Three banks to get bonds for bad-debt swap

The Viet Nam Asset Management Company (VAMC) will issue bonds worth VND792.66 billion (US$36.03 million) to buy bad debts from SHB, SCB and GPBank, according to a report from the State Bank of Viet Nam.

SBV said SHB would receive bonds worth VND74.65 billion ($3.39 million), GPBank would get VND170.08 billion ($7.73 million) and SCB, VND547.93 billion ($24.9 million). There will be no interest on the five-year bonds, which came into effect on October 16.

Starting this month, VAMC signed contracts to buy bad debts from Agribank, PGBank, SCB, SHB and SouthernBank.

Last week, SCB signed a contract to sell VND1.3 trillion ($59.09 million) of bad debt to VAMC, bringing the total bad debt it sold to about VND1.8 trillion ($81.818 million) and helping to decrease the bank's non-performing loan ratio to less than 3 per cent.

HCM City firms in line for short-term SBV loans

About VND17 trillion (US$805.6 million) is expected to be lent to businesses, including family-run, under the bank-business connectivity prog-ramme by year-end, a State Bank of Viet Nam official said.

Nguyen Hong Minh, deputy director of the central bank's HCM City branch, said under the programme, launched in 2007 by SBV and the city's districts, eligible borrowers can get short-term loans at interest rates of not more than 9 per cent.

All 24 districts are part of the programme, and so far 600 firms and household businesses have borrowed a total of VND13 trillion in six years but VND17 trillion in the next three months, Minh said.

The programme is expected to help city-based banks increase their credit growth by 2-3 per cent, enabling them to achieve the yearly target of 11-12 per cent.

Last Thursday alone, 60 borrowers in Districts 1 and 3 inked loan deals worth over VND3.12 trillion ($141.818 million) with 13 banks.

They are mainly involved in agriculture and rural development, exports, support industry, and technology and are small- and medium-sized businesses

Security application reaches 1m mobiles

Viet Nam's leading internet security firm BKAV yesterday said it had attracted one million users to its security application on mobile devices.

The company, better known for it BKAV anti-virus software product which accounts for 70 per cent of the local internet security market, said the figure was based on the number of downloads on Android's Google Play only, not including iOS, Windows Phone, BlackBerry or Symbian handsets. "Among the 1 million users of our BKAV Mobile Security app, about 14 per cent were downloaded from abroad," said BKAV's vice chairman of R&D Ngoc Son.

Son said that last month, BKAV had signed an agreement with Index Corporation, one of the leading mobile content providers in Japan, to distribute BKAV Mobile Security worldwide.

The Ha Noi-based firm previously also teamed up with Japanese electronics giant Sony to integrate its mobile security app in Sony Xperia mobile phones.

BKAV in August warned Vietnamese mobile users that they should care more about protecting data and accounts on their smartphones as most users purchase, sell, lend or borrow smartphones, but still keep their accounts saved on their phones.

This opened up the risk of losing important information such as photos, messages, emails, contacts and so on, the company said.

Established in 1995 by a group of IT lecturers from Ha Noi Polytechnic University, BKAV was ranked on Gartner's "cool vendor" list in June, which ranks top IT companies in emerging markets.

Viet Nam's mobile security market is dominated by local firms BKAV and CMC, and Kaspersky Lab from Russia.

Long An tops Delta investment

Long An Province continues to maintain its top position in the Mekong Delta in attracting investment into its industrial zones.

In the year to date, as many as 61 projects, including 24 by foreign investors worth more than US$174 million have been licensed in the province, Phan Thanh Phi, head of the Long An Economic Zone Management Board, said.

At a conference on 15 years of developing industrial parks in Long An last week, he said domestic firms had invested VND2.13 trillion ($101.4 million) and leased 60ha of land and 40,000ha of factories.

Seventy per cent of projects were Japanese.

Long An Province has 28 industrial parks covering a combined area of 10,200ha, whose infrastructure totally cost $77 million and VND34 trillion ($1.6 billion).

They had attracted 766 projects worth $1.7 billion and VND27.6 trillion ($1.3 billion).

Of them 360 had already begun operating, and the rest were preparing to build factories.

According to the Long An Economic Zone Management Board, which did a study, the development of industrial parks faces challenges like low occupancy rate, pollution, and inconsistency in investment policies.

Vietnam-Russia trade to hit US$4 billion in 2013

Two-way trade turnover between Vietnam and Russia was US$2.7 billion in the first seven months of 2013, and is expected to reach US$4 billion by the year-end.

The figures were released at the first Vietnam-Russia Economic Forum held in Hanoi on October 16 by the Vietnam Ministry of Industry and Trade and the Russia Economic Development Ministry.

Vietnamese Deputy Prime Minister Hoang Trung Hai highlighted Vietnam’s recent economic development and transparent investment environment, and called on both sides to increase investment in the areas of their strengths, such as high technology, manufacturing, education, and health care.

He noted with satisfaction the fruitful cooperation in various areas between Vietnam and Russia, especially trade exchanges, hitting US$3.7 billion in 2012, up 19.7% from a year earlier.

By the end of August 2013, Russian businesses had become involved in 92 direct foreign investment (FDI) projects in Vietnam, with a total capitalisation of nearly US$2 billion, ranking 19th among the country’s largest foreign investors, Hai said.

Russia is also among the top three investment destinations for Vietnamese investors, with 17 projects worth US$2.4 billion.

The two countries have established a high-level working group to facilitate their prioritised projects.

Hai also reaffirmed Vietnam’s determination to boost administrative reform, complete legal systems, improve business climate and create the best possible conditions for foreign investors.

The Government of Vietnam encourages businesses to invest in high technology, support industry, infrastructure, and technology transfer, he said.

Russian Deputy Prime Minister Igor Ivanovich Shuvalov highly valued the huge potential for Vietnam-Russia cooperation.

He said the Customs Union of Belarus, Kazakhstan, and Russia and Vietnam are conducting negotiations of a free trade agreement (FTA), and the signing of the agreement, together with implementation of joint prioritised projects, will help bilateral economic, investment and trade ties to growth and flourish in the near future.

Nearly 70 Russian officials and business executives joined their 60 Vietnamese counterparts at the forum.

Vietnam’s largest iron ore pellet mill inaugurated

A US$14.1 million mill producing raw iron ore pellets, the largest of its kind in Vietnam, was inaugurated in Vi Xuyen district, the north-western province of Ha Giang on October 15 after over one year of construction.

The factory, using advanced technology and equipment, is capable of churning out 300,000 tonnes of iron ore pellets a year, serving the Hoa Phat Integrated Steel Complex and nationwide iron smelting furnaces.

The plant is expected to generate jobs for more than 200 ethnic minority people with an average monthly income of over VND4 million (US$188). It is to contribute over VND20 billion (US$940,000) to the State budget.

On the occasion, the Ha Giang Electricity Company, the An Thong Mining Investment JSC and the Ha Giang Industrial Zone’s management board also put into operation a 110 kV transformer station and the 110 kV-35 kV Binh Vang electricity transmission line.

The facilities with a combined investment of nearly VND60 billion (US$2.82 million) will facilitate local socio-economic development.

The two aforesaid projects will further speed up the province’s industrialisation and modernisation process, Chairman of the provincial People’s Committee Dam Van Bong said.

The province pledges to realise comprehensive and effective investment policies, aid investors in seeking investment opportunities and implementing their projects, and speed up administrative reform, with the view to becoming an attractive investment destination, added the chairman.

Hanoi Int’l trade fair opens doors for business

The 2013 Vietnam International Industrial Fair (VIIF) opened at the Vietnam Exhibition and Fair Centre in Hanoi on October 16.

The annual event attracted over 200 Vietnamese businesses and 100 foreign companies involved in various fields, such as machinery, equipment and spare parts for production, mining, support industries, processing industry, plastics production, chemicals and consumer industrial products.

A pavilion is reserved for a project “Improving the capacity of enforcing intellectual property in Vietnam”, sponsored by the UK’s Prosperity Fund and carried out the Ministry of Industry and Trade.

It aims to improve the awareness of enterprises and the community of intellectual property and the industrial field in Vietnam.

The fair will run until October 20.

Cement prices to remain solid

The Ministry of Finance's Pricing Management Department expected the price of cement to remain stable this month after increasing last month.

Some member enterprises of the Viet Nam Cement Industrial Corporation (Vicem) raised prices by 5 to 9 per cent one month ago to VND1.3 million – VND1.5 million per tonne in the north and VND1.6 million – VND1.8 million in the south.

The price in the south is often higher than in the north because almost all cement factories are located in the north, said Luong Quang Khai, Vicem Chairman.

Khai attributed the price increase to higher production costs, which in turn were due to electricity price hikes.

The higher electricity price added VND80 billion to production costs, said Hoang Xuan Vinh, general director of Cam Pha Cement Company. Cam Pha increased its cement price by VND100,000 per tonne in September, its first surge since the end of 2011.

Higher coal and petrol prices also contributed to the price hike, forcing the company to spend VND50,000 more to produce each tonne of cement, Vinh said.

The Vissai Cement Company increased prices VND40,000 per tonne to VND1-1.2 million for the same reason, said Nguyen Vu Thanh, Vissai's deputy general director in charge of business.

In the first nine months of this year, the cement industry produced 38 million tonnes, 11 per cent more than last year.

Lao Cai seeks more investment

Northern Lao Cai Province will continue to speed up administrative reforms, improve transparency in developing socio-economic development plans to attract more investment capital.

This was the message delivered by director of the provincial Department of Planning and Investment Dang Xuan Phong.

Phong said the province had thus far attracted 430 projects, including 30 foreign-invested ventures, with total registered capital of VND60.15 trillion (US$2.86 billion).

Top priorities for attracting future investment would be natural resource processing, real estate, trade and tourism, he noted.

Kien Giang promotes border trade

Southern Kien Giang province will further promote cross-border trade activities with Cambodia in the last months of 2013, aiming to realise the target of US$180 million in two-way trade between the two sides.

The province is accelerating construction of border markets under a 2010-20 plan and infrastructure facilities at border gates, thus attracting more enterprises to invest in export-import activities in border areas.

Local authorities have signed co-operation agreements with a number of neighbouring Cambodian provinces to boost trade promotion and expand markets for local products.

Kien Giang shares almost 60 kilometres of land borders with Cambodia, including the Ha Tien international border gate and Gia Thanh national border gate. Since the beginning of 2013, the locality posted a cross-border trade turnover of over $130 million, up 30 per cent over the same period last year.

Trade with Mexico up 14%

Two-way trade between Viet Nam and Mexico had reached an estimated US$676 million over the past nine months, up 14 per cent year-on-year.

Despite encountering several difficulties, Vietnamese exports still increased 17 per cent to top $595 million, with key items including footwear, seafood, textiles and garments, electronic equipment and coffee leading the charge.

The nine-month export figure made up 80 per cent of the 2013 target, putting the country firmly on course, according to the America Market Department under the Ministry of Industry and Trade.

To the end of September, Viet Nam also imported $82 million worth of goods - mainly machinery, equipment and animal feed from Mexico - marking a modest decrease of 2 per cent.

Local gold price stays flat

The State Bank of Viet Nam sold 14,500 of 15,000 taels of gold to 15 credit institutions at a cost of VND37.15-37.18 million (US$1,769-1,770) per tael at its 65th auction yesterday.

Gold prices did not change much from Tuesday when the Saigon Jewellery Company (SJC) posted a rate of VND37.13-37.23 million ($1,768-1,772) on its website at 3pm, while the kitco.com trading floor listed the price at $1,281.8 per ounce or $1,544 per tael, leaving prices in Viet Nam $228 per tael higher than global rates.

Rubber sales fall in tough year

The export value of rubber and products made from rubber trees is expected to reach US$4 billion this year, $26 million lower than last year, including $2.4 billion from rubber exports.

According to Nguyen Thi Thuy Hoa, Viet Nam Rubber Association (VRA) general secretary, rubber sales this year would likely decline because the world economy had not completely recovered.

The world rubber market is in a difficult period, as the global stockpile of rubber will reach 2.17 million tonnes in 2014, which means an oversupply, Hoa said.

The average export price of rubber last year fell 30 per cent; this year, the price continued falling, plunging 17.7 per cent to $2,393 per tonne in the first nine months.

According to the International Rubber Study Group (IRSG), the export price on the world market is expected to drop further because global rubber output will reach 11.8 million tonnes, higher than global demand (11.6 million).

Viet Nam is the world's third-largest rubber producer and the fifth-largest rubber exporter. However, the export value of Vietnamese rubber is not high because the local rubber industry has not implemented modern processing technology, Hoa said.

Because Vietnamese rubber is viewed as low quality, almost all rubber products are exported to China. Local exporters have not made luxury products to ship to other potential markets such as the US, South Korea, Germany and Japan.

The local rubber industry has a development strategy to improve the value and quality of rubber products, Hoa said. The VRA has studied world demand and promoted quality management to improve the industry's competitive ability and build a trademark for Vietnamese rubber products.

In the first nine months of this year, Viet Nam exported 710,000 tonnes of rubber, earning $1.68 billion, according to the Ministry of Agriculture and Rural Development. Exports fell year-on-year by 1.2 per cent in volume and 17.8 per cent in value.

China was still the largest export market of Vietnamese rubber, accounting for 42.7 per cent of the total export value, but exports in the first nine months tumbled 10.3 per cent in volume and 24.8 per cent in value.

Viet Nam's second-largest rubber export market was Malaysia, accounting for 21.2 per cent of the total export value.

Private firms want to recycle sludge

Several private companies in HCMC have shown keen interest in recycling sludge from wastewater treatment plants into compost, instead of burying or discharging it at dumpsites, a practice harmful to the environment.

Speaking to the Daily on Thursday, Ngo Pa Ri, chairman of Saigon Xanh Biological Technology Ltd. Co. in Phu Nhuan District, said his company was seeking approval from authorities to recycle sludge at Binh Hung wastewater treatment plant into clean soil for tree planting and compost.

One ton of clean soil now sells for around VND1 million in the market, he said, adding his firm was making and supplying clean earth, fertilizer and biological products bearing Tribat brand.

Along with Sai Gon Xanh, other enterprises such as Uy Thanh and Tan My Kim in District 6 have also sought approval from the local government to process sludge at local wastewater treatment facilities into compost.

Sludge in the city could be treated into around 300 tons of compost a day, said Nguyen Trung Viet, a waste treatment expert. The recycling will help minimize environmental pollution sources and generate hundreds of millions of Vietnam dong for the city a day, he insisted.

In fact, sludge at the Binh Hung wastewater treatment plant and other facilities of the same kind at the city’s industrial zones are yet to be handled in line with recycling technologies, causing huge waste as a result, Viet noted.

The volume of sludge from production, dredged canals and drainages contain semisolid materials hazardous to the environment. However, given the shortage of sludge treatment facilities with proper technologies, the city has mainly buried such toxic waste.

Therefore, over 4,000 tons of sludge from the wastewater treatment process has piled up at Binh Hung plant recently, sending out bad smells and causing deplorable distress for nearby residents.

Based on the aforesaid private enterprises’ petitions, the city’s government on Monday asked the municipal departments of natural resources-environment and science-technology to evaluate the sludge treatment solutions submitted by them.

Draft law puts realty trading floors at risk

It is probable that many property trading floors will face shutdown if the draft amendments to the Real Estate Trading Law, now being passed around for public comment, are approved, as its provisions no longer require housing trades to be conducted on such exchanges.

Many realty trading floors have been established in recent years as realty traders sought to conform to the current real estate law, which requires that apartments at commercial projects must be traded on the floor.

Article 59 of the prevailing law regulates that “individual and institutional property traders have to transfer and lease the assets via realty exchanges as per the law’s regulations.”

However, the draft amendments remove the aforesaid requirement and instead “encourages all organizations and individuals to perform property transactions through real estate trading floors to ensure the transparency and the benefits of related sides.”

The regulation that apartment trading must be done via trading floors effective in early 2009 has resulted in the boom of new floors to take advantage of attractive business opportunities and cope with the requirement.

In HCMC alone, the number of trading floors registered for operation in the property sector exceeds 300. In fact, these facilities are struggling and many have been forced to shut down given the protracted slump in the condo market while only professional ones are able to survive tough times.

Saigon New Port snags lease on Cai Mep berth

Military port operator Saigon New Port looks set to win the leasing contract to operate the Cai Mep container berth at the Cai Mep-Thi Vai International Terminal as it was the only participant in last week’s tender.

Vietnam Maritime Administration (Vinamarine) last week announced it had received Saigon New Port’s application to lease the Cai Mep container berth for 30 years. Although they were the only applicant, Vinamarine deputy director Bui Thien Thu said the tender was still transparent and legal.

“I learnt that eight port operators bought tender documents following the government’s announcement that the Cai Mep-Thi Vai International Terminal was up for lease this year. However, in the end, Saigon New Port was the only one to file the document,” said Nguyen Manh Ung, deputy general director of Portcoast Consultant Corporation, advisor on the tender.

“Because Saigon New Port is the only applicant, it will not be surprising if the port operator wins the leasing contract,” Ung added.

The Ministry of Transport last July approved a plan to lease two berths of the Japanese development assistance-funded Cai Mep-Thi Vai International terminal in the southern province of Ba Ria-Vung Tau, which was inaugurated in January this year.

The Cai Mep container berth, which can accommodate vessels up to 100,000 dead weight tonnage, will be leased for a minimum fee of $219.5 million, while the Thi Vai berth, capable of servicing vessels up to 50,000 dead weight tonnage, will cost at least $130.5 million.

According to the Ministry of Transport, leasing the berths will enable the state to more quickly recoup its investment capital.

The Cai Mep International Terminal is among five terminals that have been put into operation in the Cai Mep-Thi Vai port complex in Ba Ria-Vung Tau, including SP-PSA International Port and SP-SSA International Container Terminal, jointly invested by state-run Vinalines and Denmark’s APM Terminals BV, Singapore’s PSA International and US’ SSA Marines, respectively. The other terminals are Saigon New Port’s Tan Cang-Cai Mep Container Terminal and Hutchison Port Holdings’ Saigon International Terminals.

However, most port operators at the Cai Mep-Thi Vai port complex are in a very perilous condition as they have suffered losses since last year due to low cargo volume.

US businesses eager to invest in Vietnam but obstacles remain

An investment wave from the US has been hitting Vietnam thanks to good developments in the Trans-Pacific Partnership Agreement (TPP).

“US enterprises, especially makers of products exported to the US such as garments and textiles, footwear and aquatic products, are seeking investment opportunities in Vietnam to benefit from TPP’s investment and trade-related incentives,” Nguyen Viet Ha, managing director of US-backed investment consultant BowerGroupAsia, told VIR.

According to the Ministry of Planning and Investment, Vietnam is now home to 665 US investment projects with the total registered investment capital of $10.6 billion. This year’s first nine months saw 24 new US projects registered with the registered investment capital of $48.5 million, up 3 per cent on-year.

“Recently a delegation of 20 US businesses operating in garments and textiles, footwear, telecommunications and finance came to Vietnam for investment windfalls,” Ha said, citing Amcham Hong Kong chairman Vuylsteke as saying that US businesses “did not want to pour too much money in only one market like China.”

“Vuylsteke affirmed that Vietnam was a potential investment spot and a new US investment wave was waiting to hit Vietnam,” Ha said.

Nguyen Duc Tiep, deputy head of Quang Ninh Provincial Investment Promotion Agency’s Investment Promotion Division, told VIR some US investors were working with the northern province in potential projects of property, tourism, service and financial sectors. For example, the provincial people’s committee and ISC Corporation inked a memorandum of understanding in mid-September on the US firm’s projected implementation of a $7.5 billion entertainment complex including a casino in Quang Ninh’s Van Don Economic Zone.

According to the Singaporean Amcham’s ASEAN Outlook Survey 2014, conducted over 475 American businesses in ASEAN last year and recently released, Vietnam ranks first among top regional target countries for US business expansion, with 58 per cent, followed by Myanmar (41 per cent) and Thailand (29 per cent).

In terms of business expansion, 61 per cent expected their workforce to increase in Vietnam in 2013, while 62 per cent expected profits to increase this year, rising to 85 per cent for 2014.

However, despite the optimism, Ha noted that “US investors are also concerned over a series of difficulties in setting up business in Vietnam, such as completed investment procedures and weak infrastructure.”

Under the Singaporean Amcham’s survey, US businesses’ satisfaction in Vietnam has declined compared with five years ago across a variety of criteria. Reduced satisfaction covered an 11 per cent drop regarding availability of raw materials, 9 per cent for laws and regulations, 32 per cent for new business incentives offered by the Vietnamese government, and 9 per cent for tax structure.

PetroVietnam faces up-hill drive to promote ethanol fuel

State-run PetroVietnam has been instructed to ensure preparations for the use of ethanol fuels meet the planned schedule, despite a number of setbacks.

According to Phung Dinh Thuc, chairman of the Board of Members, the group will have one year more for preparations for the distribution of ethanol fuels in seven cities and provinces of Vietnam by the end of 2014.

“The Vietnamese government has instructed PetroVietnam and other manufacturers and distributors to keep the process on good track to the end of next year,” Thuc said.

With less than a year before the deadline, Thuc admitted that difficulties continued to hamper the use of ethanol fuels in Vietnam.

Major preparations yet to be completed are the installation of filling stations and storage facilities, as well as developing wholesale agents.

To date, PetroVietnam has five filling stations and four storage locations for ethanol fuels.

Currently, only three out of more than 10 petroleum wholesalers trade bio-fuel E5. Between them, PV Oil, Petec and SaigonPetro have a total of 175 stations selling ethanol petrol in 34 cities and provinces.

“We have seen that the process of developing distribution networks is the weak link. This bottle neck is causing difficulties for the consumption of ethanol manufacturers’ products,” Thuc said.

PetroVietnam is the investor in three ethanol factories in Vietnam located in Phu Tho, Quang Ngai and Binh Phuoc provinces which will have the combined capacity of 300,000 cubic metres per year.

Thuc confirmed that due to the lack of demand only two of the plants were presently producing, and even then, not at full capacity.

PetroVietnam’s Dung Quat ethanol plant in Quang Ngai province and the Binh Phuoc plant, a joint venture between Itochu, PetroVietnam’s affiliate PV Oil and Licogi 16, are both producing biofuels. However, due to consistent losses, Itochu is attempting to sell its stake in the Binh Phuoc plant, but has so far received no offers.

The Phu Tho ethanol plant remains under construction. Due to the lack of demand, the investors, PV Oil and a local company, asked permission to halt the operation while awaiting increased ethanol use in seven cities and provinces to increase in 2014.

The plants that are currently operational are suffering losses due to high manufacturing costs and low  export prices. Current export prices stand at around VND15,000 per litre, lower than the manufacturing price of between VND17,000 to 18,000 per litre.

Thuc admitted that all of the factories were suffering, but he believed that the business would pick up in 2014 and 2015 when the new regulations are applied.

Vietnam now has a total of 13 factories planned to produce biofuels nationwide. Of those, three factories are operating and three are under construction.

According to the government roadmap, bio-fuel use will begin in December 2014 for motor vehicles in seven cites and provinces of Hanoi, Ho Chi Minh City, Haiphong, Danang, Can Tho, Quang Ngai and Ba Ria-Vung Tau. From December 2015, it will be used widely across the country.

The Ministry of Industry and Trade forecast that Vietnam will need around 6.88 billion litres of bio-fuels by 2015, with the figure climbing to 8.31 billion by 2020.

Clouds gather as Global Sphere quits solar project

Global Sphere has announced its withdrawal from a $310 million solar panel manufacturing joint venture nearly a year after the United Arab Emirates-based firm and its Vietnamese partner broke ground on the project.

Nguyen Trong Nguyen, general manager of Global Sphere in Vietnam, told VIR that the company was longer involved in the solar panel manufacturing project in Thua Thien-Hue province, adding that the company’s decision had been passed on to its Vietnamese partner.

“We withdrew because our Vietnamese partner [WorldTech Transfer Investment] didn’t have the financial capacity. We found out about some non-transparent transactions between WorldTech Transfer Investment and some banks,” said Nguyen.

Instead of investing in the manufacturing project in Thua Thien-Hue, Nguyen said Global Sphere was in discussions about another project in Ho Chi Minh City. He refused to go into more detail.

Global Sphere and WorldTech Transfer Investment received an investment certificate for building a solar panel manufacturing plant in Thua Thien-Hue at the end of last year. Global Sphere would be responsible for 100 per cent of investment capital while Worldtech would be responsible for building, managing and controlling the plant.

The solar energy project, located in Phong Dien Industrial Park, was to be divided into two phases. The $300 million first phase was scheduled to start construction late this year and would have started production in May 2015.

Following Global Sphere’s withdrawal, the project’s future is now in question. Almost a year after the ground breaking ceremony, the project remains consigned to paper.

“We learnt that there was debate between Global Sphere and WorldTech Transfer Investment, but the investors have not yet officially informed us whether they will follow through with the project or not,” said an anonymous official at Thua Thien-Hue’s Department of Planning and Investment.

This solar panel project is the third of its kind that has been granted an investment certificate in Vietnam. None of two others, a $1.2 billion project in Ho Chi Minh City and a $390 million project in Quang Nam province, have been built so far because of low global demand.

NPL bargain hunt starts

Vietnam’s non-performing loans (NPL) seem to be magnetic to foreign financial groups.

Le Xuan Nghia, former deputy chairman of the National Financial Supervisory Commission, said that since the Vietnam Assets Management Company (VAMC) was established over a month ago, “many foreign investors are coming to Vietnam to buy loan packages including giants such as US Blackstone Group.”

Blackstone is a multinational private equity, investment banking, alternative asset management, and financial services corporation.

“This has exceeded our expectations, as before the establishment of the VAMC we were concerned that no one would be interested in buying up NPLs from banks and even once it was established we were worried it would find it difficult to resell them,” added Nghia at last week’s international conference on Vietnam’s macroeconomy and bank restructuring.

It is reported that more than 20 foreign business delegations have visited Vietnam to explore the possibility of buying high volume bad debts and with many local banks eager to sell their NPLs to the VAMC, there should be more than enough to go around.

Simon Andrew, regional manager of International Finance Corporation for Cambodia, Laos, Thailand and Vietnam, said that foreign investors were very interested in Vietnam’s NPLs.

However, foreign investors would have to first overcome certain legal obstructions, particularly those that were unclear about their asset ownership rights, he added.

Nghia reasserted the VAMC planned to buy up around $1.4- $1.6 billion in NPLs within this year.

Can Van Luc, senior advisor to the chairman of the Bank for Investment and Development of Vietnam, said many countries had sold NPLs to foreign partners. He noted in some regional countries, 60-70 per cent of NPLs have been sold to foreign institutions.

According to economic experts, Vietnam is focusing on economic reform and foreign financial institutions are looking at this as an opportunity, particularly in buying high volume NPLs.

However, Nghia did admit that while this interest might help, an overall solution was still needed and might take time.

“If the economy continues to slow down and the property market continues to suffer, NPLs will be much higher risk and foreign investors will opt out. This is not only a banking sector problem, but one of the whole economy,” he stressed.

Phu Tho province to improve livelihoods

The northern province of Phu Tho is making great efforts to implement new rural development plans, greatly improving the lives of local people.

Over recent years, provincial authorities have been focusing on developing the province’s infrastructure network linking roads, bridges, and electricity, which have laid firm groundwork for the province’s socio-economic development.

As a result, many communes in the province have met the government’s 19 criteria on new rural development, with seven communes fulfilling 16 criteria, 47 communes with 10-14 criteria and 71 communes with 7-9 criteria.

More than 15,000 people in the province have found jobs and received vocational training. Nearly 3,500 kilometres of road have been upgraded, while 60 irrigation works and 11 clean water projects have been built. Nearly 85 per cent of the province’s population now uses clean water and all localities have medical stations that meet national standards.

Phu Tho reported that it would need more than VND73 trillion ($3.47 billion) for its new rural development plans. During 2011-2020, each commune would need about VND400 billion ($19 million) to accomplish its targets. The province has received VND200 billion ($9.5 million) in government subsidies for its new rural development strategy.

Nguyen Manh Hung, chief of the Administration Division of Phu Tho Provincial Department of Agriculture and Rural Development said the major demand for capital would target the implementation of new rural development, especially towards infrastructure. The issue that would affect the success of the work was infrastructure weaknesses in some communes in the province. Presently, the roads leading through rice fields remain pathways and the agricultural irrigation systems are not up to par.

Phu Tho has been also menaced by environmental pollution. For instance, although holding several geographical advantages in terms of new rural development, Son Duong commune in Lam Thao district is finding it difficult to treat the growing amount of rubbish. The commune said it wanted to build a 0.5 hectare waste treatment area and reconstruct its waste water drainage system.

In its plan for new rural development 2013-2015, the provincial people’s committee has identified 57 communes in the province that will meet all the new rural criteria, via concrete projects and programmes.

The province will focus on improving its electricity, roads, markets, and sport and cultural facilities, as well as post offices under the criteria. It will also encourage the public to contribute funds to upgrade public works and their houses.

The province will also boost the development of production, and try to attain an average per capita income level of at least VND18 million ($857.1) per year, while decreasing the poverty rate somewhere between 5 and 10 per cent.

The province is trying to ensure that at least 70 per cent of hamlets meet cultural standards, 100 per cent of local businesses meet environmental standards, and that all households use clean water.

The province will also try to raise the number of communes meeting national health care standards, while also boosting the universalisation of secondary education. Efforts are also being made to raise the number of local skilled workers.

As for the communes that have met either a few or none of the new rural criteria, the province will draft a detailed plan, including classification of the communes in terms of difficulties and advantages, so that case-specific solutions can be implemented.

The provincial people’s committee has also requested local state management agencies implement solutions already set out in approved plans. One of the biggest solutions is to boost awareness about the benefits of new rural development, and combine government campaigns promoting culture and improved infrastructure.

The provincial people’s committee said the biggest priority was to seek sufficient financial resources to invest in the new rural development plans. Phu Tho has also found ways to raise financial resources from the local people and businesses for new rural development. Locals have also been empowered to implement small-scale projects and programmes, in order to enhance their engagement.

Kien Giang promotes border trade with Cambodia

Southern Kien Giang province will further promote cross-border trade activities with Cambodia in the remaining months of this year, aiming to realise the target of 180 million USD in two-way trade between the locality and the country .

Towards this goal, the province is accelerating the building of border markets under a 2010-2020 plan and infrastructure facilities at border gates, thus attracting more enterprises to invest in export-import activities in border areas.

Kien Giang authorities have signed cooperation agreements with a number of neighbouring Cambodian provinces to boost trade promotion and expand market for local products.

At the same time, the locality worked closely with Cambodia’s forces in fighting cross-border smuggling and trade fraud, especially in small roads and subsidiary border gates.

Kien Giang shares almost 60 kilometres of land border with Cambodia, with the Ha Tien international border gate and Gia Thanh national border gate.

Since the beginning of the year, the locality posted a cross-border trade turnover of over 130 million USD, up 30 percent over the same period last year.

The province exports mainly processed food, household goods, cattle-feed and aquatic products.

Unit to assist Japanese firms set up in Dong Nai

The southern province of Dong Nai has issued a decision to set up a “Kansai Desk” to solve all procedure on investment and share investment information with businesses from Japan’s Kansai region.

“Kansai Desk”, a unit under the Dong Nai Industrial Zone Management Board, is responsible for receiving and responding to requests from Kansai region’s businesses by direct discussions and emails or on telephone. It also works with the province’s relevant agencies to provide consultations to investors.

In early this year, Dong Nai province and Kansai region signed an agreement on economic cooperation in order to strengthen exchange, experience sharing and investment in the fields of mutual concern, including supporting industry, environmental pollution treatment, energy saving and human resources development.

Dong Nai is home to over 1,000 foreign businesses with a total capital of 23 billion USD, generating jobs for nearly 50,000 labourers. Of the firms, 130 come from Japan with total investment of more than 3 billion USD, according to the provincial Department of Planning and Investment.-

Vietnamese, Chinese companies build coal-fired power plant

The Vinh Tan 3 Energy Joint Stock Company (VTEC) has teamed up with the Chinese Harbin Electric Company in building the 2.7 billion USD Vinh Tan 3 coal-fired thermal power plant in the southern province of Binh Thuan.

At a contract-signing ceremony in Hanoi on October 14, Hoang Quoc Vuong, Chairman of the Vietnam Electricity (EVN) said the plant will consist of three turbine groups with a capacity of 1,980 MW.

The plant will use imported coal for generating over 12 billion kWh a year, which will considerably help the southern region ease power shortage.

Construction, which costs 1.14 billion USD, will start in the third quarter of 2014 and the plant’s first turbine is expected to generate electricity by 2018, he said.

Established in 2009, VTEC – the project developer, is partnered by EVN, One Energy Ventures Ltd and he Thai Binh Duong Company.-

VAMC issues first batch of special bonds

The Vietnam Asset Management Company (VAMC) has issued the first batch of special bonds worth 718 billion VND (34.1 million USD) as an effort to handle bad debts for several banks, according to a State Bank of Vietnam’s announcement on October 14.

The bonds, which have a five-year maturity from October 16, 2013 to October 16, 2018 and a zero percent interest rate, are issued to three VAMC’s clients, including the Sai Gon Hanoi Bank (SHB), Petroleum Bank (PGBank) and Sai Gon Commercial Bank (SCB).

Accordingly, SHB will receive 74.65 billion VND worth of bonds, while PGBank and SCB will get 170.08 billion VND and 547.93 billion VND each.

Wholly owned by the State, VAMC with charter capital of 500 billion VND (23.5 million USD) is placed under the central bank’s management and supervision, and mandated to purchase bad debts of banks in two ways: at their book value by issuing special bonds, or at market value by using other sources.

VAMC targets to issue 35 trillion VND worth of special bonds to buy bad debts from now to the end of this year.

FDI boosts Da Nang economic growth

The central city of Da Nang has worked out a programme to develop support industry products by 2030 in a bid to attract more foreign direct investment (FDI).

It has also screened a range of projects for calling investment and exploiting the advantages of its position as a key economic zone in the central region and the East-West Economic Corridor (EWEC).

Over the past five years, FDI enterprises have fostered local economic growth, created more jobs, boosted exports and encouraged technical innovation, especially in the support industry and commercial services.

Despite a slow increase in the number of FDI enterprises involving in producing for-export items, the FDI sector has increased significantly its export-sourced contribution to the local economy.

The sector’s export earnings reached nearly 76.3 million USD, accounting for 28.6 percent of the city’s export turnover in 2001. It hit 474 million USD and 52.96 percent in 2012.

Moreover, FDI businesses have also increased their participation in the city’s retail sales, evidenced by the establishment of Metro Cash and Carry, Big C and Lotte Mart, serving a wide range of choices.

Despite achieving some good results, the attraction of FDI projects, especially those using high technology, remained low. Environmental protection standards of some FDI projects have yet been complied with strictly.

In the first nine months of this year, the city granted investment certificates to 26 FDI projects with a total of 33.7 million USD in new investment, three more projects than the same period last year, and agreed with the expansion schemes of 13 projects with an added investment of 140.7 million USD, up 4.9 percent year on year.

At present, Da Nang has 268 FDI projects with capitalising at 3.2 billion USD, of which 1.65 billion USD have been realised, accounting for 51.6 percent of the total registered capital.

More money flows into Tra Noc industrial park

The southern city of Can Tho has attracted an additional 25.8 million USD for its industrial zone of Tra Noc, one of the most successful in the Mekong Delta with 98 percent of its total area of 290ha in use.

Located near Hau River and national highway 91 for easy access, Tra Noc industrial zone has so far lured 183 projects with registered capital totalling 1.6 billion USD.

In the first nine months of this year, its total revenue exceeded 800 million USD, including 294 million USD from exports.

The industrial park is investing 213 billion VND (about 10 million USD) in a plant capable of treating all the wastewater of its nearly 190 businesses.

As efforts to attract more investors, local authorities have reduced land rent price to 0.6 USD from 4 USD per sq m/year, and shrunk processing time for investment licences from 90 days to 60 days.-

Vice President highlights business culture’s importance

Vice President Nguyen Thi Doan highlighted the importance of the business culture while receiving 120 exemplary entrepreneurs who are members of the Vietnam Entrepreneurs’ Cultural Centre in Hanoi on October 14.

The Vice President valued the entrepreneurs’ efforts to run their businesses successfully despite difficulties, improve employees’ wellbeing and create a healthy business environment.

She asked small- and medium-sized enterprises to be more active in their operations to satisfy domestic and foreign demand with high-quality products.

Meanwhile, the Vietnam Entrepreneurs’ Cultural Centre was urged to support businesses in creating development strategies, building brand names and fostering international cooperation.

Vice President Doan also voiced her hope that the entrepreneurs will continue to bring into play the Vietnamese entrepreneurial spirit to stand firm under any circumstances and join hands with the Party and State to stabilise the macro-economy and ensure social welfare.

Hai Duong sees big rise in number of businesses

The number of businesses operating in the northern province of Hai Duong has increased 13 times to 6,000 compared to the 1997 figure.

The information was revealed by Nguyen Huu Doan, President of the provincial Entrepreneurs Association at a recent meeting in the locality to celebrate the Vietnam Entrepreneurs Day (October 13).

In general, the businesses have made active contributions to the development of the province and the association, he said, adding that many of them have reaped successes in the domestic market and even reached out to foreign markets with their prestigious brands.

At the meeting, entrepreneurs said that they still face a lot of difficulties in production and business activities.

They urged the authorities to have specific mechanisms and policies to support their operations while speeding up the streamlining of administrative procedures to reduce their time and costs.-

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