MPC mulls issuing non-convertible bonds to raise more working capital

Minh Phu Seafood Corporation JSC (MPC) may decide to issue 2,500 non-convertible bonds for periods of three years or more at the annual shareholders meeting on April 18.

MPC also plans to offer 30 million shares for at least VND100,000 each under private placement between 2015 and 2016 to funds, companies, domestic and foreign investors.

The revenue collected from the offering will be used to purchase fixed assets and invested in the firm's global shrimp and fish production chain.

This year, the company is targeting VND19.3 trillion (US$892 million) in total revenue, which will then result in a pre-tax and an after-tax profit of VND1.58 trillion ($73.1 million) and VND1.4 trillion ($65.5 million), respectively.

The company also plans to achieve $896 million in combined export turnover and export total 60,750 tonnes of processed shrimps.

Last year, MPC invested VND4 billion ($185,000) to hold 48.7 per cent of Minh Phu Aquamekong Seafood Raising Techniques and Services Company.

It also funded VND2 billion to found a subsidiary named Minh Phu Seafood Supply One Member Company, and dissolved Minh Phu Seafood Raising One Member Company.

MPC last year recorded an export turnover of $729 million and total export volume of 47,570 tonnes. The United States and Japan were the two largest markets. MPC recorded export values of $284 million and $155.3 million, respectively.

The firm's total revenue was VND15 trillion ($694.4 million) and the pre-tax profit for the holding company's shareholders was VND755 billion ($35 million).

The firm's earning per share (EPS) was VND10,930. MPC plans to pay a dividend of VND687 billion ($31.8 million), equal to VND10,000 per share. The dividend will be paid in two stages with VND5,000 per share each stage.

Finns talk trade with local firms

Investment and partnership opportunities between Vietnamese and Finnish businesses, particularly in education, IT and telecommunications, were presented at a workshop held in Ha Noi yesterday.

Birgit Nevala, co-ordinator of a programme connecting Finnish and Vietnamese enterprises, told the local business community of their chances to access financial grants.

She also said that a Finnish delegation in IT and education would visit and look for partnership opportunities in Viet Nam in May.

Pham Thi Thu Hang, general secretary of the Viet Nam Chamber of Commerce and Industry, said the event was a bridge for long-term economic ties.

According to the Finnish Ambassador to Viet Nam, Kimmo Lahdervirta, there are currently about 75 firms from his homeland investing in the country.

Trade between the two countries reached more than US$4,246 million in 2014 - footwear, apparel and furnishings from Viet Nam and machinery and forest products from Finland.

The workshop is part of a programme to encourage Vietnamese firms to expand overseas, especially as several free-trade agreements, including one with the EU, enter their final round of negotiations.

Ha Noi to conduct checks at housing projects

Commercial housing projects and new urban areas in the capital city of Ha Noi will be monitored, with a focus on infrastructure construction, following instructions from the municipal People's Committee.

Accordingly, the municipal departments of construction, planning and architecture, planning and investment, natural resources and environment, and transportation would implement overall checks to clarify the progress of projects and the compliance of investors during construction of social and technical infrastructure.

Reports must be submitted to the municipal People's Committee by the end of this month.

Nearly 900 projects are currently under the city's management in Ha Noi. Last year's checks revealed violations and problems at more than 350 projects, spread over a combined area of 1,400 ha, including land use violations, slow progress and difficulties in site clearance.

The municipal People's Committee said the evaluation of projects before licensing must be tightened, together with selecting qualified investors.

At a meeting on Thursday, the Deputy Chairman of Ha Noi People's Committee, Nguyen Quoc Hung, asked relevant organisations to check the housing supply for resettlement and the use of the first floor for resettlement housing projects before the end of April.

There were 32 housing projects for relocation under construction in the city, with a total of more than 12,000 apartment units. The city plans to complete 11 projects this year in case there is enough capital, which is estimated at VND315.7 billion (US$14.7 million).

Currently, as many as 13 key infrastructure projects in the capital city have been delayed because of trouble in site clearance. One of the causes is a lack of resettlement homes to place dislocated residents.

Unused rice exports mount at northern border crossings

Thousands of tonnes of rice is currently stocked up in trailers queued up at the border gates with China in the Lao Cai Province.

The drivers are awaiting customs clearance from the Chinese side, which had slowed the imports of rice as of April 1.

The online Nong nghiep Viet Nam (Vietnamese Agriculture) newspaper quoted a woman named Tran Thi L, who is a resident of the Pho Moi border area, and works as a rice broker between Chinese buyers and Vietnamese sellers, as saying that some rice-carrying trucks had been waiting for more than a week and were forced to turn around and leave, depositing their cargo in the border warehouses that were being rented out.

A report by the Lao Cai Provincial Department of Trade and Investment said that since earlier this month, as little as 7,500 tonnes had been exported, compared with a total of 75,310 tonnes during the first three months of this year.

The Nong nghiep Viet Nam newspaper had interviewed an officer at the Bat Xat Customs Bureau, who preferred to remain anonymous, and said the Chinese side had sent two documents to the provincial customs office to explain the pullback in foreign trade activity.

One of the reasons proffered by the Chinese side was that they were currently carrying out an air force exercise along the border and the closure of subsidiary border crossings for Vietnamese goods was aimed at preventing any stray bullets from being fired across the border.

The other revealed that the Chinese had launched a campaign to crack down on smuggling along the border and also solicited the Vietnamese's coordination.

According to the customs officer, the low river water level had also crippled the movement of ferry boats between the two banks of the river that serve as a border between the two countries and had also contributed to sluggish trade in the border area.

2015 Vietnam trademark forum looks at connectivity

The 2015 Vietnam Trademark Forum opened in Ho Chi Minh City on April 17, focusing on the theme of connecting national brands for improved competitiveness.

Participants called on the National Branding Programme to help in enhancing enterprise capacity of building, marketing and protecting their brand names via practical actions.

Several opinions proposed that domestic firms should deliver post-sale services to every outlet and consumer rather than relying on publicity campaigns.

Nguyen Hoang Ngan, General Director of Binh Minh Plastics Jsc, urged Vietnamese companies to fix weaknesses in resources to sustain their brands, especially in the adoption of technological advances to catch up with the ongoing international economic integration trend.

Last year, as many as 63 firms were honoured with the National Value Awards for strong brands, an increase from 30 in 2008, deputy head of the Ministry of Industry and Trade’s Trade Promotion Agency Do Kim Lang said while presenting achievements of the National Branding Programmes for the 2003-2014 period.

He also pledged branding support for firms via training and counseling while developing brands characteristic of each locality and region between now and 2020.-

EU expert praises Vietnam’s ocean energy potential

Policy and Operation Director of the Ocean Energy Europe Association (EOE) Remi Gruet said with over 3,000 kilometres of coastline, Vietnam has significant potential to exploit ocean energy towards developing inshore area economies.

The expert made the assessment in an interview granted to the Belgium-based Vietnam News Agency correspondents on the sidelines of the third Ocean Energy Forum, which was held by the European Committee (EC) in Brussels on April 16.

The event is a part of activities to prepare European Union (EU) contributions to the International Conference on Climate Change, to be held in Paris, France in late 2015.

Gruet said green energy in general and ocean energy in particular is playing an increasingly important to European countries.

The forum discussed issues in licensing, developing technology and resources for ocean energy, which is considered by the EC as one of five focus development areas for a “green economy”, creating more jobs in coastal areas.

Additionally, the ocean energy sector would help the EU fortify its energy security and reduce dependence on fossil fuels used in electrical production. The EU spends an average of 500 billion EUR (540 billion USD) on fossil fuel energy each year.

Quang Ninh airport project under consideration

The Prime Minister has assigned the Ministry of Transport to collaborate with other ministries and agencies to appraise the proposed Quang Ninh airport project and submit to him a report within June.

The report should clarify the necessity of the project based on existing development plans for airports and other related schemes, its efficiency, sources and forms of investment, and its expected impacts on socio-economic development need and security-defence.

According to a plan of the northern province of Quang Ninh, the airport will be built on 248.6 hectares in Van Dong island district’s Economic Zone in the form of BOT (build-operate-transfer) with an estimated investment of 7.49 trillion VND (531.6 million USD), including costs for site clearance.-

Soc Trang helps new enterprises

A business incubation model was established in the Mekong Delta province of Soc Trang in mid-April.

The initiative aims to build a "new" generation of enterprises to fuel international integration and actively contribute to local social economic development.

Funded by the Canadian government, the programme is a key activity of the province's development plan for small-and medium-sized enterprises (SMEs). The model is expected to help new enterprises or individuals overcome initial challenges in starting businesses in the province.

Director of the provincial Department of Planning and Investment Mai Phuoc Hung said most start-ups face difficulties such as a lack of strategic orientation, underperforming administrative competency and low trade promotion and connectivity skills.

Vietinbank signs loan contract with foreign banks

The Vietnam Joint Stock Commercial Bank of Industry and Trade (Vietinbank) signed a 100 million USD syndicated loan agreement arranged by the Bank of Tokyo-Mitsubishi UFJ (BTMU) on April 16.

The foreign banks participating in this agreement include BNP Paribas and Mega International Commercial Bank.

Speaking at the signing ceremony, Vietinbank board member Phung Khac Ke said the bank is committed to using the loan for the right purposes and to a rational use of resources to generate the highest return on investment.

The loan will be an additional significant source of foreign currency for Vietinbank to meet businesses' demands for production and trade as well as the country's economic development.

International gift expo held in Ho Chi Minh City

Over 270 domestic and foreign exhibitors are showcasing their products at the Lifestyle Vietnam 2015, one of the largest home décor and gifts fairs in Southeast Asia from April 18.

On the display at over 800 pavillions are fine art articles, handicrafts, wooden furniture, and home decoration, among others.

Do Nhu Binh, Chairman of the Vietnam Handicraft Exporters Association, said that the event, under the theme of design and sustainable development, aims to serve as a bridge to link domestic and foreign enterprises while highlighting the role of creativity in every design.

Especially, the organising board arranged a zone to introduce Vietnamese sustainable designs and latest designs by French and Swedish specialists. Handicraft products of the 22 Vietnamese ethnic minority groups with export potential are also on display at the area.

Lifestyle Vietnam 2015 is one of the important trade promotion activities in the country’s fine arts and handicraft sector. It also presents opportunities for the producers, distributors and customers to look for new designs and market trend.

Lam Dong fish industry faces challenges

Coldwater fish farming areas have narrowed across the Central Highlands province of Lam Dong, fuelled by difficulties in distribution, investment and technology.

According to Tran Van Hao, Chairman of the Lam Dong Coldwater Fish Farming Association, only 11 of 40 projects were launched in 2014 on 30 hectares of water surface, instead of the planned 350 hectares, producing just 200 tonnes of sturgeons.

Low-priced Chinese sturgeon-made products smuggled into the country have also posed a big threat to domestic trade.

Meanwhile, raising tuna requires large investments and a strict process, forcing many firms to abandon the practice or only breed for research purposes.

Vu Ba Lien, a farm manager at Ngoc Mai Trang Company, said pricy imported feed, contaminated water and unusual rains caused much of his tuna to die, requiring the business to switch its operations to sturgeons and black carps.

These trends could lead the local industry to fall short of its growth targets of 100 hectares of farming and 3,000 tonnes of fish products by 2020.

First market to be built in Vietnam-Cambodia border

Deputy Prime Minister Pham Binh Minh has approved plans to build a market to facilitate trade development and improve the living conditions of residents along the Vietnam-Cambodia border.

On April 17, the Tay Ninh People’s Committee said that the market, the first to be built by Vietnam at the neighbouring country’s suggestion, will be located in Cambodia’s Memot district, Tbaung Khmum province, bordering with Vietnam’s Tan Bien district, southwest Tay Ninh province.

The Ministry of Planning and Investment will work with the Ministry of Finance on the project’s capital allocation. The Ministry of Trade and Industry will work in consultation with relevant bodies and the neighbouring country to issue regulations on the facility’s operations.

The Government also requested the Ministry of Foreign Affairs upgrade the Chang Riec border gate in Tay Ninh to facilitate the supervision and management of trade while ensuring social order and security in the border area.

Work starts on maritime tourism urban area in Binh Thuan

Work started on April 18 on a 2.6 trillion VND (121.5 million USD) marine tourism urban area in central Binh Thuan province.

The Phan Thiet marine tourism urban complex, invested by the Rang Dong Group, covers 62 hectares in Phu Thuy ward, Phan Thiet city.

Once completed after six years of construction, the complex includes villas, buildings, parks, lakes and recreational wards. It is designed to accommodate up to 6,000 residents and 4,000 visitors.

Speaking at the ceremony, Vice Chairman of the provincial People’s Committee Nguyen Ngoc said Binh Thuan targets to become one of the national tourism destinations, with Phan Thiet being a tourism city.

The project will help improve local infrastructure facilities and traffic system, contributing to the provincial socio-economic development.

This forms part of activities to mark the 40th anniversary of the liberation day of the province (April 19, 1975).-

Cuba introduces incentives to Vietnamese investors

Cuba is offering a wide choice of incentives to attract foreign investors, President of the Cuban Chamber of Commerce Orlando Hernández Guillén told a workshop in Ho Chi Minh City on April 17.

Vietnam is one of the countries Cuba prioritises in developing trade and investment, he stressed, adding that now is a favourable time to seek partners and form ventures.

Oscar Perez Oliva, Executive Director of the Mariel Special Development Zone, said Cuba is waiving taxes on personal income sourced from business profit or corporate dividends, worker hiring and import tariffs on equipment and machinery.

Sales and services taxes are exempted in the first year and will later rise to a mere 1 percent.

Fields in much need of investment include bio-technology, pharmaceuticals, packaging, renewable energy, agriculture, telecommunications and information technology, tourism, real estate and infrastructure.

Deputy Director of the Vietnam Trade Promotion Agency (Vietrade) Bui Thanh An cited successful Vietnamese business models in Cuba, including a hotel and an 18-hole golf course by the Vietnam Housing and Urban Development Corporation, as well as an oil and gas survey and exploration project by the Vietnam National Oil and Gas Group.

Last year, trade hit 207.5 million USD with Vietnam exporting food, confectioneries and footwear to Cuba and importing pharmaceuticals and health food.

This year, Vietrade is working to connect the Vietnamese business community with Cuba by sharing information about the local business climate and legal regulations as well as holding market survey trips.

Quang Ngai: Chilli price reaches record high

Chilli price in the central province of Quang Ngai has reached a record-high rate of 36-38,000 VND (1.67-1.75 USD) per kilogramme.

With this price, farmers have made a profit of about 25-30 million VND (1,160-1,400 USD) with 360 square metres.

Le Tan Thuong, a farmer from Binh Duong commune in Binh Son district , said his family is going to use the increased profit to invest in expanding his chilli cultivation area since the profit from chilli is five-fold that of paddy rice.

According to Phan Van Ba from Quang Ngai city, strong demand for chilli in China is contributing to the price increase.

Binh Duong commune grows about 100 hectares of chilli annually.

Supporting travel agencies to join ASEAN playground

A two-day training workshop is held in Hanoi on April 16-17 to help small-and medium-sized tourism businesses create a competitive advantage and be fully prepared after the ASEAN Economic Community (AEC) is formed.

The workshop, run by the Pacific Asia Travel Association (PATA) and the International Labour Organisation (ILO), provides a chance for tourism businesses and vocational training schools to learn and practise destination management, handicraft production and hotel management.

These practice tools have been recognised and valid in all ASEAN countries.

General Secretary of PATA in Vietnam Dinh Ngoc Duc, who is also head of the International Cooperation Department under the Vietnam National Administration of Tourism (VNAT) said the manual will help trainees develop their business plans and improve the quality of their services and competitive edge.

The training programme particularly meets the needs of small travel agents, homestay owners, restaurants, craftsmen, souvenir sellers and local drivers.

It’s very important to popularize the manual, especially after the coming into effect of the ASEAN Mutual Recognition Arrangement for Tourism Professionals (MRA-TP) this year.

Duc suggested that participants, including local officials and business people, share information to complete the manual and make it helpful for tourism businesses.

Sa Pa town launches information booths for upcoming tourism week

Three travel booths have been opened in Sa Pa, a famous resort town in northern Vietnam, to provide information on tourism services for visitors to the scenic locality and welcome the upcoming week dedicated to the tourist industry.

The three are erected in a flower garden, by a lake, and in a new coach station located in the heart of Sa Pa District in Lao Cai Province, the Vietnam National Administration of Tourism said.

The booth attendants will provide tourists with necessary information on tourism services, hotels and restaurants, among others.

Phone numbers of the chair of the Sa Pa District People’s Committee, head of the local police department, and hospitals are provided outside the booths.

Leaflets featuring detailed maps of scenic spots in Sa Pa in Vietnamese and English are also handed out there.

The booth attendants are fluent in at least one foreign language, including English.

The booths open from 8:00 am to 4:00 pm every day, and their operation time will be extended during the upcoming “Sa Pa Culture-Tourism Week,” which is slated to run from April 28 to May 3.

The district’s authorities plan to operate the booths until the end of this summer.

The forthcoming tourism week will boast a wide array of fascinating activities, including “Festival on Clouds,” which features ethnic minority villagers’ traditional culture; a show displaying ethnic people’s attire; and a “Being Farmers in One Day” program.

Other highlights will be a music performance, a cuisine fair, stalls displaying rare flowers and ornamental plants, and an exhibition showcasing photos on Sa Pa’s picturesque landscape and cheery people.

On the week’s opening night on April 30, locals and tourists will get treated to a gorgeous fireworks display, which will sparkle above the banks of Xuan Vien Lake nestled in the heart of Sa Pa Town.

The town is expected to welcome over 50,000 tourist arrivals during the week.

Indonesia plans to takeover cement company in Vietnam

State-owned cement producer Semen Indonesia (SMGR) would further strengthen its foothold in Vietnam’s market by acquiring another local cement company in the country, the company’s executive said.

SMGR’s finance director Ahyanizzaman said in Jakarta on April 17 it had budgeted a total capital expenditure of between US$545.8 million and US$857 million this year to expand its operations, which includes the acquisition of the Vietnamese company.

He said the company’s accountants were currently conducting a due diligence audit of the Vietnamese company’s books and records, which should be completed by the end of June.

“The Vietnamese company is a private business, which has a local market share of about 4%,” Ahyanizzaman said on April 17 after the company’s general shareholders meeting.

If SMGR goes ahead with the acquisition, it would be Semen Indonesia’s second acquisition in Vietnam. Through its current Vietnamese subsidiary, Thang Long Cement Company (TLCC), SMGR produces about 2.5 million tons a year in the country.

Ahyanizzaman said the company would borrow up to Rp 1 trillion (US$77,742.30) to support the international expansion plan.

SMGR president director Suparni said the expansion was part of the company’s strategy to take advantage of the ASEAN Economic Community tariff reductions, which should come into effect by January 1 of next year.

Suparni said the company is projecting higher growth in sales volume in the third and fourth quarters this year after posting a sales growth of just 1.8% in the first quarter.

“We plan to export between 150,000 and 200,000 tons in the first half. In the second half, exports will drop due to seasonal factors,” Suparni said.

French expected to ratchet-up current investment

French firms are deepening roots in Vietnam in anticipation of the EU- Vietnam free trade agreement and growing economic ties.

Sanofi, a diversified global healthcare provider, recently affirmed their commitment to developing its presence in Vietnam’s market after visiting as part of a French government delegation led by Minister of State Matthias Fekl who is responsible for foreign trade, tourism, and the rights of French nationals abroad.

Fekl was in Vietnam last week to attend the third annual high-level Vietnam-France Economic Dialogue.

Sanofi is a trailblazer in building pharmaceutical plants in Vietnam

Last March, the firm kicked off construction of a new drug manufacturing plant and a research and development centre in Ho Chi Minh City with US$75 million in the total investment capital, making it Sanofi’s largest investment project in Vietnam so far, according to Sanofi CEO Christopher A. Viehbacher.

“With a 50-year plus track record operating in Vietnam, Sanofi is enjoying its number-one position in one of most dynamic nations in the region. The new project will continue affirming its pole position in this emerging market,” said Viehbacher.

Other members of the French delegation, such as Alstorm, Airbus D&S, Thales and IMP Engineering all expressed interest into expanding their presence in Vietnam.

Alstom, a global leader in power generation, power transmission, and rail infrastructure is hoping to team-up with other partners in order to spur on sustainable development city models in Vietnam.

The group has already been involved in a string of large-scale projects in Vietnam such as the landmark Son La hydropower plant, and Hanoi’s metro line 3.

International electrics and systems group Thales voiced its intention to develop surveillance satellite systems in Vietnam, while IMP Engineering is keen to building hospitals. IPM has engaged in a proposal to build a 500-bed hospital in the Mekong Delta city of Can Tho. This project, if it gets the go-ahead, will be funded using French official development assistance.

The French investors’ proposals were all commended by Deputy Minister of Planning and Investment Nguyen Chi Dung who chaired dialogue.

“Current French investment in Vietnam is well below its potential. We want French businesses to realize there are plenty of opportunities in the country, especially as we’re about to wrap-up negotiations on the European Union free trade agreement and become part of the ASEAN Economic Community,” said Dung.

“Vietnam has a number of advantages in terms of its investment environment, reformed policies, coupled with low-cost labour and competitive infrastructure,” Dung said.

The Ministry of Planning and Investment’s Foreign Investment Agency’s figures revealed that France had 429 investment projects in Vietnam worth US$3.4 billion in the total committed capital, ranking 16 out of 101 countries and territories investing in Vietnam by the end of March.

Danang’s journey to sustainability

Danang leads the pack as one of the world’s fastest-growing family and vacation destinations as its marble mountains, tranquil beaches and authentic Vietnamese dishes continue to bring international praise.

It has also been cited as one of the world’s leading atractors of foreign direct investment (FDI), having experienced a remarkable spike of more than US$2.1 billion during the five-year period leading up to 2010.

However, since 2009 foreign investment has declined and in the three months leading up to April of this year the city has reported investment of US$3.39 million, much lower than many leading economists had expected.

Recently, Director of the Da Nang Department of Planning and Investment Tran Van Son,

sat down with a reporter from the Vietnam Business Forum to explain the figures.

Most of the decline in reported FDI can be attributed to the fact that the city is highly selective in the types of investment it approves, as city leaders place special emphasis on environmentally friendly projects, Son said.

Son cited a US$200 million textile investment by Textile and Garment Group (Hong Kong) that the city turned down because it consisted of dyeing stages that were highly likely to pollute the environment as one example of the importance placed on the environment.

Similarly, in the second quarter of 2014, a Korean company was seeking over 30 ha for its textile dyeing complex but the authority also turned it away and helped them find another province in the region to locate the project.

Earlier, the city rejected two billion-dollar each steel projects because of environmental issues, Son said but facilitated them finding other more appropriate cites for their business ventures.

It is clear from Son’s interview that the city doesn’t have a problem attracting investment per se, it is just that the city is having problems courting the type of investment it desires into target industries like aerospace, supporting industries, tourism, trade, logistics and healthcare.

The city continues to benefit tremendously from the FDI it has received in the past Son said, adding that there are many promising opportunities on the front burner with big firms like Airbus, Safran, KAI, Mitsubishi Industry and Apple.

Lam Quang Minh, director of the Da Nang Investment Promotion Centre recently expressed the same views as Son saying the city has in recent years turned away many foreign investments that are not environmentally friendly.

It is a pragmatic approach toward conservation, observed Minh. There are those that have suggested only wealthy cities can be green and environmentally sustainable but for Danang it is the other way round.

City leaders are looking to make Danang a prosperous strategically located port and tourism destination and to accomplish that end it needs to attract clean and environment-friendly businesses.

The city is doing well economically because it is environmentally conscious. This consciousness is very much in policy making, land use planning and community engagement and is essential for Danang to be a liveable city with a sustainable economy

Factors such as the slow recovery of the world’s economy and weak purchasing power of the Dong have certainly contributed to an overall decline in investment but those factors are beyond the control of city officials and it does not mean we should lower our standards for investment.

Thai Ba Canh, deputy head of the Da Nang hi-tech management board in turn said the total planning area for the hi-tech zone is 1,130 hectares and only 100 hectares have been developed to date so there is plenty of room for future development.

Canh said the management board is implementing a one stop registration process to streamline the process of obtaining an investment certificates and, in addition, has begun to more aggressively seek new high tech investment.

Nguyen Bieu, Director of the city’s Department of Natural Resources and Environment said several investors abandoned coastal projects that had been approved and the department is now in the process of reclaiming hundreds of hectares of coastal land.

In all likelihood the investors lacked sufficient financial capacity to complete the project and this land can now be reclaimed and put to better use.  It is a waste just to let it set undeveloped.

For his part, Phung Tan Viet,  municipal People’s  Committee Vice Chairman said the city is focused on implementing five major solutions to attract investment in line with the strategy of high-quality and high-tech industry.

We have had much success with attracting investment and we have progressed.  There is much more to do, but there is no hallmark of success more distinctive or meaningful to achieving the position as the cleanest and greenest city in Southeast Asia.

Pundit calls for new approaches to keep Vietnam automotive industry alive

Vietnam still has opportunities to save its automobile industry from a collapse following an announcement of Toyota that it may stop assembling vehicles in the Southeast Asian country to switch to imports in order to enjoy the preferential taxes of an ASEAN trade pact, a local expert has remarked.

Dao Phan Long, vice president and secretary general of the Vietnam Association of Mechanical Enterprises (VAMI), told Tuoi Tre (Youth) newspaper in an article published on Monday that the country should have the resolve to move on and find out the right solution to the problem of a possible ‘disaster’ after Toyota has publicly announced its intention to take advantage of future cuts in taxes on ASEAN vehicles.

Early this month Yoshihisa Maruta, president of Toyota Motor Vietnam, the Vietnamese unit of the world’s largest carmaker, said the firm is mulling over putting an end to production and switching to imports in order to enjoy the preferential tax treatment an ASEAN trade pact will offer in the next three years.

ASEAN stands for Association of Southeast Asian Nations, including Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Cambodia, Laos, Myanmar, and Vietnam.

According to the road map of the ASEAN Free Trade Area, automobiles under ten seats imported from ASEAN countries are entitled to a 50 percent rate this year. The rate will be cut to 40 percent next year, 30 percent the following year, and 0 percent in 2018.

Regarding a Tuoi Tre question on the fact that though Vietnam has supported the automobile industry for years, many still complain that its policies, with some unreasonable, have been continually changed, Long answered that the main beneficiaries of the policies in the past 15 years have been foreign-invested enterprises (FIEs).

Though receiving many privileges, those FIEs always complain that Vietnam is a small-sized market with inconvenient and insufficient transport infrastructure, which has resulted in low sales.

FIEs have moaned that it is difficult for them to raise the localization rate as they committed earlier, Long said.

Vietnam then asked those firms to raise the localization rate, but the way the country has done it is wrong.

“Instead of offering tax incentives to those who can make certain kinds of spare parts and accessories in Vietnam in large amounts that will both meet local demand and be enough for export, we have requested them to raise the localization rate in producing thousands of kinds of spare parts just for the local market,” the VAMI secretary general said.

“In my opinion, what we should do now is pick some good domestic firms to help them become stronger and develop well-known brand names, while restructuring the sector to reduce those operating inefficiently,” he said.

Regarding the question that the Vietnamese government should halt the protection of the local automobile industry, Long said even some industrialized countries having participated in many free trade agreements (FTAs) for a long time still maintain many measures to keep the market for local businesses through the erection of technical barriers.

“Joining the World Trade Organization or other FTAs does not necessarily mean that a large part of the local share will be dominated by FIEs. The problem is that we need a system of solutions for maintaining the market share for local firms without breaking the rules of those trade pacts,” he said.

As to what policies can be introduced to support the ailing industry, Long said some local enterprises have recently focused on certain niches of the market like the segment of buses, passenger cars, light trucks, and medium trucks.

But according to the ASEAN road map, importing Chinese-made trucks, or completely build units, especially those of 10 metric tons or more, will be cheaper than purchasing components for domestically assembling.

As Vietnam has issued a master plan for the development of the automobile industry, including encouraging the growth of light trucks, passenger cars, and buses, it must focus on that and create policies that can be effectively implemented, Long said.

With the advantage of a few years left for complete tax reduction as committed, Vietnam can support a number of local firms in promoting their brands and create a production capacity to serve a 100 million people market, as the local population has already hit the 90 million milestone.

When Vietnamese firms are capable of making light trucks, passenger cars, and buses, Vietnam should move on to make passenger vehicles under nine seats, the VAMI vice president said.

“In my opinion, local firms currently have many advantages in the segments of buses, passenger cars, light trucks, and medium-duty trucks, and the cost for transportation from other countries to Vietnam will make their price higher than locally assembled vehicles,” he added. “We have successfully assembled them domestically and have gained a market share that is large enough for development.”

Some Vietnamese businesses have built a strong brand in the car assembling industry and the country still has money for further investment in boosting manufacturing, Long said, adding that the state should have the right solution for encouraging and protecting domestic firms.

Truong Hai Auto (Thaco), based in the central province of Quang Ngai, earned thousands of billions of Vietnamese dong in revenue and created jobs for about 8,000 workers in poor and rural areas in the central region in 2014 after having assembled light trucks for many years.

Thaco has managed to find appropriate steps for effective investment, seek good partners, look for models that can sell well in Vietnam, and even accept losses, he said, noting that with some incentives from the government, the firm can be now considered a success story.

Long said that it is time for the Ministry of Industry and Trade, as the body supervising manufacturing, and other relevant agencies work together to promulgate stable and coherent policies.

“I emphasize here consistency and stability. We should avoid getting stuck in such paradoxes as one ministry encourages the development of the auto industry, while others have policies that hinder its growth,” he added.

Insurer Bao Viet targets $45 million annual profit

Insurer Bao Viet Holdings is targeting a consolidated revenue of over VND 18.9 trillion (US$879 million) this year, including an after-tax profit of VND1.14 trillion ($45 million).

The target was agreed upon at its shareholders at the Annual General Meeting on April 17.

The target was reduced in comparison with last year's figure, which touched more than VND1.3 trillion ($60 million).

The group's leaders explained that the target was set lower than last year's figure because the economy was forecast to have many disadvantages.   

Besides, the group will focus on finalising policies and boosting financial capacity this year by raising its charter capital.

In 2014, the consolidated revenue of the group was estimated to touch VND18.6 trillion ($865 million), the consolidated pre-tax profit had reached VND1.5 trillion ($69 million), and the consolidated net profit had reached VND1.2 trillion ($55 million).

By December 2014, the parent company of Bao Viet Corporation estimated the amount of equity at VND11.5 trillion ($534 million). Total revenue from the parent company was estimated at VND1.3 trillion, the profit after tax was expected to touch VND1.1 trillion ($46 million).

As the leading financial–insurance group in Viet Nam, Bao Viet Holdings currently focuses on three main pillars: insurance, investment and financial services, with its wide distribution network throughout 63 provinces in Viet Nam and more than 160 branches across the country.

Foreign buyers eye Masteri Thao Dien project

Foreign buyers from Japan, South Korea, Singapore, and the UK are falling for apartments in the Masteri Thao Dien project in Ho Chi Minh City.

Masteri Thao Dien offers good quality apartments as well as a pleasant surroundings

The increased interest has been driven by the amended Law on Housing which comes into effect on July 1, granting foreigners improved property rights.

Located in Thao Dien ward, District 2 with its front gate facing on to the Hanoi Highway, the Masteri complex consists of high-end apartments, a shopping centre, offices for lease, parks, lakes, swimming pools, a sports centre, and a playground.

The eight-hectare site gives residents a stunning view of the District 1 skyline to the west and natural surroundings to the east. This breathtaking living space provides great natural light and is built to catch cross breezes off the nearby Saigon River.

According to Masteri Thao Dien business director Trinh Hoai Duc, foreigners have visited mock-up apartments, inspected the quality, and reviewed the legal documentation for the project.

“Foreigners are interested in quality of life issues and are keen on having space and a natural environment. Moreover, the project is directly connected with metro line1 linking Ben Thanh to Suoi Tien, which is another positive factor in the project’s value,” said Duc.

The site will also house the VND3,500 billion ($164 million) Vincom Mega Mall Thao Dien developed by the Vingroup. This will be the biggest shopping centre in the east of Ho Chi Minh City and will be directly connected to the An Phu metro station, which is slated to go into operation in 2018.

Techcombank will act as project underwriter and the bank will ensure that should the project not be completed on schedule that all costs for the buyers, including deposits, interest, and related fines will be covered.

Techcombank will also ensure the release of capital flows based on the project’s progress.

According to Richard Brown, a potential buyer from the UK, foreigners were keen to avoid unnecessary legal entanglements. “Foreigners obviously appreciate when the developer’s responsibilities are clearly regulated and the legal regulations and the buyers’ rights are ensured by a bank,” Richard said.

“The fact that developers are starting to do that obviously increased confidence,” he added.

Masteri Thao Dien’s developer – Thao Dien Investment – has also co-operated with leading Vietnamese law firms to issue legal descriptions, and contracts are available in English in order to ensure fair rights for foreign buyers.

The recently-amended Law on Housing has opened up a potentially lucrative opportunity for real estate agents to attract foreigners.

According to official figures, more than 80,000 foreigners are living and working in Vietnam.

Market analysts optimistically assume that this will bring in an additional source of foreign currency to Vietnam, increase liquidity in the real estate market, as well as improve the business and investment environment in Vietnam in the international investment cycle.

This new situation will provide a new challenge for domestic investors who will need to up their game and provide better and clearer legal support as well as higher quality products for this more quality-conscious market segment

“Foreign buyers aren’t just interested in good quality developments; they require transparent legal information on the status of a project and clearly set out responsibilities and commitments for the developers,” said Duc.

Q1 remittances to HCMC hit US$1.2 billion

Incoming remittances via HCMC-based banks were estimated to reach US$1.2 billion in the first quarter of 2015, rising by 12% from the same period last year, according to the central bank’s HCMC branch.

Nguyen Hoang Minh, deputy director of the central bank’s HCMC branch, said the real figure may be higher. Given positive growth of the local economy, more overseas Vietnamese sent money home for investments and there were more Vietnamese sent to foreign countries for guest work.

The remittances mainly came from the United States, Europe, South Korea, Australia and ASEAN countries, and flowed into manufacturing and real estate sectors in the period, Minh said.

Normally, the incoming remittances sent home via HCMC account for 40-50% of the nation’s total. Remittances from Vietnamese guest workers make up 20-25% and the remainder is from overseas Vietnamese.

Last year, the city registered more than US$5 billion worth of remittance inflows.

According to the Foreign Labor Department under the Ministry of Labor, Invalids and Social Affairs, Vietnam sent around 25,700 workers aboard in the first three months of this year, up 10.7% year-on-year. The number was over 100,000 last year.

The increasing number of Vietnamese guest workers abroad has also helped raise incoming remittances in recent years, from around US$2.2 billion in 2013 to US$2.5 billion in 2014.

Vu Hong Nam, Deputy Foreign Minister and chairman of the State Committee for Overseas Vietnamese Affairs, told a seminar in HCMC early this year that last year’s incoming remittances to Vietnam were around US$12 billion, or 8% of the nation’s gross domestic product (GDP). Of the figure, 46% went to production and business, 36% for spending and the remainder for savings and medical treatment.

The nation has seen remittance growth of around 10% annually in recent years and HCMC always holds a lion’s share, Nam added.

A leader of the central bank estimated this year’s incoming remittances at around US$13-14 billion.

He said the amount is counted via incoming remittances at banks and it is difficult to calculate the money sent home via unofficial channels. Therefore, the real remittance figure must be higher.

Stable remittance inflows have contributed to stabilizing the exchange rate in the country in recent years, he said.

According to the Central Institute for Economic Management (CIEM), remittances were the second biggest source of capital in Vietnam after foreign direct investment (FDI) capital between 2007 and 2013. The source was even higher than official development assistance (ODA) inflows.

Incoming remittances amounted to over US$90 billion in 1991-2013, according to CIEM.

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