Lotte Mart inks deal to buy Da Lat farm produce

The Korean-owned Lotte Mart supermarket chain is set to buy Da Lat farm produce.

Lotte Viet Nam Shopping Co, Ltd signed an agreement with the Lam Dong Province Department of Investment, Trade and Tourism Promotion Centre to buy vegetables, fruits, and food products.

The company requires producers and suppliers to ensure product quality and follow Viet Nam Good Agricultural Practices (VietGAP) standards in their production.

Lam Dong is the biggest vegetable and flower growing area in the country with over 53,000 ha producing nearly 1.8 million tonnes of vegetables.

The deal will help create a stable outlet for provincial farmers.

The central province of Quang Binh is currently hosting 320 registered projects, worth more than US$5 billion, including 158 projects, worth nearly $4 billion that are already under construction.

According to the provincial People's Committee, some of these projects could add momentum for the local economy, including the 3,600 megawatt (MW) Quang Trach 1 thermal power plant, which has received an investment of over $1.6 billion from the Viet Nam Oil and Gas Group, and the Lao Government-invested construction of a $200 million oil pipeline system to the country.

Many foreign investors, including those from Taiwan (China), the Republic of Korea and Russia had also visited Quang Binh to explore investment opportunities recently, it said.

Russia's Inter RAO Group has signed a memorandum of understanding with local authorities to build the Quang Trach 2 thermal power plant under the BOT (built-operate-transfer) model.

The plant is expected to be located at the Quang Binh Power Centre in Quang Dong commune, Quang Trach District. It will have two turbines with a total power capacity of 1,200 to 1,320 MW.

In addition to offering attractive investor incentives, the People's Committee has also listed 49 projects in need of investment. Four will operate in the infrastructure sector; seven in industrial production; six in health care, culture and education; and 32 in trade and tourism.

India will not charge duties on VN steel

India's Ministry of Finance has decided against imposing safeguard duties on cold-rolled flat stainless-steel products imported from Viet Nam and some other countries, according to the Viet Nam Competition Authority.

The World Trade Organisation's website reported that the Directorate General of Safeguards, under India's Ministry of Finance, had decided to halt the investigation being conducted since September 2014 and avoid imposing safeguard measures against products imported from Viet Nam, the Republic of Korea, Japan, and China, as well as the United States, Mexico and the EU, the Viet Nam Competition Authority said.

The reason for its decision is attributed to the lack of persuasive evidence in favour of applying safeguard measures, including considerations of increasing imported products from investigated firms and facing heavy losses or threats of serious losses in the domestic production sector, it said.

The investigation was conducted following a request from India's Jindal Stainless Steel, which accounts for more than 85 per cent of the total volume of cold-rolled flat stainless-steel products in India.

The company asked the Directorate General of Safeguards to impose safeguarding measures on products imported from certain countries after the investigation into steel products imported by India in the period from April 1, 2011, to March 31, 2014.

Over the past three years, Vietnamese steel products have faced numerous anti-dumping, anti-subsidy and safeguard duties from major importers.

For example, last year, the United States conducted anti-dumping and anti-subsidy investigations on steel nails, while Canada and Australia launched investigations on oil country tubular goods and zinc-coated steel, respectively.

Manufacturers never frustrated by Vietnamese consumers on releasing costly new handsets

Lines are formed around the world whenever a state-of-the-art tech device is officially released, and enthusiasts in Vietnam, where GDP per capita is still below US$2,000, do not mind queuing to have their hands on the much-anticipated products as early as their global peers.

The Samsung Galaxy S6 and S6 Edge, the latest handsets of the world’s largest smartphone maker, hit stores in 20 countries on Friday, and quickly reaped strong sales there.

Fans of the Korean company in Vietnam lined up in queues at first light on Saturday to become the first to own the devices, dubbed the best Android phones of all time by Forbes.

“I’ve been in the line since 4:00 am,” Vo Hoang Tuan told newswireZing in a video interview while queuing in front of a mobile phone store in District 7, Ho Chi Minh City.

Tuan was waiting to get a Galaxy S6 Edge as he wanted to “experience its curve screen.”

The newest Samsung Galaxy models are available at major mobile phone stores in Hanoi and Ho Chi Minh City, with a 32GB S6 handset fetching VND16.59 million (US$773) and a 32GB S6 Edge priced at VND19.99 million ($932).

Vietnam’s GDP per capita was $1,910.51 in 2013, according to World Bank data. In the Southeast Asian region, the country stood above Cambodia ($1,006) and behind the Philippines ($2,765).

Vietnamese consumers always have to pay more for hi-tech devices, which however does not prevent them from contributing to the revenue success of such manufacturers as Samsung or Apple.

The lowest prices of the Galaxy S6 and S6 Edge in the Korean market are 647,000 won ($591.52) and 807,000 won ($737.79), respectively, according to Business Korea.

As in other parts of the world, the mobile phone market in Vietnam is dominated by Microsoft Mobile, Samsung, and its archrival from the U.S., Apple Inc.

Microsoft sold the most mobile phones in Vietnam in February, accounting for 36.1 percent of the market share, whereas Samsung came second with 18.9 percent, according to data released by German market researcher GFK.

The market share of Apple was 20 percent, nearly double the 11.6 percent it recorded in February last year.

Despite its predominant position, Microsoft was beaten by Samsung when it comes to sales, as it mostly sells budget devices compared to such deluxe series as the Galaxy S and Galaxy Note of the Korean firm.

Even though such Samsung handsets and Apple’s iPhones are expensive products in the Southeast Asian country, local consumers are willing to open their pocket, even to buy the unofficially distributed products at whopping prices.

This is particular the case of iPhones, as Vietnam has rarely been among the markets where Apple’s flagship devices are first released.

Apple’s latest handsets, the iPhone 6 and iPhone 6 Plus, hit stores in ten markets in September last year, months before they were officially available in Vietnam.

But many of the products were bought in Singapore or Hong Kong and taken back to the country as personal belongings by air, a common method of Vietnamese mobile phone traders whenever Apple releases a new iPhone.

These products have been embraced by local consumers, who were willing to pay VND33 million to VND42 million ($1,553-1,977) for a 16GB iPhone 6 Plus Gold taken to Vietnam that way, compared to the $750 contract-free price in the U.S.

And when the iPhones officially arrived in Vietnam in November, many buyers lined up overnight to be the first to purchase the devices.

The price for an iPhone 6 now starts from VND16.99 million ($792) and iPhone 6 Plus, VND19.59 million ($913), according to prices listed by a leading local mobile phone chain

Vissai to buy Song Lam 2 Cement Company

Song Lam 2 Cement JSC has announced the sale of its entire stock (PX1 listed in the UpCOM) to the Vissai Hoang Phat group (The Vissai) in April.

Vissai is one of the country's largest cement producers. Photo dantri.com

Vissai will be the new owner of the Song Lam 2 Cement JSC in the central province of Nghe An after buying it from the state-owned PetroVietnam Cement 12/9 JSC.

In 2013, PetroVietnam Cement 12/9 JSC had halted the construction of the cement company due to financial difficulties. Now Vissai will invest VND500 billion (US$23.1 million) to complete it and plans to make it operational during the third quarter of 2015.

Vissai had reportedly repurchased PX1 shares for VND10,000 (US$0.44) each. Shareholders have been allowed register to sell their stock from April 8.Based in the northern Ninh Binh province, Vissai is one of the country's largest cement producers. By the end of 2014, it had produced 8 million tonnes of product and earned VND10 trillion ($463 million) in revenue.

It also commenced the construction of the Song Lam Cement Company in February. The Do Luong Cement Company in Nghe An Province was renamed as the Song Lam Company, which had a capacity of 6 million tonnes per year.

With Song Lam 2 SJC, Vissai now owns nine clinker and cement production chains all over Viet Nam.

Vissai's Chairman, Hoang Manh Truong, said the group had signed an export contract for 1.2 million tonnes of clinker with Bangladesh, which had brought its market count to 20 countries and territories, including Germany, Mozambique, Congo, Indonesia, China, Hong Kong, France, Australia and the United Kingdom.

According to the latest data from the Department of Building Materials under the Ministry of Construction, cement consumption this year reached 71 to 73 million tonnes, which reflected a 4 to 7 per cent rise from the levels seen in 2014.

Yet to be listed in the local stock market, Vissai has 12 million shares that are traded in the OTC market.

$50 million project picked up after 10 years of lying waste

A $50 million investment project operated by Hong Thai S.I.T Joint Venture Company remains unfinished after 10 years, according to newswire Tuoi Tre. The project is stuck at the construction-phase of an impressive building complex offering villas for hire, a shopping centre, hotel accommodation and sport facilities.

In December 2003, the Ministry of Planning and Investment (MPI) authorised Hong Thai Construction Consultant Joint Stock Company (JSC) located in Bien Hoa city and Safekeeping Investment Trust Company to found Hong Thai S.I.T Joint Venture Company to start construction of the building complex on a total area of 160,000 square metres in Nghi Huong commune, Cua Lo town, Nghe An province.

Following the MPI authorisation, the Central Nghe An Provincial People’s Committee carried out site clearance of a 169,429 square metre area to accommodate the project.

However, in November 2006, the MPI officially revoked the Hong Thai’s investment certificate because the investor had overstepped its authorised boundaries by constructing 28 villas more compared to the planned 100. Furthermore, during the construction process, the foreign developer failed to transfer total registered capital required to implement the project, leading to serious budgetary tensions. Subsequently, the investors behind Hong Thai have announced their withdrawal from the project without assuming any responsibility.

Following Hong Thai’s withdrawal, other firms, namely Vietnam G5 JSC and Son Ha Art JSC, expressed their interest to pick up the project.

Accordingly, these firms would invest VND70 billion ($3.2 million) in the first phase and VND668 billion ($30.8 million) in the second phase to complete the project. There were also plans to rent additional area to deploy the Cha Rong-Me Tien project. However, the project never came to fruition.

Kim Lien Commerce and Tourism JSC had also planned to take over the unfinished project. According to Tuoi Tre news, on June 6, 2009, Central Nghe An Provincial People’s Committee has agreed in principle to let Kim Lien JSC study the project.

However, the company mistakenly announced that the Central Nghe An Provincial People’s Committee had provided authorisation for  Kim Lien JSC to become the investor of the project. As a result eleven people contributed capital and lost a total VND73 billion ($3.3 million).

At the end of October 2014, Central Nghe An provincial People’s Committee has allowed Bao Khanh Hamico Commercial Investment JSC to make investments into the project.

Accordingly, Bao Khanh Hamico will deploy the project with a total capital of VND1.05 trillion ($48.4 million), including its available capital of VND224 billion ($10.3 million) and VND826 billion ($38.1 million) of contributed capital and loans.

Previously, Bao Khanh Hamico inked a deal with Hong Thai S.I.T to buy their stake in the project.

According to the new plan of Bao Khanh Hamico, the project will cover an area of 159,158 square metres and consists of two phases. The first has started in the fourth quarter of 2014 and will last till the fourth quarter of 2018. The second is from the first quarter of 2019 to the fourth quarter of 2023.

SCIC seeking to boost state capital divestiture efficiency

Further measures are proposed to assist the State Capital Investment Corporation (SCIC) to reach its target of finalising the state capital divestment plan on time, as assigned by the government.

SCIC was formed in 2005 as a state-owned fund with the particular aim to assist state enterprises. According to statistics provided by the corporation, since its debut it has divested VND3.15 trillion ($147 million) worth in state capital at 678 state-owned enterprises (SOEs).

By its activity, it has managed to collect VND7.2 trillion ($336 million) back into state coffers, which is 2.3 times higher than the original value compared to the country’s average level of 1.48 times.

The SCIC leadership has attributed  their success partly to the state allowing them to apply flexible capital divestiture measures.

“The stock face value is VND10,000 (46 US cents). If a business incurred losses and its equity is lower than the capital amount contributed by shareholders, we were allowed to sell below par value which has greatly facilitated the process,” said Hoang Nguyen Hoc, SCIC’s deputy general director.

Similarly, the right of SCIC to divest all state capital held in SOEs where state proprietorship was not necessary has also generated efficiency.  

“In such cases, investors are often willing to pay more than at public auction sales,” Hoc commented.

The SCIC, however, stated that in the first quarter of this year it could only divest VND253 billion ($11.8 million) worth in state capital at 22 SOEs, earning VND844 billion ($39.4 million).

In light of the government approved SOE restructuring plan, by the end of the year SCIC would need to carry out divestment plans at around 300 businesses, besides to other tasks the company might be given to handle this year .  

To achieve this ambitious goal, according to Hoc, the SCIC would require additional  measures besides the existing ones.

In this regard, the SCIC has requested government extension of the right to sell stocks in whole. By their request the right would also involve unlisted public companies.

“This move is to appeal to investors, as in fact a large share volume of many unlisted public companies is kept by individual investors, some of whom are a few percentage short of corporate management roles. This leaves the SCIC in a difficult position to sell the remaining stock in part,” Hoc argued.

Ministry touts wealth of PPP transport projects

Transport infrastructure projects that are being proposed under the public-private partnership model by the Ministry of Transport are whetting investors’ appetites.

Two investors have expressed their interests in collaborating on the construction of the 24-kilometre My Thuan-Can Tho expressway, or dual carriageway that links Ho Chi Minh City and the south west of Vietnam via a build, operate, and transfer model (BOT).

The estimated VND6.2 trillion ($290 million) road is currently undergoing a feasibility study, with the government prepared to offer between VND950 billion-VND1.6 trillion ($44.6-75 million) over a twenty-year profitability schedule.

The Ministry of Transport (MoT) has allowed  Sovico-Imico-Pacific-Cienco 5 consortium and Long Thanh Golf Investment and Trading JSC access to the project. The ministry told Cuu Long Corporation for Investment Development and Project Management of Infrastructure – the body responsible for the project – to close bids in the second quarter this year so work can begin in the second half of the year.

“These investors have the financial capacity so the project should be able to be completed on schedule,” Duong Tuan Minh, Cuu Long’s general director said.

The ministry hopes to get several other BOT projects underway, including the highway project, eight road projects and one domestic waterway upgrade project valued at VND22.3 trillion ($1.04 billion), of which investment via the BOT model would total VND21.8 trillion ($1.02 billion).

The ministry has 50 projects valued at $7.5 billion which it believes can be carried out under the BOT format. It envisages the private sector contributing $5.26 billion, with the remaining finance sourced from the government.

The ministry has also announced five air transport infrastructure projects planned to be carried out under the Public-Private Partnership (PPP) format where operational rights can be sold under an operations and maintenance (O&M) contract.

Apart from the Phu Quoc Airport’s piloting of O&M, smaller scale BOT projects include car parks at Noi Bai and Tan Son Nhat international airports.

According to MoT Minister Dinh La Thang, the sale of the operational rights complies with the law, and the  government is not going to sell its state management role to the private sector.

The government will obviously carry on all national security and flight management within its air space, with the government only selling operational rights that do not require state involvement.

Phu Yen makes site clearance promise

Phu Yen is determined to address chronic site clearance problems that have delayed investment inflows to this central coastal province.

These projects include a $1.1 billion front-beach resort and hotel complex, the $3.18 billion Vung Ro petrochemical and oil refinery complex and the road infrastructure at the Deo Ca Pass which would enhance travel between Phu Yen and neighbouring Khanh Hoa province.

Pham Dinh Cu, Chairman of the Phu Yen Provincial People’s Committee, said these projects would be the driving force for the economic development of the province in future.

He stressed slow land clearance progress was a common problem for all of the projects.

In a recent meeting with investors and provincial authorities, Cu ordered land clearance work to be completed before April 20 on the 357-hectare tourism project jointly developed by South Korea’s Sun Rise Company and local Sao Viet Company.

This project, licensed in 2008, is located along the beach in the Bai Xep area, Tuy Hoa city and Tuy Hoa An district. The developers plan to build a 36-hole golf course, a resort, villas, three 5-star hotels with 1,400 rooms, a 4-star hotel with 500 rooms and a zoo. The developers will also develop a beach, two 4-star hotels and two 5-star hotels, a resort, a park, office buildings and a commercial site at An Phu commune in Tuy Hoa city.

If the site clearance is completed on schedule, Sao Viet and Sun Rise will start construction of this project in the first half of this year.

Regarding the Vung Ro petrochemical and oil refinery complex and the Deo Ca Pass, Cu asked local authorities to timely proceed land compensation policies to relocate local residents.

Although he did not give a specific deadline for land clearance for both Vung Ro and Deo Ca, Cu said this work should be completed shortly to allow investors to meet their construction schedules.

Located in the Hoa Tam Industrial Zone, the Vung Ro oil refinery and petrochemical complex is invested in by the UK’s Technostar Management Limited Company. The refinery is well-positioned to meet unprecedented demand growth for high quality fuel and petrochemical products in Vietnam and the wider region, and acts as a strategic base for business expansion within the region.

The Deo Ca Investment Joint Stock Company began the construction of the 3.9-kilometre Deo Ca tunnel in November 2012 under the authority of the Ministry of Transport. The tunnel is part of an overall project spanning 13.4km, which also includes the 500-metre Co Ma tunnel and a 9km approach road and bridge.

The Deo Ca tunnel is expected to be completed in 2016 and will facilitate transport between the central region and the southern area, connecting the pivotal economic zones of South Phu Yen and Van Phong, spurring industrial, commercial and tourism activities in the two localities and the wider south central and Central Highlands regions.

G-bond sales dip to two-year low

Government bond sales have remained sluggish this year, with the proceeds from a bond auction yesterday at a two-year low.

The State Treasury yesterday sold only VND30 billion out of VND4 trillion worth of bonds put up for sale.

Banks acquired VND30 billion worth of five-year bonds at the winning rate at 5.4% per annum, or 0.08 percentage point lower than the April 8 auction. Investors shunned 10-year bonds altogether.

In the three biddings earlier this month, the State Treasury sold only VND6 trillion out of the VND9.5 trillion-plus worth of bonds. The coupon for five-year bonds was 5.48% while that of 15-year bonds was 7.4% per annum.

By April 10, the State Treasury had raised over VND62 trillion from G-bonds while it targeted to sell VND70 trillion in the first quarter of this year.

Raising funds from G-bonds has become hard for the Ministry of Finance as bond auctions have turned unattractive to investors.

Around VND150 trillion worth of G-bonds will fall due this year, nearly doubling that in 2014 (at over VND83 trillion).

In 2015, the Government aims to sell VND250 trillion of G-bonds with tenors from five to 15 years but investors are concerned that the target might be unobtainable.

According to the Ministry of Finance, G-bond mobilization was VND55.9 trillion in the first quarter, meeting 22.4% of this year’s target and just 62.7% of the same period last year. G-bond sales in March was only 41.7% of March 2014.

On the secondary market, trading has declined in the recent two weeks and foreign investors have kept net selling G-bonds.

Bond yields are expected to increase in the coming time as investors have reduced investment in bonds. Besides, credit growth has also improved.

The local dong-U.S. dollar exchange rate has also affected the G-bond market. This week, the greenback still hovers near the upper limit set by the central bank and continues to surge on the informal market.

The inter-bank market has been tightened with overnight and one-week interest rates in dong edging up to 4.8-5% per annum.

HoREA wants less budget units in housing projects

The HCMC Real Estate Association (HoREA) has proposed the Prime Minister reduce the mandatory ratio of budget units at commercial housing and residential area development projects.

In the written proposal, HoREA wants the ratio to be halved to around 10% of the total land area of a property project.

Chairman of HoREA Le Hoang Chau told the Daily last Friday that the association has carefully studied the 2014 housing law and existing legal documents before making the proposal to help property investors bank on the recovery of the market.

Chau cited the 2005 housing law and Decree 90/2006/ND-CP as saying that local authorities can ask developers of commercial housing and urban development projects of over ten hectares each to set aside certain areas with developed infrastructure for building low-cost units. However, the total area for budget homes should not exceed 20% of the total of a project.

In 2010, the Government issued Decree 71/2010/ND-CP replacing Decree 90/2006/ND-CP to require the developers of budget housing projects and new urban areas covering ten hectares or larger to reserve 20% of the total area of these projects for local authorities to build budget homes.

Under Decree 188/2013/ND-CP issued three years later, the developers of commercial housing projects and new urban areas, no matter how large the area of their projects is, in third-class cities have to earmark 20% of the total area with infrastructure to develop budget homes.

Decree 188 also allows the developer of under-10-hectare projects to transfer units or land lots equivalent to 20% of the projects’ total area in accordance with the local governments’ land prices or pay sums equivalent to 20% of the total area.

The draft decree on development and management of budget houses also contains the same regulations of Decree 188.

Chau said though the market is recovering, enterprises are still mired in hardship. Therefore, it is not suitable if 20% of the total area of a project regardless of its scale is reserved for budget homes.

HoREA said it would be reasonable if about 10% of the total area of a project is for low-cost homes at a time when the property market has shown little sign of a sustained recovery.

HoREA also proposed allowing developers of commercial housing and urban development projects regardless of scales to choose between transferring 10% of the total area and paying 10% of the area to localities’ housing development funds.

Fuel retail prices kept unchanged

The ministries of finance and industry-trade have decided to keep oil and gasoline retail prices unchanged and at the same time allow fuel wholesalers to use the national fuel price stabilization fund to offset the gap between retail and base prices.

In a document released yesterday, the ministries permitted corporate fuel traders to get VND991 from the fund for every liter of gasoline sold (down VND38 per liter). The sums for diesel, kerosene and heavy oil were adjusted up VND134 per liter, VND217 per liter and VND383 per kilo respectively.

However, the retail price of A92 petrol remained unchanged at VND17,280 per liter, diesel at VND15,880 per liter and kerosene at VND16,110 per liter.

This was the second time the two ministries had kept retail fuel prices unchanged since the strong fuel price spike on March 11.

At the latest price adjustment, the ministries told wholesalers to shelve any price adjustment plans and even cut the price of kerosene by VND250 per liter.

The next fuel price adjustment, if any, will be on April 28.

From May 1 this year, the environmental protection fees on gasoline, diesel and heavy oil will triple to VND3,000 per liter, VND1,500 and VND900 per kilogram respectively.

The Ministry of Finance has made no mention of a plan for cutting fuel import tariffs.

MOIT urged to speed up BOT power projects

Deputy Prime Minister Hoang Trung Hai has asked the Ministry of Industry and Trade (MOIT) to thoroughly review the implementation of build-operate-transfer (BOT) power projects in order to speed up tasks to meet the current demand for socio-economic development.

Deputy PM Hai made the statement during an April 13 meeting with relevant agencies to review and seek measures to boost BOT power projects.

Negotiations for projects, which are in the preparatory period, should be sped up to fulfill the set targets for 2015 while Nghi Son 2, Nam Dinh, Hai Duong and Vinh Tan 1 projects should move into new phases, the official said.

He asked relevant agencies to continue building and improving documents to create an appropriate legal framework and favourable conditions for the projects’ realisation.

The country currently has 20 large-scale BOT thermal power projects with a total capacity of 24,000 MW, in which Phu My 2.2 and Phu My 3 thermal power plants and the first generator of Mong Duong 2 thermal power plant were being operated.

Hai Duong and Vinh Tan 1 projects are in financial preparations while Nghi Son 2 project has completed the bidding process, and others are in negotiations and preparing documents.

The implementation of the projects is facing difficulties in guaranteeing currency conversion, law application to resolve disputes, and payment.

Antibiotic residues found in more shrimp shipments to U.S.

The U.S. Food and Drug Administration (FDA) refused around 107 shrimp batches imported from different countries including Vietnam due to antibiotic residues in the first two months of this year, up 224% year-on-year, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

VASEP said the 107 shrimp batches found with higher-than-permitted antibiotic residues were the highest number in ten years. Nitrofuran, which is used to inhibit bacterial growth, and veterinary drug residues were detected in 75% of the shrimp volume.

Explaining the problem, the director of a big seafood exporter in the Mekong Delta told the Daily that as shrimp exports rose by US$1 billion last year over the previous year, export firms had been rushing to increase shrimp purchases in anticipation of stronger exports this year, so they had paid little attention to shrimp quality.

Vo Hong Ngoan, a well-known shrimp grower in the Mekong Delta city of Bac Lieu, said almost shrimp export firms have devices to check antibiotic residues but it seemed that they ignored the quality of shrimp they bought as the market grew sharply last year. Consequently, they have to pay a high price this year when more shrimp shipments were stopped from entering the U.S. market.

Ngoan said that farmers would be the most vulnerable to sluggish shrimp shipments as enterprises usually lower their buying prices when they cannot boost exports.

According to VASEP, FDA decided to intensify inspections of shrimp imports.

The U.S. also rejected certain shrimp volumes imported from Malaysia and India due to higher-than-allowed antibiotic residues in the first two months of this year.

Fair treatment sought for private hospitals

Doctors and experts at a seminar in HCMC on April 13 proposed that private and public hospitals be treated on an equal footing so as to spur the development of the healthcare sector.

Private hospitals will help not only ease overloads at public hospitals but also provide good healthcare services for patients, heard the seminar organized by the Vietnam Private Medical Association at ITO Saigon Phu Nhuan Hospital.

A report of the Ministry of Health showed there are 171 private hospitals and 30,000 private clinics in Vietnam, while the number of public hospitals is 1,200. More than 249,830 people have been licensed to work in the sector, including 64,422 doctors.

Pham Thanh Van, chairman of the association, said only a small number of the 171 private hospitals have been performing well after being licensed and the remainder have been stuck in a perfunctory situation as they have had to cope with so many regulatory hurdles and inspections, and found it hard to get practicing certificates for their employees.

Van gave an example that up to seven inspection teams visit his small hospital a week. “I feel tired. I am general director but have a lot of patients to examine at the hospital. Some inspectors come but they are not sure of what to inspect,” he said.

Van pointed out a reality that incidents at hospitals are unavoidable but they turn out to be big problems at private hospitals as they must undergone many inspections and even investigations. However, public hospitals do not have to encounter many inspections for similar incidents.

Van also complained about time-consuming procedures for employees at private hospitals to get all required practicing certificates.

A doctor at Trang An Hospital shared Van’s views that private hospitals are still grappling with scores of obstacles in raising funds and seeking land allocations in spite of the Government’s policy to open the healthcare sector to private investors.

Land lots at good locations are usually allocated to public hospitals while investors of private hospitals face a host of barriers when it comes to leasing land for their projects. Individuals have invested heavily in private hospitals and clinics but have yet to get equal support, Vu The Hung, vice chairman of the association, said at the seminar.

At the seminar, Shinhan Vietnam Bank and the Supporting Center for Korea Medical Devices clinched a memorandum of understanding with the Association of Vietnamese Private Hospitals and the Vietnam Private Medical Association to assist in market information and medical equipment supply.

The bank will offer financial packages for customers of the center and the associations as part of the cooperation agreement.

Savills: City office occupancy at seven-year high

The office-for-lease market in HCMC performed better in the first quarter than the final quarter of last year with average occupancy shooting up to a seven-year high, according to property service provider Savills Vietnam.

Average occupancy climbed to 91% in the first three months of 2015, up one percentage point compared to the last quarter of 2014 and the same period last year. “This was the highest occupancy rate in seven years,” Savills said in a report on HCMC’s real estate market for Q1.

The reported showed more than 17,500 square meters of office space from one Grade B and three Grade C projects in the city’s central business districts (CBD) were put into service in the first quarter. As of the end of Q1, there was some 1.47 million square meters from 223 projects, and the total stock rose 1% quarter-on-quarter and 4% year-on-year.

Regarding office segments, according to the report, Grades B and C fared better in terms of occupancy while Grade A’s performance remained flat compared to the last quarter of 2014.

The first three months saw the total office take-up exceeding 24,100 square meters, up 46% from the previous quarter. The demand for Grade B offices made up over 70% of total leased office space this quarter.

The demand for offices in the CBD area stayed high with the total office take-up in the CBD surging 343% quarter-on-quarter and 91% year-on-year.

The company said the average office rental in the country’s economic hub was stable at VND536,000 per square meter per month (some US$25).

The company projected 24 new projects with a total of 448,000 square meters would enter the market by the end of 2016. The number includes two new Grade C projects in the CBD area expected to come online later this year, supplying about 11,000 square meters of office space.

“With large future supply in 2015, the performance of Grade A and B may be under pressure,” the report said.

Hotels under pressure

The city’s hotel sector is now under pressure as the number of international visitors to Vietnam is in decline while there were a total of 200 new rooms in January-March.

“The rooms came from a new 5-star hotel, additional stock from an existing 4-star hotel and a reopened 3-star hotel,” the report said.

As of 2015’s quarter one, the city had 99 hotels with a combined 13,100 rooms, sliding 1% quarter-on-quarter but up 4% year-on-year.

Savills Vietnam commented that HCMC’s hotels of 3- to 5-star ratings continued to have a soft performance as their average occupancy was 70%, up two percentage points quarter-on-quarter but down four percentage points year-on-year.

“All three grades incurred a year-on-year decrease in occupancy. The 4-star segment had the highest occupancy drop of six percentage points year-on-year and the 3-star and 5-star segments decreased by four percentage points year-on-year each,” the report said.

The average hotel room tariff in the city was VND1.8 million per night (some US$82), inching down 5% quarter-on-quarter and 7% year-on-year.

According to Savills Vietnam, the city welcomed over 836,300 international arrivals in the first two months of this year, increasing 7.5% on the same period last year. However, this growth was lower than the 11% in the first quarter of last year and 9% in the same period of 2013.

The city is facing rising competition from other domestic tourist destinations having international airports such as Hanoi, Danang, Nha Trang and Phu Quoc.

Competition is also heating up in the city’s hotel market as a large amount of new supply from four new 5-star projects comes online this year, raising the total stock of this segment by 22% year-on-year.

This will put direct pressure on the five-star segment and partly affect the performance of the overall market in 2015, the report said.

There were 22 hotels of three to 5-star ratings under way, supplying around 5,300 rooms for the market as of Q1. The company predicted 10 projects with more than 2,300 units to enter the market in the next three years.

Vietnam to develop skilled, not cheap, labour

Vietnam is moving away from a "cheap labour" workforce to one more skilled to better compete in a climate of global integration, a senior industry minister said.

Deputy Industry and Trade Minister Tran Tuan Anh told a US Congress delegation that cheap labour proved to be Vietnam’s advantage when the country initially entered integration in order to attract foreign investment, but the country was moving towards improving the quality of its workforce.

Anh said Vietnam will pay more attention to the development of high-tech industry, focusing on competitive products, along with boosting the development of precision engineering, electronics, the environment, and consumer goods industries in the next five years.

Vietnam has been stepping up the privatisation of state-owned enterprises (SOEs) in order to realise its target to privatise some 90 percent of SOEs by the end 2015.

“The government of Vietnam will offer foreign investors opportunities to buy stakes in privatised enterprises,” he said.

US investors say labour costs in Vietnam may increase after the country signs the Trans-Pacific Partnership Agreement (TPP), and foreign investors may switch to other countries with cheaper workers, such as Laos and Cambodia.

In order to simplify procedures for domestic and foreign investors, the Industry and Trade Ministry is implementing a programme of one-stop customs services.

Traditional crafts thrive in Ha Nam

Hundreds of tonnes of rice sheets turned out every day have brought prosperity to residents of Cheu village, in northern Ha Nam province.

Almost 2,000 local households have involved themselves through supplying the food industry, earning a combined annual revenue of 200 billion VND (9.2 million USD).

Chairman of the Cheu Rice Sheet Production and Trade Association, Tran Van Tuong, said Cheu people always desire to profit from their traditional craft products, which boast high quality and a distinguishable taste.

The village’s recent success is attributable to villagers’ efforts to adapt and escape the difficulties of outdated machinery and techniques. They used to eke out a living until the bravery of an individual, Tran Duc Kien, led to investment in modern equipment. A surge in output and return has followed, bringing with it the creation of stable-income jobs and export links with foreign markets, such as Poland, Germany and Russia.

Ha Nam is home to 40 traditional craft villages, which make items ranging from embroidery to rattan object making. These have gradually become a major source of income for residents.

PM urges end to red tape in customs procedures

The Prime Minister has urged the customs sector to simplify its administrative procedures to ensure a favorable business climate in line with international practice.

In an announcement recently issued by the Governmental Office, the PM requested the sector to review and amend legal documents following consultations with relevant bodies.

The announcement also notes that the heads of ministries are to be held accountable for the implementation of a Government resolution issued early this year on the introduction of a one-stop mechanism for administrative procedures.

The document also highlights the collaboration and communication expected among ministries and sectors as they aim to address possible difficulties in the implementation as quickly as possible.

The Ministry of Finance (MoF) will be in charge of ensuring the integration of the database systems across all ministries and sectors, using the national one-stop information portal.

Ministries and sectors are to accelerate the application of outsourced information and technology services as well as online formalities in the inspection of exported and imported goods. They must link their systems with the MoF’s database and issue updates on their participation in the national one-stop mechanism.

The PM called for investment from various sources to improve the infrastructure and facilities of customs agencies, allowing them to deliver better services.

He also called for the Vietnam Fatherland Front Committee, the Vietnam Chamber of Commerce and Industry, the business community and the media to act as supervisors of the work.

Agricultural restructuring steering committee established

The Prime Minister, Nguyen Tan Dung, has decided to form a steering committee to help the government guide the national agricultural restructuring period from 2015-2020.

Deputy Prime Minister Hoang Trung Hai has been appointed as head of the committee, Minister of Agricultural and Rural Development Cao Duc Phat as deputy head and representatives from relevant ministries as members.

Involved agencies have been asked to make their specialist recommendations to the Prime Minister about measures to overcome restructuring obstacles and to mobilise the public to take part in the crucial work.

The move to restructure agriculture was ratified by the PM in June 2013. The aim is to create higher added value for agricultural products and ensure the sustainable development of the agricultural sector.

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