Tay Ninh urged to tap incredible potential
Deputy Prime Minister Hoang Trung Hai has suggested the southern province of Tay Ninh utilise effective macroeconomic policies to tap the potential offered by its abundant land and labour resources, in a bid to achieve its 2014 socio-economic development goals.
Deputy PM Hai made the proposal at a February 14 meeting with provincial leaders to review the province’s 2013 socio-economic development performance and discuss ways to realise this year’s targets.
He praised the locality for its achievements in the spheres of finance, banking, health and construction of new style rural areas.
Tay Ninh has reached balanced growth in agriculture, construction and services, he said, hailing its efforts in ensuring budget collection and social welfare, and reducing the number of people in poverty.
The province was asked to actively seek new opportunities, upgrade its infrastructure and expand its high-tech processing industry and precision mechanics as well as increase investment promotion.
Meanwhile, measures should be taken to tackle difficulties faced by local businesses in administrative procedures, enabling them and those from abroad to access loans, he added.
According to Chairwoman of the provincial People’s Committee Nguyen Thi Thu Thuy, the area under rice cultivation in the winter-spring crop reached 68,577 ha in January, a year-on-year surge of 6.5 percent.
In the face of the complicated movement of bird flu in Ben Cau and Chau Thanh districts at the current time, Tay Ninh has directed relevant departments to thoroughly monitor and control epidemic-infected areas, she said.
Quang Ninh to host Int’l special economic zone seminar
The northern province of Quang Ninh will host an international scientific seminar on special economic zones over March 20–21.
The provincial People’s Committee announced the seminar at a press conference in Ha Long Cityon February 13.
Managers, scientists, and international scholars will have the chance to discuss the 30-year global history of cluster models and special economic zones, as well as the opportunities they present in Vietnam.
Special economic zones in Quang Ninh will be a particular focus, such as the Van Don Economic Zone and the Mong Cai Border Gate Economic Zone.
Participants will also cover administrative formalities, industry development strategies, investment attraction, holistic infrastructure networks, green economic principles, and the service sector’s.role in special economic zones.
Vietnam-Malaysia trade exceeds US$9.1 bil
The Vietnamese Embassy in Malaysia’s trade office reports two-way trade between the Southeast Asian nations reached US$9.115 billion in 2013, 15.25% higher than 2012’s total.
Vietnam exported US$4.982 billion worth of goods and purchasedUS$4.133 billion in imports from Malaysia. Vietnam’sUS$849 million trade surplus with Malaysia extends the trend begun a year earlier.
Vietnam’s key exports to Malaysia include computers, electronics products and spare parts, crude oil, telephones, rubber, rice, iron and steel, vehicles, and glass products.
Customs Vietnam says computers and electronics products topped Vietnamese exports withUS$1.18 billion in turnover, followed by crude oil (US$916.2 million), telephones and components (US$654.8 million), rubber (US$517.9 million), rice (US$231.4 million), and iron and steel (US$198.1 million).
Malaysia’s US$10.2 billion in total 2013 investment capital ranks eighth among the nations and territories investing in Vietnam.
Hanoi’s apartment market shows signs of recovery
Analysts expect 2014 will be a more successful year for the Vietnamese real estate market, after the year began with an increase in the number of apartment transactions.
In the first weeks of the year, several real estate transaction centres in Ha Dong and Linh Dam saw a remarkable increase in the number of customers seeking to buy apartments and houses costing from VND1-2 billion.
With many measures taken by the government to solve difficulties facing property enterprises and efforts made by businesses in recent times, the real estate market is recording positive changes after a long spell in the doldrums. The liquidity of the market has increased once again, especially for apartments.
Thanks to the rosier picture, the inventory level has so far reduced almost 25% compared to the first quarter of 2013.
The price of housing has dropped sharply compared to the period between 2008-2010, with many projects having prices cut by 50%, returning to the 2006 price level.
The department said that the price of apartments in Hanoi will be stable this year, especially following a series of social housing projects and small and medium-size housing construction, while the real estate supply will be more abundant.
Under a programme on social housing before 2015, approved recently by the government, as many as 125,000 apartments are expected to be built in Hanoi.
The city has recently finished 18 major residential projects, with eight others to follow in 2014-2015.
The main supply sources of low-cost housing in Hanoi are now the Dang Xa 2 project in Gia Lam district, the Sai Dong-Rice City Song Hong project in Long Bien district and the Tay Mo- North Co Nhue project in Tu Liem district.
In addition, several developments of middle-class apartment buildings, including Kim Van-Kim Lu, Van Phu-Victoria and Trung Van-Vinacones 3, are also attracting the attention of customers.
State to keep stake in equitised SOEs
Leaders of State-owned enterprises (SOEs) have pledged to implement schedules for equitisation of enterprises by 2015 in accordance with the Government’s announced plans.
However, they still expect the State to be themajority shareholder in the enterprises.
Many SOEs said they have promoted implementation of steps to equitise the enterprises as scheduled. Yet, the equitisation process has yet to meet expectations.
Le Van Tuan, general director of the Vietnam Machine Installation Corporation (Lilama), said the Prime Minister has approved its equitisation plan and that it must be finished by 2015, reports Tuoi Tre news wire.
Tuan said Lilama has set up a division to prepare the necessary procedures for the equitisation process. Investment in non-core businesses has not had much effect on the process, but the corporationmust collect debts from some projects to implement the equitisation activities.
Tuan said Lilama would still ensure the equitisation is done as per the plan.
Ha Hung, general director of the Civil Engineering Construction Corporation No5 (CIENCO 5), said the Prime Minister has approved its equitisation plans also and the State would hold 35% if CIENCO5 shares after equitisation, as expected by the enterprises.
CIENCO 5 has hired a consulting firm and expects to complete the necessary procedures in the first quarter this year.
However, the timing of the initial public offering (IPO) must be considered carefully to ensure the maximum efficiency in offering its shares, Hung said.
A representative of the Vietnam Cement Indusitral Corporatiuon (Vicem) said Vicem expects to finish its equitisation process in 2015.
At present, Vicem is withdrawing its capital from some joint ventures. Then the corporation will find strategic partners and choose a suitable time to offer IPO shares in the market, the representative said.
The representative also said the State would still be the majority shareholder at Vicem because many foreign investors want to enter the local cement market. The market would succumb to the foreign investors if the State is not the majority shareholder, he added.
Meanwhile, Tran Quang Nghi, general director of the Vietnam Textile and Garment Group (Vinatex), said the company has prepared for its equitisation programme and has promoted it at its member companies.
Now, Vinatex is waiting for the Government’s approval of the percentage of shares for foreign strategic investors out of the 49% of shares. That means the State hold 51% of the corporation’s shares after equitisation.
Economic expert Le Dang Doanh said many industries in Vietnam are considered sensitive ones, such as textiles, garments, and cement, but globally, they are not sensitive sectors. So it is not necessary for the State to hold 51% of the shares in enterprises.
Enterprises should sell more shares to investors to attract more investment at home and abroad, renew the management, improve the competitiveness and efficiency of SOEs, Doanh said.
Equitisation should focus on attracting good strategic investors and on having large targets t take full advantage of capital, market and management in the world and increase efficiency in production and business, he said.
Steel industry experiences New Year slump
The Ministry of Industry and Trade (MoIT) reports steel production and consumption faced difficulties in January due to an imbalance in supply and demand.
Many businesses only managed to achieve 40-50% of their production capacity, fuelling production costs.
Demands for steel in late Lunar New Year (Tet) declined significantly despite reduced sale prices. The purchasing power was rather low as most construction projects had been completed before Tet.
In January, iron and raw steel output was estimated at 236,800 tonnes, down 22.4% against the same period last year while rolled steel was estimated at 309,800 tonnes, up 16.7% and steel bar 248,700 tonnes, (down 3%).
Some steel mills temporarily halted production during Tet to save operation costs, knowing market demands would not increase after Tet.
To ease business difficulties and and remove barriers, the steel sector should focus investment in producing steel ingots to reduce dependence on imported materials.
As of January 25, the MoIT temporarily imposed an anti-dumping tariff on some cold-rolled stainless steel products imported from China, Indonesia, Malaysia and Taiwan.
Earlier on January 1, the MoIT regulated to apply national technical standards for steel reinforced concrete, with the aim of protecting the legitimate rights of domestic producers and customers.
Revised law prioritises local contractors
The revised bidding law, which took effect in January, prioritises local bidders, made-in-Viet Nam products, human resource development, and job creation.
Le Van Tang, Head of the Ministry of Planning and Investment's Bidding Management Department, said that the revised bidding law also helped improve the efficiency of State capital spending.
The revised law encourages community supervision in the selection of bids and contract practices. Individual responsibility and corresponding punishments for particular improper bidding activities is regulated. These regulations are made to avoid the consequences of closed-bids.
There is also a separate part on the bidding process for medicines and medical equipment purchases that spend State capital, medical insurance funds, healthcare services incomes, and other legal sources of public clinics.
The current law also amends some regulations related to contract management in order to improve responsibilities of bidders and contractors. These regulations aim at easing practices of contracts that do not suit the nature of the bids and that may cause waste.
The selection of investors in the Public-Private Partnership projects and online procurement are also presented in separate chapters.
The objective of the online procurement is to ensure information disclosure and to simplify bidding procedures. This is in line with the country's commitment to fight corruption and increase the effectiveness, efficiency and transparency of public procurement systems.
The revised law also introduces several options to evaluate the bidding dossiers for the bidding organisers to select, particularly the packages on constancy and construction work.
And finally, under the new legislation, all foreign bidders are welcome to take part in international bidding in Viet Nam. However, it is required that foreign contractors work in partnership with a Vietnamese company or sign a sub-contract with a local company.
Further, foreign contractors are only allowed to employ foreign workers when there are no qualified Vietnamese workers available for projects.
Also, the new law devotes a chapter on e-procurement and legislative requirements on information disclosure, as well as transparency throughout the procurement process and project implementation.
The law also deals with the imposition of sanctions on violations or acts of prohibition. Any organisation or individual violating the law will be exposed in the mass media.
Deputy PM urges the spread of ‘smart grid'
Deputy Prime Minister Hoang Trung Hai has encouraged the nationwide development of "smart grid" to improve power quality and raise the efficiency of energy.
On Thursday, he was briefed by the Ministry of Industry and Trade and Electricity of Viet Nam about the implementation of the road map on developing "smart grid".
Last year, the steering committee on developing "smart grid" managed to set up a system of supervisory control and data acquisition and a remote metering system at all power plants with the capacity of more than 30MW and 110kV transformer stations.
In addition, a system of monitoring 110kV grid operator, a mini system of supervisory control and data acquisition to customers who consumed a large amount of electricity, and production and installation of electronic metres were also implemented widespread.
In this year, the committee planned to boost the efficiency of the power system and test the remote control centre of Da Nhim, Ham Thuan and Da Mi hydro-power plants.
Deputy PM Hai said it was necessary to improve the forecast ability of electricity demand and power supply and limit the power reduction during peak periods.
He asked the ministry and the corporation to collaborate closely to urgently implement the tasks on large scale and need more detailed plans for each task.
Local auto makers toast jump in January sales
Viet Nam's sales of domestically assembled cars rose 23 per cent year on year in January, thanks to strong car sales before the Lunar New Year holiday.
Amid an economic slowdown, consumers in one of the emerging auto markets in the region bought 11,066 vehicles last month, including 8,326 cars and 2,740 trucks, industry group Viet Nam Automobile Manufacturers Association (VAMA) said yesterday.
The northern region continued to be the biggest buyer with 3,729 units, followed by the south with 3,494 units and the central region with 1,472 units.
The sales of sport utility vehicles (SUV) and multi-purpose vehicles (MPV) registered the highest growth rate of 74 per cent, followed by passenger cars which saw a growth rate of 9 per cent.
The latest data, which excludes adjustments for seasonal factors, came from VAMA which comprises the country's 18 leading car makers.
"This is the tenth consecutive month when the industry volume has been higher than the same period last year," VAMA chairman Jesus Metelo Arias said in a statement yesterday.
Jesus said with this momentum, he forecasts 120,000 units for 2014, a growth of 9 per cent over 2013.
Besides the booming demand before Lunar New Year (Tet) holiday, attractive discounts offered by automakers have also helped, industry insiders said.
In order to keep the market vibrant following the prolonged economic slowdown, most car makers announced retail price cuts between VND6 million (US$295) and VND58 million ($3,330).
Meanwhile, the strong momentum of last year's sales also helped accelerate the January bonanza. The sales of domestically assembled cars in Viet Nam rose 19 per cent in 2013, with 110,519 vehicles being sold.
The recovery in demand last year was aided by a brighter economic outlook, attractive financing deals, price discounts and lower car registration fees.
The results surpassed the industry group's forecast of 10 per cent growth for the entire year and marked a strong rebound in one of the smallest auto markets in the region after years of stagnation.
Viet Nam imported 3,000 completely built unit cars (CBU) worth $58 million in January.
This was a decrease of 33 per cent in volume and 55 per cent in value compared with the previous month, the General Statistics Office has estimated.
However, the import volume in January is 9.9 per cent higher than the corresponding period last year, the office said.
The country imported 34,500 CBU cars worth $709 million last year, an increase of 25.9 per cent in volume and 15.2 per cent in value compared with 2012.
The rising number of imported vehicles is seen as evidence of restored consumer confidence following the improvements in the economy.
However, the number of vehicles imported last year is still lower than the 2011 figures, when 54,600 autos valued at over $1 billion were imported.
Viet Nam's auto market in the past 13 months proved to be one of the few that registered growth against the backdrop of the global downturn. The country's auto market endured a prolonged bleak patch in the past two years which were beset by economic difficulties and tighter financing deals.
The Viet Nam Transport Development Strategy last year approved plans to have between 3.2 and 3.5 million vehicles on the road by 2020, compared to nearly 1.65 million at present.
Services industry grows despite nationwide economic slowdown
During the 2011 -2013 period, HCM City placed particular emphasis on the service, industry and agriculture sectors, with the services industry seeing the fastest rate of growth.
Despite challenges from the national economy, the services sector retained a growth rate of 11 per cent per year, with turnover from the sector representing over 58 per cent of total GDP growth, according to HCM City People's Committee.
Trade accounted for 22.1 per cent of growth in the service sector, with a growth rate of 12.3 per cent annually.
Of that amount, exports gained US$84.4 billion or 8 per cent growth annually, the same growth rate of the previous four-year period between 2006 and 2010, which was 8.1 per cent.
Also, in the trade segment, the commodities sector focused on industrial processed products and intellectually realised products rather than the production of natural raw materials.
After trade, finance, banking and insurance ranked second in rate of growth.
During the period, the banking system faced many difficulties with slow credit growth.
A high inventory level of goods and a stagnant real estate market limited the success of this sector.
In 2011, finance, banking and insurance grew 23 per cent but fell to minus 2.3 per cent. It jumped to 8 per cent in 2013, with an average of nearly 20 per cent of total GDP.
Transport and storage ranked third in the services sector with 11.3 per cent growth every year and a proportion of 13.8 per cent of GDP, thanks to a series of transport construction projects that have been completed in HCM City.
Information and telecommunications, along with science technology consultancy, all developed speedily during the period.
For the last three years, information and telecommunications grew from 16.1 per cent in 2011 and up to 26.8 per cent in 2012, and 20 per cent in 2013.
The sector's proportion of GDP increased from 4.6 per cent in 2011 and 6 per cent in 2013.
Science technology consultancy retained its growth of 18.5 per cent each year and improved its proportion from 8.2 per cent in 2011 to 9.3 per cent last year.
Education, hotels and restaurants also saw positive growth.
According to the yearly plan, the city will continue to develop its service sector and in 2015, the city expects to have 57 per cent of GDP from services, 42 per cent from industry and only 1 per cent for agriculture.
Extra retail space causes drop in rents
The increase in retail space is closely linked with lower rents in the capital city, according to the latest reports of two leading real-estate firms, Savills and Cushman and Wakefield.
According to Savills, in Q4 of 2013, some 1 million square metres of retail space was assigned to 149 projects, a sharp increase of 15 per cent quarter-on-quarter and 37 per cent year-on-year, while the average rent dropped by 2 per cent.
Cushman and Wakefield also reported a decline in rents for Ha Noi retail outlets, citing the same reason of more retailing space entering the market.
According to the firm, the average rent for outlets on the ground floor of a shopping centre during the quarter was down to around VND844,000 (US$40) per square metre per month, as much as 9 per cent lower compared to Q3 2013.
Likewise, the average rent for a retail podium site declined by roughly 10 per cent to VND1,306,000 ($62) per square metre per month.
However, the company's chart also indicates that there is no downtrend in rents for outlets in the most expensive parts of the city. Rent on Trang Tien Street is still VND1.6-4.2 million ($71-186), while on Ba Trieu Street, rents are around VND1.05-1.6 million ($50-71) per square metre per month.
The highest rent for an outlet in a shopping mall is charged by Trang Tien Plaza, which costs VND4.6 million ($222) per square metre per month. Next is Parkson Viet Tower and Vincom City Tower, both of which cost VND2.02 million ($108) per square metre per month.
According to Cushman and Wakefield, luxury retailers continue to focus their attention on business streets with good footfall, in contrast to non-luxury brands, which favour shopping centres.
However, Trang Tien Plaza is an exception; it now houses a range of luxury brands, such as Chanel, Louis Vuitton, Dior and Cartier. Available space suitable for luxury brands remains stable, with steady demand, according to analysts.
Tuna exports fall despite new markets
Export turnover of fresh tuna fell last year despite the addition of 16 export markets that brought the total to 112, according to the Viet Nam Association of Seafood Producers and Exporters (VASEP).
In the fourth quarter, export turnover reached nearly US$112 million, down by 16 per cent year-on-year.
For the entire year, turnover value dropped slightly by over 7 per cent to reach $526 million.
Last year, export value of tuna declined in all key markets, including Japan, the US and ASEAN-member countries, due to low demand.
Although it remains the biggest partner, the US market fell strongly, especially in the last few months of the year.
Total export turnover to the US last year stood at over $187 million, a significant drop of 23 per cent compared to 2012.
In Japan, the total export value was $42 million, a year-on-year fall of 22 per cent.
In the ASEAN market, there was stable growth only in the first few months of the year. Growth fell near the year-end with export value of $35.5 million, down by 3.6 per cent year-on-year.
Experts attributed the downturn in key markets to the high stockpile of tuna in these markets.
Moreover, some Vietnamese exporters could not meet the required food safety standards, which had become more stringent.
Bad weather and high transport costs were other factors that contributed to the drop in export value.
Because of these difficulties, the association said it had modest expectation for this year's tuna exports.
It predicted that turnover could reach $550 million, an increase of 4 per cent compared to last year.
Oversupply forces cement producers to look abroad
Domestic cement producers this year will have to give priority to developing exports as supply still exceeds demand and the domestic market outlook remains grim, industry insiders have said.
According to the Ministry of Construction, the country's total cement output last year was more than 70 million tonnes, while it sold roughly 61 million tonnes of cement at home and abroad, up 14 per cent against the previous year.
Supply sources are expected to be higher as five additional cement production lines with a total designed capacity of more than 7 million tonnes per year are due to be put into operation in the second half of this year.
Although the domestic construction material market has, in recent months, showed slight recovery signs after two years of sluggishness, significant improvements in purchasing power cannot be expected.
Cement producers have also faced major challenges as the real estate market has not rebounded significantly, while input costs are rising. Producers find it difficult to access bank loans as interest rates have remained high.
Tran Viet Thang, director of the country's largest cement producer Vicem, said that most of the country's cement plants had to seek foreign loans to invest in the business and are still paying off these debts. Due to the 2-per cent exchange rate fluctuations last year, cement producers suffered a loss.
Dao Ngoc Binh from Vicem Hoang Thach, a subsidiary of Vicem in central Nghe An Province, noted that due to the fierce competition in the domestic market, many cement producers have promoted exports.
Thang claimed that the country's cement exports last year reached more than 14 million tonnes, the highest ever recorded.
Southeast Asia and the Middle East are the two main markets for Viet Nam's cement, while Malaysia and Indonesia are the nation's largest importers of cement in the Southeast Asian region.
The added focus on exports also has an eye on long-term business success, given that Viet Nam is part of the Trans-Pacific Partnership (TPP) that is currently in force.
Many industry insiders are hoping the TPP can help ameliorate the situation by boosting exports.
Chairman of the Viet Nam Steel Association Pham Chi Cuong pointed out that with the TPP agreement, the domestic construction material industry will be able to sell more products, while they can import better products at reasonable prices.
He said that most Vietnamese construction materials are of average quality, but even these are needed in some countries. These countries would have to drop their import tariffs under the TPP, creating an opportunity for Vietnamese firms.
However, economist Tran Minh Hai of the HCM City National University stressed the need for the domestic construction material producers to come up with effective export strategies, adding that focus should be put on pricing, quality and sales promotion.
Dong Nai eyes US export gains
In 2014, the US will continue to be a potential export market in the southern province of Dong Nai, where the demand from this market keeps rising.
The provincial Department of Trade and Industry has confirmed that since the end of 2013, orders, especially from the US market, on garments, footwear, timber products and machines have recovered.
At the beginning of this year, many local companies signed contracts for the end of the second quarter, the department was quoted as saying in Dong Nai newspaper.
The newspaper reported that while exports to bigger markets such as China, Japan and South Korea were down in 2013, the export value to the US reached nearly US$3.2 billion, a year-on-year rise of 19 per cent.
Experts predict that in 2014, the demand from this market will further increase.
Nguyen Thanh Nhan, owner of a timber-based product manufacturer in Trang Bom District said that in the first month of this year, his manufacturer had already received orders for the second quarter and that the volume had doubled, while prices are up 10 per cent.
There will be more opportunities for Dong Nai in 2014, when the US economy is predicted to increase by 2.5 per cent compared with last year. Furthermore, when the Trans Pacific Partnership (TPP) is signed, local companies will be able to benefit further from exporting footwear, garment and textiles, cashew, steel and agriculture products.
Le Van Danh, director of the department, told the newspaper that the improved predictions for the economy shows there's a bright future for Dong Nai in particular and Viet Nam as a whole.
The department, he promised, would regularly meet local companies to try and solve difficulties that they faced when doing business in his province. The province would also provide more information on export activities and any new credit packages, to companies.
Danh encouraged local companies to develop exports by learning more about their standards and information relating to companies that will sign the TPP.
Meanwhile, local enterprises hoped that they will be able to find competitive suppliers so that they too will be able to be competitive in such a big market.
Vietnam-Japan trade hits 25.6 bln USD
Two –way trade between Vietnam and Japan was estimated at 25.6 billion USD in 2013, according to the General Department of Vietnam Customs.
Of the amount, Vietnam’s commodity exports to Japan reached 13.6 billion USD, a yearly rise of 4 percent, while imports from the market were valued at 11.6 billion USD, a year-on-year increase of 0.7 percent.
Vietnam’s major export commodities to Japan included garment-textile, crude oil, vehicles and accessories.
Meanwhile, the country mainly imported machinery, spare parts, computers, iron, steel, fabric and electronic products from Japan .
The Vietnam-Japan Economic Partnership Agreement, which took effect in October 2009, has facilitated the Vietnamese goods, especially farm produce, garment products, and seafood to penetrate into the Japanese market.
Japan is the biggest supplier of official development assistance (ODA) of Vietnam with 200 billion JPY each year, or 30 percent of ODA inflows in the country.
It is currently Vietnam’s biggest foreign investor, injecting 5.7 billion USD into the country in the first 11 months of 2013, accounting for 26.7 percent of Vietnam’s total foreign investment.-
Tra fish exports to ASEAN surge
Vietnam raked in 124.8 million USD from tra fish exports to members of the Association of Southeast Asian Nations (ASEAN) in 2013, representing a year-on-year increase of 13 percent, said Vietnam Association of Seafood Exporters and Producers (VASEP).
Singapore topped the list of Vietnamese tra fish importers with 36.7 million USD during the period, up 2.4 percent against 2012. It was followed by Thailand with 34.2 million USD, a yearly increase of 63.3 percent, added VASEP .
Vietnam is home to 236 tra fish exporters with 94 owning processing factories that account for 90 percent of the total tra fish export value. In total, the fish have been exported to 149 countries worldwide.-
Southern firms unveil ambitious 2014 expansion plans
Although not being out of the woods yet in terms of economic hardships, numerous businesses in Ho Chi Minh City have presented ambitious expansion plans, according to the Vietnam Investment Review.
Director of Minh Tien Company Limited Nguyen Tri Kien said they plan to double production space to meet burgeoning customer demands.
Minh Tien produces bags and suitcases under the Miti brand and operates five production lines currently and boasts a workforce of 500 skilled workers and employees as well as an expansive distribution system with 200 agents and 50 outlets throughout Vietnam.
Kien said Chinese-made suitcases hold a 90 percent market share in the north and 60-70 percent in the south but often have problems with wheels, handles or zippers.
“Our company does not have these problems and we offer customers a five-year guarantee on our suitcases,” said Kien.
As well as doubling their production area and procuring state-of-the-art equipment, the company has a production goal of 500,000 units, up 80 percent against 2013.
According to CEO of Thien Nam Elevator Joint Stock Company Tran Tho Huy, the company managed stable production last year with 328 billion VND (15.6 million USD) in revenue, on par with the yearly projection.
More importantly, it developed a strategy to more effectively tap the Japanese market.
“In early February our company shipped off the year’s first batch of elevators to Japan, valued at 230,000 USD. This promises a more positive business performance compared to 2013,” said Huy.
Thien Nam’s new factory kicked off construction in October 2013 in southern Long An province and is expected to open (first phase) in April this year.
The company, which was honoured as a national brand and named a leading elevator supplier in the country, has set out to surpass 10 percent growth this year.
Deputy Chairman of the Ho Chi Minh City Business Association Pham Ngoc Hung said difficulties in 2013 resulted in many firms going bankrupt, leaving the market open to other players.
Healthy firms have the opportunity to fill this void in 2014.
One example is Nam Thai Son Plastic Packaging Joint Stock Company in Ho Chi Minh City’s District 2, which succeeded in seizing 70 percent market share for biodegradable plastic bags after scores of companies surrendered once environmental fees were imposed on plastic bags.
All of these firms responded similarly that fairly stable exchange and lending rates played a major role in their decisions to expand.-
Military-run companies see more chances in 2014
2014 is projected to be a good year for military-run businesses, said the People’s Army newspaper online, adding that although over 60,700 companies went bankrupt last year due to economic recession, military-run firms are still seen as a silver lining of the national economy.
By the end of last year, Construction Corporation 36 under the Ministry of National Defence entered a list of military investors to start the project to upgrade two sections of National Highway 19 in Binh Dinh and Gia Lai provinces under the BOT (build-operate-transfer) investment scheme.
Previously, the Ministry’s Group 319 became the main investor for the BOT upgrade project of the National Highway 1A road surface between Binh Thuan and Dong Nai provinces, and formed a joint venture with the Civil Engineering Construction Corporation No.4 (Cienco 4) of the Ministry of Transport to carry out the project to expand National Highway 1A from Thanh Hoa to Nghe An provinces.
Senior Lieutenant General Nguyen Viet Anh from the Department of Economics under the Ministry of National Defence said that the above examples showed the great development of defence businesses.
He held that last year, military-run companies achieved a turnover of 260 trillion VND (12.264 billion USD) and profit of 39.9 trillion VND, and contributed nearly 18.1 trillion VND to the State budget, increasing 11.6, 28.7 and 9.5 percent against 2012, respectively.
The military-run telecom group Viettel still takes the lead with a turnover of 162.4 trillion VND and profit of 34.6 trillion VND, about 39.54 and 27.3 percent higher than the same period last year, and contributed 13.3 trillion VND to the State budget. These figures are considerably beyond the figures obtained by the Vietnam Post and Telecommunications Group (VNP)s. Besides, Viettel heads the list of the top 1,000 taxpayers in Vietnam.
In addition, the Saigon Newport Group is one of Vietnam’s leading ports, making up 65.54 percent of Ho Chi Minh City’s market and 42.87 percent of the nation’s. Of that, the Cat Lai Port ranks 34th on cargo entrepôt worldwide. Meanwhile, the Dong Bac Coal Corporation effectively fulfilled all production targets set by the Ministry of National Defence, added Anh.
As a result, with the remarkable growth rate, military-run businesses are striving to win more success in 2014.
Despite facing many difficulties in 2013, the ACC Aviation Construction Company, Lung Lo Construction Corporation and Corporations 319 and 789 gained turnovers of 2 trillion VND, 1.6 trillion VND, 3.7 trillion VND and 1.2 trillion VND, respectively, to become prestigious brand names in the construction sector.
The recognition of official contractors for projects in the region, such as the Lung Lo Corporation which has been constructing hydropower plants in Laos, affirmed the potential and development of military-run businesses.
However, in order to boost sustainable development in the coming time, they should improve competitive and financial ability, bring into play the self-control in operating business, and team up with others, while developing their dynamism and effectively using money sources from budgets of the State and Ministry of National Defence.
Anh stressed that the military companies should also work out suitable development strategies, apply advanced technologies in production, mobilise more capital from financial organisations, and well manage and monitor debts.
The above measures will help them develop their business and speed up restructuring plans according to Decision 929/QD-TTg signed by Prime Minister on July 17th 2012 on restructuring State-owned enterprises, focusing on economic corporations and groups for the 2011-2015 period, he concluded.-
New resolution aims to cut investment red tape
Many unnecessary administrative procedures would be cut out when a new resolution on administrative reform in investment projects is approved by the Government, the Vietnam Law and Legal Forum Magazine reported.
The draft resolution, which was announced at a meeting held by the Ministry of Justice on February 7 in Hanoi, aims at simplifying administrative procedures in investment projects and improving the business environment.
It proposes measures to simplify administrative procedures in investment project implementation, including the abolishment of unnecessary and ineffective administrative procedures. One-stop-shop policy would also be applied in investment projects.
Other measures on administrative procedures transparency would help prevent corruption and build up trust for individuals and enterprises in investment and business activities.
The number of administrative procedures that enterprises have to follow from preparation to implementation of projects would be cut down from 34 to 22.
Accordingly, the time frame would be halved, helping individuals and enterprises save around 60 million USD every year.
Speaking at the meeting, Minister of Justice Ha Hung Cuong said the simplification of administrative procedures at many State agencies remained slow and unsystematic, many agencies even set out extra requirements for individuals and enterprises while administrative procedure fees in Vietnam ranked the highest in the world.
He asked related agencies to properly address individuals and enterprises’ responses and recommendations on administrative reform and timely tackle government staff corruption and wrongdoings related to investment procedures.-
Mekong Delta to contribute 38 trillion VND to State budget
The Mekong Delta region is striving to collect 38 trillion VND (1.8 billion USD) for the State budget in 2014, an increase of 406 billion VND compared with the previous year.
To reach the goal, Mekong Delta provinces have accelerated administrative reform and modernised the tax and customs sectors through adopting state-of-the-art technology in order to make it easier for taxpayers and prevent tax fraud.
Provincial People’s Committees have instructed tax agencies to strictly collect money and handle debts or actions that appropriate the State budget, according to the Steering Committee for the Southwestern region.
The provinces also inspected the operation of businesses that have regularly engaged in international transactions along with amending and supplementing procedures in granting business liences.
The customs sector will also simplify its clearance process and carry out an array of methods in a bid to ease tax fraud.
The sector has, so far this year, partnered with the Anti-Smuggling Investigation Department under the General Department of Vietnam Customs, market management forces and border guards of provinces sharing a border line with Cambodia to fight against smuggling and trade fraud.
Fall in January FDI approvals not worrisome
Fresh foreign direct investment (FDI) approvals tumbled in January after a sharp rise in all of 2013, but there is no concern about this as the country’s macroeconomic situation has stabilised. Analysis by The Saigon Times Daily on February 12.
Last month FDI approvals, including both new and existing projects, reached over 397 million USD, down 21.9 percent year-on-year, according to the General Statistics Office.
This is in stark contrast to last year when new FDI approvals amounted to 21.6 billion USD, up 54.5 percent year-on-year and well above the target of 13-14 billion USD.
FDI attraction is forecast to be fine this year and the following year as the macroeconomy has been stabilised.
The National Financial Supervisory Commission hopes that FDI activities will improve now that the World Bank has projected the world economy to grow 3 percent this year and 3.3 percent next year, compared to last year’s 2.2 percent, and that investors are expecting to benefit from the Trans-Pacific Partnership (TPP) which will be signed soon.
Over the recent past, many multinationals have expressed interest in investing in Vietnam. For instance, Vung Ro Petroleum Company and Rose Rock Group have struck a deal to develop a 2.5-billion-USD resort complex in Vung Ro Bay in the central coastal province of Phu Yen.
Hansol Electronics Vietnam, an affiliate of Samsung, has obtained approval to invest 150 million USD in an electronic components production project to serve Samsung’s phone manufacturing factory in Thai Nguyen province.
Some industry insiders said the FDI inflow would keep coming into the country thanks to its ideal geographic location, cheap labour, a large market with 90 million people and prospects from the TPP and the ASEAN Economic Community.
However, some experts said that the strong FDI inflow in 2013 was unsustainable, so the nation may find it hard to reach such a high figure this year unless foreign investors pump capital into big-ticket projects.
Phan Huu Thang, former head of the Foreign Investment Agency under the Ministry of Planning and Investment, said the substantial rise in FDI approvals last year was far beyond the investment authorities’ expectations. Whether the country can attract more quality foreign investment depends on the competitiveness of the economy and the investment environment.
Increasing the competitiveness depends on the implementation of solutions to increase FDI capital attraction, and use and manage the capital efficiently in the coming time, he said.
In addition, FDI attraction also depends on the results of negotiations of the Vietnam-EU Free Trade Agreement and the TPP and Vietnam’s ability to implement its commitments to those pacts, he said.
Phu Yen provides 22 billion VND for disadvantaged areas
The central province of Phu Yen has decided to allocate over 21.7 billion VND (1 million USD) to underprivileged communes and hamlets to help them develop infrastructure and production.
Accordingly, each of the three mountainous districts of Dong Xuan, Son Hoa and Song Hinh will receive between 5.8 billion VND and 7.7 billion VND to support 18 communes and 28 hamlets with extreme difficulties. The funding will come from the national target programme on sustainable poverty reduction.
Last year, the province’s specially difficult communes and hamlets was provided with more than 32.6 billion VND (1.55 million USD) to upgrade public houses and build transport and water supply systems, classrooms and markets.
In addition, the province also invested over 3 billion VND in implementing 10 sustainable poverty reduction models on afforestation, rubber and sugar cane planting, and cow breeding.
These models attracted the participation of 173 poor households and employed 370 labourers.