Central bank pledges $2b in soft loans

The HCM City branch of the State Bank of Viet Nam will offer enterprises low-interest loans from a fund totalling VND40 trillion (US$1.89 billion) approved by the central bank.

Deputy Governor Nguyen Phuoc Thanh told a recent meeting between the municipal People's Committee with the local banking sector that the fund would be disbursed under a programme that links local banks and enterprises.

All the city-based banks would be encouraged to participate in the scheme.

"The programme will continue to focus on preferential loans to enterprises involved in prioritised sectors, with priority given to those that want to upgrade production technology and equipment or apply high technology, or are involved in support industries," Thanh said.

"This year, the programme will create conditions for more customers to get access to preferential loans with the interest rate of less than 9 per cent per year.

"They may include small traders, students, households and those involved in other economic sectors," he said.

Committee vice chairwoman Nguyen Thi Hong said that, since the beginning of the year, many commercial banks had registered to participate in the programme, an indication that they were ready to offer loans to local enterprises to help them settle difficulties.

To Duy Lam, director of the SBV branch in HCM City, said under the programme the banks in the city to date have provided preferential loans worth VND130 trillion (US$6.16 billion) to enterprises in prioritised sectors, up by 3.2 per cent compared to the figure recorded in late 2012.

Of the figure, VND80.9 trillion was given to small- and medium-sized enterprises, up 1.7 per cent, while preferential loans worth VND22.4 trillion were offered to rural and agricultural development purposes, up 7.4 per cent.

Export enterprises were lent VND19.4 trillion, up 5.8 per cent. About VND7.14 trillion was given to enterprises involved in the support industry, Lam said.

"So far this year, the branch has received a list of 203 enterprises that want to get loans that are valued at a total of VND3.5 trillion under the programme, of which 149 have already received a total of VND3.1 trillion in loans. The agency is processing the remaining cases," he said.

Hong of the People's Committee said the loans had significantly helped enterprises further develop production and business activities, and banks improve credit growth.

January surplus tops 2013 figure

Viet Nam attained a trade surplus of US$1.44 billion in January of this year, bigger than the total $863 million trade surplus for 2013.

According to the General Department of Customs, total imports and exports to and from Viet Nam reached $21.48 billion in January 2014, down by 9.9 per cent compared with December 2013 and down by 3 per cent over the same period last year.

The country attained an export turnover of 11.46 billion, down by 0.8 per cent compared with the same period last year while imports totalled $10.02 billion, a fall of 5.5 per cent compared with last year.

Foreign invested enterprises scored a trade surplus of $1.41 billion while locally-invested enterprises attained a trade surplus of $31 million.

The big trade surplus in the first month of the year is a good sign for the country's economy. However, it's difficult for Viet Nam to enjoy the trade surplus, as the country's major exports are semi-processed products and trade deficits in two-way trade with China remain very big, according to the Sai Gon Tiep Thi (Sai Gon Marketing) news magazine.

Sugar industry has huge stockpile

The domestic sugar industry has an inventory of 400,000 tonnes, which is likely to increase as farmers are in the midst of harvesting sugarcane, according to the Viet Nam Sugarcane Association.

Association chairman Nguyen Thanh Long said the primary reason for the glut in the industry was the sugar smuggled from Thailand via Cambodia's southwest border. The smuggled sugar currently accounted for up to 70 per cent to 80 per cent of the Cuu Long (Mekong) Delta region's market share.

Smuggled sugar was cheaper than the domestic product as it evaded import duties and value added tax, Long noted.

Fertiliser firm exports to Myanmar

The PetroVietnam Fertiliser and Chemicals Corporation exported its first fertiliser batch to Myanmar in 2014 in the past week.

Considering Myanmar a potential market, the corporation has been operating a representative office in Myanmar since last May.

The company planned to increase fertiliser exports to offset the large supply in the domestic market.

Nine cement projects removed from plans

The Government has approved the removal of nine cement production projects from the country's cement industry development planning, according to the Ministry of Construction.

The ministry noted that each of the projects had a capacity of less than 2,500 tonnes of clinker per day.

The construction process of another seven projects would be slowed down.

The Government asked the ministry to report the current state of supply and demand in the market, to help in the timely adjustment of the cement industry's development planning and market stabilisation.

Investors withdraw from IPs

Investors in several steel projects in industrial parks in the southern province of Ba Ria-Vung Tau have withdrawn their investment applications due to insufficient capital, according to the the province's Industrial Park Authority.

Nguyen Anh Triet, chief of the agency, said licenses granted to projects invested by Southern Steel Sheet and Essar Viet Nam, had been revoked.

Triet said investors had applied for withdrawal of these projects, which had been progressing at a snail's pace due to lack of capital.

Owners of these projects revealed that they couldn't find customers for their projects's products. Total output of steel plants in Ba Ria-Vung Tau amounts to 10 million tonnes annually, accounting for about 40 per cent of the country's steel products.

According to the Viet Nam Steel Association (VSA), the country's steel sector shouldered a trade deficit of over $5.68 billion in 2013, making the sector with the biggest trade deficit in Viet Nam.

VSA said in January that steel consumption in the domestic market is estimated at 235,000 tonnes, down 42 per cent over the same period last year, bringing the amount of steel products in stock to 850,000 by the end of January.

Work to begin on $2.5b thermal plant

Japan's Mitsubishi Corporation is making the final preparations before the ground breaking for the Vung Ang 2 thermo-power plant in the central province of Ha Tinh in June 2014.

This was stated by the deputy head of the Vung Ang Economic Zone management board, Ngo Dinh Van, who told Viet Nam News yesterday that the Ministry of Planning and Investment would soon grant the investment registration certificate to the US$2.5 billion project.

The Mitsubishi Corporation has begun the site clearance for the power plant, designed to have a capacity of 1,320MW and two turbines. It will be built on 42 hectares in Ky Anh District, next to the Vung Ang 1 thermo power plant, under the build-operate-transfer form.

The plant's turbine 1 is expected to begin operations by 2018.

Meanwhile, Samsung Corporation from South Korea has signed a memorandum of understanding to invest in the Vung Ang 3 thermo power plant, which has 2,400-MW capacity.

"Samsung Corporation has been completing procedures to ask for the investment registration certificate," said Van.

According to the Ministry of Planning and Investment's Foreign Investment Agency, Ha Tinh Province had 53 foreign direct investment projects at the end of 2013, totally valued at nearly $11 billion.

US$31 million poured into Vietnam-Japan techno park project

Construction work began on an innovative Vietnam-Japan technology park in Ho Chi Minh City on February 17 with a total investment of US$31 million.

Vie-Pan Techno Park covers an area of 13 hectares in Hiep Phuoc Industrial Park and is expected to open in October.

The project is divided into two phases. Phase one capitalized at US$ 7.6 million covers three hectares and accounts for 55% of Vie-Pan Industrial Park, the remaining ten hectares makes up phase two from the Hiep Phuoc Industrial Park Joint Stock Company

TheTechno Park aims to attract more investment from Japanese support industry firms. It will provide an all inclusive service, creating favourable conditions for Japanese investors in the city.

At the ground-breaking ceremony, Japanese Deputy Consul General in Ho Chi Minh City Yoshinori Yakabe said the project is listed in Japan’s national strategy to support small and medium-sized companies.

He confirmed there will be 690 Japanese firms investing in the country’s southern economic hub in 2014, 70 more than last year.

Municipal People’s Committee Vice Chairman Le Manh Ha announced this is the first model to be applied in Ho Chi Minh City to entice Japanese businesses, noting that it will be expanded to other industrial and technology parks across the city.

Hong Kong bans imports of Vietnamese salted eggs

Hong Kong Special Administrative region authorities have banned the import of salted duck eggs from the Vietnamese provinces of Nam Dinh, Quang Ngai, Tay Ninh, Khanh Hoa, Ca Mau and Kon Tum due to growing concern about an H5N1 avian influenza outbreak.

The import ban of the same product from Vietnam’s northern provinces of Hoa Binh and Bac Ninh is still in place as the disease had been detected in some farming houses in these localities.

Officials from the Hong Kong Centre for Food Safety said they said they will closely monitor the situation and maintain contact with local egg importers, distributors and retailers to prevent bird flu from further spreading.

The ban came as China’s Hong Kong struggled against avian influenza H7N9 that broke out last August, with five cases of infection, including three fatalities.

Prior to the Lunar New Year Festival, the region had culled 20,000 chickens after the H7N9 bird flu virus was found in poultry imported from mainland China.

Korean vegetable cultivation project successful

A model of safe vegetable cultivation using Korean technology has become a success in the northern provinces of Hoa Binh and Hai Duong.

Beginning life in August 2013, the project received a total investment of over US$2.8 million, more than US$2.6 million of which is sourced from the Government of the Republic of Korea (RoK).

After receiving training by RoK specialists, 15 households in Hoa Binh’s Yen Thuy district have reaped a bumper harvest just within one year of growing onions, turnips, sweet potatoes, chilli and napa cabbage.

Local farmer Bui Van Phu said the Korean method of cultivating vegetables offers higher yields and double or three-fold economic value. Farmers now use organic fertilisers or bio pesticides to reduce production costs and protect the environment instead of chemical manure like in the past.

Prof. Lee Dong Jin, Director of the project, said Korean-sourced vegetables will be grown from now until 2015 on a pilot basis. The Korean companies will also work to ensure that they are sold well after harvest.

This year, training courses will be opened in both Vietnam and the RoK and they will identify which kinds of vegetable that will grow well in the district.

In the coming time, the project will reach out to other districts across Hoa Binh which is blessed with natural conditions for growth of vegetables and fruit.

It is a joint partnership between the Korea Rural Community & Agriculture Corporation and the Vietnam Academy of Agricultural Sciences.

SMEs post impressive growth

Vietnam Report Joint Stock Company (Vietnam Report) on February 18 announced the FAST 500 rankings in 2013 - a list of the 500 businesses achieving the fastest growth rates in the country.

500 businesses achieve fastest growth rates

The rankings showed that the average growth rate of 500 businesses in the 2009-2012 period stood at 44.7%, lower than that recorded in 2008-2011.

Vietnam Report’s survey found that top 10 small-and-medium-sized enterprises (SMEs) posted an impressive growth rate of 88.3%.

Top of the FAST 500 rankings was Intimex Nha Trang import and export JSC, while Duong Hieu mineral exploration JSC secured the first place among leading SMEs.

Ho Chi Minh City and Hanoi remained the most dynamic economic hubs with their businesses accounting for major proportions in the FAST 500 rankings (31% and 21%, respectively).

Sectors achieving highest growth included seafood (65.1%), construction and real estate (59.2%), and transport (58.6%).

Most surveyed businesses stressed the need tostabilize macroeconomy, simplify administrative procedures aiming to create a healthier business climate and adopt a preferential tax policy.

Japanese group launches its second factory in Vietnam

The Japanese company Pegasus-Shimatomo Auto Parts on February 17 started construction on its second factory, Pegasus Shimamoto Vietnam company, in the southern province of Dong Nai.

The project is being built on an area of two hectares with total investment capital of more than US$20 million.

The factory specializes in producing auto and motorbike spare parts and components for other industrial sectors.

Pegasus Shimatomo Vietnam is designed to generate total production value worth US$38 million and create jobs for hundreds of workers. In initial years, the company will export its products to the Thai and Japanese markets and expand to other markets.

Dong Nai provincial People’s Committee Chairman Dinh Quoc Thai said the province has seen a growing number of Japanese investors.

In 2013 alone, Japanese investment accounted for 30% of US$1.6 billion worth of direct foreign investment (FDI) in the locality.

Thai said he hopes that more Japanese investors will invest in the Long Duc industrial park as well as Dong Nai’s other parks.

The price of domestic gold on February 17 rebounded by 1.53 percent to VND36.78 million per tael (1.2 ounces), driven by an increase in global gold prices.

Global gold prices improved as the world raised concerns over the US economy’s weak growth and US dollar depreciation, which led investors to return to the precious metal. Gold gained US$1.326 per ounce in the Asian market in the early afternoon of February 17.

Back on home soil, the Saigon Jewellery Company (SJC) posted gold prices between VND36.68 - 36.78 million (US$1,737 - 1,742), an increase of VND550,000 (US$25.85) per tael compared to last weekend’s figures, the highest surge in the past three months.

Since the beginning of this year, the domestic price has hovered around VND35 million (US$1,666) per tael in quiet trading sessions. In addition, retailers have narrowed the gap between buying/selling quotes to encourage gold purchases.

How to boost SOEs equitization discussed

To equitize state owned enterprises (SOEs) successfully, it is important to seek strategic investors and sell equities to them prior to the initial public offering (IPO), said Minister of Transport Dinh La Thang.

Minister Thang emphasised this point at a meeting chaired by Prime Minister Nguyen Tan Dung, in Hanoi on February 18 discussing the equitization of SOEs in the 2014-2015 period.

Minister Thang shared his thoughts on how best to implement the restructuring and equitization of SOEs effectively.

“When the equitization of SOES has been carried out, shareholders will get involved in supervising the work while the State will be left to solely to focus on managing and devising overall business policy”, he said.

Thang also unveiled the ministry’s plan to equitize SOEs in the 2014-1015 period.

Almost all corporations and SOEs will be equitized and ten corporations will complete the equitization in the first quarter of 2014, while Vietnam Airlines will finalize the process in the second quarter of the year.

In the 2014-2015, the Ministry of Transport will continue to speed up the equitization of nine maritime businesses.

From 2011 to 2013, the country restructured 180 businesses and equitized 99 SOEs, with the total number of equitized SOEs having reached 4.065 to date.  

MoT eyes private funding for projects

With public spending on infrastructure development proving insufficient, the Ministry of Transport is seeking to attract private investment.

According to the ministry's Planning and Investment Department, transport infrastructure is not well developed, affecting the country's socio-economic development.

In big cities, incompetent infrastructure planning and slow site clearance are blamed for creating many traffic bottlenecks.

The transport sector faces a shortage of capital for infrastructure development in 2014–20 estimated at VND960 trillion (about US$45.7 billion).

Capital from the State budget is estimated at VND70 trillion and VND110 trillion ($3.3 billion-$5.2 billion) from the Government's bonds, plus VND100 trillion ($4.7 billion) from foreign investment sources. Thus, an additional investment of VND680 trillion ($32.3 billion) is needed for infrastructure development.

In this scenario, private investment becomes important.

Le Anh Tuan, head of the ministry's PPP (Private-Public Partnership) projects management unit, said the ministry has rolled out the "red carpet" to private investors for a number of projects in BOT (build-operate-transfer), BT (build-transfer), and PPP modes to be completed by 2016.

According to Nguyen Hoang, head of the ministry's Planning and Investment Department, in 2011-13, the ministry had mobilised nearly VND90 trillion ($4.2 billion) from private sources for major transport projects. The figure included VND43.7 trillion ($2.1 billion) for BOT projects to expand National Highway No 1A, nearly VND6 trillion ($286 million) for BOT projects to expand National Highway No 14, and nearly VND40 trillion ($1.9 billion) for other projects.

The ministry will continue to seek private investment for aviation, rail, and waterway projects and hold auctions for the purpose.

Fishing industry in need of revamp

Deputy Prime Minister Hoang Trung Hai has urged the Ministry of Agriculture and Rural Development to strengthen oversight of the nation's fishing ports and storm shelters for fishing boats.

The request is part of a long term plan to improve fishing ports across the country in the lead up to 2020 and with a vision to 2030. The project will also see revisions to storm shelter planning to align with the national master plan on fisheries development.

Deputy Prime Minister Hai also said coastal provinces and cities should look to speed up efforts to survey, plan and build fishing ports and shelters to meet infrastructure demands.

The Agriculture Ministry will collaborate with the Ministry of Planning and Investment on issues relating to funding allocation and public relations efforts to improve awareness of storm management skills.

At present, there are 83 fishing ports in 28 coastal provinces across the country and 65 sheltering areas. The facilities are currently equipped to house 82,000 vessels compared with Viet Nam's 130,000 strong fishing fleet, which also includes 27,000 off-shore boats.

The move follows criticism levied at a conference held late last year on the management and operation of fishing boats, which described the nation's fisheries infrastructure as insufficient.

Feedback given by management boards based in localities including central provinces such as Binh Dinh, Khanh Hoa and Da Nang, cited insufficient legal provisions, funding shortages and a lack of qualified staff as major problems affecting the sector.

Overlapping management of separate fishing ports was also believed to be causing a headache for stakeholders using the ports and failed to address violations.

Some sources cited conflicting authority between port management boards, empowered to manage port areas, and provincial People's Committees with the discretion to allocate or hire land to private parties.

Mekong Delta expands fruit growing area

Farmers in the Mekong Delta region, the country’s largest fruit cultivation area, aim to increase the total area for local fruit specialties to over 80,000 ha by the end of 2014.

The provinces of Tien Giang, Ben Tre, Dong Thap, Vinh Long, Tra Vinh, Soc Trang and Hau Giang, along with Can Tho city, plan to develop an additional 10,000 ha of high quality Nam Roi grapefruit, Hoa Loc mangoes, Chin Hoa durians, Lo Ren star apples, thick-skinned oranges and dragon fruit.

Local farmers are being encouraged to work in groups or cooperatives to ensure uniform quality and increase the competitiveness of local fruits in international markets.

They are also provided with farming techniques to create safe and disease-resistant products in line with Vietnam Good Agricultural Practice (VietGAP) and GlobalGAP standards.

With the current fruit cultivation area of over 60,000 ha, the Delta produces around 360,000 tonnes of fruits a year.

It exported over 160,000 tonnes of specialty fruits to the US, Japan, China and the Republic of Korea in 2013.

TPP opportunities attract FDI to Vietnam

Foreign companies have continued pouring investment into Vietnam to take advantage of the expected opportunities presented by the Trans-Pacific Partnership agreement (TPP), said a local economist.

According to Dr. Nguyen Dinh Cung, head of the Central Institute for Economic Management (CIEM), the signing of TPP is hoped to bring many trade and investment opportunities to Vietnam. The wave FDI coming into the country has been progressing in recent years and is expected to continue for years to come after the agreement is signed.

Professor Nguyen Mai, former Deputy Minister of Planning and Investment, said the higher FDI can be attributed to an improved business climate and political stability in Vietnam along with lower interest rates and better infrastructure.

After the World Bank released its report, “Doing Business 2014”, which showed the investment climate in the country had lost ground compared to last year, the prime minister urged miniseries, agencies and localities to make improvements.

This year, Samsung plans to produce 230-240 million mobile phones in Vietnam. Other large firms also plan to set up research and development centres in Vietnam, which may help to boost the development of supporting industries.

The Foreign Investment Agency predicted that Vietnam would attract a total FDI of USD22 billion, including both the newly-registered and added capital, equal to that of 2013. Of that amount USD13-14 billion is expected to be disbursed.

In January, about USD400 million came in from foreign investors, Singapore contributing the most, with 132.65 million.

Many FMCG firms report good profits

The 2013 financial reports of many fast moving consumer goods (FMCG) firms released to date indicate that they have gained fairly good profits compared to 2012 in spite of high sales expenses and production costs.

The financial report of Lix Detergent Joint-Stock Company shows that goods sales and service revenues in the fourth quarter and the whole 2013 increased by 5% and 10% respectively over the corresponding periods of 2012.

However, the company had to shoulder growing costs, with the production cost rising more than 4.8% and sales expenses up 22.7%. Yet its net profits of 2013 reached more than VND68.7 billion, a rise of 15% year on year.

Other listed enterprises such as Net Detergent Joint-Stock Company enjoyed similar results. Its financial report for the last quarter of 2013, pending auditing, shows that the total goods sales and service revenues rose 3.6% over 2012.

Even though the production cost did not fluctuate, the company had to spend more on sale expenses and management costs by 23.9% and 17.9% respectively compared to 2012. Overall still, its net profits reached VND56.76 billion in 2013, a rise of nearly VND700 million compared to 2012.

At Tuong An Vegetable Oil Joint-Stock Company, its net profits reflected in its financial report are over VND65.58 billion, a rise of 3.1% compared to 2012 despite growing sales costs. The report also indicates that the production cost in 2013 rose by over 6% year on year.

Vinamilk Joint-Stock Company as a giant in the FMCG sector also reported higher sales expenses and production cost.

According to Mai Kieu Lien, general director of Vinamilk, the company’s net profits of the fourth quarter dropped by 10.8% compared to the same period of 2012, but its net profits for the whole 2013 reached VND6.53 trillion in 2013, a rise of 12.2% year on year.

Tet flowers in city estimated at over VND1.5 trillion

The total value of ornamental flowers and plants supplied by companies and gardeners in HCMC during the Lunar New Year holiday amounted to over VND1.587 trillion, up 20% year-on-year.

Nguyen Phuoc Trung, director of the HCMC Department of Agriculture and Rural Development, reported to the city government at a meeting on Tuesday that there were 1.3 million yellow apricot pots sold, equivalent to VND790 billion and up 30%. Meanwhile, around three million orchid spots and three million orchid branches were sold with a combined value of around VND376 billion and a rise of 13%.

Besides, sales of bonsai and ornamental plants rose by 9% to VND268.4 billion.

HCMC targets to achieve a growth rate of over 6% in agro-forestry-fishery production value and added value growth of over 5%.

According to the department, the value of agro-forestry-fishery production in HCMC was estimated at VND329 billion in January, rising by 6.3% from last year’s same period.

Quang Dung opens electricity, telecom showroom

Quang Dung Technology Distribution Company Limited (QD.TEK) on Tuesday opened its first showroom displaying electricity, telecom and security solutions of local and foreign brands in HCMC’s District 1.

The showroom opening also marks the company’s ten years of development in communications, security and electricity infrastructure.

Having an area of around 100 square meters, the showroom located at the corner of Ky Con and Nguyen Thai Binh streets can meet the demand of households. It sells products of such brands as GE, Legrand, Cadivi, TE Connectivity, Cablofit, Ekorack, AXIS and EnGenius.

Partners of QD.TEK can also introduce their products at the showroom to customers via the online camera system at http://qdtek.vn/showroomonline.

In addition to displaying and introducing products, the showroom is also a customer care and product warranty center.

The Ministry of Transport expects to complete construction of 58 major infrastructure projects this year, with many of them in HCMC and Hanoi.

In HCMC, the remaining section of the Tan Son Nhat Airport – Binh Loi - outer ring road project will be in place by end-2014, after the first stretch of five kilometers was opened to traffic last September. The axis road, with a width of between 30 and 60 meters, will serve as a key route between HCMC and neighboring Binh Duong Province.

The first section in use now stretches from Nguyen Thai Son Intersection in Go Vap District to Binh Loi Bridge in Binh Thanh, while the remaining section will continue on to Thu Duc District to connect to the outer ring road. South Korea’s GS Engineering & Construction Corporation started work on this US$340 million project in 2008.

The HCMC Department of Transport said the road, when fully complete, will account for some 40% of vehicular traffic between HCMC and Binh Duong and help ease traffic congestion along certain routes in the city.

Apart from this road, several other projects in HCMC will also be completed this year, including Provincial Road 10-10B to Long An Province, Kinh Bridge in Thanh Da Peninsula in Binh Thanh District, and four bridges spanning Nhieu Loc Canal.

In Hanoi, several large-scale bridge projects will be completed this year, especially the cable-stayed Nhat Tan Bridge crossing the Red River. This bridge, comprised of the main span of 3.7 kilometers and access roads of 5.2 kilometers, costs a hefty VND13.6 trillion, and when in place it will shorten travel time between downtown Hanoi with Noi Bai International Airport.

Other major bridges to get ready this year in Hanoi are Dong Tru Bridge spanning the Duong River to connect Long Bien and Dong Anh districts, and Vinh Thinh Bridge across the Red River to link Hanoi’s Son Tay Township with Vinh Phuc Province.

Another focal infrastructure project is T2 Terminal of Noi Bai International Airport, which will help ease the overload at the international airport when in service later this year. This terminal is designed to have an annual capacity of ten million passengers, and can be further expanded to handle 15 million.

Ha Tinh Economic Zone attracts 514 businesses

The Ha Tinh Economic Zone houses 514 businesses with revenue reaching thousands of billions of VND.

Several large projects from domestic and foreign companies have commenced including Son Duong Formosa, a steel mill and deepwater port, and Vung Tau Water Supply Plant, according to the zone’s management board in Ha Tinh.

Ha Tinh Economic Zone stretches from Vung Ang Economic Zone and Cau Treo Economic Zone.

Ten investors lost licenses due to investment commitment violations.

The zone management board also licensed 1,900 households to run business.

Cau Treo now has 1,100 workers from private and limited companies while Vung Ang has 21,465 employees including 3,496 foreigners.

VinaCapital eyes revised Times Square design

VinaCapital’s real estate arm VinaLand recently announced that it would finish the revised design for the long delayed mixed-use Times Square Hanoi development this year.

Despite a prime location opposite the National Convention and Exhibition Centre in western Hanoi, often considered as the city’s future main business district, red tape and re-design issues have delayed the construction of the project since 2008.

The $50 million project – in which VinaCapital holds a 65 per cent share, comprises a shopping centre, 24-storey office building, a 240 room hotel and serviced apartment building, and three 54 to 58 storey residential towers totalling over 1,900 apartments.

But after ground was broken on the project in May 2008, work on the four hectare site in My Dinh urban township ground to a halt.

“Licensing delays coupled with a slow property market have pushed back commencement and a new strategy is now in place,” the company announced in its quarterly report released at the end of 2013.

“The strategy is to secure a long-term commitment from an international retail mall operator and seek to divest all or part of this land parcel to facilitate an early exit,” it claimed as reasons for the long delays.

“Obtaining new licences and revising the master plans have been a challenge, which has led to delays. Due to recent changes in the master planning for the area surrounding Times Square, a revised master plan is being sought with a target completion date in 2014,” the company said.

A Ministry of Construction circular issued in July 2009 amended master planning considerations in the area around the National Convention and Exhibition Centre.

Circular 29/2009/TT-BXD further detailed the scale, height limitations and functions of a number of projects in the area, including Times Square Hanoi.

This compelled VinaLand to make changes in the design, and meant a new construction licence needed to be obtained from the Hanoi Construction Department.

Times Square Hanoi is VinaCapital’s only development in the north and was listed among the company’s top 10 investments, behind projects like Century 21, Danang Beach Resort, Pavilion Square, Dai Phuoc Lotus and VinaSquare.

VinaLand was now in a cash return period and would not make any investments, except where funds are required for existing projects.

VinaLand sold 100 residential units last year, triple its 2012 results, mainly due to improved sales during the fourth quarter.

Mitsui Fudosan scopes Hanoi eco-city plan

Mitsui Fudosan, a Japanese urban service supplier from Japan is looking to establish a new urban development in northern Hanoi.

“To prepare for this project we had to discuss a suitable location, find potential partners, work out the costs and draft a schedule to develop infrastructure in this area along with a whole raft of other details,” Mitsui Fudosan’s spokesperson Shuji Tomikawa said last week.

Deputy Minister of Con struction Nguyen Thanh Nghi said north Hanoi would see several new developments, especially after the road linking Nhat Tan Bridge and Noi Bai Airport was completed in 2015.

According to the MoC, 17 projects have already been planned to run along the new route, and room still exists for further projects along the road.

“There are a variety of different developments planned already, Mitsui should consider whether they can partner with these licenced projects,” Nghi suggested.

Nghi assigned the Urban Development Bureau to liaise with the Japanese so they could take into account possible Vietnamese partners for their future projects.

Deputy Chairman of the Hanoi People’s Committee Nguyen Van Suu said that in the future, the city would aim to develop five satellite urban development areas in Xuan Mai, Phu Xuyen, Soc Son, Son Tay and Hoa Lac. All five satellite city projects are presently seeking Japanese investors. The Japanese delegation’s is part of a wider project agreed in 2012 to establish so-called ‘eco-cities’. The first developments of this kind have been slated for Hanoi and Ho Chi Minh City.

ATM card holders complain about irrational banking fees

Many ATM card owners have been complaining about being charged with extra fees when using services at banks.

A woman named Phuong, from HCM City said she was surprised when informed that she has to pay VND176,000 (USD8.32) for an annual usage fee right after registering for internet banking at Vietcombank. She was also told that she has to pay extra fees whenever she conducts a transaction.

Service fees for internet banking in Vietnam usually run from VND10,000-VND20,000 (USD0.47-USD0.96) per transaction depending on the type and destination of the transaction. An additional fee of VND10,000-VND15,000 would be applied for customers who transfer money from their account to others’ two days right after their deposit.

Many customers have been surprised by these fees, as a number of banks have changed their policy on service charges. Being caught off guard some of these customers have become upset and call the fees irrational.

Le Thi Loan, from HCM City registered for a saving book at Agribank-Dong Saigon Branch and was surprised to find there was a 0.05% charge of the total sum upon withdrawal.

“It’s unacceptable when to be charged for accessing your own money from a savings account,” Loan said.

Mai Ngoc from HCM City had an unhappy experience with Agribank when she went to a bank branch in District 2 to transfer VND10 billion (USD473,148) from her account to a client’s account at an Agribank branch in Cho Lon. She was asked to pay a fee of 0.015%, equal to around VND330,000 and she refused. Instead she withdrew the money and took it to the Cho Lon branch herself.

According to the State Bank of Vietnam’s Circular 35 which took effect March 1, banks are allowed to collect service fees whenever clients conduct any transaction including money transfers, issuance of a new card, getting a receipt or an account statement.

Despite multiple fees, many also complain that the quality of service is still substandard. During holidays, many ATMs do not work or run out of money, preventing people from withdrawing.

An anonymous deputy director at a commercial bank said it is only right for banks to charge their customers fees for services. These fees account for as much as10% to 15% of revenues.

He added that in order to ensure transparency, banks should make their service fees public at transaction offices and provide customers with information about usage fees.

Large companies' management shake up reflects broad ambitions

In the first months of the new year, many local companies have appointed new leaders with a hope that they will bring about positive changes in development.

Vingroup JSC has took on Duong Thi Mai Hoa as their new CEO. The former CEO, Le Thi Thu Thuy, will be leading the new eCommerce service, VinE-com. Mai Hoa has held high positions in two domestic banks and important financial positions in Credit Lyonnais and Oracle.

Seokee Won is now slated to be the new CEO of Masan Consumer and Deputy CEO of Masan Group after Truong Cong Thang resigned because of personal problems. Seokee Won has 22 years experiences working at Unilever multinational consumer goods company in a number of countries, including China, Thailand and South Korea.

After the president of Viet-Y Steel JSC, Tran Van Thanh, stopped serving as CEO, the company assigned Nguyen Thanh Ha to the position for the interim during the first few months of the year. Other enterprises, such as Bac Giang Exploitable Mineral JSC, Dong A Bank, Danang Rubber JSC and Phu My Fertilizer, have also experienced changes in high-level positions.

Most of these companies are in the top rung of the industries they serve. Vingroup is well-known for its work in real estate development and tourism. However the group is expanding into retail with a focus on eCommerce. According to a representative, eCommerce will be its key to its future business agenda.

Even though Masan Consumer is already at the top of consumer goods and is already an established and familiar brand to Vietnamese households, the choice for their replacement as CEO carries along hopes with vast experience in global marketing.

The recent slew of replacements at large companies is unique in that many see it as a signal of wider vision in Vietnamese companies, as well as a more concrete plan to realise these companies' broadening ambitions.

Predicated drop in lending rate anticipated

While deposit rates remain fixed, the bank lending rate could fall further due to the banking capital surplus.

According to the State Bank’s latest figures, the banking system’s deposit growth rate in 2013 stood at 18 per cent, while credit held at 12 per cent. This shows redundant capital in the banking system.

Moreover, in an announcement on solutions to boost credit growth in 2014 released last week, the State Bank revealed that after the Tet lunar new year holiday, deposit flows into the banking system had continued to rise as in previous years. However, the State Bank stated that it believed the sharp deposit increase and lower commodity prices after Tet had created conditions that would reduce lending rates by 1-2 per cent.

On the interbank market, transactions were made at a stable rate of 4-6 per cent, much lower than the rate of 12-13 per cent in 2012 when banks lacked liquidity. Specifically, the current overnight rate is around 4.5 per cent, while the one to six week term is 5-6 per cent. Such low rates are contributing to the reduction in many banks’ capital cost burden.

Another evidence of capital surplus in the banking industry is their huge investments in government bonds. The Hanoi Stock Exchange (HNX) report on 2013’s government bond market revealed that seven of the top 10 active traders on the bond market were banks. Most active were Maritime Bank, Vietcombank and Techcombank.

According to Doan Trang from Sacombank’s treasury department, the slipping interbank rate has made government bonds a safe and beneficial investment channel for banks, helping offset capital costs.

Statistics from the Ministry of Finance’s Finance and Banking Department show that in 2013, the issuing yield of one to three-year-bonds reduced by 1-1.7 per cent and 5-year-bonds were down by 0.25 per cent. The reducing bond yield is regarded as a positive sign as this is often used as a reference for the debt market.

The HNX report also stated that the primary bond market is characterised by auctioning with price transparency and competitiveness which helps investors save on capital costs, while helping orientate the lending rate.

In addition, the macro-economy always has an important role in reducing interest rates. According to Nguyen Thi Hong, head of the State Bank’s Monetary Policy Department, if the market conditions turn favourable, the interest rate for loans could decrease 1-2 per cent, while still maintaining the deposit rate ceiling. “However, this decrease will depend on the capital input cost and the financial capability of each bank,” added Hong.

Do Ngoc Quynh, head of BIDV’s Treasury Department said that if inflation in the first five months of this year continued to be controlled at reasonable levels, lending rates would decrease.

Current lending rates are commonly 7-9 per cent for agricultural and rural development, exporters, supporting industries, SMEs and high-tech enterprises. Short term rates are typically 9-11.5 per cent, while middle and long terms tend to stand at 11.5-13 per cent.

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