BUSINESS IN BRIEF 20/8
Moody’s upgrades BIDV’s deposit, issuer ratings
Moody’s has revised domestic currency deposit and foreign currency issuer ratings of the State-owned Bank for Investment and Development of Vietnam (BIDV) up by one place to B1.
The global credit rating agency has also assessed BIDV’s prospect as stable.
The commercial bank has recently been recognised as the best domestic supplier of foreign exchange services in Vietnam for the second straight year by domestic businesses and financial institutions.
It was also voted as the best for foreign exchange research and market coverage in the country by Asianmoney – a prestigious Hong Kong-based magazine.
According to the bank’s recent financial report, BIDV’s total asset by June 30 this year was valued at more than 583 trillion VND (nearly 27.8 billion USD) – relatively high in the Vietnamese market, up 5.4 percent from the year’s beginning.
Its liabilities grew by 4.9 percent while the ratio of bad debt to liabilities stood at 2.2 percent.
Over the first half of 2014, BIDV gained approximately 2.5 trillion VND (119 million USD) in pre-tax profit, fulfilling 41 percent of its yearly goal.
Vinacomin ships more than 400,000t of aluminium
The Lam Dong Aluminium-Bauxite Complex Project run by the Viet Nam Coal and Mineral Industries Group (Vinacomin) has exported 411,000 tonnes of aluminium since operations began in December 2013.
The information was released at a project meeting in the Central Highlands province of Lam Dong last Friday.
In the past seven months alone, the company shipped abroad a record high 251,000 tonnes of aluminium.
According to Vinacomin, aluminium products were exported to Switzerland, the Republic of Korea, Singapore, China and Hong Kong, among others. The group is currently expanding into Malaysia and Middle Eastern countries.
In the domestic market, Vinacomin provided 100 tonnes of aluminium products per month for local customers. The Tan Rai Bauxite Plant has produced nearly 352,000 tonnes of alumina products and 533,000 tonnes of aluminium hydroxide since it began operations in October last year.
The plant is scheduled to reach full capacity next year.
Construction giant Lilama to be equitised by 2015
The Minister of Construction last week approved and took steps to equitise machinery installation corporation Lilama by next year.
The corporation will have to file its corporate valuation to the ministry no later than October 30, 2014. The verification and publication of corporate valuation must be performed by December 30.
Further, Lilama will have to submit its equitisation plan to the Prime Minister before February 15, 2015.
The ministry also required the corporation to organise an initial public offering before April 15 next year.
TTF to use $15m share raising to pay down debts
Truong Thanh Furniture (TTF) announced it is finalising procedures to issue more than 31 million shares, hoping to raise VND310 billion (US$14.6 million) to reduce debts. The sale is expected to conclude by the end of this quarter.
In the second quarter of this year, the company's net profit reached VND30 billion ($1.4 million), increasing by nearly 16 times compared to the corresponding period last year. As of June 30, the company's debts accounted for 70 per cent of its capital, increasing 9 per cent compared to the beginning of this year.
SeaBank to provide loan to Vietnam Airlines
SeABank has received approval from the Prime Minister in principle to provide a credit loan exceeding the limit of the equity for Vietnam Airlines to buy aircraft.
The credit loan is to buy one Airbus aircraft A321-200 for the airline's freight business.
SeABank will be fully responsible for the evaluation and efficiency assessment, credit granting and debt collection from Vietnam Airlines under current law.
Mineral business prepares to list on Ha Noi exchange
Bac A Mineral and Metallurgy Company have registered to list 30 million shares on the Ha Noi Stock Exchange, the exchange announced late last Friday.
The company has a registered charter capital of VND768 billion (US$36.2 million), but actually contributed VND300 billion ($14.1 million).
Foreign funds reap gains of buying domestic stocks
Three foreign funds bought 17.85 million shares of PetroVietnam Drilling Services (PVD) in July last year and have since reported profits of VND1.2 trillion (US$56.6 million).
The funds, including Mutual Fund Elite, Private Equity New Markets II and VinaCapital Viet Nam Opportunity Fund, purchased at the issue rate of just VND45,600 ($2.1) per share. PVD has since climbed to VND100,000 ($4.7).
Specifically, Mutual Fund Elite earned VND655 billion ($30.9 million), Private Equity New Markets II held VND318 billion ($15 million) and Private Equity held VND196 billion ($9.2 million). In addition, these funds received dividends at 10 per cent.
PVD enjoyed a profit of VND1.3 trillion ($61.3 million) in the first six months this year, increasing 150 per cent compared to the same period last year. Foreign ownership in the company is currently over 40 per cent.
Hanoi to host TPP talks in September
Chief negotiators of the Trans-Pacific Partnership (TPP) agreement will meet in Hanoi from September 1-10 to work out solutions blocking the trade pact.
More than 400 delegates of 12 countries are scheduled to discuss pending issues, including access to the commodity market and services, intellectual property rights, investment, the environment, and restructuring of State-owned businesses.
The 12 countries will also have bilateral talks on tariff issues, one of the difficult areas of the negotiation process.
Vietnamese Minister of Industry and Trade Vu Huy Hoang attended a TPP Ministerial Meeting in Singapore in February 2014
The meeting is expected to make a breakthrough in settling differences between member countries, paving the way for an early conclusion of negotiations.
In addition to addressing traditional issues such as liberalization of trade, commodities, services and investment, the trade pact also looks at new, key issues such as intellectual property rights, competitive policy, state-owned enterprises, public procurement, labour, and the environment.
The TPP members are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. They make up nearly 40% of global GDP and one third of global trade.
Rubber exports plunge in first seven months
Vietnam exported 451,000 tonnes of rubber worth US$832 million in the first seven months of the year, down 10% and 32.3% in volume and value respectively over the same period last year.
The export price of rubber averaged about US$1,870 per tonne in the first half of this year, 52% lower than in 2011.
Due to this, Vietnam plans to reduce its export volume to one million tonnes for the entire year, down 7% from last year.
China remained the largest market, consuming nearly 40% of Vietnam's total rubber exports; but both export volume and value to the neighbouring country saw large declines during the period, according to the Vietnam Rubber Association.
Nearly 139,000 tonnes of rubber products were shipped to China raking in US$248 million, representing a year-on-year drop of 42.6% in value and 23.6% in volume.
Last year, Vietnam surpassed Malaysia and India to become the third largest rubber producer in the world, according to the Association of Natural Rubber Producing Countries.
Brokers undeterred by August fears
Real estate traders have not stopped doing business in the seventh lunar month this year as in previous years, said experts.
The Vietnamese believe that on the seventh lunar month of each year, spirits of the deceased return to the human realm for a month.
Many people avoid important events during the seventh month, considered an unlucky month. Activities to avoid include moving into new homes, weddings, and opening of new businesses.
Economic expert Le Ba Chi Nhan said that this year was different from previous years, with many property developers not afraid of offering their apartments in the market during the seventh lunar month, believing in their business ability to attract customers, reported the BizLIVE online..
In fact, many companies are offering their properties in this month, especially low cost apartments. According to property experts, low cost apartments have attracted customers due to their high demand. Therefore, property enterprises have been competing with each other to increase market share in the low cost apartment market, reports Xay dung (Construction) newspaper.
These included the 89 Phung Hung apartment building of the Ha Tay Trading Joint Stock Company, the Bac Ha Tower of the Bac Ha Construction and Trading Joint Stock Company and the CT9 apartment building under Van Phu Victoria project of the Van Phu Investment Joint Stock Company. The Ehome3 project of the Danh Khoi A Chau Real Estate Joint Stock Company and 8X Plus project of the Hung Thinh Property Company are also in demand.
These companies said, this was the right time to sell apartments because the market had shown signs of recovery, and there was high demand for low cost apartments.
But not all projects attracted customers, they said. Customers also explored projects of prestigious investors, progress of the project and a good sales policy.
Meanwhile, many companies are planning to offer their properties by this month-end, including the Him Lam Riverside project of the Him Lam Real Estate Company, the Tropic Garden project of Novaland and the Mall City project of the Kim Oanh Real Estate Joint Stock Company.
However, Nguyen Viet Hai, Director of VIC property trading floor, said property transactions in the seventh lunar month in this year were slower than the same month last year, and customers mainly put deposits to buy properties this month and would sign the contract next month, reported NDH.vn.
Viet Nam Medi-Pharm Expo to open this week
As many as 256 local and foreign enterprises will showcase their products at the 14th Viet Nam International Hospital, Medical and Pharmaceutical Exhibition (Viet Nam Medi-Pharm Expo), held in HCM City from August 21 – 23.
The event, which aims to connect traders domestically and internationally, will feature medicines, health equipment, ophthalmologic equipment and dental products. Exhibitors come from countries including India, Russia, Germany, the United States, Republic of Korea, China, Singapore and Thailand.
Viet Nam's pharmaceutical market is expected to increase by US$5 billion to reach $8 billion in 2020, according to Global Data.
Software firm FPT reports revenue increase of 22%
Software giant FPT Corporation earned revenue of VND17.9 trillion (US$841 million) in the first seven months of 2014, an increase of 22 per cent against the same period last year.
Pre-tax profit reached VND1.39 trillion ($66 million), representing 98 per cent of its yearly goal, while after-tax profit reached VND1.17 trillion ($55 million), flat against 2013.
The corporation signed a contract last month to create an online booking system for Viet Nam Railways.
Quang Ngai grants licences for two industrial parks
The industrial parks management board in the central province of Quang Ngai granted investment certificates for two projects in Quang Phu Industrial Park on Thursday.
Construction on the VND50 billion (US$2.3 million) Thuy Tram Confectionary Factory will begin in September. The factory is expected to open in June 2015 with production capacity of 700 tonnes per year.
Galant Dachan Seafood's $7.5 billion Frozen Seafood Processing Export Factory will produce 4,000-5,000 tonnes of shrimp per year.
The board has granted investment licences for 89 projects with total registered capital of VND6,000 billion ($282 million), creating 12,000 jobs.
Masan Group posts H1 loss
Masan Group Corporation (MSN) reported a loss of more than VND333 billion (US$15.8 million) in the first half of this year despite its sales growing 60.2 per cent against the same period last year.
The group's sales reached VND6.839 trillion ($324 million) ending June, up 60.2 per cent compared with the first half of 2013, boosted by strong growth in sales.
Consumer sales increased 33.3 per cent during the first six months of last year, propelled by strong seasonal growth, a growing market share in convenience foods and momentum from new beverage launches.
In addition, Masan Resources contributed VND1.145 trillion ($54.3 million) as the Nui Phao mine continued its ramp-up. Techcombank, a group's associate company, also posted a 45.4 per cent rise in profit before tax, reaching VND948 billion ($45 million), achieving almost 80 per cent of the lender's annual profit target.
Masan Group is restructuring to establish Masan Agri and Masan Brewery, two new pillars to focus on consumption-led growth.
In the last few months, the group has launched three new products, caffeine-based drink Wake-Up 247, isotonic drink Aktiva and energy drink Storm to target the $2.5 billion non-alcoholic beverage market.
With the entry into complete meals and the mid-market instant noodle segment, as well as the establishment of a strong platform to target the beverage category, the market for Masan expanded from $1.1 billion to $4.5 billion.
Despite higher sales, Masan Group still incurred a loss of VND333.33 billion ($15.8 million) in the first six months of this year, of which the second-quarter loss was VND227 billion ($10.8 million).
The group attributed the loss to towering financial costs rising to VND565 billion ($26.8 million) in the second quarter and a cumulative VND880 billion ($41.7 million) in the first six months.
Nonstandard expenses arising from the Nui Phao project and high depreciation in its resources business also contributed to the loss.
According to its filing to the HCM City Stock Exchange, the group's cash reserves stood at VND5.16 trillion ($244.5 million) at the end of June.
The group said it retained high cash reserves to support growth and fund potential M&A deals. It believes the costs of interest and depreciation of the Nui Phao project will decrease when the mine continues its expansion, lifting gross margins from economies of scale and profits.
Masan Group is one of the top 30 shares by market value and liquidity on the HCM City's market. Its share price declined 3.5 per cent yesterday to close at VND83,000 ($3.93) per share.
VinGroup posts 25% rise in Q2 revenues
Real estate developer VinGroup (VIC) announced a 25 per cent rise in its second-quarter revenue yesterday, driven by property sales.
VinGroup's total sales reached VND7.692 trillion (US$364.5 million), of which more than VND6.3 trillion ($298.7 million) came from sales of property transfers, up 29 per cent over the previous quarter and 400 per cent more than the same period of last year. Times City and Royal City apartments sold briskly, with around 600 selling out in just two days. Earnings from leasing shopping centres and offices climbed 33 per cent compared with the same period of last year, reaching VND532 billion ($25.2 million).
Revenue from hospital services witnessed impressive growth of 206 per cent, reaching VND185 billion ($8.8 million), while hospitality, tourism and entertainment sales totaled VND569 billion ($27 million), up 35 per cent.
Pre-tax profits increased 7 per cent over the previous quarter, topping VND1.663 trillion ($78.8 million), and net profit rose 8 per cent to VND1.148 trillion ($54.4 million).
The group's total assets reached VND83.808 trillion (nearly $4 billion) at the end of June, a rise of VND8.035 trillion ($380.8 million) compared with the end of 2013. Equity also grew VND3.057 trillion ($145 million) to VND17.529 trillion ($830.8 million). The company announced plans on Thursday to pay stakeholders dividends by shares at the rate of 1,000:487 from its cumulative profit last year. An additional 452.7 million shares, equivalent to VND4.527 trillion ($214.5 million), will be issued to fund this payout.
The payment will be made in the next two months and shareholders must register to participate by August 28. After the issuance, the outstanding shares of VinGroup on the market will reach 1.38 billion, surpassing the landmark 1 billion level.
Last month, the company warmed the market up with the information that it would spend almost VND2 trillion ($94.8 million) to pay cash dividends by the end of this month. Despite the latest positive news, VinGroup's shares lost 1.3 per cent in value to end yesterday's session at VND77,500 ($3.67) per share.
Australian cattle export to Vietnam up 9,000 pct
Australia ’s export of live cattle to Vietnam soared nearly 9,000 percent during the 2011-2012 financial year, according to the Meat and Livestock Australia (MLA).
The latest statistics by the MLA showed that the number of cattle shipped to Vietnam has risen from 1,500 to a staggering 131,000 head of cattle over the past three years.
Chief executive officer of the Northern Territory Livestock Exporters Association Ben Hindle said Darwin alone exported 49,000 head of cattle to Vietnam during the reviewed period, up 200 percent year-on-year.
In its annual plan announced in January 2014, MLA forecast that exports to Vietnam will see a slight decline this year. However, the record high figure last year made Vietnam the second largest customer of the Northern Territory ’s livestock industry.
Hindle said the Northern Territory government has played a crucial role in establishing Vietnam as a significant trading partner.
"They have been in Vietnam for a bit over two years with specialists providing technical advice to a lot of the supply chains," he said.Local livestock industry faces import pressure
The increasingly high number of meat imports in recent months has put pressure on the domestic cattle industry, according to an article published on the English language news portal VietNamNet Bridge.
Vietnamese beef products are no longer found on the shelves at Lotte, Co-op Mart and Big C, the big supermarket chains in Vietnam. There are only beef imports from Australia, which, though being more expensive than domestic products, are still selling faster.
According to the General Department of Customs, in the first months of 2014, Vietnam imported 1,431 pigs, or two times higher than that imported in the same period of 2013. Of these, 66.4 percent were from the US, 31.9 percent from Canada and 1.7 percent from Taiwan.
Vietnamese government agencies had granted licences to import 72,000 live cows by May 31, which accounted for 13.2 percent of the total number of cows Australia had sold by that time. It is highly possible that Vietnam would have to import 150,000 cows from Australia this year to satisfy domestic demand.
Besides live cows, Vietnam has also been importing live buffaloes to slaughter domestically for sale and for frozen products. About 300 tonnes of boneless meat and 14,532 tonnes of boned meat had been imported by the end of May.
Meanwhile, chicken imports have also been increasing rapidly, with 43,000 tonnes of chicken having arrived in Vietnam by the end of May. In 2013, Vietnam imported 78,000 tonnes of chicken.
A report showed that chicken imports account for 6-7 percent of the total amount of meat consumed domestically.
Imports have pushed domestic farmers against the wall. Dat Viet newspaper quoted the owner of a fowl farm in Binh Duong province as saying that the chicken price has fallen by 1,000 VND per kilo in recent days.
The farmers blamed the lower prices on oversupply after farmers had rushed to expand their farms’ scale, and on high quantities of recent imports.
A local newspaper quoted its source as reporting that in May and June alone, nearly 10,000 tonnes of frozen chicken were marketed, while the demand remained very weak due to the economic crisis.
Analysts have repeatedly given warnings about the difficulties the livestock industry is facing. The meat imports, with amounts increasing steadily in recent years, have made Vietnamese farmers suffer because their products cannot compete with imports.
Tran Hoang Ngan, a renowned economist, noted that farmers now incurred double losses because their products are unsalable, or sold at low prices, while they have to pay high costs for imported feed.
Minister of Agriculture and Rural Development Cao Duc Phat said Vietnam had to import 1.3 million tonnes of maize and 1 million tonnes of soybeans in 2012 to make animal feed.
Meanwhile, the total import turnover of feed and input materials reached 3 billion USD in 2013, up by 22.3 percent over 2012.
According to the Vietnam Livestock Association, the domestic livestock industry incurred a major loss of 27 trillion VND in the last two years.
Phat admitted that animal husbandry is the weakest sector of Vietnam’s agriculture production.-
JICA assists waste treatment in aquatic farming
The Japan International Cooperation Agency (JICA) has pledged to provide 3.63 million USD in non-refundable aid for a project to produce electricity from waste in aquaculture in the Mekong Delta.
A document to this effect was signed at Ho Chi Minh City National University on August 14.
The project will focus on issues relating to treatment of water and organic waste. Accordingly, organic waste, which is sediment in ponds and can pollute the living environment of fish and other aquatic animals, will be pumped into a tank to produce biogas.
Biogas then will be used to generate electricity to provide for the water treatment system in farming ponds.
The project will be implemented in the Mekong Delta from April 2015 to March 2020.
New opportunities for leather and footwear exports
The Vietnamese leather, footwear and handbag industry has more room for export development due to increased market demand and shifted production orders to Vietnam , the Vietnam Economic News reported on August 15.
According to the Vietnam Leather and Footwear Association (LEFASO), the leather, footwear and handbag industry has enjoyed many development opportunities as import demand from foreign markets especially the US market is recovering and Vietnam ’s competitiveness in the EU market has improved.
Starting in January 2014, Vietnamese footwear exports to the EU benefit from a Generalized System of Preferences (GSP) tax rate of 3.5-5 percent. Many investors are looking for investment opportunities in Vietnam and increasing the number of their orders to Vietnamese businesses. Foreign partners have tended to move their orders from China and Bangladesh to Vietnam .
The leather, footwear and handbag exports earned more than 5.7 billion USD in the first seven months of 2014, up more than 19.2 percent from the same period last year.
There were many domestic and foreign projects investing in the leather and footwear industry, including supporting industry projects. The Zhu Rui Vietnam Co., Ltd from Hong Kong , China , has recently invested 10 million USD to produce molds and soles in Binh Duong province. A 16.6-billion VND project is expected to begin operation this year to produce packaging for garment, textile, leather and footwear products.
Negotiations of many free trade agreements, including a Trans-Pacific Partnership (TPP) agreement, an EU-Vietnam Free Trade Agreement, and a free trade agreement with the Customs Union of Belarus, Kazakhstan , and Russia , and are expected to be completed later this year or in 2015. Free trade agreements with ASEAN (Association of Southeast Asian Nations) countries and China , which already took effect, have provided big opportunities for the leather, footwear and handbag industry.
Director of Lien Phat Shoes Company Tran Ngoc Lien said that trade agreements will create both opportunities and challenges. Both domestic and foreign businesses are subject to the agreements, while domestic companies remain inferior to their foreign counterparts in terms of finance and business administration.
LEFASO Deputy President Diep Thanh Kiet said that the leather, footwear and handbag industry considerably depends on exports as 90 percent of its products are exported, while the domestic market is overwhelmed with imported goods. The product’s localisation rate of strategic investment products remains low. Specifically, the local input of tanned leather is only 30 percent, that of synthetic leather is 40 percent and that of decorative materials is 45 percent.
LEFASO suggested that businesses in the sector improve business administration and apply advanced management technology such as the Enterprise Resource Planning (ERP) and streamlined production to increase profits and labour productivity and reduce production costs. Each business should build its own research and development team to better satisfy customer’s requirements and improve competitiveness.
Vietnam textile industry urged to advance supporting industries
Textile export has ranked second and made up 15 percent of total national export turnover, however Vietnam textile and garment industry has heavily relied on importing raw materials, hindering the industry to develop in a sustainable manner, said the Vietnam Business Forum Magazine (VBF).
According to the Vietnam Textile and Apparel Association (VITAS), the Vietnam textile supply chain is currently focusing heavily on exports (making up 86 percent of production capacity), and greatly depending on imported fabric sources (accounting for 86 percent of total demand).
In addition, bottlenecks still happen in the process of knitting and dyeing in Vietnam’s textile supply chain.
These have prevented the industry from sustainable development. To increase profits and competitiveness, and reduce imports of raw material, the industry needs to advance supporting industries.
In particular, Vietnam’s textile industry should promote supporting industries and seek for more market share.
In the supporting industry development strategy, the textile industry has launched a number of specific programmes. Accordingly, the industry will call for investment in the production of polyester fibre - an important factor contributing to the sustainability of the textile industry. Besides, the industry has also required a 580 hectare land for plant construction to have 11.6 million spindles by the time of 2025. Moreover, it needs to invest in large-scale industrial parks, following by supporting material development for export garment.
More specially, the industry will focus on stimulating the fashion design industry. The domestic market with more than 90 million people is the good reason for the development of this industry.
With the strategic direction mentioned above, VITAS said that the Government should supplement and adjust the textile industry development plan in the period 2015-2025 with the orientation to 2035; call for investment in the fabric manufacturing sector, including weaving, and dyeing. It also needs to have financial resources to support investment in waste water treatment for the industry.
Furthermore, the Government should also enhance the quality of human resources; issue guidelines and policies for attracting advanced technologies, encouraging the transfer and creating a playground for Vietnamese enterprises to grow.
VITAS also recommended that local enterprises should boost exports of traditional weaving products, strengthen links in the domestic supply chain, increase design and trade capability. In particular, the industry needs to find additional sources of raw materials from others countries to gradually replace Chinese ones, reducing the dependence on China.
Vietnam receives more foreign handicrafts orders
Vietnam has recently taken a lot of handicrafts orders from China and Japan which would likely help it achieve this year’s export turnover goal of 1.6 billion USD.
According to Secretary-General of the Vietnam Handicraft Exporters Association (Vietcraft) Le Ba Ngoc, the increase in orders has reflected customers’ trust in the quality of Vietnamese goods – which have been improved in recent years.
Besides traditional markets like the US, the EU and Japan, Brazil, Russia, India, China and South Africa are seen as potential ones for Vietnamese handicrafts, Ngoc said.
Among those potential countries, China imports about 100 million USD worth of furniture pieces from Vietnam annually, he noted.
Ngoc recommended enterprises to increase advertisements to further popularise Vietnamese handicraft items and obtain a patent for their products in order to protect their legitimate economic interests.
Vietcraft will send a business delegation to Brazil to study the market and launch a marketing drive there, Ngoc said.
Handicraft exporters grossed nearly 900 million USD in the first half of this year, a year-on-year rise of 10 percent.-
VN-Singapore industrial park to bring new face to Phu Quoc
A Vietnam-Singapore Industrial Park is expected to bring a new face to the island district of Phu Quoc in southern Kien Giang province, with upgraded transport infrastructure and modern urban areas.
The Investment and Industry Development Corporation (Becamex ICD) and the Vietnam-Singapore Industrial Parks Joint Venture Co. Ltd (VSIP) in Binh Duong province have been assigned to implement the project, which will cover a total area of nearly 3,000 ha.
It will also involve in forest protection for the formation of ecological forests serving sustainable tourism.
According to Tran Van Nam, Vice Chairman of the Binh Duong provincial People’s Committee, VSIP Phu Quoc is a large-scale project that will significantly contribute to the future development of the island.
The project will be designed by Singaporean experts and foreign investors are also encouraged to engage in it, said Chairman of the Kien Giang People’s Committee Le Van Thi.
Phu Quoc Island , dubbed as the Pearl Island in the southern sea, is a tourist hub of not only Kien Giang but also the southern region.
Binh Duong vows to promptly support Taiwanese firms
The southern province of Binh Duong will draw more practical policies to help enterprises, including those from Taiwan (China), maintain and develop production activities, Vice Chairman of the provincial People’s Committee Tran Van Nam has said.
At an August 14 meeting with representatives from 11 Taiwanese businesses operating in the Song Than 2 Industrial Park, Nam said that the local authorities will make all it can to provide the best assistance to the firms.
The Taiwanese enterprises, which faced many difficulties in recovering their production and business after incidents sparking from workers’ rallies protesting against China ’s illegal actions in Vietnam ’s waters three months ago, have received aid from the Government and local authorities over the past time.
They said that the most difficulty they are facing now is the clearance of damaged workshops and warehouses due to insurance companies’ delay in evaluating losses.
The firms proposed that local authorities take measures to accelerate the evaluation and compensation progress as two of them are still yet to normalise their operation.
Chen Bai Xiu from the Taipei Economic and Cultural Office in Ho Chi Minh City said that Taiwanese investors still want to continue doing business in Binh Duong, suggesting the province speed up assistance to them.
Local leaders promised to urge insurance companies to hasten compensation for enterprises suffering losses, while considering giving support to those that did not buy insurance as well as applying new investment policies for them.-
High-tech applications crucial for agriculture
Problems associated with transfer of high-tech applications need to be solved to help promote the growth of the HCM City High-Tech Agricultural Park (HHAP), heard a seminar held in HCM City on August 15.
"Policies which attract agricultural and rural investors, especially in high-tech agriculture cultivation, must be completed, along with adjustment of policies of agricultural production co-operation," said Nguyen Hai An, director of the Park's Incubation Centre.
Dr. Nguyen Tan Binh and Dr. Huynh Thanh Dien, lecturers of Van Hien University, pointed out that transferring high-tech application faces hindrances, including the inability of farmers to use new technology, limited capital, and small land plots unsuited for high-tech applications.
"Enterprises are participating in high-tech agricultural research but they are not directly taking part in real production," Binh said.
To solve the problem, he suggested that public-private partnerships be established in high-tech agricultural research and development.
"Local authorities should promote research trends and develop agriculture as well as invite enterprises to take part from the very beginning. The work should not be done only by research institutes and universities," Dien said.
He also emphasises the important role of farmers in transferring new plantation technology and asked that they be trained often.
From now to 2020, the HHAP will include four regions, with the first the current location of 88ha in Pham Van Coi commune, Cu Chi District, which is focused on plantations.
Another 200ha will specialise in fresh pet-fish research, and 90ha will be allotted for marine research in Can Gio. The fourth will be in Binh Chanh District and will specialise in animal-feed research.
The park, which was set up in 2004, has gained achievements but it has been limited because of haphazard investment and a poor support system that could attract enterprises. In addition, products have not been very popular with customers.
There are 29 high-tech agriculture parks in the country.
Vinacomin estimates coal exports at eight million tons this year
Vietnam National Coal and Mineral Industries Holding Corporation (Vinacomin) expects to export nearly eight million tons of coal this year whereas local thermal power plants will have to import coal.
According to a master plan for national grid development by 2020 with a vision to 2030, new thermal power plants will have to make the most of local coal resources.
From 2020, to turn out 156 billion kWh with the total capacity of the coal-fired power plants reaching 36,000 MW, the industry will need 67.3 million tons of coal and 171 million tons when the capacity of coal-fueled facilities is 75,000 MW by 2030.
Therefore, coal supplies in the country will not be enough to meet the surging demand, resulting in coal imports.
Deputy Prime Minister Hoang Trung Hai at a recent meeting ordered the Ministry of Industry and Trade and other relevant agencies to forecast the use of energy resources, ensure a balance of supply and demand, and weigh demand for coal import.
He also asked them to seek other potential coal resources to secure the national economic development after 2020.
Nguyen Thanh Son, director of Song Hong Corporation under Vinacomin, told the Daily that Vinacomin would maintain coal output at 40-45 million tons to guarantee jobs for over 100,000 employees.
Domestic consumption is projected at over 20 million tons while the surplus will be exported. The coal industry cannot cut output despite large amounts of coal inventory for fear of massive job losses.
In the coming years, it will be difficult to maintain coal output at 40 million tons to meet the needs of a number of new coal-fueled power projects, Son said. “We will have to depend on coal imports with higher prices than our export prices.”
An expert in the sector said many thermal power plants are worried about the lack of coal while coal exported to China is a special type for electricity generation.
The Ministry of Industry and Trade has recently issued a circular halting the export of certain types of coal measuring less than 15 millimeters at some mines in the northern region from next year.
Leading global brewer confirms commitment to Vietnamese market
During his recent visit to Vietnam, CEO Carlos Brito of AB InBev, a leading global brewer and one of the world’s top five consumer goods companies, affirmed the company’s commitment to Vietnam as AB InBev plans to open its first brewery in the country by the next Spring Festival.
“This was my first visit to the country and I discovered a very dynamic market in general. With its vibrant economy, business friendly policies, and educated work force, we believe in the long-term growth potential of the Vietnam market,” he said.
“We look forward to further developing our business and brands in Vietnam, with a specific focus on Budweiser,” he added.
Ricardo Vasques, general manager of AB InBev Vietnam, said the fast-growing beer market as well as social factors had driven the company’s investment strategy
“While a strong beer culture has been part of Vietnam for years, consumers are increasingly seeking premium and super premium alternatives. Leading global brands such as Budweiser are well placed to serve these consumers with unique experiences,” he noted.
Accordingly, the Belgian-based company will complete the construction of its state-of-the-art brewing facility in the southern province of Binh Duong in early 2015.
This will be the company’s first bricks-and-mortar investment in Vietnam, as well as its first investment of the kind in the greater ASEAN region.
This new brewery will feature cutting-edge equipment, environmentally-friendly technology and advanced quality standards to produce Budweiser and other AB InBev brands for the domestic and regional markets.
With the dream to be the Best Beer Company Bringing People Together For a Better World, AB InBev is also committed to good corporate citizenship, with a special emphasis on protecting the environment, promoting responsible drinking and contributing to the communities where the company develops its activities.
In 2013, AB InBev sold 425 million hectoliters and reported $43.2 billion in revenue.
Its portfolio includes global brands Budweiser, Corona and Stella Artois; international brands Beck’s, Leffe and Hoegaarden; and local champions like Harbin and Sedrin in China.
Of the more than 200 beer brands in AB InBev’s portfolio, six are recognised in Millward Brown’s BrandZ® Top 10 most valuable beer brands. In addition, Budweiser remains the only beer brand in its Top 100 most valuable global brands at number 34.
Opera Software app helps save 3G charges
Norwegian firm Opera Software ASA, in coordination with local smartphone brand Mobiistar, has introduced the Opera Max app that helps users save 50-80% of 3G charges.
Mobiistar’s Prime 508 has become the first smartphone in Vietnam to be installed with the Opera Max app.
Sergey Lossev, head of product for Opera Max, said the Mobiistar-Opera Software ASA partnership would see the app installed in a couple of Mobiistar smartphone models before it is downloadable on Google Play store in Vietnam.
The Opera Max app compresses download and upload data, so users, especially those downloading video clips, can pay less for 3G data.
According to Mobiistar, Opera Max will be available on some of its smartphone models such as Prime 508, LAI 504m, BEAN 414 and LAI 504c.
Springer: No ties between Ton Duc Thang Univ. and APJCEN
Springer Publishing, the owner of Asian-Pacific Journal of Computational Engineering (APJCEN) magazine, on August 14 confirmed that there is no connection between Ton Duc Thang University and the magazine.
In an e-mail sent to the Daily on August 14, Renate Bayaz, Springer’s public relations manager, said that the university was not mentioned in the magazine establishment contract.
The e-mail is meant to respond to the Daily’s question over who is the real owner of the magazine.
Earlier, the privately-held university based in HCMC filed a lawsuit against Professor Nguyen Dang Hung, editor-in-chief of APJCEN, for failing to develop the magazine, which is claimed to be a project of the university.
In addition, Professor Hung was accused of being deceitful when claiming that Springer and the editorial board would be founders of the magazine, rejecting the founding role of Ton Duc Thang University.
The petition claimed that after the university and Hung terminated their contract before maturity in March, Hung used the name of another college to replace Ton Duc Thang as the founding member of APJCEN, local media reports.
The university also asked the professor to return over VND461 million, the expenses paid to the professor and partners to run the magazine.
Meanwhile, Springer’s Bayaz said in the e-mail that Professor Hung, who was a senior advisor of the local university at that time, and Dr. Le Van Ut, a lecturer of the university and Hung’s assistant, contacted Springer to offer the scheme of establishing APJCEN.
According to a contract signed by both sides, the magazine allows open access, meaning those who post articles have to pay a fee at around US$1,400. However, researchers from poor countries like Vietnam are exempted from the fee.
The contract made no mention of Ton Duc Thang University.
Professor Hung in an e-mail to the Daily said that big scientific journals normally belong to large publishing houses. APJCEN is also one such example.
“A contract between the editorial board represented by me and Springer was signed before the magazine was established. This is a founding contract and signatories are founding members. No one can jump in to demand the founding role here,” Hung said.
Meanwhile, representatives of Ton Duc Thang University refused interviews as the court is handling the case.
The lawsuit between the university and Professor Hung therefore will only make clear labor contract violations, if any, not the real ownership of APJCEN magazine.
Enterprises can offset losses incurred in real estate projects
Local realty firms are now allowed to use their profits from other business operations to offset losses when transferring realty projects in a taxable period, which will help them ease the pressure of paying tax during this hard time in the real estate market.
The decision, effective from August 02 this year, was made by the Ministry of Finance in Circular 78/2014 which provides guidelines for the implementation of Decree 218/2013 on the Corporate Income Tax Law issued by the Government.
Revenues from transfer of properties, investment projects or the right of implementing projects must be accounted separately and will be subject to a tax rate of 22%. The rate will go down to 20% from January 1, 2016.
However, if enterprises incur losses from the aforesaid activities, such losses can be offset by profits from other business operations during the same taxable period.
Speaking to the Daily, Nguyen Van Duc, deputy director of Dat Lanh Real Estate Company, said that he supports the new decision as it now treats realty firms like those companies in other sectors.
For instance, if a firm gained VND100 million from selling a house and lost VND50 million in transferring a property project, it would pay income tax for the VND100-million profit under previous regulations. However, the new decision allows it to pay tax for the net profit of VND50 million only.
Nguyen Ngoc Thanh, vice chairman of the Vietnam Real Estate Association, said the transfer of real estate is quite popular at present as realty firms could relinquish their projects if they lack capacities.
However, transferring a property project also takes time which could push many enterprises into the red. Meanwhile, they have to pay tax every year and many of them do not have enough to settle arrears. Therefore, the decision that allows enterprises to offset losses is reasonable, Thanh said.
A member of the Tax Policy Department under the Ministry of Finance said that over the past years, many firms suffered losses from the transfer of real estate; however, policies at that time did not allow them to use profits in other business operations to offset losses.
However, he advised realty firms to calculate revenues from other business activities and from the transfer of real estate separately. Enterprises should also be aware that they can offset losses in the same taxable year only.