi for the last quarter of 2013 saw the consistently high sales of low priced products ($1,000 per square metre or less) overtaken by those of mid-priced products ($1,000-$1,500 per square metre).

According to CBRE Vietnam, for the first time in two years low-priced products lost the dominant share.

Figures from the consultancy showed that more than 10 projects at the mid-price level saw increasing liquidity including Golden Westlake, Mandarin Garden, and NO4.

Richard Leech, executive director of CBRE Vietnam, said that this new trend may be considered developers’ response to market’s changing appetite to mid-priced products. “Unlike previous quarters in which transactions mostly occurred in the low price range, the last quarter of 2013 saw more transactions in the mid-price level. This is most likely driven by buyers’ increasing confidence, which also led to a 50 per cent quarter-on-quarter increase in total transaction volume,” Leech said.

Richard Leech, executive director of CBRE Vietnam said the changed trend may be a positive sign that developers anticipated the rise in demand for mid-price products. “The mid-price level made considerable gains in the last quarter against the rest of the year with many more transactions. This is likely being driven by increasing consumer confidence which pushed a 50 per cent transaction volume increase,” Leech explained.

However, also in the final quarter of 2013, Hanoi’s condominium market was cautious with only 1,400 units sold, a 30 per cent fall on-quarter.

Re-launches were much more active though, as developers focused on clearing old stock rather than releasing new products.

Following a record third quarter, the fourth saw the nearly as strong completion of 7,500 total units.

Hoa Binh Green City just put 300 apartments on sale with prices starting at VND20.5 million ($976) per square metre, excluding interiors, and VND26-29 million ($1,238 to $1,380) per square metre inclusive of interiors.

CapitaLand is also selling apartments in its Mulberry Lane project in Ha Dong district at prices of VND25 to 27 million ($1,190 to $1,285) per square metre. Another project in Cau Giay is offering units for just a fraction more.

Other projects along the same price lines are the Discovery Complex and Thang Long Number One.

The prices of secondary products however are still in a downward spiral, noted CBRE. Price drops in the fourth quarter were not as low as the first and second, but were bigger than quarter 3.

It is a fact that prices will not recover quickly as 2014 is expected to see another parade of openings that will increase competition and cast an even darker shadow over second hand units. Buyers are trending toward investing in just finished or very nearly finished properties to avoid handover quality and lateness issues. Quality projects are sure to see active sales in the coming time, but they shouldn’t expect demand to stimulate anything more than a modest price rise.

New plan proposed for Hoa Lac-Hoa Binh route

A fresh investment plan has been proposed for the construction of a road system connecting Hanoi to Hoa Binh province under the build-operate-transfer model.

A proposal from the Ministry of Transport (MoT) just submitted to the prime minister outlines a two-lane Hoa Lac-Hoa Binh route built over 30km starting from an ethnic culture and tourism village in Hanoi’s Son Tay town and linking up to National Highway 6 next to Hoa Binh city.

The proposal also includes expanding Highway 6’s 33km Xuan Mai-Hoa Binh section by two lanes.

Consulting unit estimates show the cost for the route, which would be later upgraded to a highway, at around VND2.138 trillion ($102 million), of which VND566 billion ($27 million) would go into site clearance.

Improving the 33km of Highway 6, including sections through crowded residential quarters, was estimated at around VND341 billion ($16.2 million).

“We are seeking the prime minister’s approval to combine Highway 6’s 33km upgrade with the construction of the Hoa Lac-Hoa Binh route,” said Deputy Minister of Transport Nguyen Hong Truong.

This would put total project costs at around VND3.129 trillion ($149 million).

The project is considered urgent because Highway 6 is the only road linking the northwest region to Hanoi and is quickly deteriorating.

Estimates show that to meet increasing transport demand by 2017, the highway needs to be upgraded to four lanes. It faces a particularly great challenge as the expansion will infringe on the properties of numerous residents.

Since budget capital is not readily available for the project and it is hard to access ODA, the MoT is proposing the project be conducted under the build-operate-transfer (BOT model) with all funding provided by the investor.

The investor will be granted the right to place two toll stations on Highway 6 and collections could begin immediately after the upgrade slated for 2015.

One station would be set up on the Hoa Lac-Hoa Binh route with collections starting when it opens hopefully in 2017.

Considering the toll price, the MoT proposed the government apply a fee similar to that of National Highway 1’s BOT projects, where the fare exceeded the MoT’s cap by 3.5 times.

With these conditions, investment could be recouped within 29 years.

Under the new plan, the road system connecting Hanoi and Hoa Binh would have four lanes, similar in scope to the Hoa Lac-Hoa Binh highway project that developer Hanoi Import Export JSC (Geleximco) withdrew from in August 2013.

After the project’s investment spiked to VND18 trillion ($857 million), Geleximco sent a document to the prime minister asking they be allowed to stop their involvement as they would not be able to recoup their investment.

According to a MoT source, other local investors have since showed interest in the project, even Geleximco has renewed interest after changes to the project’s plan and model.

“This is actually a solution for both the MoT and investors when it comes to the successful upgrade of this important road system,” said a transport expert.

Budget figures consistent, say Finance Minister

Finance Minister Dinh Tien Dung on Monday said that the ministry has always given clear figures for State budget collection and expenditure in 2013 after consistencies have been found in collection results announced over the past time.

Speaking at the press briefing in Hanoi City on Monday, Dung said last year’s budget collection were 0.4% higher instead of 1% lower than estimated as announced at the summarizing conference a week ago.

The result was a surprise as budget collection only met 43% of estimation as of June, over 66% as of September and 86% as of November.

Explaining the difference within just around a month, Dung said the National Assembly (NA) had released some resolutions asking State-owned enterprises to submit dividend of the State holdings in joint stock companies. The NA had also decided to collect 75% of interests from the joint venture Vietsovpetro instead of 50% like before.

Dung told the Daily that the sum was around VND28 trillion in 2013 and might be higher when the fiscal year of some enterprises ends in March.

The sum is real, not the book-keeping number, as it has been really submitted to the State budget, Dung explained.

In addition, local authorities took drastic measures for budget collection last year. All 63 provinces and cities have issued directives or plans to facilitate State budget collection, he added.

Tax agencies launched inspections into over 60,000 enterprises, collecting over VND13 trillion worth of taxes. The agencies also recovered over VND25.4 trillion, or 52% of total tax debts.

State budget collection has drawn much attention as 2013 is considered as the toughest year in recent years.

The General Statistics Office earlier announced two more sources, added value of the banking sector and the self-supporting housing service of residents, contributing 5.36% and 3.96% of the nation’s gross domestic product (GDP). Without the sources, the nation would have not reached 5.4% in GDP growth last year.

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