OV help distribute Vietnamese goods abroad

Overseas Vietnamese businessmen have set up a distribution network with a lot of trade centers, bringing Vietnamese goods to many foreign markets, said Deputy Minister of Foreign Affairs Nguyen Thanh Son.

Some of the overseas trade centers for Vietnamese goods are Rainbow Trade Center in Ukraine, Vietnam Trade Center in Maryland, the U.S., and similar centers in Germany, Poland, the Czech Republic, Laos and Cambodia, said Son, who is also chairman of the State Committee for Overseas Vietnamese Affairs.

These centers help bring Vietnamese goods to foreign markets, highlighting the role of overseas Vietnamese businessmen as a bridge for export of Vietnamese items, Son said at the second meeting between overseas Vietnamese and domestic entrepreneurs in Dalat City last week.

In the coming time, the Hanoi-Moscow Cultural & Trade Center Complex and Hotel will open in Moscow, Russia. This wholly Vietnamese-invested project worth a total of US$240 million is the largest such undertaking in Russia as well as in the Commonwealth of Independent States

When operational, it will help address the demand for employment and accommodation of Vietnamese people in Russia.

The meeting between overseas Vietnamese and domestic businessmen took place at Dalat Edensee Lake Resort & Spa from Tuesday to Friday last week, with the theme “Combine the strength of Vietnamese entrepreneurs - Opportunities for investment and business.” The event was held by the State Committee for Overseas Vietnamese Affairs and the Ministry of Foreign Affairs.

Talking to the Daily, Tran Hoa Phuong, deputy head of the overseas Vietnamese committee in HCMC, said Vietnamese enterprises at home and abroad were struggling. Thus, he forecast investment by overseas Vietnamese businesses would not increase this year.

In the current tough times, overseas remittances to the city in the first six months of this year totaled US$2.2 billion, versus US$1.9 billion in the same period last year, which Phuong described as an encouraging result.

According to the State Committee for Overseas Vietnamese Affairs, 51 out of 63 cities and provinces nationwide have received investments from overseas Vietnamese. More than 3,600 overseas Vietnamese companies are involved in investment projects worth a total of US$8.6 billion.

Creditors let Vinashin restructure US$600 million debt until 2025

International creditors have agreed to give State-run shipbuilder Vinashin more than a decade to restructure a US$600 million debt.

International creditors of Vinashin, including over ten banks and three investment funds, met in Singapore last week to discuss how to handle the US$600 million Vinashin borrowed in May 2007 through the arrangement of Credit Suisse, a source told the Daily.

The debt has been three years overdue but Vinashin has not been able to pay it. In November 2011, two investment funds of the Netherlands, Elliott Advisors and Bluecrest Mercantile, took Vinashin to a London Court.

To prevent the credibility of major State companies from being tarnished on international capital markets, the Government told the Ministry of Finance to issue convertible bonds with an annual coupon of 1% to help Vinashin extend the debt repayment period to 2025. But if Vinashin could not settle the debt thereafter, the Government would do it on behalf of the firm.

Nguyen Ngoc Su, chairman of the board of members of Vinashin, said the London Court decided in mid-June that creditors would have to meet with Vinashin over a debt restructuring plan. At the Singapore meeting, 64.7% of the creditors, representing 79.3% of the total debt, approved the debt restructuring scheme of Vinashin, which is guaranteed by the Government and arranged by CitiGroup.

Vinashin said it had signed debt rollover agreements with 20 local banks, sending its total debt down 70%. Its debt owed to foreign creditors has also declined nearly 40%. Vinashin is trying to buy back other debts worth less than US$200 million.

Auto traders pinning hopes on final months

Stronger auto sales in recent months, coupled with registration fee cuts in Hanoi and Danang, have led auto traders to look toward a further improvement from now to the end of the year.

The automobile market has seen a clearer trend in recent months, with sales edging higher.

In April, the number of vehicles sold was over 8,700 units, up 5% from the preceding month and up 26% over the same period last year. In May, auto sales jumped to around 9,700 units, up 11% from April and up 42% year-on-year.

June auto sales were almost unchanged from May, but grew by 48% over the same period last year. Although official statistics have not been released yet, auto firms said the market continued to go up in July.

Some individual automakers informed their sales in July slightly picked up from the previous month but markedly increased year-on-year.

Toyota Vietnam last month sold nearly 3,000 vehicles, a rise of 137 units month-on-month. Compared to the same period in 2012, its sales grew by nearly 1,270 units.

Meanwhile, Ford Vietnam sold 685 vehicles in July, an increase of more than 100 units over the preceding month and up 215 units year-on-year.

Better auto sales are an encouraging sign of the market recovery and a positive response from consumers to registration fee reductions, said the Vietnam Automobile Manufacturers Association (VAMA).

VAMA forecast total auto sales this year would be around 108,000 units, or 8,000 units higher than forecast earlier this year, hoping business results in the rest of the year would be better than in previous months.

However, automakers are not sitting back, waiting for customers to come, but they are racing to launch new products to lure buyers.

In the past two months, big brands such as Honda, Nissan, Ford, Mercedes-Benz, BMW and Rolls-Royce have warmed up the market with new car lines and promising sales plans.

In addition to mid-end cars priced around VND600 million a unit offered by Honda, Nissan and GM, high-end products of BMW and Mercedes-Benz also quickly debut in the market.

Auto firms are also preparing for a busy year-end, with the most prominent event being Vietnam Motor Show 2013. The event is scheduled to take place at the Saigon Exhibition & Conference Center in HCMC this October.

Earlier, it was announced that Vietnam Motor Show 2013 would feature products of six luxury car importers, including Audi, BMW, Land Rover, Nissan, Renault and Lexus.

In addition, the event will be attended by VAMA members such as Ford, GM, Hino, Honda, Mercedes-Benz, Suzuki, Toyota and Vinastar.

Normally, the most intense competition takes place after this motor show, when automakers officially launch their new products and sales promotions to stimulate demand. Therefore, this event is expected to give the market a strong boost.

Budget revenue surges in July

State budget revenues in July rose by a staggering 41.9% against June to VND73 trillion, or an additional VND21.55 trillion over the preceding month, said the Ministry of Finance in a statement last week.

The ministry noted that budget incomes in July showed a marked turnaround compared to the first six months of the year, when revenues always fell far short of targets.

The ministry did not give a breakdown of revenue sources, nor gave explanations for the steep increase.

In a previous report, the ministry said revenues for the State budget in the first half was much lower than the target. Up to 42 provinces and cities collected revenues at less than 50% their annual targets, including major economic centers like HCMC, Hanoi, Danang, Dong Nai, and Binh Duong provinces, while only 21 cities and provinces realized half of the targets.

With the upsurge in budget revenues in July, the accumulated incomes for the State coffer in the January-July period totaled over VND429 trillion, equal to 52.6% of the year’s estimate and rising 6.3% year-on-year, according to the ministry.

Of the total figure in the seven-month period, domestic revenues amounted to VND281.7 trillion, rising 8.2% on-year, while income from crude oil reached VND64.33 trillion, and foreign trade revenue contributed VND119.7 trillion.

As of end-July, Government bonds had contributed VND127.33 trillion, or 65.3% of the annual target, according to the ministry.

In a recent TV program, Minister of Finance Dinh Tien Dung stressed budget collections this year would prove difficult as the Government had introduced programs to exempt, reduce or reschedule taxes for enterprises, which would lead to a shortfall of VND7 trillion for the State budget this year and VND36 trillion in 2014.

PRUBF1 rises to one-year high

Although Prudential Balanced Fund (PRUBF1) managed by East Spring Investments will officially close on October 4 as scheduled, the price of the fund unit increased to VND10,500 last Friday, the highest in the past year.

According to a report of PRUBF1 in July, the fund had net assets of VND539.5 billion as of the end of July, including VND526.4 billion in cash. Its net asset value (NAV) per unit was VND10,791 by late July, higher than the par value.

PRUBF1 closed last Friday’s session at VND10,500, which was still lower than its NAV by July 31.

This is why the price of the fund unit has increased steadily with high trading volume in recent times. Over the past year, PRUBF1 has reached the highest price of VND10,400 versus the lowest level of VND6,000. However, the fund unit stood at VND10,500 in the last two sessions last week.

According to a report the fund has sent its investors, asset liquidation will last from April 1 to October 4. If liquidity on the market falls short and odd fund certificates accrue during liquidation, the process will extend to April 6, 2014.

In case that asset liquidation is done on October 4, the fund will settle financial obligations to the State, operation and dissolution fees from October 7-15. Payment for investors will be on October 7-8.

Orders in settlement have been regulated in charters of PRUBF1 with payments for fund dissolution fees coming first, followed by accounts payable to fund management firm and custodian bank, financial obligations to the State, and other amounts following the laws and investors. 

The Hochiminh Stock Exchange (HOSE) last week announced that 50 million PRUBF1 fund units will be delisted from the exchange on September 4 as its operation time will end October 4.

Phan Thi Anh Minh, head of marketing and government relations of East Spring Investments Fund Management Company, told the Daily that the company was processing to launch a new open-ended mutual fund investing in diversified financial products.

Budget homes fall short

Although the current number of unsold apartments has amounted to dozens of thousands of units, the supply of low-cost and commercial apartments of less than 70 square meters each and priced under VN15 million per square meter is insufficient. 

According to a report of the Ministry of Construction at a meeting on housing policy and property market held last week, after nearly two months of executing the VND30-trillion home loan program, there have been 150 households and individuals receiving loans worth a combined VND46.02 billion. VND33.46 billion has been disbursed for 139 customers.

Vietnam Bank for Industry and Trade (VietinBank) has received 160 borrowing requests while Bank for Investment and Development of Vietnam (BIDV) and Bank for Foreign Trade of Vietnam (Vietcombank) have around 100 and 50 respectively. “However, there have appeared difficulties in having low-cost and commercial houses eligible for sale under the program,” Deputy Minister of Construction of Nguyen Tran Nam said at the meeting.

Meanwhile, the total value of unsold real estate in 56 of the nation’s 64 provinces and cities is now VND108.77 trillion, down 15.4% from the first quarter.

Unsold apartments number 27,805 units, worth VND41.542 trillion and accounting for 38.19% of the total, while the respective figures of low-rise homes are 15,007 units valued at VND27.45 trillion, accounting for 25.23%. Unsold land lots total nearly 10 million square meters, worth VND33.95 trillion, and there are over two million commercial land lots worth VND5.84 trillion having found no buyers. 

Unsold properties are mainly in Hanoi and HCMC, with the capital city having 9,651 homes worth VND17.06 trillion unsold. Meanwhile, the value of unsold property in HCMC is around VND26.7 trillion, with 12,613 homes, 326 low-rise houses and 265,753 square meters of land and office space.

However, Nam said Vietnam’s demand for low-cost homes was huge. According to a survey of the Ministry of Construction, around 1.74 million people are in need of a budget home measuring 50 square meters until 2015.

Besides, around 1.75 million people would need to buy homes for workers at industrial parks. As many as 700,000 low-cost homes and worker dorms would be needed nationwide, so an abundant supply of such housing is not a concern.

The ministry’s comprehensive report on low-cost housing development indicates that 34 projects for low-income earners have been completed with 18,850 units and a total investment of around VND5.92 trillion. Thirty-two other projects worth a combined VND8.58 trillion are under way, turning out a total of 19,550 units.

Besides, regarding budget homes for workers, 62 apartment projects with 12,500 units have been completed with an investment of VND2.8 trillion. Meanwhile, 39 other projects and over 27,500 apartments worth over VND6.9 trillion are being carried out.

Financial companies deteriorate

The key financial indicators provided by the State Bank of Vietnam (SBV) reveal that the situation at financial and finance leasing companies is deteriorating.

The return on assets (ROA) and the return on equity (ROE) of financial and finance leasing companies as of June 30 had fallen by 0.19 and 4.22 respectively against the end of last year, according to data on SBV’s website based on June account balance reports and the first-quarter financial statements of credit institutions.

However, other indicators unveil the health of this group of lenders is worsening and this is the group faced with ‘the worst situation’.

Equity capital of financial and finance leasing companies by the end of June had sharply dropped 7.76%, or some VND9.93 billion, versus a decline of 3.3% as of May 31.

Total assets of these credit institutions had dwindled 0.75%, equivalent to VND153.7 billion.

Capital adequacy ratio (CAR) at the end of June was 8.41%, down from 8.76% at May 31 when the ratio was minus 1.23% (losing over VND152.9 billion against the end of 2012).

The ratio of credits to deposits between banks and individuals or organizations was 164.33%, a further increase from 161.93% in the preceding month.

Meanwhile, banks also saw their CAR shrinking. CAR of the whole system at the end of June stood at 13.65%, down significantly from 14.25% at May 31.

CAR of state-owned banks was 11.1% and of joint stock banks was 12.8%.

ROA and ROE of the system at the end of June remained unchanged from May 31, standing at 0.23% and 2.52% respectively.

Equity capital of State-owned banks rose nearly VND153.14 billion, or 11.56%, while that of private lenders went down 3.68%, equivalent to VND176.4 billion.

The ratio of credits to deposits also dipped from 87.44% in May to 87.3%.

Total assets of the credit system reached VND5,293,557 billion, an increase of 4.09% compared to the end of 2012.

Total equity of the system picked up 2.89% from 2012.

Speaking about bank restructuring, SBV Deputy Governor Dao Minh Tu in an interview on the website of the central bank said foreign investment in the banking sector of Vietnam had produced very positive results.

“We have 13 joint stock banks with participation of foreign investors and generally they’re very efficient,” said Tu. “The central bank is studying and will propose the Government adjust a number of limits in a bid to enable foreign investors to contribute capital to or acquire stakes in local institutions, firstly in the weak banks.”

Eight of the nine weak banks have received approval for their restructuring schemes. Restructuring is taking place at all banks, including those not subject to restructuring, with mergers and acquisitions one of the forms.

Searefico sells 20% stake to Japanese partner

Searefico Refrigeration Industry Joint Stock Company (SRF) signed a strategic partnership agreement last Friday to sell a 20% stake to Taisei Oncho, a Japanese firm in the same industry.

The agreement allows Taisei Oncho to buy over 1.3 million shares, or a 16.45% stake, from SRF and the remaining 3.55% from large shareholders, raising its total ownership the local firm to 20%.

This is the biggest ever share transfer of SRF and Taisei Oncho is the largest strategic shareholder of the enterprise up to now.

Le Tan Phuoc, general director of SRF, said the Japanese firm would give technical training and help SRF improve project management capability to international standards.

Taisei Oncho will also assist SRF to expand its business to Cambodia, Laos, Myanmar and India. Besides, it will give technical support and marketing to help SRF approach Japanese projects in Vietnam.

Established in 1977, SRF is a mechanical & electrical (M&E) and industrial refrigeration contractor in Vietnam while Taisei Oncho is one of 10 leading contractors in this field in Japan.

Chu Lai economic zone attracts US$1.5 billion

Chu Lai Open Economic Zone in Quang Nam Province has attracted nearly US$1.5 billion in investment capital over the past 10 years, of which 50% of the capital has been disbursed. Still, officials said the zone’s potentials are yet to be tapped effectively.

Huynh Khanh Toan, vice chairman of the provincial People’s Committee and director of Chu Lai Open Economic Zone Authority, said that 89 projects have obtained investment licenses at the economic zone with the total registered capital of nearly US$1.5 billion, including 21 foreign-invested projects worth US$162 million. He was speaking at the “Chu Lai Open Economic Zone: Vision and Reality” online meeting held by the web portal of the Government in conjunction with Vietnam Television Danang on Sunday

Currently, there are 62 active projects in this zone.

According to experts, although the nation’s best incentives are available at the economic zone, the results are still modest while giant foreign direct investment (FDI) projects have yet to show up. However, capital disbursement rate at the economic zone is viewed as positive compared to the nation’s level.

Toan said that Chu Lai has attained significant achievements after 10 years of investment and development. There have been factories, tourist sites and urban areas in the region beside large-scale projects such as Chu Lai-Truong Hai auto engineering complex, Chu Lai soda production workshop, Cat Vang ecological tourist site and Chu Lai Resort tourist site.

Projects in Chu Lai Open Economic Zone have contributed to development of the province, created key industrial products and made big contribution to the State budget.

Between 2006 and 2012, the economic zone paid over VND12 trillion to the budget, or 50.6% of the entire State revenue in the province. The zone has created regular jobs for over 14,000 people beside 46,500 indirect employees and workers at construction projects.

With this development, the Government has picked Chu Lai Open Economic Zone as one of five priority economic zones in the 2013-2015 period, Toan said.

Up to now, Chu Lai Open Economic Zone in Quang Nam Province is the first and only one of its kind in the country. Best incentives have been applied at the economic zone such as free compensation, site clearance and land leveling fees.

Investors are able to lease land in 70 years and enjoy land rent and infrastructure fee exemptions until 2015. 

However, incentive policies for the zone are yet to be deployed effectively, insisted Deputy Minister of Planning and Investment Dang Huy Dong at the online meeting.

Specifically, Dong said, it was still unable to carry out many preferential treatments in the free trade area in the economic zone as expected. On the other hand, he noted plenty of airports were planned nationwide but not all of them were international terminals and that Chu Lai was still operating a local terminal even though it was recognized as one international airport.

Chu Lai OEZ is selected as one of five coastal EZs with priority in sourcing State funds for infrastructure development in the 2013-2015. The zone has already been allocated with VND790 billion under such a priority, Dong said.

Vice Chairman Huynh Khanh Toan echoed Dong’s view, saying Chu Lai Airport is planned as an international terminal but it now is serving Chu Lai-HCMC and Chu Lai-Hanoi routes only as a domestic one.

Pham Van Tai, deputy general director of Truong Hai Automobile Joint Stock Company as a big investor in the economic zone, noted at the meeting that multiple policies issued for Chu Lai OEZ a decade ago are no longer suitable now. Investment efficiency of investors in the economic zone would have been higher it the zone’s policies had been more open, he remarked.

“Investment incentives of Chu Lai OEZ were offered in a timely manner in 2003 and thus attracted our investment but a decade has gone by, with certain mechanism there already out of date,” Tai said. He deemed now as the right time to make breakthroughs to change the situation for the better.

Vietnam ships footwear to nearly 100 countries

Vietnam has shipped footwear products to nearly 100 countries worldwide, with 72 of them buying at least 1 million USD of the products, reported the Vietnam Leather and Footwear Association (LEFASO). 

Statistics from the General Department of Customs showed that the US remained Vietnam’s largest footwear importer as of late May with 1.99 billion USD, up 13.9 percent year-on-year and accounting for 35.2 percent of Vietnam’s total footwear export value.  

The European Union (EU) ranked second with 1.76 billion USD, up 9.7 percent annually and making up 31.15 percent of the total. It was followed by China (418.4 million USD), Japan (284.4 million USD), the Republic of Korea (RoK) (158.3 million USD). Those five markets accounted for 83.3 percent of Vietnam’s earnings from footwear export. 

The US also took the lead in buying Vietnam’s handbags, suitcases and briefcases, spending in excess of 555 million USD, up 6 percent and making up 41.1 percent of Vietnam’s shipments of those products. Behind the US was the EU (365 million USD), Japan (146.5 million USD), China (57.6 million USD), the RoK (52.8 million USD). The five top markets accounted for 87.2 percent of the total export value of handbags, suitcases and briefcases of Vietnam. 

Nearly 80 percent of Vietnam’s leather product and footwear export value comes from factories located in the south, the southeast and the southwest regions. Ho Chi Minh City and the southern provinces of Binh Duong and Dong Nai are currently the largest footwear and handbag producers. 

In the north, most leather and footwear factories are concentrated in Thanh Hoa, Hai Phong, Hai Duong, Hanoi, Ninh Binh and Thai Binh. In the central region, only Da Nang city and Quang Nam province have some large-scale production facilities.

In the first half of the year, the leather and footwear sector earned 8.7 billion USD from exports, marking a 11 percent increase, including 7 billion USD from footwear and 1.65 billion USD from handbags and suitcases, up 12 percent and 4 percent, respectively. 

It is forecast that the total earning this year will hit 17.8 billion USD, up 10 percent annually. 

The LEFASO suggested that firms join manufacturing chains at home, in the region and the world while adopting advanced technologies and exploiting advantages offered by free trade agreements in which Vietnam is a member.

PM pushes SBV to achieve robust growth target
     
Prime Minister Nguyen Xuan Phuc has urged the State Bank of Viet Nam (SBV) to take more comprehensive and bold measures to boost credit growth and reduce interest rates.

The message was communicated to the SBV on Tuesday in Ha Noi by a working group led by Government Office Chairman Mai Tien Dung, to push the central bank to help achieve the 6.7 per cent economic growth targeted for this year.

Besides meeting the credit growth target of 18 per cent in 2017, the PM has required the SBV to better direct loans flowing into production, business and infrastructure to support firms, Dung said.

Dung said the PM pointed out that though the country had 110,000 newly established firms in 2016, and nearly 60,000 in the first half of this year, the number of firms that closed or stopped operations during these periods was high, because of difficulties in credit access, land and policies.

Interest rate cuts would help firms a lot, Dung said, estimating that with outstanding loans of the entire banking system standing at around VND5 quadrillion (US$219.3 billion), a rate cut of 1 percentage point would help firms save VND50 trillion; the State budget earn another VND2 trillion from corporate income tax; and the GDP rise by 0.25 per cent.

With domestic public debts of roughly VND1 quadrillion, the same rate cut would also contribute to saving VND10 trillion of the State budget, Dung added.

However, he said, to cut rates, the SBV must first focus on settling non-performing loans (NPLs).

“Interest rate cannot be cut unless NPLs are settled,” he said and ordered the SBV to issue guidelines soon to make it easier for credit institutions to sell secure loans and assets, based on the new resolution passed recently by the National Assembly on settling NPLs.

The PM has also asked the central bank to study and determine how to mobilise foreign currency from local people, and said the current zero per cent interest rate policy for US dollar deposits would obviously not attract dollar holders to make bank deposits.

“Though the SBV’s aim is to curb dollarisation of the local economy, it must think about other measures to mobilise this idle capital as we still have to buy international bonds at interest rate of more than 4 per cent,” Dung said.

He said Phuc had also instructed the SBV to better implement regulations in Circular 36/2014, which are aimed at settling cross-ownership among commercial banks. Though the issue is more under control since the circular took effect in 2015, there remain cross-ownership among banks. For example, Vietcombank still holds 7.16 per cent of the charter capitals of Military Bank, 8.19 per cent of Eximbank, 5.07 per cent of SaigonBank and 4.3 per cent of OCB’s charter capital, lower ratio compared to 9.8 per cent, 8.2 per cent, 5.26 per centand 4.6 per cent in 2014, respectively.

Finally, the SBV must also strengthen security for internet banking services. “We are encouraging local people to use other kinds of payment instead of cash in their daily lives, so security is very important. Otherwise, it will affect people’s trust on the banking system,” Dung said. 

Ministry issues circular on management of milk prices
     
The Ministry of Industry and Trade has issued a circular on registering and declaring prices of milk and supplement products for children under six.

Under the circular, retail prices for these products must be listed and cannot exceed the prices that are registered with relevant State agencies.

The registered prices are the basis for State agencies managing prices and for enterprises that must announce them to customers.

Producers and importers of milk and supplement products must register the prices of their products with State agencies according to existing regulations during the period when the State implements price stabilisation.

State agencies have recommended that producers and importers register their prices at suitable rates keeping the geographic area in mind.

The circular stipulates that the Ministry of Industry and Trade will publish a list of traders who register prices. The ministry will check this list to make adjustments annually on July 1 or on an ad hoc basis.

The provincial people’s committees will announce the list of qualified traders in their localities on July 1 each year or in unexpected cases.

Traders producing and importing dairy products will register recommended retail prices and inform the registered retail prices to distributors of their products.

Hoa Phat reached $925 million of revenue in H1
     
Hoa Phat Group recorded a revenue of over VND21 trillion (US$925 million) and an after-tax profit of VND3.47 trillion in the first half of 2017, a year-on-year increase of 36 per cent and 14 per cent, respectively.

Construction steel and steel pipes continue to be the main contributors to the positive results of Hoa Phat in the six-month review period.

Hoa Phat in H1 produced more than one million tonnes of construction steel, increasing 33 per cent compared to the same period last year and meeting more than half of its annual production plan.The group exported nearly 90,000 tonnes of construction steel and wire drawing steel to the US, Australia, Malaysia, Singapore, Cambodia, Laos and the Philippines.

The sales volume of steel pipe in H1 reached 273,000 tonnes, raising the firm’s market share to 26.57 per cent.

The group is improving production capacity in all factories nationwide to reach an expected capacity of one million tonnes of steel pipe by 2020.

In addition to the revenue from construction steel, other manufacturing industries such as furniture, refrigeration and spare parts continue to maintain the steady growth.

Especially, the agricultural sector--including animal feeds, pigs and high-tech Australian cow raising techniques--also contributed about VND1 trillion to the group’s revenue in the first six months of 2017.

In terms of Hoa Phat Dung Quat iron and steel production complex, up to now, Hoa Phat Dung Quat Steel JSC has completed the negotiation of equipment contract with the supply partners. Danieli Group from Italy assured that the first steel rolling line of the project will be completed and tested in June 2018, and the second steel rolling line is expected to be completed six months later.

When the complex comes into full operation, Hoa Phat expects to supply two million tonnes of high quality construction steel annually to the market.

VN could be major AI market: experts
     
Although Viet Nam is a relative late comer to the Fourth Industrial Revolution, it can be confident of catching up if it adopts correct policies and measures, Nguyen Anh Tuan, CEO of the Boston Global Forum, told the Viet Nam CEO summit in Ha Noi on Tuesday.

“Viet Nam is a big potential market for arfitical intelligent (AI),” Tuan said, noting that the country’s population was nearing 100 million, many of them young people who could help Viet Nam access high-quality technologies and new knowledge.

In addition, Viet Nam’s consumption of new technologies has been relatively high, making the market attractive to high-tech investors, such as Google, Facebook, Apple and Samsung, according to Tuan.

On the other hand, Viet Nam has big IT firms well-known in the world, including Viettel and FPT, which are seeking new markets in banking, healthcare, education and transport. Viet Nam has been listed as one of the leading automation markets in the world. 

“In the context of the Fourth Revolution, Viet Nam should develop products with high added value to become a centre of high-tech, especially of AI, in the Southeast Asia region”, he added.

He suggested that Viet Nam adopt preferential policies to encourage new AI products as well as facilitating the entry of American AI start-ups into the country.

Deputy Minister of Public Security, Nguyen Van Thanh, said the Fourth Industrial Revolution had wrought changes, such as big data, smart cities, virtual currency, AI, renewable energy, robots and nano technology.

Thanh said local businesses should develop a vision and actions to adapt to the fast-moving revolution affecting their production, organizational structure and customer demands.

Associate Professor Vu Minh Khuong, a senior expert on economic development policy from the Lee Kuan Yew School of Public Policy said Viet Nam had outstanding achievements over the past 10 years in terms of catching up with IT. The world and Southeast Asia had been impressed with Viet Nam’s achievements, he said, noting that the country had quickly integrated into the world despite of the low income of many of its residents.

Professor Fredmund Malik, chairman of the Malik Institute for Complexity Management, Governance and Leadership, spoke of successful management models and measures which had been applied in the world’s leading groups.

Viet Nam CEO Summit 2017 attracted the participation of more than 400 Vietnamese businesses from the country’s 500 biggest firms (VNR500), top 500 fastest developing firms (FAST 500), Best Prospect 500 and Top 1,000 biggest tax payers.

Vu Dang Vinh, the general director of the Viet Nam Report that organized the conference, said the event aimed to connect business leaders, specialists on Viet Nam and international partners to exchange experiences, discuss the development of the local market and how to better integrate it into the global market.

During the event, Viet Nam Report honoured the top 10 commercial banks and top 10 insurance companies in the country.

EVN reports enough power to meet dry season demand
     
National power utility Electricity of Vietnam (EVN) says increased production and decreased transmission loss will allow it to meet power needs in the 2017 dry season.

The utility announced on its website a first half production of 94.9 billion kW, a year-on-year increase of 7.23 per cent.

Commercial electricity production increased 8.47 per cent year-on-year to 82.9 billion kW, with domestic supply increasing by 8.78 per cent over last year. The most productive day on June 2 saw a record 628.4 million kW generated at the maximum transmission capacity of 30,206 megawatts.

EVN affirmed that the company would supply sufficient electricity to meet demand across all regions and purposes. It also promised to generate enough to meet increased consumption in the 2017 dry season which saw a prolonged heat wave in the Northern and Central Highlands at the beginning of June.

The general trend is southward transmission, EVN noted, with electricity transmitted from the north to the Central Highlands and southern regions.

The highest recorded electricity transmission capacity on the 500 kilovolt southward line was 3,600 megawatts. On average, total transmitted amount was 79.95 billion kilowatts, an increase of 4.7 per cent over 2016.

For the second half of 2017, EVN has set a production goal of 102.1 billion kW, in which commercial output including exports to Laos and Cambodia would reach 92.1 kW.

For 2010 to 2015, EVN spent VND492 trillion (US$21.8 billion) on 34 power generators and many other projects that laid a total 13,100 kilometres of power lines.

The company expects power demand to increase 10 per cent on a yearly basis, and plans to invest VND710.6 trillion ($31.3 billion) during the 2016-20 period.

Its official financial report for the year 2016 showed that total outstanding public debt was approximately VND487 trillion ($21.5 billion), up 7.1 per cent over 2015.

The funds were borrowed to invest in numerous power plants in order to meet national demand, it said.

EVN’s Deputy Director General Dinh Quang Tri commented earlier this year that the company relied mainly on two financial sources, revenue power prices and “capital arrangements”.

Tri also said that each year, EVN would need between five and six billion dollars, and with little support from the Government, the utility had been working with the World Bank on ways to raise funds.

He said the company hoped to raise enough funds next year from various sources including the issuance of international bonds.

EVN also reported an improvement in its power loss index at 7.25 per cent for the past six months, 0.22 per cent lower than the set target. It attributed this achievement to a concerted effort by the company’s numerous technology and operation departments, in order to minimise blackouts and risks within the national power grid.

In the first two quarters of 2017, EVN focused on enhancing customer service and improving the electricity accessibility index.

Since May 15, technical and administrative procedures have been minimised and all customers duly informed.

The company has also signed an agreement with the Vietnam Chamber of Commerce and Industry for the latter to perform regular surveys on and assessments of service quality.

Reliability indexes for EVN have increased significantly from last year. For the first six months of 2017, the System Average Interruption Duration Index reduced by 47 per cent, the Momentary Average Interruption Frequency Index by 40.2 per cent and the System Average Interruption Frequency Index by 47.6 per cent.

EVN has worked closely with the Ministry of Agriculture and Rural Development and its Water Resources Department, as well as other operational agencies on managing hydroelectric reservoirs to supply water for irrigation purposes.

There are still three releases left for the spring summer crop in the Red River Delta this year.

Competition in upscale lodging industry heats up

With an expanding room inventory and more on the development schedule, the competition in the upscale lodging industry in Vietnam will likely heat up over the next two-three years, says Grant Thornton.

Especially in the 5-star segment,Grant Thornton said in its just released 2017 Vietnam Hotel Survey report.

The report provides a broad range of financial, operational and marketing information for 2016 regarding4- and 5-star hotels and resorts. For simplicity purposes, resorts are referred to as hotels in the report.

Last year,inbound travellers to the Southeast Asian countryrose 26% following a lull in 2015 primarilyfuelled by increased Chinese travellers, said Trịnh Kim Dung, director of advisory services at Grant Thornton Vietnam.

That upward trajectory, buttressed by business travellers from the Republic of Korea, is expected to continue in 2017, and hopefully signal an end to the pre-2016 stagnation the upscale lodging industry experienced.

The Vietnamtourism and business travel industries recorded 10 million inbound visitors in 2016 – which though low by international standards – represented marked improvement over the lull the country had experienced prior to 2016, she noted.

In line with the higher figures for leisure, recreation and business arrivals in the Southeast Asian country, 41 new 3- to 5-star hotels opened their doors in 2016,heightening competition.

The average room rate for upscale lodging in 2016 saw a 1.3% increase year-on-year to US$88. The rate for 4-star rooms was US$75, a rise of 3.8% but still lagging far behind the 2014 level.

Five-star rates dropped slightly for the second year in a row to US$104.40 from U$106.80 in 2015.

Revenue per available room (RevPAR) increased in both star categories: a 10% rise for 4-star hotels to U$51.40, and 4.1%rise for 5-star hotels to U$68.70.

The upscale lodging industry in 2016 saw a recovery with an occupancy rate increase for high-end hotels.

The average occupancy rose to 67.2% from 61.5% for 4-star hotels and to 68% from 62.7% for 5-star hotels.

Individual tourists, tour groups and business travellers collectively made up more than three fourths (77.6%) of the total number of guests staying in high-end establishments last year.

Travel agents and tour operators remained the largest booking channel at high-end properties, accounting for 37.3% of reservations, Ms Dung added.

This ratio, however, has seen a gradual decline over the years, and fell by 3.1%in 2016.

The reportsaida notable increase was seen in the application of digital technology by hotels in 2016.

Last year, 67.3% of hotels reported using digital technology compared to 49.3% in 2015.Another 18.6% said they plan to engage it in 2017 or 2018 while 15.4% said they are undecided about employing it.

Work starts on high-quality breeding shrimp farm in Soc Trang

Construction on the first high-quality breeding shrimp farm began in the Mekong Delta province of Soc Trang on July 18.

Invested by Viet-Uc Corporation (VUC) at a total cost of VND120 billion (US$5.21 million), the farm will sit on a site of over 23ha in the first stage which will be completed in June 2018, producing around 5 billion breeding shrimps per year and generating jobs to roughly 400 local workers. 

The second stage, which will start in late 2018, will extend to more than 60ha. 
Luong Thanh Van, Chairman of the VUC Board of Directors and General Director, said VUC has produced about 40 billion breeding shrimps, accounting for 24% of market share nationwide. 

It is the VUC’s fourth farm in the Mekong Delta and the ninth nationwide, he said. 

Tran Van Chuyen, Chairman of the provincial People’s Committee, said Soc Trang needs 16 billion – 18 billion breeding shrimps each year, adding that the project will help cut transportation costs and offer jobs to hundreds of local people. 

He pledged all possible support for the project and asked VUC to accelerate the construction.

EVN provides electricity for Truong Sa archipelago

The Electricity of Vietnam (EVN) on July 18 began operating a clean energy and lighting system on Truong Sa (Spratly) archipelago and Platform DK1, and signed a cooperation agreement with the Naval High Command to supply electricity for the archipelago and the platform.

Duong Quang Thanh, Chairman of the Board of Members of the EVN, said that the group’s mission is to bring electricity to far-flung areas and islands, thus helping boost socio-economic development, maintain defence and protect national sovereignty.

Together with Truong Sa, EVN has to date received and operated power supply systems in 10 out of the 12 island districts across Vietnam, he stated, adding that it will begin operating the power grid in Con Co island district in central Quang Tri province this year.
 
With the cooperation agreement, the group will ensure sufficient and continuous supply of electricity for soldiers and people on all Truong Sa islands and Platform DK1.

Between now and 2020, the EVN will focus on completing projects under the programme supplying electricity for rural and mountainous areas and islands in 2013-2020, ensuring power supply to nearly all rural households.-

HCM City seeks RoK locality’ support for start-ups

Secretary of Ho Chi Minh City Party Committee Nguyen Thien Nhan has suggested Incheon city of the Republic of Korea (RoK) help the Vietnamese city set up a start-ups support centre, towards promoting scientific and economic exchange.

Talking to visiting Chairman of Incheon Metropolitan City Council Jegal Won-young at a meeting on July 18, Secretary Nhan said the centre would also support RoK citizens and businesses in HCM City. 
He hoped the RoK locality will enhance experience sharing with HCM City in aviation management, urban transport and creative research activities. 

HCM City’s Party chief proposed holding annual meetings and exchanges between the two localities to share experience in management and investment cooperation, expressing his belief that Vietnam-RoK relations and ties between HCM City and Incheon will improve. 

For his part, Jegal Won-young praised the economic development of Vietnam and HCM City in particular, and predicted that Vietnam will always develop rapidly.

More and more RoK enterprises have decided to invest in Vietnam, he added. 

Incheon is willing to share experience with HCM City in areas such as the environment, transport, urban development, education and start-ups, he affirmed.

He also hoped links between the two cities will continue to be enhanced effectively, contributing to bolstering RoK-Vietnam cooperative ties.

The RoK is Vietnam's largest foreign investor, second largest official development assistance provider and third biggest trade partner.

HCM City has established cooperative friendships with five localities of the RoK. 

As many as 80,000 RoK citizens live in HCM city, while about 2,000 RoK firms operate in the southern economic hub.