Construction of Vinh Tan 1 thermal plant underway

The Ministry of Industry and Trade (MoIT) on July 18 announced the start of work on the construction of the Vinh Tan 1 thermoelectricity in central Binh Thuan province.

Built in the form of BOT ( build-operation-transfer) by two Chinese companies – the Southern Power Grid Co. and Chinese International Power Co.Ltd.-, and the Vietnam National Coal – Mineral Industries Holding (Vinacomin) Group, the plant is due to be completed within 48 months at an estimated cost of more than 1.75 billion USD.

After 25 years of commercial operation, the plant will be transferred to the Vietnamese Government.

According to Head of the MoIT’s general department of energy Dang Huy Cuong, with an expected annual output of approximately 9.5 billion kWh, the Vinh Tan 1 coal-fired power plant will play an essential role in ensuring electricity supply in southern Vietnam.

The plant is among major projects approved in the master plan for the national grid development through 2020.-

Work on Phuoc Khanh bridge commences

The Vietnam Expressway Company (VEC) held a ceremony to break ground on the Phuoc Khanh Cable Stayed Bridge crossing Long Tau River on July 18 in Ho Chi Minh City’s Can Gio district.

Addressing the ceremony, VEC Deputy Director General Pham Hong Quang said the bridge is a key component of the Ben Luc-Long Thanh Expressway project.

The bridge building contract, worth a total of 2.84 trillion VND (132.9 million USD) is jointly implemented by the VEC and a consortium made up of Japanese contractor Sumitomo Mitsui Construction and local partner Civil Engineering Construction Corporation (Cienco 4).

The Phuoc Khanh Cable Stayed Bridge will be 21.75m wide and 3.2 km long, connecting Can Gio district in Ho Chi Minh City and Nhon Trach District in Dong Nai province.

The Ben Luc-Long Thanh Expressway project has a total length of 57.1km running through Long An province, HCM City and Dong Nai province.

With four lanes, the road is designed for vehicles to run at a maximum speed of 100 kph.

The expressway includes a total of 20 km of bridges, including the Phuoc Khanh bridge and the almost 3km-long Binh Khanh bridge spanning Soai Rap River.

The first phase of the expressway project will require roughly 1.6 billion USD, of which 636 million USD is funded by the Asian Development Bank and 635 million USD comes from the Japanese Government via the Japanese International Cooperation Agency (JICA).

Upon its completion, the work will help promote socio-economic development in the southern key economic zone, especially the southeastern region.

It is also expected to draw investment and boost the development of tourism in Ho Chi Minh City, Long An and Dong Nai provinces.

VTC posts impressive results in the first half of the year

Viet Nam Multimedia Corporation or Viet Nam Television Corporation (VTC) posted impressive results in the first half of the year.

The company's turnover reached VND1.85 trillion (US$85.6 million), representing a 37 per cent year-on-year rise.

Figures released during a conference held in Ha Noi yesterday to unveil the tasks before VTC in the second half of the year showed that its profit of VND81.6 billion during the six-month period amounted to 80 per cent of its target for the entire year.

VTC's subsidiary, VTC Intecom, contributed the highest turnover of VND1.23 trillion in the overall result, posting a 49 per cent year-on-year increase. The company's profit reached VND100 billion, which is much higher than VND27 billion profit it made during the same period last year.

VTC Digital reported a turnover of VND226 billion and a profit of VND33 billion, while VTC Media posted a turnover of VND45 billion and a profit of VND2.8 billion.

The corporation contributed VND222 billion ($10 million) to the State budget, posting a 54 per cent year-on-year increase and meeting 75 per cent of the year's target. It paid an average monthly salary of VND14.4 million per worker.

Dam My Nghiep, VTC's General Director, said the company's restructuring, to reduce the number of its units from 49 to eight, had contributed to the results.

Deputy Minister of Information and Communications Nguyen Thanh Hung hailed the results, which nearly reached the company's targets for the entire year, saying that this year could be the most successful of the last three years for the firm. Hung asked the corporation to focus on completing its planned tasks during the second half of the year, especially with regard to the VTC Television division. The company was also urged to link the second phase of its restructuring to the next five-year development plan. The corporation should pay attention to domestic and international regulations, especially the Trans-Pacific Partnership agreement, to develop strategic development plans, Hung said.

Domestic firms fail to qualify for Samsung production chain

Vietnamese businesses still have a low share of just about 10 per cent in Samsung Electronics' production chain in Viet Nam.

The main reason for this is the limited ability of local firms to ensure quantity, quality and competitive prices for Samsung.

The Deputy Minister of Industry and Trade, Tran Tuan Anh, said becoming a supplier for Samsung would be a significant achievement in terms of improving the competitiveness of the country's support industry, which has been a key pillar in the country's industrialisation process.

In the context of globalisation, the support industry has acted as a foundation on which the country's development depends since it can decide the production cost and add value to products, Anh told a conference, held in Ha Noi yesterday, on the support industry for Samsung.             

Samsung is one of the big foreign investors in Viet Nam, having 80 suppliers of spare parts and accessories in the country, he said.

"However, the number of Vietnamese suppliers in Samsung's production chain is low as they have not met the company's requirements. The local enterprises have joined production segments which have low added value," he said.

Businesses were not solely responsible for this situation, he said, pointing to a lack of strong policies, especially a favourable legal framework to enhance the capacity of firms and create opportunities for them to join the support industry.

The deputy minister said it was true that policies regulating the support industry had not created a breakthrough for local businesses. The ministry has submitted to the government six draft plans to develop the sector, and is awaiting approval for these, he said.

"The ministry will cooperate with Samsung to find capable suppliers," he added.

Han Myoungsup, Samsung Viet Nam's general director, said the company had worked with the Vietnamese government to develop the country's support industry.

He said four Vietnamese businesses were direct suppliers to Samsung Viet Nam, while 28 other firms had passed strict selection tests to become its suppliers.

Last year, the local suppliers sold spare parts worth US$35 million to Samsung. The figure is expected to increase to $45 million this year.

Jang Ho Young, SEV's purchasing manager, said several Vietnamese firms wanted to work with Samsung, and two companies had been trying to become Level 1 suppliers to the company.

Nine other firms had the potential to become Level 1 suppliers to Samsung, he said.

Forty-one local businesses are expected to become potential partners of SEV, he said.

"Businesses are required to meet conditions such as having a large scale, high quality, stable capital and capable leaders to become our suppliers," he added.

Jun Dea Joo, the South Korean Ambassador to Viet Nam, said his country's investments in Viet Nam had reached US$39.4 billion, with 4,000 firms involved. Two-way trade turnover has increased steadily. Last year, there was bilateral trade worth $30.1 billion, while the figure for the first five months of this year was $14.66 billion, he said.

This is the second time SEV has organised a conference to seek local suppliers. Samsung unveiled a list of electronics components the company is seeking from suppliers, and held direct talks with 200 businesses that want to become its suppliers.

After seven years of operation in Viet Nam, SEV sources 36 per cent of its components locally. Of this, nearly 10 per cent is made by Vietnamese firms, while the remaining comes from foreign firms from nine countries operating in Viet Nam.

Trade deficit reaches US$3.07 billion in first half of 2015

Vietnam ran a trade deficit of US$3.07 billion in the first six months of this year, according to the most recent statistics released by the Vietnam Customs Agency.

In the first half of the year, total export turnover reached US$77.77 billion, posting a 9.3% year-on-year increase, while the total import turnover was US$80.84 billion, an increase of 6.7% year on year.

As a result, there was a US$3.07 billion trade deficit in the first six months of 2015.

The FDI sector took the lead in terms of import revenue during the period, reaching US$100.71 billion, an increase of 22% compared to the same period last year.

Some products saw an increase in export turnover including garments, textiles, fruits and vegetables, telephones and spare parts, machinery appliances, iron, steel and wood.

Vinamilk tops enterprises with the most varied information in the media

Vinamilk has led a list compiled by Vietnam Reports on the enterprises receiving the most favorable media coverage overall.

Based on an analysis of media reports, the Top 10 enterprises that received the most positive media exposure from July 2014 to June 2015 were announced by Vietnam Report, an independent company ranking the services and quality of companies in Vietnam.

The Top 10 include Vinamilk (VNM), the Vietnam Insurance Company (BVH), the Bank for Foreign Trade of Vietnam (VCB), the Hoa Sen Group (HSG), the Hoang Anh Gia Lai JSC (HAG), the PetroVietnam Fertilizer and Chemicals Corporation (DPM), the Hoa Phat Group (HPG), the Vingroup JSC (VIC), the Military Commercial Joint Stock Bank (MBB), and FPT Telecom (FPT).

Vietnam Report also named enterprises with the most varied information appearing in the media. VNM led the way, followed by VIC, HAG, DPM, VCB, BVH, HSG, HPG, FPT and MBB.

Vinamilk has stood out in the milk industry for years, according to Vietnam Report. Since its establishment 37 years ago, Vinamilk has developed a reputable brand in Vietnam and gradually penetrated the world market. Additionally, its CEO Mai Kieu Lien has attracted much attention in both domestic and overseas media. She was honoured as one of the top 50 female Asian entrepreneurs in 2012-13 by Forbes.

There was more positive media exposure for the Top 10 enterprises than negative exposure. According to Vietnam Report, the enterprises had high capitalization ratios and liquidity in the stock market and had a great deal of positive exposure. Secondly, with the stock market performing well, Vietnamese businesses are in a better position to build a positive image.

The most discussed topics in the media regarding enterprises were their stock price, business performance, business strategies, products, and human resources.

According to Vietnam Report, the positive exposure for enterprises was mainly regarding their stock price, which attracts a lot of people’s attention. Meanwhile, business performance influenced the ability of enterprises to make a profit, which also attracts positive media exposure.

SMEs advised to adopt long-term growth plans

Small and medium sized enterprises (SMEs) should develop long-term strategies, renew technology and equipment and management, President Truong Tan Sang said at a meeting with outstanding businesspeople in Hanoi on July 16.

The meeting marked the tenth anniversary of the Association of Small and Medium Sized Enterprises.

The President said the association should work harder to attract more enterprises and involve them in the making of policies concerning them.

He said the association hosted 90 percent of all businesses in Vietnam, adding that it had played a great role in creating jobs and wealth for the nation, contributing much to national socio-economic development.

He said that the Party and society would always create the best conditions for SME businesses to grow. He urged the association to help its members access legal consultation, finance, technological transfer, market information and copyright.

He called on enterprises to co-operate better among themselves and with bigger businesses to make roads into markets where big brands were established.

Cao Sy Kiem, Chairman of the Association, told President Sang that the association now extended to 55 provinces and had 52,000 members operating in most economic realms.

He said SMEs had been confirmed as one of main drivers of national economic development, contributing 40 percent to the Gross Domestic Product (GDP), 30 percent of the State budget, 33 percent of total industrial value, 30 percent of export value and make up half of the nation's workforce.

They had also helped preserve many of the dwindling traditional craft villages.

ASEAN market access paper launched

The European Union-ASEAN Business Council (EU-ABC) has launched a region-wide position paper of recommendations to boost market access as well as increase trade and investment between Europe and ASEAN.

In a statement released on July 16, the council said Europe has been the region's largest source of foreign direct investment (FDI) and the position paper explores ways to open markets up even further in line with the ASEAN Economic Community Blueprint.

The paper mentioned the elimination of non-tariff barriers to trade, highlighting issues such as cumbersome customs procedures with little harmonisation across ASEAN and unpredictable application of regulations and procedures, impacting businesses' ability to make informed long-term investment decisions.

Other issues include restrictions on foreign ownership and foreign competition and lack of harmonised standards or lack of mutual recognition of such standards across the region.

On the same day, the EU published its latest EU-ASEAN trade and investment statistics which confirm that the EU is ASEAN's second most important trade partner after China, accounting for 13 percent of ASEAN's goods trade.

Between 2004 and 2014, ASEAN-EU trade grew at an annual compound rate of 4.7 percent with the trade balance in ASEAN's favour, with the EU importing more from the region than it exports to it.

Singapore is the EU's most important trading partner in ASEAN, accounting for 25.1 percent of ASEAN-EU goods trade, followed by Malaysia (18.8 percent), Thailand (17.3 percent) and Vietnam (15.8 percent), it said.

The statistics also show that the EU was ASEAN's largest investor with 156 billion EUR in FDI stocks in 2013, accounting for 22 percent of investment flows into ASEAN, followed by Japan with 18.7 percent.

Environmental protection at industrial areas specified

Ministry of Natural Resources and Environment issues Circular on protecting the environment in economic zones, industrial parks, export processing zones, and high-tech zones.

Circular No. 35/2015/TT-BTNMT from the Ministry of Natural Resources and Environment (MoNRE) was issued recently, on environmental protection at economic zones, industrial parks, export processing zones, and high-tech zones. The Circular will take effect on August 17.

In economic zones, agencies that propose their establishment or expansion must evaluate the capacity to adapt to environmental requirements and report to MoNRE and the Ministry of Planning and Investment.

Such agencies are also responsible for the planning, construction and operation of environmental protection infrastructure and must send a written notice to MoNRE so it may monitor and inspect the infrastructure. Environmental protection infrastructure includes systems for collecting, storing and processing solid waste, collecting and draining rainwater, and treating wastewater, observation points to determine the quality of the surrounding environment, and green areas.

In industrial parks, export processing zones, and high-tech zones, the planning of their functional areas must minimize the impact of production pollution and be able to respond to environmental incidents.

Projects in these parks and zones must be a safe distance from the surrounding environment according to national technical regulations for public utilities and infrastructure to minimize any potential impact on other facilities or their surroundings.

Technical infrastructure for environmental protection must be suitable with the type of investment and minimize any adverse impacts on the surrounding environment. Green areas must be at least 10 per cent of the total area. Rain water drainage systems, centralized wastewater treatment systems, storage areas for solid waste and automated wastewater monitoring systems must be in place. Environmental protection infrastructure in these parks and zones must follow technical regulations.

The Circular also specifically defines the management of waste water, emissions, noise, solid waste, and hazardous waste, and regulates the prevention of and response to environment incidents.

$300 million Indian credit for textiles sector

The Vietnam Textile and Apparel Association (VITAS) has announced that the Indian Government has officially provided a preferential credit package of $300 million to Vietnam with the aim of promoting cooperation in the field of textiles between the two countries.

The $300 million will go to investment projects in the textiles sector with 75 per cent of equipment and services coming from India. The loan term is ten years with an interest rate of 2 per cent per annum. Transactions will be conducted through the Vietnam Export Import Commercial Joint Stock Bank (Eximbank).

VITAS believe the credit package will help Indian companies develop factories in Vietnam and at the same time encourage Vietnamese companies to expand their cooperation with Indian partners. This is also an opportunity for businesses to gain more advantages after joining the Trans-Pacific Partnership (TPP).

More supply to come for HCMC & Hanoi office space

Vietnam is fast becoming the go-to place for manufacturing, setting the foundation for stronger growth of ancillary industries in Ho Chi Minh City and Hanoi, according to Cushman & Wakefield (C&W)’s Asia Pacific 2015-2016 forecasts.

Notably, growth in the IT, finance, insurance, pharmaceutical/life science and fast-moving consumer goods sectors is propping up leasing activity.

“There is expected to be around 715,000 sq m of office space across all grades coming onto the Hanoi market in the next two years, thus more opportunities for tenants when choosing office space with a reasonable rental rate,” commented Mr. Alex Crane, General Manager of C&W Vietnam.

In Ho Chi Minh City, he went on, there is expected to be over 100,000 sq m new office space, providing more choice for tenants. “Due to competition among landlords in attracting tenants there will be more flexible terms to support tenants than before,” he said.

According to the report, development activity continues to rise more rapidly in both cities, which should provide ample space opportunities for their expanding tenant rosters.

“Growing availabilities will also continue to fuel a flight to quality in Ho Chi Minh City, with tenants still opting to locate in both the CBD and fringe areas as opposed to decentralized locations given favorable rental rates,” the report stated.

In Hanoi, tenants will remain drawn to the lower rates offered in the mid-town and west sub-markets, while high-quality space in the CBD, still in short supply, will continue to retain the best tenants.

“Longer term, the outlook calls for a gradual improvement in the business environment as the government steps up reforms that should open up more opportunities across various industries,” the report added.

Hanwha Life targets to break even in 2017

Hanwha Life Vietnam has announced that in the first half of the year it recorded steady growth, with total insurance premium revenue of VND153 billion ($7.03 million), up 56 per cent compared with the same period of 2014.

The insurer is currently implementing a strategy to expand its network nationwide. As at June it had 20 sales offices in major cities and 28 offices in small and medium-sized cities. This year it plans to expand the network to 60 locations around the country.

It also targets to break even in 2017. According to a representative from Hanwha Life, the company has advantages in capital support from its parent company in South Korea, which helped it increase its charter capital to VND1.9 trillion ($87.4 million). “With steady growth over the years Hanwha Life Vietnam is confident to reach the break even point in the shortest time possible and be among the Top 5 leading life insurance companies in Vietnam,” she said.

Along with goals of expanding and breaking even, this year Hanwha Life also aims to diversify its product lines and participate in community activities.

Hanwha Life Vietnam was established in 2008 and its charter capital is one of the highest among insurers in Vietnam.

Licogi 13 and SaoMai Group to sell additional shares

The State Securities Commission (SSC) has given Licogi 13 and the Sao Mai Group permission to sell additional shares.

Licogi 13 will offer 5,568,100 shares with a par value of VND10,000 ($0.46) to existing shareholders, for a total of VND55.68 billion ($2.55 million).

It specializes in the construction of foundations and infrastructure, both civil and industrial. It has been involved in many major national projects, such as the Ho Chi Minh Mausoleum, T1 Terminal at Hanoi’s Noi Bai International Airport, the National Convention Center in the capital, the Pha Lai Thermoelectric Plant I and II, and the Ban Chat, Song Tranh II, and Lai Chau Hydroelectric Plants.

The Sao Mai Group, meanwhile, will offer 112,652,127 shares with a par value of VND10,000 ($0.46), of which 107,287,740 shares will be offered to existing shareholders and 5,364,387 stocks offered as the 2014 dividend payment to these existing shareholders. The total value of the offering is VND1.12 trillion ($51.63 million).

Leather & footwear makers struggle to compete locally

Vietnam is now among the Top 4 leather and footwear exporters in the world, with $10 billion worth of goods shipped overseas every year, but in the domestic market foreign firms hold a market share of 60 per cent.

Asia Shoes PTE is one of major players in the domestic market but only sells 1 million products a year, or 50 per cent of its manufacturing capacity. As with many other local producers, it suffers from the fact that the price of its products are higher than imports.

“Domestic firms don’t have the opportunity or the need to be dominant in the domestic market,” said Ms. Van Thuy Hanh, Sales Director in Domestic Markets at Asia Shoes PTE. “One factor that greatly affects the price is the cost of input materials.”

The lack of planning for support industries has also made domestic manufacturers be passive in supply chains and increasing added value. “We have proposed a decree on support industries many times but one is still to be introduced,” said Mr. Nguyen Duc Thuan, Chairman of the Vietnam Leather, Footwear and Handbag Association (LEFASO). This is at the root of the problems facing domestic firms, he added.

According to the Master Plan for Developing Vietnam’s Footwear Industry to 2020 and Vision to 2025, the industry should have localization ratios of 65 per cent by the end of 2015 and 80 per cent by 2020. Sectoral planning, especially in support industries, would be a solution for domestic firms to seize the opportunities from trade agreements Vietnam has signed or is about to sign.

Phuong Nam releases 2014 business results

The Phuong Nam Corporation (PNC) has presented its business results for 2014 to its shareholders meeting.

Total revenue in 2014 was VND333.2 billion ($15.24 million), a slight fall compared to 2013’s VND334.5 billion ($15.34 million). Gross profit was VND127.3 billion ($5.84 million), profit before tax VND2.8 billion ($128,380), and profit after tax VND2.4 billion ($110,040). In 2013 it recorded a loss of VND43.6 billion ($2 million) after tax.

The plan for 2015 is for revenue to reach VND450 billion ($20.63 million), gross profit VND165.3 billion ($7.58 million) and profit before tax VND10 billion ($458,500). These will be difficult to achieve, according to General Director Nguyen Huu Hoat.

Regarding the results at its joint ventures and investments, profit after tax at Megastar Ltd (where it holds 10 per cent of capital) was VND69.96 billion ($3.21 million), at the Bach Viet Phuong Nam JSC (25 per cent) VND572 billion ($26,226), and at the Book and School Equipment Soc Trang JSC (23.08 per cent) VND861 billion ($39,476).

Cross Junction Investment Pte Ltd has lent $7 million to PNG, with $5 million being transferred on June 26, 2014 and the remaining $2 million transferred on January 5, 2015.

PNG operates mainly in the field of cultural production and media. It is also currently partnering with international firms such as Envoy Media Group (US), Longman (England), Indochina Capital, the Caravelle Fund, and the East Media Holdings Incorporation (EMHI) in operating high-quality cineplexes and exclusively releasing movies.

BIDV releases first half results

The Bank for Investment and Development of Vietnam (BIDV) has announced its business results for the first half of the year.

Total assets were VND730 trillion ($33.47 billion), an increase of 25 per cent against the same period last year and 14 per cent higher than at the beginning of the year. Profit before tax stood at VND3.01 trillion ($138 million), an increase of 25 per cent compared to the first half of 2014.

Outstanding credit was nearly VND535 trillion ($24.52 billion), 31 per cent higher year-on-year and 9.1 per cent more than at the beginning of the year. Mobilized capital was VND574 trillion ($26.31 billion), an increase of 33 per cent against the same period last year and up 11.2 per cent since the beginning of the year.

Its non-performing loan ratio was 2 per cent, or VND10 trillion ($458.5 million).

Its credit accounts for 12.7 per cent of credit provided by commercial banks and its mobilized capital 11.59 per cent of the total.

BIDV divested from non-core business in the first half, bringing in some VND700 billion ($32.09 million), while its sale of VID Public Bank earned it VND1 trillion ($45.85 million).

After its merger with the Mekong Housing Bank (MHB) its charter capital was VND31.48 trillion ($1.44 billion), which is to increase by VND2.69 trillion ($123.33 million) in the time to come.

TPBank signs two cooperation contracts

TPBank signed a cooperation contract on July 17 in Ho Chi Minh City with the Saigon Commercial Bank (SCB) regarding cash transactions.

Customers can use all of SCB’s transaction points to deposit cash into their TPBank accounts. The cooperative arrangement was based on TPBank taking advantage of SCB’s network and staff.

On the same day TPBank and the Bao Long Insurance Corporation signed a bancassurance agreement, where the two form a partnership that allows the latter to sell its products to the former’s customer base.

In the first half, TPBank’s total assets increased slightly against the beginning of the year, to VND52 trillion ($2.38 billion), while mobilized capital and outstanding credit increased about 10 per cent year-on-year. Profit before tax was VND342 billion ($15.68 million), representing 112 per cent of the plan for the first half and accounting for 55 per cent of the annual plan.

CBRE Vietnam to manage The Pride

Hai Phat Invest has appointed CBRE Vietnam to cooperate with its subsidiary Hai Phat PSP to manage its latest project, The Pride, in Hanoi’s Ha Dong district.

CBRE Vietnam will provide key positions onsite to deliver quality management services, including customer service, facilities management, maintenance, and operations, and to help create a peaceful and harmonious environment for residents and their families.

“We chose CBRE to manage our flagship project after a competitive bidding process, because we believed that they have the capabilities and experience to do a good job,” said Ms. Tran Hoai Anh, Deputy General Director of Hai Phat Invest. “Also because they showed a strong commitment to understanding the project and what we are trying to achieve: building a sustainable community at The Pride.”

According to the Executive Director of CBRE Vietnam, Mr. Richard Leech, in Vietnam CBRE manage over 900,000 sq m, in which 500,000 sq m are residential property. “We give our firm commitment to work closely with Hai Phat Invest, Hai Phat PSP and the residents of The Pride to create a pleasant environment that allows residents to enjoy the facilities in the project and take advantage of the lifestyle offered in western Hanoi,” he said.

The Pride is a mixed-use complex comprising three 35-floor towers and one 45-floor tower, with a total of 1,560 units. To enhance the lifestyles of residents The Pride is equipped with full facilities, such as a swimming pool, a gym, and community rooms, among others.

For added convenience, the project is built on top of a new retail center with 23,000 sq m of space.

Located at the gateway to western Hanoi in the Ha Dong new urban area and with convenient road connections to the city, airport and surrounding towns, The Pride is considered one of Ha Dong’s most prestigious and successful developments. Upon completion it will be a fully-integrated community where residents can live, work, and play.

Banks, property developers clinch guarantee deals

A number of property developers have got guarantees from commercial banks for their projects as required by the Law on Real Estate Business, which came into force on July 1.

Article 56 of the new law regulates that before selling or leasing products at half-done or future housing development projects, developers must obtain guarantees from commercial banks as assurances for financial obligations to their customers.

The Vung Tau City branch of Vietnam Prosperity Bank (PVBank) has inked an agreement to extend guarantees to Petroleum Real Estate Joint Stock Company’s apartment project Linh Tay Tower in HCMC.

The company resumed work on the project in Thu Duc District earlier this month to bank on the recovery of the local property market, Vietnam News Agency reports.

At the final sale phase of 117 land lots at its Jamona City in HCMC’s District 7, Saigon Thuong Tin Real Estate JSC (Sacomreal) signed guarantee and cooperation deals with banks including ACB and HDBank for its future housing projects.

Real estate firm TNR Holdings Vietnam has entered into a deal with Maritime Bank to guarantee its project in HCMC’s District 4 while Novaland Group has got assurances from VPBank.

Bui Huu Phuc, director of investment and development at Novaland, was quoted by Vietnam News Agency as saying that VPBank’s guarantees would enable the group to make sure its financial obligations to buyers and win customer confidence in its projects.

Phan Ngoc Hoa, deputy general director of VPBank, said if Novaland was unable to hand over apartments to its buyers as pledged while customers asked for compensation for the delay, the bank would refund the money which the buyer has paid to the group and other fees clarified in the contracts between the two parties.

Hoa noted many developers had put on hold their property projects and failed to hand over apartments to buyers in accordance with the contracts signed between the two sides since the local real estate market froze in 2008.

To attract more buyers, Dat Xanh Group has signed deals with VietinBank and BIDV to secure guarantees for its real estate projects that would be launched in the second half of this year, including the high-end apartment project Opal.

Dat Xanh hailed the law as it safeguards the interests of buyers and ensures the construction tempo of property projects. The law helps the market develop sustainably as it kicks ailing property firms out of the market.

Hung Thinh Corporation has won guarantees from five lenders including VietinBank, BIDV, Vietbank and Sacombank.

Nguyen Dinh Trung, chairman and chief executive officer of Hung Thinh Corporation, said banks would carefully check the financial capability of a property developer and the liquidity of its projects before agreeing to provide guarantees for them.

In addition to their guarantee agreements with banks, real estate firms plan more housing products targeting expatriates as the revised Housing Law with effect from early July eases foreign home ownership in Vietnam.

More FDI flows into IT in Hanoi

Hanoi City awarded investment certificates to 85 fresh and operational foreign direct investment projects in the information technology (IT) sector with combined capital pledges totaling more than US$64 million in the first half of this year.

The newly registered capital represented a year-on-year leap of over 93%, according to an updated report of the municipal Department of Information and Communications.

Of the total, foreign firms pledged nearly US$5 million for 23 fresh projects in the first six months of the year. They included nine projects invested by Japanese companies, followed by South Korean firms with three projects.

The department has sent the Hanoi government and the Ministry of Information and Communications a plan to establish a software park invested by Hanel One Member Co. Ltd. The agency is also working on a scheme to recognize major contributors to the IT sector in the capital city.

Apart from Hanoi, Danang is also striving to attract Japanese IT firms.

At a recent meeting with a Japanese business delegation, Danang City’s vice chairman Phung Tan Viet called for Japanese firms to set up shop in Danang, particularly in the hi-tech industry.

Viet also proposed the ASEAN-Japan Center join hands with the central coast city to hold a workshop later this year to introduce investment opportunities to Japanese companies.

More incentives expected for supporting industries

The Government is expected to issue a decree providing more incentives for private firms committed to supporting industries, Deputy Minister of Industry and Trade Tran Tuan Anh said.

Anh told a seminar held by Samsung Electronics in Hanoi on July 15 that the decree with supporting policies for development of industrial clusters and research, and incentives for enterprises would create a clear legal framework for Vietnamese and foreign firms to get involved in the nation’s underdeveloped supporting industries.

Such supporting policies and incentives are in line with Vietnam’s commitments to bilateral and multilateral trade agreements.

Small and medium enterprises will also be assisted in terms of access to infrastructure and preferential loans, Anh said at the seminar, which was attended by over 200 representatives of Vietnamese enterprises and government agencies.

The ministry, which is in charge of drafting the decree, is pinning high hopes that supporting industries could attract about 1,000 enterprises after the decree is issued.

Anh told the Daily on the sidelines of the seminar that the Government could issue the decree late this year after six reviews.

According to Jang Ho Young, purchasing manager at Samsung Electronics, only four Vietnamese enterprises have clinched direct contracts to supply parts for the South Korean giant. In addition, 28 other components makers have become suppliers of Samsung after rigorous selections.

Jang said many homegrown enterprises have proposed cooperation deals with Samsung and that their proposals are being weighed.

Combined revenues of Samsung’s existing suppliers totaled US$35 million last year and are forecast to reach US$45 million this year, he said.

However, such sales are insignificant compared to huge revenues of Samsung Electronics in Vietnam.

Total revenue of Samsung Electronics in Vietnam is estimated at US$26.3 billion this year, according to Samsung Vietnam’s general director Han Myoung Sup.

Han suggested the Government should financial support and offer more investment incentives while enterprises need to have a long-term vision if they want to become suppliers of Samsung.

Han said Samsung will provide suppliers with technical support.

Han hoped that close cooperation between the Government, local enterprises and Samsung would help improve the performance of supporting industries.

Samsung is the biggest foreign investor in Vietnam and has recruited more than 100,000 people for its electronics complexes in the northern provinces of Bac Ninh and Thai Nguyen and research and development center in Hanoi.

GENCO 3 promises to solve air pollution at Vinh Tan 2

Power Generation Corporation 3 (GENCO 3) promised on July 15 to solve the serious air pollution caused by Vinh Tan 2 thermal power plant in Binh Thuan Province and asked the households in nearby residential areas for sympathy.

The affiliate of Vietnam Electricity Group (EVN) explained in a statement released on July 15 that the air pollution worsened on July 2 when there was a problem with the ash pipeline of the power plant’s Generator No. 2. This resulted in more black smoke emissions.

GENCO 3 said it mobilized all resources and suspended the generator to deal with the ash pipeline glitch. The problem was solved on July 7 and the concentration of dust discharged from the smoke stack has since been below the permissible level.

Therefore, GENCO 3 asked local residents for sympathy and understanding.

EVN also called for sympathy and understanding in mid-April after a large number of local people gathered on National Highway 1A, the nation’s backbone road, near Vinh Tan 2 to protest against the dust pollution caused by the plant. The gathering triggered heavy traffic congestion on the highway.

Vinh Tan 2 consists of two generators with a total designed capacity of 1,233 megawatts and came on steam early this year. The plant is part of Vinh Tan Power Center covering an area of 397 hectares in Vinh Tan Commune in Tuy Phong District.

Air pollution caused by coal ash from the plant has posed a serious environmental hazard and affected thousands of people in nearby residential areas since the thermal power facility was put into operation.

Construction ministry to complete SOE equitization this year

The Ministry of Construction looks set to realize a target of letting all State-owned enterprises (SOEs) at its helm go public at the end of this year, Deputy Minister Le Quang Hung said.

Hung said in a recent report that seven out of 16 corporations and holding companies under the ministry have undergone equitization and the remaining nine would go public between now and the year-end.

The SOEs subject to equitization toward the year-end are Song Da, Housing and Urban Development (HUD), Vietnam Machinery Installation Corporation (LILAMA), Construction Machinery Corporation (COMA), Vietnam National Construction Consultant Corporation (VNCC), Vietnam Urban and Industrial Zone Development Investment Corporation (IDICO), Construction Corporation No. 1 (CC1), Building Materials Corporation No. 1 (FiCO) and Vietnam Cement Industry Corporation (VICEM).

Hung said the target of equitizing all SOEs within this year is obtainable.

The revised Enterprise Law, which took effect on July 1, says SOEs are those 100% owned by the State instead of 51% or above as previously. Therefore, in addition to the construction ministry, the new law also helps other ministries complete restructuring and equitization plans for SOEs under their umbrella.

Experts are concerned that the corporations would not be able to improve their corporate governance and continue to enjoy incentives, including supporting policies and easy access to funds.

According to the construction ministry’s plans, SOEs under its management will divest all State capital from non-core business areas at the end of this year.

Bibica explains VND4.7 billion tax debt

After the HCMC Tax Department fined Bibica Corporation for missing the tax payment deadline, the confectionery maker on Tuesday released a statement explaining its tax debts of over VND4.7 billion incurred in 2009-2012.

Bibica said the tax debts in the period consist of three components, including over VND2.5 billion in personal income tax. The company forgot declaring some incomes of its employees and occasional payments of commissions and remunerations of its board of directors.

The company owed over VND1.7 billion in corporate income tax as the tax department adjusted up collections of interest from a loan lent to Bach Tuyet Cotton Corporation. Bibica said it has yet to collect interest but the tax department still took the amount into account as part of the earnings from its financial activities.

The tax agency excluded the copyright fee of Lotte Pie as a relevant contract has not been registered with the Ministry of Industry and Trade. However, it calculated the corporate income tax differential of interest payments for its employees when Bibica mobilized their idle funds.

The final debt of nearly VND466 million resulted from the fact that the tax department wanted to take back the value-add tax (VAT) deduction from products the corporation discarded.

Bibica was slapped with an administrative fine of over VND316 million and a fine of over VND1.8 billion for late tax payment. The company is required to pay the fines and unpaid tax within ten days after it got the agency’s notice.

This year Bibica targets to earn VND1.25 trillion in consolidated revenue and VND64.2 billion in after-tax profit. The company earned net profit of VND21.4 billion in the first quarter of this year.

Vietnam rice export prices decline

Export prices of Vietnamese rice have dropped on global markets though Thailand and India are enjoying higher prices of this staple food.

According to oryza.com, Thailand’s 100% B rice (equivalent to 5% broken rice of Vietnam) has been offered at US$400-410 per ton, rising by US$25 a ton against the end of June. Meanwhile, India’s 5% broken rice has gone up by around US$10 to US$385-395 per ton.

Thailand and India have adjusted up rice export prices as poor weather conditions have made inroads into their rice output.

Thailand has also revised down this year’s rice export forecast from 10 million to 9.5 million tons given concerns that higher prices would push importers to get closer to its rivals.

Meanwhile, rice prices in Vietnam have kept falling on dreary trading.

According to some rice exporters in the Mekong Delta, 5% broken rice has been sold at US$345-355 a ton, down by US$5 against late June.

Lam Anh Tuan, director of Thinh Phat Co. in Ben Tre Province, said rice exports to China through unofficial channels have been tightened since early this year, thereby sending rice prices down. In previous years, local enterprises shipped much rice to the northern neighbor.

Regarding official channels, Tuan said as importers have been aware that Vietnam has entered the peak harvest season while enterprises are facing capital shortages, they have asked for price cuts; otherwise, they would postpone purchases.

Ngo Ngoc Yen, director of Yen Ngoc rice company in HCMC, said prices of unprocessed IR 50404 rice in Tien Giang Province are VND5,900-6,200 per kilo depending on quality, dropping by VND50 a kilo versus a fortnight ago.

Statistics of the Vietnam Food Association (VFA) showed its member enterprises exported nearly 85,000 tons of rice with a combined free-on-board (FOB) value of over US$34 million in the first nine days of July. Between January 1 and July 9, they shipped nearly 2.8 million tons worth US$1.2 billion.

BIDV posts pre-tax profit of VND3 trillion in H1

The Bank for Investment and Development of Vietnam (BIDV) on July 15 announced its pre-tax profit of more than VND3 trillion (US$137.5 million) in the first six months of this year, up 25% compared to the same period last year.

BIDV said in a statement that it aims to realize 75% of the year’s pre-tax profit target by the end of September and meet the whole target approved by its shareholders.

The bank’s credit market share reached 12.7% in the period, up 1.1 percentage points year-on-year, and its market share of capital mobilization was 11.59%, rising by 1.28 percentage points over the same period last year. Its assets totaled VND730 trillion (US$33.5 billion), increasing 25% year-on-year and 14% versus early this year.

Outstanding loans were more than VND535 trillion, rising 31% over a year ago and 9.1% against early 2015.

The bank said it mainly lent to borrowers in rural agriculture, export and supporting industries; small and medium-sized firms; hi-tech applied enterprises and retail customers. Its bad debt ratio was about 2% and deposits were VND574 trillion, growing 11.2% from early this year.

Two member companies of the bank, BIDV Insurance Corporation (BIC) and BIDV Securities Company (BSC), have been searching for strategic investors, and BIC has signed an agreement with Canada’s insurance firm Fairfax.

BIDV increased its chartered capital to VND31.48 trillion (US$1.44 billion) after its merger with the lender MHB earlier this year. The figure will rise by VND2.69 trillion as approved by the State Bank of Vietnam.

Listed firms report mixed earnings results

Listed enterprises reported mixed business results in the first quarter of this year, with firms on the Hanoi market posting strong profit rises and those on the HCMC bourse seeing important indicators increasing slightly or declining.

Ending the first quarter, enterprises listed on the Hochiminh Stock Exchange (HOSE) saw their after-tax profit growing 2.25% against the same period of 2014 whereas the total profit of firms on the Hanoi Stock Exchange (HNX) surged 31.9%.

According a recent report of HOSE, member enterprises reported revenue rises of 9.05%. However, enterprises in the VN30 group reported a 9.84% decrease in profit.

Besides, the return on asset (ROA) of companies on the southern bourse dropped 10.2% year-on-year and that of VN30 tickers lost around 22.5%. But the return on equity (ROE) of the entire market increased 2.85% and that of the VN30 group rose 2.92%.

Explaining the profit decrease of VN30 companies, Tran Anh Dao, deputy general director of HOSE, said many listed enterprises raised capital in the first quarter, so profit indexes (which are calculated based on capital) fell. Besides, net profit growth of this group also decreased mildly.

Enterprises in the VN30 basket reported ROA and ROE at 0.62% and 2.92% at the end of the first quarter. While the combined profit of VN30 enterprises lost 9.84%, their total assets and equity surged 16.3% and 31.6% respectively.

The indexes were calculated on data of 184 out of 301 enterprises listed on HOSE.

Meanwhile, HNX said that 355 out of 362 listed enterprises saw profit surging 31.9% year-on-year in the first quarter.

According to a report of HNX, enterprises continued to post better business and production results than 2014’s first quarter. Aside from positive impacts of the macro economy, enterprises took measures to cut management costs and focus on core businesses.

Enterprises in the report obtained over VND2.99 trillion (US$137.4 million) in after-tax profit, surging by 31.9%. Of which, 302 profitable companies registered total net profit of over VND3.1 trillion, up 20.6% year-on-year, while 53 firms reported total losses at over VND163 billion, falling 53%.

Businesses in the industrial sector had the most positive results with 100 firms reporting gains, followed by the finance sector with 25 firms and the fuel and mining industry with 22 companies.

Among loss-making firms, the industrial sector made up the largest ratio with 12 enterprises losing VND40.7 billion, followed by finance and construction with VND39.1 billion and VND38.9 billion respectively.

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