BUSINESS IN BRIEF 21/11
Fuji Xerox opens $119m LED printer factory in Hai Phong
Fuji Xerox Co Ltd yesterday opened a factory manufacturing digital colour multifunction devices and small-sized LED printers in northern Hai Phong City, with a total investment capital of US$119 million.
The facility has an output capacity of around two million products per year.
With it, Fuji Xerox aims to avoid the need to focus on existing factories in China, which rolls out about 90 per cent of the firm's products.
The company began works on the plant in VSIP Hai Phong Integrated Township and Industrial Park in January.
Trade deficit with China hits US$19.7 billion
In the first nine months of this year, Vietnam imported 43 kinds of products from China worth more than US$26.74 billion.
Among many products exceeding the level of more than US$1 billion were machinery and equipment, telephones and components, computers, electronics, cotton, and steel. Vietnam’s exports to China grew by just 2.61%.
The country’s deficit with China remains too large to compare with the US and Japanese markets.
According to the Ministry of Industry and Trade, it is growing wider year by year. The reason is that Vietnam mainly exports raw materials to China while importing finished products.
Vietnam is strong in agricultural production but domestic market is still dominated by Chinese products like potato, ginger, lemon, grapefruit, pear, apple and garlic. Shipments from China have risen by 25% from a year earlier. Half of the total volume of vegetables and fruits on sale was from China, including many disguised as products from Da Lat, Thailand, the US and Australia.
Vietnam and China set their two-way trade target at US$5 billion in 2005, but they already surpassed the level of US$7.1 billion in 2004.
They are striving to raise it to US$60 billion in 2015.
Vietnam to boost economic ties with Italy
Vietnam will open economic offices in Lombardy and Puglia, Southern Italy, in 2014 to introduce its potential for investment cooperation.
These offices will help increase trade information exchanges, seek investment and business partners, and establish coordination mechanisms between Vietnam and Italy.
The information was released at a seminar in Genoa on November 19 as part of the ongoing Vietnam Day in Genoa to celebrate 40 years of diplomatic ties between Vietnam and Italy.
In his opening speech, Ambassador Nguyen Hoang Long highlighted Vietnam as a large market of 90 million consumers and with a skilled labour force. In addition, Vietnam is the gateway to other markets in Southeast Asia.
However, he said, Vietnam-Italy trade has yet to match their potential. Italy now ranks 9th among foreign investors in Vietnam. As of September 9 2013 the European nation invested in 50 projects with a total registered capitalisation of US$257 million.
Bilateral trade ties have been strengthened in recent times. Business delegations from Emilia-Romagna and Toscana visited Vietnam to seek partners. Other Italian localities noted for industry, trade and services also entered into cooperation agreements with Vietnam.
At an international trade seminar in Salerno, Southern Italy held on the same day, the Trade Office under the Vietnamese Embassy in Italy introduced visitors to Vietnam’s potential, its key products, and opportunities for investment and cooperation.
A number of economic seminars were held in Italy recently, offering local entrepreneurs the chance to meet and establish partnerships with Vietnamese businesses.
Vietnam to increase fertiliser imports
Vietnam plans to import 11 million tonnes of fertiliser for agricultural production next year, a major increase from this year's total of 10.3 million, according to the Ministry of Agriculture and Rural Development.
Demand for urea stood at 2.2 million tonnes, SA at 900,000 tonnes, NPK at 4 million tonnes and DAP at 1.8 million tonnes.
While domestic producers can satisfy demand for some kinds of fertilisers, they still have to import others, the ministry said.
Vietnam imported 3.81 million tonnes of fertiliser in the January-October period.
Last month alone, the Ministry of Industry and Trade estimated the country's fertiliser imports totaled 450,000 tonnes, a 2% surge over the previous month but a 6% decrease year-on-year.
Urea imports saw the highest rise, surging 98% against the same period last year to 138,000 tonnes.
Dinh Vu Fertiliser Plant in the northern city of Haiphong has a yearly output of 330,000 tonnes, meeting 30% of domestic demand for DAP. It expects to increase its annual capacity to 660,000 tonnes.
The country has to spend hundreds of millions of US dollars importing over 800,000 tonnes of DAP every year.
The Vietnam National Chemicals Group (VINACHEM) will invest in building a plant with a similar capacity in northern Lao Cai province's Tang Loong Industrial Park. The plant is expected to become operational in 2015.
In 2015, local enterprises will be able to meet 100% of demand for urea, phosphate and NPK, 70-80% of demand for DAP and 30% for SA.
Industrial parks promote investment opportunities in Hanoi
The capital city of Hanoi will host a November 20–30 exhibition promoting investment in Vietnam's industrial parks (VietIZ 2013).
The Ministry of Planning and Investment worked with Vietnam Invest Network to organise the exhibition, themed “Promoting investment and cooperation in Vietnamese Industrial Zones”.
Attendees will learn about the advantages of investing in economic zones and industrial parks via a selection of images, documents, maps, sand tables, and lists of projects actively seeking capital.
The exhibition also encompasses cooperation agreement signing ceremonies and a seminar outlining the latest developments in industrial park management and investment policies.
Trade surplus with EU hits US$10.8 billion
Vietnam achieved a trade surplus of US$10.8 billion with the European Union in the first nine months, accounting for 60.6% of its exports to the EU.
Vietnam’s General Customs Department reports two-way trade between Veitnam and the EU reached US$24.8 billion in the reviewed period.
Of the total, exports to the EU earned US$17.8 billion, a 24.7% improvement on 2012, and imports hit US$7 billion, up 11%.
Germany was Vietnam's largest European trade partner, followed by France, the Netherlands, the UK, and Italy.
Property disputes mar development
The country's legal system has not kept pace with rapid real estate development, triggering a number of disputes between investors and customers.
There were many disputes between real estate investors – who made large profits in a short time –and home buyers, who felt that investors were not professional in their transactions, an expert said at a conference in Ha Noi yesterday.
Former deputy minister of Natural Resources and Environment, Dang Hung Vo singled out Le Van Luong Residential Project and Dai Thanh Apartment Building as areas where disputes had occurred over such issues as service fees and certificates of home ownership.
The Law on Apartments and other legal documents lacked regulations on building management boards and other key issues, according to Vo.
Moreover, contracts between investors and customers failed to protect the rights of home buyers or require supervision from authorities.
He proposed completing such regulations and urged investors to provide customers with legal information about projects.
State management agencies and associations should also implement drastic measures to resolve the disputes, he said.
Tran Huu Huynh, chairman of the Viet Nam International Arbitration Centre, agreed, saying the disputes would get more severe if State agencies and relating authorities did not intervene.
Lawyer Nguyen Truc Hien, director of the Viet Nam International Law Firm (Vilaf) Hong Duc, said that in several property projects, investors contributed only a small amount of the capital, while the rest was mobilised from customers and loans.
For this reason, investors were ready to run away from projects if there was a dispute, he pointed out.
Lawyer Phan Vu Anh, former director of Vinaconex's legal department, said the Government could prevent hundreds of disputes by taking measures to make home buyers feel secure and encouraging banks to pour money into property projects given the quiet real estate market and increasing bad debt.
Banks focus on human resources
Commercial banks have accelerated staffing adjustments in the face of a tough economic outlook, according to Dau tu Chung khoan (Securities Investment).
Asia Commercial Bank (ACB) staffing levels fell to just over 9,000, after the bank dismissed nearly 1,300 employees within the first nine months of this year, with more than 700 jobs slashed in the third quarter.
ACB deputy general director Nguyen Thanh Toai said better market conditions had enabled the bank to expand until 2012, before the economic downturn. The bank has since had to modify expansion plans and restructure its workforce to stay competitive.
He confessed that salaries at ACB had become less attractive for employees as a result of sharp declines in profit, with many people leaving the bank in search of better pay packets.
The bank reached a pre-tax profit of around VND1 trillion (US$47.6 million) in the past year, with losses in gold trading amounting to VND1.7 trillion ($80.95 million).
Techcombank said it discharged around 1,000 employees in 2012 and was continuing to slim its workforce as third-quarter profits slumped nearly 84 per cent over the same period last year.
The bank's earnings came in at VND562 billion ($26.76 million) in the first nine months, declining 66.4 per cent from last year.
Eximbank chairman Le Hung Dung said late last week that the bank had terminated nearly 50 contracts, repositioned over 300 people and slashed management-level salaries; in an effort to strengthen sales and boost retail activities.
He said the bank had been trying to reshuffle jobs and limit job cuts, a move typically undertaken by banks in periods of low profits.
Meanwhile, Sacombank staffs have reached more than 11,300 people after the bank recruited an extra 700 employees last year and more than 1,000 this year. General director Phan Huy Khang said the bank would continue to hire as branches were showing strong growth.
But he admitted that market difficulties remained and the bank would need to keep restructuring staff to ensure leaner and higher quality operations.
Compared with the market's larger lenders, staffing levels at small- to medium-sized banks remained almost unchanged this year. At the end of the third quarter, Southern Bank had 2,960 employees, shedding only 24 people from the end of 2012.
Chairman of a HCM City-based bank with VND4 trillion ($190.5 million) in equity, said his bank had not changed staff numbers this year, but had reshuffled staff between different sections of the business.
Industry insiders say this tactic was used primarily because small banks had downsized sharply in the last few years, with many employees fired as a result of mergers and acquisitions.
Former Governor of the State Bank of Viet Nam, Cao Sy Kiem said cutting costs was extremely important for banks in the face of high bad debt levels and sluggish credit growth.
The downsizing of banking staff is due to continue next year if market demand remains weak and business borrowing stays low.
Debts restructured to support failing firms
Credit institutions have restructured nearly VND300 trillion (US$13.63 billion) in debts, accounting for 10 per cent of total outstanding loans.
According to Governor of the State Bank of Viet Nam, Nguyen Van Binh, measures used to restructure the repayment period meant large amounts of outstanding loans would remain as such, instead of becoming non-performing loans (NPLs).
As many as 60 per cent of the restructured debts would have become bad loans without the restructuring, he said.
The restructuring has also eased borrowing conditions for businesses with no penalty interest payments being applied.
Binh said the measures for self-handling NPLs of banks, including debt restructuring have yielded positive and meaningful results for both businesses and banks.
In late May, the central bank had to delay the application of Circular 2 on bad debt classification and risk management until June 2014.
The move aimed to help enterprises access credit, boost lending and reduce lending interest rates to fight looming economic downturn and rising bankruptcy rates.
As a result of the delay, credit institutions have been permitted to restructure repayment periods for loans.
Circular 2, which reflected international norms and was compatible with economic conditions, will prevent banks and financial institutions from intentional misconduct.
However, the implementation of the circular would see tighter conditions for enterprises seeking bank loans and force banks to contribute to risk funds.
Vice Chairman of the Viet Nam Asset Management Company, Nguyen Quoc Hung, told Thoi bao Ngan hang (Banking Times) that as of November 15, the company had bought VND17.3 trillion ($786.36 million) in debts from 20 credit institutions.
As many as 24 banks have registered with the company to sell debts valued at VND40 trillion ($1.818 billion). The company is currently reviewing debts for future deals.
Retail banking the wave of the future, experts say
The trend toward retail banking will only get stronger in Viet Nam as banks realise the vast potential of the market, experts said at the ASEAN Banker Forum held yesterday in HCM City.
"The experience of the monetary crisis in 1998-99 and 2007-08 showed mistakes. Commercial banks had invested a great deal in sectors that easily brought high profits such as real estate and security. They forgot retail, a potential, stable sector," Ha Huy Tuan, deputy chairman of the National Financial Supervisory Commission, told the forum.
Bankers, financial experts and technology consultants attending the forum agreed that the fast pace of urbanisation, the country's rising population and higher incomes, and an increasing number of small- and medium-sized enterprises (SMEs) had pushed the development of retail banking in the country.
During the one-day meeting, experts spoke about operational excellence and the need to differentiate and transform banking channels.
Tuan said the increase in population and income had created "much potential; moreover, 90 per cent of companies in Viet Nam are SMEs, a potential customer for the market".
"That's why developing retail banking is becoming the key strategy of banks and financial institutions," he said.
Le Cong, CEO of Military Bank, said that only 30 per cent of Vietnamese residents had been approached by banking services, and the remaining 70 per cent represented a huge market for retail services.
Nguyen Tu Anh, CEO of Smartlink Card Joint Stock Company, said that retail banking had become more important in the Vietnamese banking sector in the last three years.
"For big banks like Vietcombank and Vietinbank, capital mobilisation from the retail sector accounts for 50-55 per cent. Meanwhile, the figure is more than 80 per cent at smaller banks," she said.
Tu Anh said the number of cards and banking accounts had continued to surge.
"As of June, there were about 50 million banking cards and many other payment tools. The payment network has also developed with more than 16,000 auto teller machines (ATMs). Many companies are accepting online payments. In addition, many other payment methods such as mobile banking are being used," she said.
Despite the potential, many forum participants said that competition was tough as the banking sector was one of the first to open to foreign players.
To win the market, banks must be able to differentiate themselves in service and products from their competitors, they said.
The forum said that service payments and money transfers at banks in Viet Nam were too similar and as a result customers did not distinguish between banks.
Developing better management skills and investing more in information technology were two other necessary steps, speakers said.
"Banks in Viet Nam have to create differentiation and make big changes. They need to upgrade their distribution systems as well as services and products," said Tran Thi Hong Hanh, secretary general of the Viet Nam Banks Association.
The ASEAN Banker Forum was co-organised by the association and International Data Group (IDG). This was its third annual meeting.
Six banks win Outstanding Banking prizes
Six banks in Viet Nam yesterday were awarded the Viet Nam Outstanding Banking Awards 2013 organised by IDG ASEAN and the Viet Nam Banks Association.
The award honoured those banks that had achieved an outstanding performance and had contributed to the development of the banking and financial sector.
The title outstanding retail bank was bagged by Techcombank; outstanding e-banking award, Vietinbank; outstanding security initiative banking award, HDBank; outstanding trading platform banking award, Vietinbank; outstanding branch of foreign bank ward, CitiBank; and Oceanbank and TienPhong Bank, outstanding innovative banking products and services award.
The board of judges included representatives from Government agencies, ministries, associations and experts in the fields of finance and banking technology.
Ailing Trang An offloads accounts
Trang An Securities Company would transfer its 12,000 trading accounts to the Viet Nam Investment Securities Company (IVS), the account receiver announced yesterday.
The number of shares held by these accounts reached around 30 million shares, according to the Viet Nam Securities Depository's data as of November 15.
Among the accounts, a large proportion belongs to Chinese investors as the current chairman of Trang An Securities holds Chinese nationality.
In April last year, Yang Xiao Dong, the largest shareholder of Trang An Securities, was appointed chairman of the company, replacing Le Ho Khoi who was then arrested earlier this year for appropriating clients' assets.
In May last year, many investors opening accounts at Trang An Securities reported that their money and securities disappeared without a reason.
After increasing his stake in Trang An Securities, Yang offered a loan of VND29.8 billion (US$1.4 million) to the company.
"In fact, the shareholder succeeded in acquiring the brokerage at a low price, and he can restructure it in his own way," a securities analyst said under the condition of anonymity.
Yang said he wanted to transfer the accounts to a domestic brokerage firm and continue to invest while the Vietnamese market remains promising.
Trang An Securities was de-listed in September, while the Viet Nam Investment Securities is performing normally, having no accumulated losses.
Yamaha recalls faulty Nozza scooters due to petrol leakage
The Viet Nam Competition Authority said that in first six months of this year, Yamaha Viet Nam had recalled 58,196 Nozza scooters, but 24,804 units remained on the road.
Early this year, Yamaha recalled 83,000 Nozza scooters due to possible petrol leaks from the pipe connecting the fuel tank to the engine.
The Japanese motorbike maker said it would fix and replace all the pipes and their holding systems, which were not correctly assembled.
The recall applied to the model produced between August 2011 and March 2013, Yamaha Viet Nam said.
Nozza owners could bring their bikes to Yamaha dealers for repair and replacement work, which would take about 30 minutes and be free of charge, the company said.
Viet Nam enjoys growing rice export revenue, especially from Africa
The Viet Nam Food Association said in the first two weeks of this month, Viet Nam exported 142,265 tonnes of rice, valued at US$60,023 million at FOB prices.
Since the beginning of the year, Viet Nam's rice exports reached 5.88 million tonnes, valued at $2.5 billion at FOB prices.
Africa is the largest importer of rice from Viet Nam, having bought 67,000 tonnes so far this year, while Asian countries rank second, with 48,000 tonnes.
Shrimp sales drive seafood exports to $1.7b in Q4
The export value of seafood in the last quarter of this year is expected to increase 6.5 per cent to US$1.7 billion, bringing the annual total to $6.5 billion.
The Viet Nam Association of Seafood Exporters and Producers (VASEP) said the surge would be mainly due to increasing shrimp exports, while exports of tra fish would likely struggle to recover and exports of tuna and other kinds of seafood would be lower than last year.
Mollusc exports, including cuttlefish and octopus, would continue to decline, it added.
In the first three quarters of this year, seafood export value saw a year-on-year rise of 6.4 per cent to $4.8 billion. The total grew by $1.9 billion in the third quarter, 17.4 per cent higher than last year.
Thua Thien-Hue tempts development investment
A workshop to introduce adjustments to Hue city’s master plan took place in Hanoi on November 19, in a bid to call for investment and turn the central province of Thua Thien-Hue into a centrally-governed city in the future.
Project Director Ohn Yeong-te said the master plan, funded with non-refundable aid from the Korea International Cooperation Agency, is divided into three stages.
During 2011-2015, several key sectors that have potential to draw short-term investment will be chosen to drive durable economic growth.
Between 2016 and 2020, industries, services and sectors linked with planned development will come under the radar.
From 2021-2030, the province will make the most of hi-tech sectors to create high added value.
Chairman of the provincial People’s Committee Nguyen Van Cao vowed all possible resources to overhaul administrative procedures and create a legal environment that is conducive to future production and training.
The province will improve a system of urban infrastructure in transport, culture, tourism, healthcare, education and science-technology, raising its reputation as a major hub of the region and the whole country, he said.
To this end, Thua Thien-Hue will ensure the progress of key tourism projects like Chan May – Lang Co economic zone, Phu Bai and Phong Dien industrial parks, he added.
Sweeping changes will also be seen in general education and vocational training, with attention paid to rural areas and the workforce in the tourism sector, industrial zones and local hospitals.-
Phu Quoc stimulated to become key special economic zone
The launch of the 110kV Ha Tien-Phu Quoc undersea cable project is an important premise for fostering socio-economic development of the southern province of Kien Giang in the time to come, said Trade and Industry Minister Vu Huy Hoang.
The undersea cable project has created a turning point for province to become nation’s key special economic zone and a high-quality green tourist attraction, added Minister Hoang.
The 58km system linking the island to the national power grid is the longest of its kind in Southeast Asia with a total investment of over 2.3 trillion VND (110 million USD), partly financed with a World Bank loan.
Approving the overall development of Phu Quoc island to 2010 with a vision to 2020 has given a new impetus to transform the island district into a special economic zone.
Many domestic and foreign organisations and individuals have sought investment opportunities on the island since the overall development plan approved in 2004, according to Minister Vu Huy Hoang.
Under the provincial master plan, Kien Giang has put into use a number of infrastructure projects, including the Phu Quoc international airport and An Thoi international seaport.
The major transport axis connecting the island’s northern and southern sections is currently under construction, while the Ha Tien-Phu Quoc undersea cable system is expected to become operational on the occasion of the 2014 Lunar New Year.
Phu Quoc has seen a stable and high level of economic growth with Gross Domestic Product (GDP) on average increasing by over 22 percent a year during the 2005-2013.
In addition to witnessing rapid development in trade-services, construction and transportation, the island is also attractive to tourists at home and abroad.
The province welcomed nearly 2.9 million visitors in the first nine months of this year, fulfilling nearly 70 percent of its yearly target. Phu Quoc Island in particular received more than 68,000 tourists.
The island is expected to attract 5-7 million domestic and foreign visitors by 2030.-
Pro-property solutions on path to realisation
A positive change in the property market has been seen in the last quarter of 2013 thanks to the Government’s solutions, according to Minister of Construction Trinh Dinh Dung.
The minister noted that in recent months, the property market has seen an increase in transactions, particularly in affordable medium and small-scale housing, adding that supply for the segment still fails to meet the demand.
He said the sharp drop in real estate prices over the past two years is inevitable after prices reached artificial high levels well above the purchasing capacity, and forecast that the liquidity of property products will be improved when prices come close to affordability.
Discussing the implementation of the Government’s 30 trillion VND package for low-income homebuyers and corporate customers developing social housing projects, minister Dung admitted that disbursement of the preferential source is still sluggish.
He said the country needs more than one million social homes, but the construction could not be done in a short time. At the same time, many obstacles, including tight procedures and low profit, discouraged housing developers from investing in social housing projects.
The minister reiterated the resolve to carry out the programme, and urged the banking system and local administrations to try and cut unnecessary procedures, facilitating people’s access to the bailout money.
Moreover, he stressed the need to fight against wastefulness and loss in construction, which is an urgent issue.
The over-supply of property products is the result of spontaneous investment without planning, leading to “suspended” projects and bad debts in the real estate sector.
The government has issued two decrees to tighten management of urban development and construction quality, and will continue to refine legal documents related to this field.
Workshop promotes export trademark protection
A workshop was held in Hanoi on November 18-19 to discuss trademark protection for exports and the effective use of the Madrid system to protect intellectual property rights for Vietnamese exports in foreign markets.
The event was organised by the National Office of Intellectual Property (NOIP) under the Vietnamese Ministry of Sciences and Technology and the Economic Cooperation Programme of the ASEAN-Australia-New Zealand Free Trade Agreement, with assistance from the World Intellectual Property Organisation (WIPO).
Speaking at the event, NOIP Deputy Director Tran Huu Nam said Vietnamese businesses increasingly attach importance to registering trade name protection for their products. However, he noted that they have not focused on undertaking this process for exports, especially in big potential markets.
In 2012, NOIP received over 5,000 applications from international organisations wishing to register trademarks in Vietnam under the Madrid System. In the same year the office only received 113 registration applications for products of Vietnamese origin.
Luu Duc Thanh from NOIP underlined the importance of registration of trade name protection for exports, saying that the move helps enterprises develop their export market, while protecting them from unhealthy competition.
Vietnam is now a member of the WIPO, the Madrid System for the international registration of trademarks (Madrid Agreement and Madrid Protocol). Therefore, Vietnamese enterprises can submit registration trademark applications to other member countries of the agreement and protocol through the National Office of Intellectual Property.
There are currently 90 countries registered with the Madrid System.-
Aquatic exports to hit 1.7 billion USD in Q4
Vietnam expects to earn 1.7 billion USD from exporting aquatic products in the fourth quarter of this year, up 6.5 percent year-on-year.
The figure will help raise the year’s total to over 6.5 billion USD, an increase of 5 percent against last year, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).
In the first nine months of 2013, Vietnam shipped its aquatic products to 156 markets throughout the world, fetching 4.8 billion USD, or a year-on-year rise of 6.4 percent.
Among the aquatic products, shrimp accounted for 43 percent of the country’s total export value. Since March, the product has enjoyed a two-digit monthly export growth, ranging from 20 percent to 66 percent.
In the January-September period, shrimp export turnover exceeded 2 billion USD, up 27 percent compared to the same period last year.
Meanwhile, the tra fish sector has seen slow recovery, and even some drops, in recent months. Its exports in the first three quarters reached nearly 1.3 billion USD, down 1.4 percent year-on-year.
The export of tuna and sea fish has also come to a standstill due to the EU and Japanese markets’ falling demands and higher standards. Tuna exports in the first nine months fetched only 415 million USD, a decline of 4.5 percent over the same period last year.
Cuttle and octopus saw continuous decreases in the Jan-Sept period, earning 309.5 million USD, down 17.2 percent.-
Real estate market faces further challenges ahead
It is forecast that there will be many challenges for real estate businesses to overcome in the coming time.
The Ho Chi Minh Construction Department says since the beginning of this year, more than 4,400 properties have been sold to reduce the real estate sector’s inventory level by 30.62%). But as many as 10,053 houses worth over VND17,600 remain in the buffer even though they are offered on 10% - 20% price discount.
High-end apartments and villas are no exception as Phat Dat company in Novaland group has agreed to cut down selling prices by 50% and Vincom has committed to accept 10-year house rents at a fixed price.
Tran Trong Tuan, Director of the HCM City Construction Department, says high inventory level in the local real estate sector have forced investors to reduce housing prices and launch more promotion programmes to increase demand.
Nguyen Van Duc, Director of Dat Lanh real estate company argues that consumers will get some benefits from buying completed houses at a lower price but they many face the risk of buying houses which are still under construction.
There’s growing concern about the Government’s VND30,000-billion aid package to help iron out snags in the local real estate sector. By August 31, 2013, VND105 billion was disbursed for 331 borrowers.
By the end of September 2013, HCM City claimed 51 people had registered for loans worth VND71.2 billion in total, but only 18 got VND5.93 billion in loans.
Such snags in the real estate sector will only discourage investors from getting involved in future housing projects.
Luxury villas still lack access
Five years ago, a row of seven villas was constructed in the new urban area of Bac Linh Dam. However only three houses No. 16, 28 and 26 have been inhabited so far. House No. 28, at the other end of the terrace, was just recently moved into, making it the only other house with access to the surrounding neighborhood.
The remaining villas are isolated from the surrounding area as the investor has utilised all of their land for the construction of the houses, expecting a new city project road to provide access to the housing.
This farcical situation only recently came to light when the Government requested Hanoi authorities to carry out an audit of “abandoned” villas across the capital city.
The stupidity of the situation was underlined when one of the current owners of the remaining villas was unable to enter his property with construction materials as landlords in the surrounding area denied him access.
The five-hectare Bac Linh Dam urban area has been developed by the Housing Development Investment Joint Stock Company (HUD2), and consists of part of the Linh Dam model new urban area in Hanoi’s Hoang Mai District.
The company started construction of the urban area in 2003 and first houses were sold in 2005. At present Bac Linh Dam houses around 3,000 residents.
Alongside Bac Linh Dam, a municipal project was scheduled to build a 15-metre road in front of the villas. HUD2 marketed the project with their project showing plans including the road, which was supposed to be built by the city. However delays in the municipal project have left the owners of HUD2 properties in a difficult situation.
HUD2’s Director Nguyen Thanh Quang, said the company was mulling over a plan to rent land in order to construct a road for the isolated villas.
He noted that the firm had yet to receive an official petition from the owners complaining over the problem, and had become aware of the situation only through recent press coverage.
In the short term, HUD2 intends to co-operate with the Hanoi drainage project’s management board and authorities in Hoang Mai District to access land plots for the road’s construction.
A 3,000 square metre land lot in front of the villa block belongs to 20 households who have yet to receive compensation from the management board.
Le Thanh Hai, head of a site clearance group in Hoang Mai, said the project site was expected to be entirely cleared in the third quarter of this year. This means that at long last the owners of the Bac Linh Dam villas will have the road access they were promised many years ago.
New Zealand project mitigates disasters in Mekong
The New Zealand government is providing $414,000 to the Livelihood Improvement for Building Resilient Communities project in the southern Vinh Long province to help locals improve their disaster response capabilities.
According to the New Zealand Embassy in Vietnam, the $580,000 project is funded by its Ministry of Foreign Affairs and Trade and international NGO ADRA Vietnam.
The project will run from 2013-2017 in high risk disaster areas in Vinh Long and will benefit about 30,000 local residents. It will focus on assisting the locals in developing sustainable agriculture livelihoods and community-based disaster risk management.
Official says Vietnam can produce sausage from duck meat
Vietnam currently exports salted duck eggs and may consider producing sausages from duck meat when it begins to breed varieties, one official said.
Dr. Nguyen Dang Vang, Chairman of the Vietnam Animal Breeding Association, made this statement at the 5th World Waterfowl Conference, which opened this morning, October 6, in Hanoi.
The three-day event attracted the participation of 20 scientists, managers, and officials from 17 countries and territories, along with representatives from outstanding farms in Vietnam. Discussions focused on several issues, including genetics and reproduction, nutrition and animal feed, veterinary biosafety and environment, market and food safety and hygiene, and household breeding businesses.
“Vietnam should import new varieties of ducks and goose for domestic breeding, as they have the have higher productivity and larger and thicker breast meat,” Vang said.
According to him, Vietnam should consider producing sausage from duck meat and smoked duck meat as some other countries have succeeded in this field and the products are much higher priced.
Currently, Vietnam exports salted duck eggs, but duck meat exports are modest; mainly to Hong Kongand Singapore.
He attributed the situation to the outdated technology of duck meat processing and that the country should learn from the advanced technology of developed countries like France and the US.
Now Vietnam has the second largest waterfowl flock with 80 million animals. In order to improve sales the country must improve its supply chain including variety selection, animal feeding, enhancing food safety and hygiene and lower selling prices.
Sime Darby Motors distributes BMW, Mini cars in Vietnam
Malaysia’s Sime Darby Motors will soon distribute BMW and Mini cars in the Vietnamese market.
At the ceremony to hand over five cars of BMW Series 5 to the Sheraton Saigon Hotel on Tuesday, Horst J. Herdtle, CEO of BMW Euro Auto as official importer and distributor of BMW cars in Vietnam, said that Sime Darby Motors has become a strategic partner of BMW Euro Auto.
The five sedans for the Sheraton Saigon Hotel are used to upgrade its limousine service. BMW Series 5 sedans were launched at the Vietnam Motor Show 2013 two weeks ago and have not been sold in Vietnam, and the Sheraton Saigon is the first hotel in HCMC to own cars of this series.
“With an aim to expand business operation, BMW Euro Auto has sought a strategic investor. After careful consideration, BMW Euro Auto has decided to sign an agreement with the Malaysian partner,” said Herdtle.
According to Herdtle, Sime Darby Motors not only contributes capital but also experiences to develop the Vietnamese auto market.
BMW Euro Auto will open a showroom for Mini cars (an auto brand of BMW) in Hanoi late this year and another one in HCMC next year. Besides, the firm is expanding its BMW showroom and customer care system.
SBV efforts may stop dollar lending ahead of schedule
The government’s anti-dolarisation plan will stop financial institutions from lending in foreign currencies by 2020. Dollar lending specifically may end even earlier following moves by the central bank.
By the end of October growth in dong-denominated loans hit 11 per cent while those in dollars shrunk by 13.6 per cent. Falling dollar lending is in-line with the government’s anti-dolarisation plan which debuted in 2011 and is to run through 2020.
According to Banking Academy deputy director To Kim Ngoc, due to the State Bank’s (SBV) dollar lending restrictions, dollar deposits against total means of payment fell from 19.5 per cent in 2011 to over 11 per cent only by mid-2013.
Economic experts have widely praised the SBV’s commitment to anti-dolarisation.
Le Xuan Nghia, member of the National Financial Monetary Policy Council said achievements in the foreign exchange market such as increased currency reserves and stable exchange rates were all results of the SBV’s anti-dolarisation policies.
“In light of the government’s anti-dolarisation plan, raising and lending capital in dollars will be finished by 2020. And lending in dollars may end even earlier,” Nghia said.
Despite advocating the government’s anti-dolarisation drive, deputy general director of Military Commercial Joint Stock Bank (MB) Nguyen Thi An Binh still has concerns.
“Dollar lending has slowed, but to completely finish it will require a step-by-step process. At MB we maintain a certain level of dollar-denominated deposits,” Binh explained.
Numerous other banks have also said they are concerned about the dollar mobilising rate falling to zero as banks still need dollars to run their operations.
Businesses are also worried about the effort. Nguyen Tien Dung, chairman and general director of Hanoi-based Agricultural Products and Materials JSC (Apromaco) is concerned that importers would find it difficult to make payments if they could not access dollars from banks.
Responding to banks and firms’ concerns, Ngoc said the government was moving toward stopping dollar lending but that the process would go through tiered steps to avoid severe market shifts. He backed up his point by pointing out that the SBV has still maintained the dollar mobilising rate at 1.25 per cent per year.
Gov’t-to-gov’t rice contracts decline
The ratio of government-to-government rice export contracts tumbled to only 13% of total rice export volume between January and September versus 44% in the same period of 2011, according to the Vietnam Food Association (VFA).
China remained the biggest rice importer of Vietnam in the period with 1.76 million tons, a 2.7% year-on-year increase. Local firms mainly exported rice to China via private channels.
For government-to-government contracts, the Philippines imported only 353,000 tons, or just 6.6% of total rice export volume. Malaysia also imported 348,000 tons, making up the same ratio.
Indonesia, the Philippines and Malaysia are traditional rice importers via this channel. However, the nations have reduced rice imports due to improving food self-sufficiency and higher roles of private rice importing firms, said Nguyen Dinh Bich, an expert in the rice industry.
According to an official of VFA, many enterprises have been hurt by the decline of government rice export contracts.
Vinh Long Cereal and Food Corporation saw its after-tax profit slumping 35% in the third quarter. In a statement sent to the Hochiminh Stock Exchange and the State Securities Commission, Nguyen Thanh Hoang, general director of the enterprise, explained that the low ratio of government rice export contracts dragged down rice sales in the quarter.
The enterprise used to be a State-owned firm under Vinafood 2, which joins auctions for government-level rice export contracts. After equitization, Vinh Long is no longer a member of Vinafood 2 but it is still allocated with some rice export volumes from government contracts signed by the company.
Although many private enterprises have joined the rice exporting market, most exporters are State-run or equitized enterprises that have been familiar with sharing government export contracts. As a result, they have suffered challenges given a contract number decrease, said an expert.
Rice export prices also depend on government contracts. Last month, as Vinafood 2 won a contract to export 120,000 tons of rice to the Philippines, local rice prices increased by around 10%. However, the high prices will only be maintained if more contracts are signed in the near future, the expert said.
Speaking at a recent seminar, Pham Van Bay, vice chairman of VFA, said that the nation may fail to export seven million tons as earlier estimated if no more contracts are signed before the year-end.
Meanwhile, VFA predicted that rice exports via niche channels will continue to rise in border provinces in the north, causing risks for enterprises.
VFA expects rice exports via official channels at around 6.7 million tons this year, down by one million compared to 2012. In contrast, rice exports via niche channels, especially to China, are estimated to rise strongly to 1.5 million tons.