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BUSINESS IN BRIEF 20/2

 PM: Restructuring of SOEs key political task; Over 400 SOEs to be equitised by 2015; Vietnamese abroad encouraged to remit money home; HCM City IPs eye US$550 million in investment; Vietnam among top world’s gold consumers

PM: Restructuring of SOEs key political task

Prime Minister Nguyen Tan Dung has stressed the restructuring of state-owned enterprises (SOEs) as a key political task for 2014 and the following year.

The PM told a conference on SOE restructuring in Hanoi on February 18 that the restructuring must be implemented in earnest with focus on the equitisation of state-owned enterprises.

He instructed ministries and localities to effectively carry out the equitisation of 432 SOEs during the 2014-2015 period, while considering further reducing the number of enterprises funded entirely with State capital and more divestiture in state capital dominant companies.

At the event, PM Dung hailed important contributions by SOEs to the country’s development over the past years, saying that SOEs have been a tool for the State to regulate the economy, maintain macroeconomic stability, contributing to promoting growth.

SOEs have promoted their leading role in building and developing the infrastructure system, research and application of science and translation of advanced technology into production and business, especially in oil and gas, telecommunications, transport, construction and chemicals.

Statistics released at the onference showed that a total of 432 SOEs will be equitised during the 2014-2015 period, which is seen as a huge job in need of breakthrough measures.

By 2015, State groups and corporations will withdraw nearly 22 trillion VND (roughly 1 billion USD) invested in fields outside their core business.

Participants at the event underlined the need to soon issue regulations on the management and inspection of State groups and corporations along with supervising the implementation of strategies and plans.

Reports presented at the conference revealed that during the 2011-2013 period, 180 SOEs nationwide were rearranged with 99 equitised, raising the total number of privatised businesses to 4,065.

Most of the equitised enterprises have seen remarkable growth, contributing to improving the economy’s competitive edge and promoting stock market restructuring.

Between 2011 and 2013, State capital poured into the enterprises has climbed from 700 trillion VND (32.9 billion USD) in 2010 to 810 trillion VND (38.07 billion USD) in 2011 and 1,019 trillion VND (47.9 billion USD) in 2012.

Over 400 SOEs to be equitised by 2015

A total of 432 State-owned enterprises (SOEs) will be equitised during the 2014-2015 period, which is seen as a huge job in need of breakthrough measures.

The figure was released at a conference on restructuring SOEs held by the Government in Hanoi on February 18. Prime Minister Nguyen Tan Dung and Deputy PM Vu Van Ninh co-chaired the event.

By 2015, State groups and corporations will withdraw nearly 22 trillion VND (roughly 1 billion USD) invested in fields outside their core business, the conference heard.

Participants at the event underlined the need to soon issue regulations on the management and inspection of State groups and corporations along with supervising the implementation of strategies and plans.

Criteria to classify 949 wholly foreign-invested enterprises which are operating in Vietnam should also be adopted, they said.

It is necessary for SOEs to apply modern business administration standards and accelerate the application of scientific and technological advances in order to cut costs and improve productivity.

Reports presented at the conference revealed that during the 2011-2013 period, 180 SOEs nationwide were rearranged with 99 equitised, raising the total number of privatised businesses to 4,065.

Most of the equitised enterprises have seen remarkable growth, contributing to improving the economy’s competitive edge and promoting stock market restructuring.

They have also affirmed the role of SOEs in the socialist-orientated market economy.

Between 2011 and 2013, State capital poured into the enterprises has climbed from 700 trillion VND (32.9 billion USD) in 2010 to 810 trillion VND (38.07 billion USD) in 2011 and 1,019 trillion VND (47.9 billion USD) in 2012.-

Vietnamese abroad encouraged to remit money home

Recipients of overseas remittances won’t be required to pay income tax, according to a new regulation issued by the State Bank of Vietnam.

The exemption from taxation is part of an initiative by the Government to encourage and create the best possible conditions for overseas Vietnamese (OVs) to send foreign currencies to their relatives at home.

Foreigners and OVs are permitted to transfer foreign currency into Vietnam through licensed financial institutions or international postal and financial service providers. They can also carry it with them when travelling to Vietnam.

Anyone bringing foreign currency into Vietnam for recipients is required to declare the amount with customs officers.

Recipients can sell it to credit organisations, transfer to individual accounts, deposit in banks or use in line with current regulations on management of foreign currencies.

Credit organisations are allowed to receive foreign currency sent by OVs and remit tax free to recipients at home.

HCM City IPs eye US$550 million in investment

HCM City aims to attract US$550 million to its industrial parks (IPs) and export processing zones (EPZs) in 2014, an increase of 10% over 2013.

The city encourages businesses to invest in key high technology and support industries, primarily in mechanics, electronics-informatics, chemicals, and food processing.

The Ho Chi Minh City Export Processing and Industrial Zones Authority (Hepza) is required to work closely with relevant agencies to speed up infrastructure construction at newly-established IPs.

Hepza is currently working on the Vietnam-Japan technology centre project at Hiep Phuoc IP in order to receive investment from small and medium Japanese businesses.

The centre provides not only workshops for production but also other convenient services such as employment recruitment, investment consultancy, accounting, employee training, and management consultancy. Municipal leaders have asked Hepza to replicate the model to other IPs in the city.

Last year businesses mostly invested in industrial production, pharmaceuticals, plastics and chemicals in these IPs and EPZs.

Vietnam among top world’s gold consumers

Vietnam ranks seventh in the world in terms of gold consumption, according to the World Gold Council (WGC).

The country’s demand for gold reached 92.2 tonnes in 2013, an increase of 20% over 2012. Of the total, gold jewelry was 11.9 tonnes.

China took the lead with the total gold demand of nearly 1,065.8 tonnes, up 32% over the previous year.

India came in second with 874,8 tonnes, a year-on-year increase of 13%, followed by the US (190.3 tonnes, 18%), Turkey (175.2 tonnes, 60%), Thailand (140.1 tonnes, 73%), Germany (121 tonnes. 10%), the United Arab Emirates (77.1 tonnes, 24%, Russia (73.3 tonnes, 5%) and Saudi Arabia (72.2 tonnes, 14%).    

Private sector dominates 500 fastest growing firms

More than 65% of Vietnam’s top 500 businesses with the fastest growth rates in 2013 are from the private sector, twice as much as that of state-owned companies.

According to the FAST 500 ranking in 2013 announced on February 18, Intimex Nha Trang JSC topped the list, followed by CNG Vietnam JSC and Phan Minh Trade and Services Co. Ltd.

FAST 500 is conducted by Vietnam Report Joint Stock Company (Vietnam Report). It is based on the Compound Annual Growth Rate (CAGR) which considers firms’ total assets, labour and post-tax profit, as well as turnover in the 2009-2012 period.

This year’s ranking shows that the average growth rate of these in the 2009-2012 period stood at 44.7%, lower than that recorded between 2008 and 2011.

Of the total, the food and beverage industry posted the highest number of businesses in the list, accounting for 18%. Construction and real estate came next with 16% while mineral, oil and gas was third with 9%.

Vietnam Report said that nearly 88% of the surveyed firms forecast that 2014 will be a better year for the business sector.

Workshop focuses on sustainable procurement

A start-up workshop of the project “Stimulating the demand and supply of sustainable products through sustainable public procurement and eco-labelling” (SPPEL) took place in Hanoi on February 18.

Deputy Minister of Natural Resources and Environment Bui Cach Tuyen said that the SPPEL project aims to combine green production and green consumption in order to obtain the maximum effectiveness of boosting sustainable procurement.

Through this start-up workshop, Vietnam will join in implementing this project with other nations like Brazil, Indonesia and the Philippines, with the aim to improve the capacity of making and implementing policies on sustainable public procurement and eco-labelling.

During the event, delegates gave their opinions on how to promote green public procurement in Vietnam.

They stressed the need for the Government to expand activities to raise people’s awareness of green purchase, and have policies to encourage enterprises making environmentally friendly products.

Vietnam has to date issued many legal documents encouraging sustainable production and consumption.

The National Strategy on Green Growth approved by the Prime Minister also noted that one of the solutions to ensure green growth is to foster sustainable consumption and promote a green lifestyle.

The event was co-organised by the Ministry of Natural Resources and Environment and the United Nations Environment Programme.

Laos, Vietnam boost auditing cooperation

The Vietnamese and Lao State Audits have vowed to increase auditing training and continue to support each other in the field, especially at multilateral forums, in a joint effort to nurture the special ties between the two countries.

The agreement was reached at the February 18 talks in Vientiane with the participation of Vietnamese State Auditor General Nguyen Huu Van, who is leading a delegation to Laos from February 18-22.

Van and his Lao counterpart Viengthong Siphandone informed each other of the socio-economic situation in their respective countries, and at the same time showed their pleasure at the effective collaboration in the sphere in recent time.

The two bodies have witnessed regular exchanges of high-ranking delegations, which will be maintained during 2014, and shared experience and documents in auditing-related issues.

The State Audit of Vietnam (SAV) is scheduled to join leaders from the state audit agencies of Laos and Cambodia at their sixth joint conference in Vientiane in the coming time. The Lao side will also visit Vietnam to attend a ceremony marking the 20th anniversary of the SAV.

As a member of the International Organisation of Supreme Audit Institutions (INTOSAI), the SAV has so far signed cooperation deals with over 30 audit institutions around the world.

State Audit targets economic restructuring activities

The State Audit of Vietnam (SAV) will focus on auditing economic restructuring activities and the efficiency of public investment and assets this year, says Deputy State Auditor General Le Minh Khai.

At a conference on February 18, Khai said that the SAV planned to audit 185 units across the country this year, over 20% higher than the number of units audited last year.

These include 14 ministries and central agencies, 35 provinces and cities and 42 State-owned enterprises and commercial banks, plus agencies under the Ministry of National Defence and Party bodies as well as operations at 35 key construction projects funded by Government bonds.

The SAV will look at the management and use of State budget and public assets at the ministries of Finance, Transport, Construction, Agriculture and Rural Development, Natural Resources and Environment, Health, Culture, Sports and Tourism and the State Bank of Vietnam.

Provinces and cities to be audited include Hanoi, Vinh Phuc and Ha Nam in the north, Quang Tri, Thua Thien Hue, Nghe An, Binh Dinh, Quang Nam and Danang in the central region, and HCM City, Long An, Tay Ninh, Bac Lieu, Soc Trang and Ca Mau in the south.

Major State-owned enterprises on the "hot list" include those operating in chemicals, cement, medicine, railways, steel and paper.

Khai said that of the 42 State-owned corporations to be audited this year, insurance and finance institutions are the SAV’s primary targets.

"This is expected to serve the implementation of the Government's plans to restructure credit institutions and State-owned enterprises before 2015," he said.

Last year, the National Assembly assigned the SAV to manage the use of all Government bonds, and the Office audited 151 units including 34 provinces and cities, 17 ministries and agencies, 32 investment projects and 32 State-owned enterprises and banking institutions.

In the reports, it recommended financial penalties of over VND22.7 trillion (US$1 billion) and asked for the removal or revision of 71 legal documents.

The SAV also transferred five cases to police or State Bank inspectors after finding irregularities. They included alleged capital losses at the Song Da Finance Corporation, an inability to collect debts at the Sea Products Import and Export Corporation and wrongful lending procedures at branches of the Bank for Agriculture and Rural Development.

According to the SAV, about 70% of its post-audit recommendations have been implemented over the years.

Vietnam, India increase textile exchanges

India has gained high bilateral trade turnover in the garment industry with most countries, but its textile trade value with Vietnam remains low.

The President of the Cotton Textiles Export Promotion Council of India (Texprocil), Manikam Ramaswami, made the statement at an exchange between Vietnamese and Indian textile makers in Ho Chi Minh City on February 18.

Ramaswami said Indian cotton textile only accounted for 1.59%, cotton fibre for 16.5% and cotton fabric for 0.58% of the market share in Vietnam – much lower than the average world level of 26%.

Thus the Texprocil and the Powerloom Development and Export Promotion Council (Pdexcil) sent an Indian business delegation on a fact-finding tour of Vietnam to promote textile potential.

In addition, more than 20 Indian businesses operating in fabric, cotton fibre, denim and jeans cotton are travelling Vietnam to seek cooperation opportunities.

In 2013 garment trade between Vietnam and India grew on a par with total bilateral trade.  Vietnam exported more than US$77 million worth of garments and fabrics to India, a-year-on-year increase of 38%, and imported more than US$419 million of garment and footwear materials, cotton, and fabrics, up 46%.

The trade exchange between Vietnam and India is co-organised by the Vietnam Chamber of Commerce and Industry (VCCI) HCM City branch, Texprocil, Pdexcil and the Indian Consulate General.

During their stay in HCM City, the Indian business delegation met with some craft associations and visited some businesses in HCM City and neighbouring provinces.

Vietnamese products win consumer trust

Vietnamese products are currently gaining a firm foothold in the domestic market thanks to their improved quality, high competitiveness and reasonable prices, a conference heard in Hanoi on February 18.

A report of the Central Steering Board for the campaign “Vietnamese people use Vietnamese products” showed many Vietnamese products are now favourites with local people, but a small segment of the population still express their preference for imports.

To further popularize the Politburo-launched campaign which enters its fifth year in 2014, the board suggested further improving product quality, enhancing communications, promoting the Vietnamese brand, strengthening State management, and supporting businesses in production expansion.

Delegates at the conference affirmed accelerating the campaign is one of solutions for removing economic difficulties and capitalizing on the ASEAN Free Trade Area (AFTA) in 2015 and the Trans-Pacific Partnership (TPP) Agreement due to be signed in late 2014.

Addressing the event, Nguyen Thien Nhan, President of the Vietnam Fatherland Front (VFF) Central Committee, and head of the central steering board, affirmed through the campaign, Vietnamese consumer trust in locally-made products has increased considerably over the years.

He proposed ministries, agencies and localities encourage their officials and staff to buy Vietnamese products, draw up communications plans for consumers living inside and outside the country, and consider honouring exemplary campaign contributors.

He also proposed incentives for businesses to produce highly competitive and quality products.  

Tokyo Metro offers assistance to Hanoi Metro

Japan’s Tokyo Metro will provide technical assistance and counselling services for the Hanoi Metropolitan Railway Management Board (MRB) to develop and run urban metro lines.

A document to this effect was signed in Hanoi on February 18 by Tokyo Metro Co. Ltd CEO Yoshimitsu Oku and MRB director Nguyen Quang Manh.

Both sides will exchange information and increase cooperation in human resources for metro projects.

 Since February 2013 the Japan International Cooperation Agency (JICA) has helped Hanoi carry out a project on technical assistance and increased capacity building of a Hanoi agency to operate and repair metro lines in the city.

Tokyo Metro and MRB experts are working on the establishment of an agency to manage and operate the lines in the future.

Yoshimitsu Oku expressed hope Tokyo Metro’s 90 years of experience will help Hanoi develop modern urban rail lines, giving it a facelift in the coming years.

Binh Duong attracts additional US$715 million in FDI

The southern province of Binh Duong has so far this year licensed 39 foreign direct investment (FDI) projects capitalized at US$715 million.

Among the projects, 20 are newly licensed with a combined capital of US$189 million, and 19 are operational, registering for additional capital of US$525 million.

Investors mainly focus on high technology and highly competitive industrial production. Just to name some, the Republic of Korea’s Nexfil is investing US$30 million in an insulating film production line; Japan’s Tanaka Ai Vietnam is pouring US$20 million in cosmetics accessories manufacturing; and Japan’s Yamazaki Vietnam is funneling US$15 million into household utensil production.

A favourable and efficient investment environment has prompted many businesses to increase capital and expand operations in Binh Duong.

Thailand’s paper Kraft Vina has decided to invest US$150 million more in expanded production to meet local demands and for export. The company began operation in 2010 at an initial investment of US$180 million.

Binh Duong has built a synchronous infrastructure system, developed quality human resources, improved service quality, accelerated administrative reforms, and timely addressed investor concerns.

The province is poised to capitalize on the Trans-Pacific Partnership (TPP) agreement expected to be signed in 2014. Accordingly, it will build an industrial park covering more than 300ha to support garment investors.

To date Binh Duong has attracted more than 2,250 FDI projects totaling US$19.4 billion.

SOE equitisation to pick up steam

As many as 432 State-owned enterprises (SOEs) will be equitised over 2014-15 to make SEO restructuring more efficient.

The figure was unveiled at a national conference on SOE restructuring in Hanoi on February 18.

Pham Viet Muon, Deputy Head of the Steering Board for SOE Renovation and Development, admitted EOE equitisation went behind schedule between 2011 and 2013 due to economic difficulty, mechanism obstacles, and lax management.

SOE equitisation is said to go slow between 2011 and 2013

He said equitisation is the most complex task in SOE restructuring that needs a breakthrough to make it efficient.

SOE restructuring, with equitisation forming the core, will be accelerated, from now till 2015, even for State economic groups, Muon said.

Businesses, including those operating efficiently, will be encouraged to divest from non-core operations and sell stakes the State does not hold.

Muon revealed first and foremost SOE restructuring will be carried out for businesses in the industrial, trade, transportation and construction sectors.

Businesses that are eligible for initial public offering (IPO) will follow current laws. Those that cannot go public will be transformed into joint stock companies whose stakeholders are the State and State capital investment corporation (SCIC).

In these businesses, the State may hold the majority of stake – a way of changing the business’ legal status and diversifying capital ownership, to help the business meets investor needs when market conditions are right.

Muon reminded to-be-equitised businesses to consider debt settlement policies and other social welfare policies for redundant workers.   

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.

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.

More companies to receive award for high-quality goods

The Vietnamese High Quality Goods award would be given to 474 firms this year, up 58 enterprises compared to 2013, it was announced yesterday.

The winners were selected from a list of 662 eligible companies following a 3.5-month poll conducted nationwide by the Business Association of High Quality Vietnamese Products.

Besides conducting surveys on households and individual consumers, the association, for the first time, surveyed retailers in markets, supermarkets and shops, said Hoang Trong of the association.

The association has co-operated with government agencies to check the firms' compliance with product quality management and Government policies and laws.

There are 80 new winners and 42 that have won annual recognition for 18 consecutive years, according to Trong.

It also marks the first time that businesses operating in the fresh flower and vegetable industry have participated in the awards competition. Seven of them won awards.

Most of the award-winning firms are makers of food, sauces, spices, electrical and household machines, non-alcoholic beverages and embroidered products.

Vu Kim Hanh, the association's chairwoman, said yesterday the association would support businesses so they could expand market share in domestic and neighbouring markets, as well as update and improve their technologies and management.

In addition, the association would help small- and medium-sized firms and specialty food producers to promote their businesses.

The association also planned to enhance communication activities to improve the consumption of Vietnamese goods in the domestic market, she said.

The awards ceremony will be held on February 25 at the White Palace Convention Centre in Phu Nhuan District.

India eyes VN cotton textile market

Vying for a bigger share of the Vietnamese market, Indian cotton textile companies met with Vietnamese businesses yesterday in HCM City to promote the benefits of enhanced trade.

At the meeting were representatives from more than 20 companies from India, one of the biggest cotton textile manufacturers in the world.

Manikam Ramaswami, chairman of India's Cotton Textiles Export Promotion Council, said that in most markets the council had been able to reach a respectable level of trade fairly quickly.

However, in Viet Nam, their share in cotton textiles was only 1.6 per cent, up from 1.3 per cent last year, he said.

Their share in cotton yarn too was still far below India's average international share of 26 per cent, just 16.5 per cent, up from 13 per cent last year.

"Viet Nam needs quality yarns and fabrics at the right price. India is the world's most competitive manufacturer of these products and has rapidly increased its exports to Pakistan and China," he said.

"We need to improve the understanding of India's capabilities and present India textiles as a good partner for Vietnamese textiles to reduce cost of production," he added.

"We are here to cooperate with you to help you emerge an even more competitive industry, and help your journey to become the fastest-growing garment market of the world," he said.

According to the Viet Nam Chamber of Commerce and Industry (VCCI), bilateral trade turnover in the industry has developed strongly in recent years.

Last year, Viet Nam exported more than US$77 million of garments and textiles to India, a jump of 38 per cent year-on-year. Meanwhile, it imported $419 million of textiles and yarn from India, a surge of 46 per cent.

"India has great potential as a supplier for the Vietnamese garment and textile sector," said Vo Tan Thanh, head of VCCI in HCM City.

Domestic fertiliser supply stable: MoIT

The domestic fertiliser market has had no fluctuations in the first two months of the year due to stable fertiliser demand for the winter-spring rice crop in the South and large-scale domestic output, according to the Ministry of Industry and Trade.

In January, the country's fertiliser production slightly increased against the same period last year.

The production of NPK (nitrogen, phosphorous and potassium) fertiliser reached 202,000 tonnes, up 2.2 per cent and urea, 185,000 tonnes, up 5.2 per cent.

Meanwhile the production of DAP (diammonium phosphate) fertiliser was estimated at 15,000 tonnes, down 36.8 per cent.

Farmers tend to increase their use of natural mineral NPK and high-quality organic fertiliser because of low prices and its environmentally friendliness. This will cause the price of other kinds of chemical fertilisers to decline, says the Ministry of Industry and Trade.

The country imported 242,000 tonnes of various kinds of fertilisers worth US$67 million last month, down 22.4 per cent in volume and 47.1 per cent in value against the same period last year, according to the Ministry of Agricultural and Rural Development.

EVN tightens investment rules

Electricity of Viet Nam (EVN) will not partner with, invest in or buy shares in the real estate sector, banks, and other financial sectors, except under the prime minister's authorisation.

As part of this policy, EVN, a State-owned electricity provider, will not consider investment in securities companies, hedge funds and securities investment companies, according to a financial regulation draft issued by the Ministry of Finance.

The ministry has issued the draft to collect suggestions for regulations before they are formally recognised, the Ministry of Finance stated.

Under the regulations, EVN will use its capital to invest in non-core businesses underlined within the company's organisation and operation regulations. The investments in non-core businesses must ensure efficiency, conservation and development of the invested capital, must increase revenue and must remain unchanged operationally.

EVN must get the prime minister's approval to add businesses to its operation regulations or to invest its capital into non-core businesses that are at variance with its operation regulations for the next few years.

Meanwhile, EVN will not receive investments or joining capital from its subsidiaries, and the subsidiaries with EVN's wholly invested capital will not be used to buy shares at other subsidiaries of EVN when being equitised.

The draft also has clear regulations on the mobilisation and use of capital, selling of debts, salaries for labourers and the retail prices of electricity.

EVN plans to withdraw capital worth VND2.07 trillion (US$97.64 million) from seven non-core companies by 2015.

The withdrawal, as part of its master restructuring plan, will ensure that EVN focuses on its core business of power production and trading to better serve society and the economy.

In 2013, EVN had withdrawn some VND252 billion ($12 million) from An Binh Bank and VND26 billion ($1.22 million) from GIC.

Last October, the Government Inspectorate announced that by the end of 2011, EVN's non-core investments reached VND121 trillion ($5.76 billion) and surpassed its charter capital of almost VND77 trillion ($3.7 billion). Despite the large non-core investments, EVN reported losses of VND2.2 trillion ($104.7 million).

Small funds report mixed results in 2013

Five small funds out of nine that have released their 2013 results have reported improved though still modest performances, according to Dau tu Chung Khoan (Securities Investment) magazine.

The State Securities Commission has issued an operating licence to Dai-ichi Life Vietnam Fund Management Company.

The company, which has a legal capital of VND25 billion (US$1.2 million), will offer services like fund management, portfolio management, and investment consultancy.

Thang Long Fund Management Co., which manages VND30 billion ($1.4 million), announced a net profit of VND970 million (US$46,000) compared to just VND100 million the year before. It helped lessen its accumulated losses to VND9.4 billion (US$447,000).

The VND46 billion ($2.2 million) Vietnam Asset Management reported profits of VND190 million ($9,000), a far cry from the loss of VND2.5 billion ($120,000) it made in 2012, mainly because a company to which it owed VND1 billion forgave the debt. It still has accumulated losses of VND20.5 billion in its books.

After having made a loss of almost VND1 billion in 2012, fund management firm An Binh made a dramatic turnaround to make a profit of VND570 million. Its total losses now stand at almost VND8 billion ($380,000). It manages VND30 billion.

Hung Viet and Thai Binh Duong also reported positive results.

A major fund, Ban Viet, said it earned VND20.3 billion ($970,000), or more than twice the 2012 profit.

An Phat, Phuong Dong, and VFM reported losses of VND1.3 billion, VND1.8 billion, and VND9.7 billion respectively.

The State Securities Commission estimated that 22 out of 41 active fund managers made profits last year.

Mekong Delta helped to maximise farming techniques

A project, funded by the International Rice Research Institute (IRRI) and the World Bank (WB), is looking to aid Mekong delta provinces to keep up with advanced farming techniques in the world to enhance the competitiveness of their rice.

The project, Closing Rice Yield Gaps in Asia (CORIGAP), designed for the 2013-2018 period, aims to improve rice productivity, quality and efficiency while reducing the gaps in rice yield in the region.

Furthermore, by developing modern rice farming models, it also targets to contribute to reducing poverty, ensuring food security and improving income for local people.

Activities of the project for 2014 were discussed in Can Tho city on February 18, with the participation of local scientists and their colleagues from Thailand, Indonesia, Sri Lanka and Myanmar.

The Mekong Delta has targeted an annual rice output of 24 million tonnes from 2020 to 2030 to remain as the country’s top rice producer.

To reach the goal, the region is required to zone 4.3 million hectares of land for rice farming from now to 2030.

Localities are also working with research institutes to apply new biotechnology allowing the creation of new rice varieties and improving existing ones.

From now to 2015, Mekong Delta provinces plan to increase the mechanisation of farm work to minimise post-harvest and storage losses.

From 2015 onwards, the localities will multiply cultivation under the Good Agricultural Practices so that the area under clean rice will account for at least 40 percent of rice land.

According to the Mekong Delta Rice Research Institute, the region increased its rice output from 4.2 million tonnes in 1976 to 24.5 million tonnes in 2012.-

Automobile industry needs strategic focus

In any angle of product, sedan seems to be the apparent face of the Vietnamese automobile industry, said an article published on the Vietnam Business Forum - a weekly magazine of the Vietnam Chamber of Commerce and Industry.

However, many people forget, intentionally or unintentionally, that the automobile industry is not only made up by only the sedan but also a variety of extremely important means to the economy, or to be more specific, production and business activities of the business community, business households and individuals.

According to the article, such other means include trucks, vehicles for special purposes, and passenger cars (more than 10 seats).

Less than four years before import taxes on CBU (completely built unit) cars from Southeast Asian nations are brought to zero percent, automakers in Vietnam are still squirming with simple assembly processes.

Localisation ratio in assembled-in-Vietnam automobiles is very low, except for some models like Toyota Innova with a locally sourced component ratio of 40 percent or so.

Meanwhile, other ASEAN countries like Thailand and Indonesia have strongly emerged to be leading automobile manufacturing centres in the world. They are exporting automobiles to the world where Vietnam is a potential market with a population of over 90 million and a very low car-to-people ratio.

Foreign-led car joint ventures admitted that Vietnam would impossibly develop the automobile industry with sedans being the flagship in the next four years. There was a warning that Vietnam would have only three foreign-led carmakers with production bases in the country by 2018.

The article said if the Vietnamese automobile industry lacks breakthrough changes, the remainders will be fewer, proposing that commercial vehicles are the cure. Trucks and buses hold enormous advantages, and commercial vehicles do not face as heavy pressure as imported vehicles like sedans.

For example, Vietnam will have to slash import tariffs on completely built cars from Southeast Asian nations to zero by 2018. This is very much worrying manufacturers of cars with less than 10 seats.

Among the 56 automobile manufacturers in Vietnam now, bus and truck makers like Truong Hai, Vinaxuki, Samco, Vinamotor and VEAM are controlling the market. Fair enough, trucks and buses are helping Vinaxuki and Truong Hai to sustain development and nurture the ambitious dream of making sedans or hatchbacks.

Previously, some experts suggested that instead of trying to make a Vietnamese sedan, automakers should focus on researching and manufacturing trucks and buses.

They argued why Vietnam did not focus on what it was good at instead of trying to raise the localisation ratio in cars with less than 10 seats. Indeed, Vietnam was hoped to bring the localisation ratio to 40 percent in cars assembled in Vietnam in 2010 while the actual rate was just 5 percent. Meanwhile, it is easy to raise the ratio in buses and trucks to over 50 percent.

According to the new automobile development strategy to 2020, with a vision to 2030, the Ministry of Industry and Trade has drafted fundamental changes to the focus on vehicles. Vietnam will focus on manufacturing midsize and small trucks, passenger cars and vehicles for special purposes (concrete mixers, tankers, etc.) The strategy also mentions Vietnam’s ambition to become a supplier for global automobile value chains.-

Over 1 trillion VND disbursed in housing loans

Commercial banks had by January 31 disbursed 1.068 trillion VND (50.61 million USD) from the 30 trillion-VND housing support package to 2,218 customers.

The State Bank of Vietnam (SBV) said in a February 18 statement that the disbursed loans increased by 32.7 percent from the figure of last December.

Earlier, the banks committed to offer loans to 2,231 individuals with a total capital of 801.6 billion VND (37.99 million USD). Of which, 533.7 billion VND (25.3 million USD) was disbursed to 2,208 borrowers.

The Bank for Investment and Development of Vietnam (BIDV) reached the highest disbursement of 192.4 billion VND (9.11 million USD), followed by the Vietnam Joint Stock Commercial Bank for Industry and Trade (VietinBank) with 153.4 billion VND (7.27 million USD).

The lowest disbursement was seen in the Mekong Housing Bank with over 7.7 billion VND (nearly 365,000 USD).

The SBV also said it has confirmed registration from three banks - BIDV, VietinBank, and Bank for Agriculture and Rural Development - to sign contracts valued at 1.5 trillion VND (71.09 million USD) with 15 enterprises, accounting for 16.7 percent of the total capital for housing for businesses.

So far, 534.8 billion VND (25.34 million USD) has been disbursed to ten firms, the SBV added.

The 30 trillion VND (1.42 billion USD) package for housing support was announced last year by the SBV.-

Cooperation in Hanoi’s rail system gathers steam

The Hanoi Metropolitan Railway Management Board (MRB) and the Tokyo Metro Co. Ltd. from Japan inked a memorandum of understanding on cooperation in the management and construction of the capital’s railway system on February 18.

For the past year, the Japan International Cooperation Agency has implemented a technical assistance project to enhance Hanoi ’s capacity in urban railway management, operation and maintenance.

Tokyo Metro President Yoshimitsu Oku said more experience and training are required to ensure the safe and stable operation of the urban railway system.

He expressed his hope that the Japanese side will tighten technical collaboration and conduct further personnel and information exchanges with the MRB.

At the signing ceremony, Vice Chairman of the Hanoi People’s Committee Nguyen Van Khoi said both sides also need to expand their cooperation content in terms of management, operation and maintenance, which are pivotal to urban railway system development.

Hanoi plans to build eight urban railway lines. Five are under construction or in the research phase.

The first line is expected to become operational by the end of 2015.-

Action required to up use of made-in-Vietnam goods

Chairman of the Vietnam Fatherland Front Central Committee Nguyen Thien Nhan has called for more actions to boost the use of locally made goods in Vietnam.

The chairman made the call while addressing a meeting to implement the 2014 plans of the campaign “Vietnamese people prioritise the use of Vietnamese goods” in Hanoi on February 18.

Chairman Nhan, who is also the head of the campaign steering committee, said more people are satisfied with the quality of goods manufactured in Vietnam, thanks to the effective operation of the campaign.

He asked relevant agencies to work together to spread information about locally made goods to Vietnamese people both at home and abroad, while honouring organisations and individuals contributing to the campaign.

In the meantime, local authorities were asked to encourage the use of goods produced locally and create more incentives to back enterprises active in the field.

2013 is the fourth year of the campaign, which has improved the quality and competitiveness of locally made products, winning the support of consumers.

This year the campaign will focus on bettering the quality of products as well as further promoting Vietnam’s trademark in the global market.-

Binh Duong province’s rubber promises good exports

Vietnam’s rubber production faced many difficulties in 2013, but southern province of Binh Duong still reached encouraging results, the Binh Duong online newspaper reported, adding that the sector promises well in 2014.

Currently, Binh Duong has more than 130,000 hectares of rubber trees, including more than 80,000 hectares from small plantations.

There are two big rubber companies, namely Dau Tieng Rubber One-Member Co.Ltd. and Phuoc Hoa Rubber Joint Stock Company (JSC). The two companies have over time gone along with farmers at the local small rubber plantations, especially in the task of rubber latex purchasing.

Their exports will support the development of small rubber plantations a lot, contributing to ensuring an income source for the local rubber growers.

In 2013, Binh Duong’s rubber latex export reached more than 270,000 tonnes, a twofold increase in comparison to 2012.

The price of rubber latex saw a continuous fall, due to the natural rubber area on increase.

There was an increase in the rubber export, but a reduction in export value, due to the selling price lower than previous years.

One of important elements affecting Vietnam’s export rubber price was that Vietnam’s export rubber industry mainly depends on the Chinese market. It is known that Vietnam’s rubber exports to China account for 45 percent of the total exports.

Thanks to sound policies, Phuoc Hoa Rubber JSC and Dau Tieng Rubber last year maintained their exports at a high level, thereby fulfilling the set targets. Phuoc Hoa Rubber JSC secured 34 million USD in export turnover. This was an impressive figure in the context that the Vietnamese rubber industry isfacing difficulties.

Nguyen Van Tan, General Director of Phuoc Hoa Rubber JSC, said that despite difficulties, the JSC has still maintained export contracts with partners in the world. According to him, the JSC will further maintain and improve its exports in 2014 by trying to meet all requirements from partners; maintain the quality of latex products; listen to partners’ ideas, make coherence with partners; maintain old partners and seek new ones.

Dau Tieng Rubber last year maintained its exports at a high level with a selling price higher than those of other units. Particularly, the company exported more than 29,000 tonnes of latex to main markets, including Northern Europe, Eastern Europe, Japan, China, Singapore, Taiwan, Malaysia, Australia and New Zealand.

For the 2014 plan, the company’s exports will reach 27,000 tonnes. Nguyen Quoc Viet, Deputy General Director of the company, said that it overcame difficulties in 2013 thanks to its good export tradition. The company also took measures in production and business, including improving its quality control system. In 2014, it will further maintain its traditional partners abroad and take measures to enhance the quality of latex products at partners’ demand.

It is predicted that the price of rubber latex will be higher than 2013. The Ministry of Finance has also issued a circular cutting the export tax rates on both natural and synthetic rubber exports.

According to the circular, the export tariff on all rubber exports will be fixed at 1 percent. This means that the tax on synthetic rubber exports is being reduced from 5 percent to 1 percent, while that on natural rubber exports will also be 1 percent from 3 percent previously. This is seen as a favourable condition for Binh Duong’s export rubber industry to reap higher results in 2014.

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

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