BUSINESS IN BRIEF 22/11
CFO conference sheds light on business growth
Senior financial executives are playing increasingly influential roles in strategy and operation, working closely with CEOs and management boards to creatively assess and design growth opportunities.
Nguyen Thi Thanh Truc, chief financial officer in HSBC Viet Nam, made the statement at the 5th Viet Nam CFO Forum 2013 held yesterday.
Titled "Resilience Strategies in Hard Times", the forum was organised by the Viet Nam CFO Club, Japan Association for CFOs and ACCA Viet Nam.
It attracted more than 250 delegates including representatives from International Association of Financial Executives Institutes, Viet Nam Association of Corporate Directors
(VACD), members of Viet Nam CFO Club, Japan Association for CFOs, the Association of Chartered Certified Accountants, CEOs and CFOs of big corporations.
Truc pointed out that the new core competencies for CFOs are collaboration, business partnering and talent management.
She said that to cope with changes driven by the global economic situation, a paradigm shift in corporate management was needed, especially in financial issues.
For instance, working in silos should be changed to partnering with other corporate functions, she said.
Apart form traditional roles such as measuring and monitoring business performance, meeting local regulatory requirement, improving business, driving cost reduction, CFOs need to be more strategic in thinking, understand competitive advantage, customers and products, she added.
More compelling and meaningful analysis, better ways of communicating to non-finance colleagues should be also included. Moreover, CFOs need to forward looking risk management.
Agreeing with Truc, Han Manh Tien, chairman of VACD, said Vietnamese businesses are currently not equipped to assess or predict evolving situations in business and investment environment.
Hence the role of CFOs in a difficult period becomes more important. They should work with business owners and partners to solve all obstacles and drive the company ahead towards sustainable development, he said.
Le Anh Tuan, head of the research department at Dragon Capital Co said the world and domestic economy has overcome the most unstable and vulnerable period and will be stronger in the coming year.
The recovery of some leading economies such as Europe, the US, China and Japan is leading the recovery, he added.
While cautious and defensive policies were called for during the past few years, it may be time for businesses to think about growth and expansion strategies now, he said.
Tuan said next year will see a better growth than this year. Total investment is expected to reach 31-32 per cent of GDP in 2014-15. To reach 31-32 per cent, capital for investment has to increase US$9-11 billion higher than that in this year.
For next year, currency is certainly one of the causes of inflation, however, other specific factors also have strong impact on inflation such as oil price, and food prices.
Development advocates talk green growth
More than 400 people who have been involved in economic development initiatives spoke about the importance of their experiences at an one-day workshop organised on Wednesday in the southern province of Dong Nai.
The participants included members of Viet Nam's city and town governments, national and international development agencies and the business sector.
The event was organised by the Association of Cities of Viet Nam (ACVN), Federation of Canadian Municipalities (FCM), UN's Human Settlements Programme (UN-Habitat) and UNDP (UN Development Programme).
During the workshop, representatives from Thai Nguyen, Ha Tinh and Soc Trang provinces and members of ACVN discussed what they had learned while implementing the Municipal Partners for Economic Development demonstration projects.
The projects were co-managed by ACVN and FCM with financial support from the Canadian Government.
The workshop also focused on the important role of green-growth paradigms and public administration reform in local economic development.
Discussions focused on the impact of Hoi An's best practices and initiatives on eco-city development and public administration reform initiatives, as well as economic development in Da Nang City.
"In order to have a strong and enduring local economic growth, we need to define suitable models of development for each city and town," said Nguyen Quang, UN Habitat programme manager.
"In order to make a green growth model achieve the desired effects, each locality must have suitable development strategy with a realistic vision and practical tools to draft their multi-sector investment plan," he said.
The workshop was held to encourage people to participate and contribute to the urban development process.
"Learning, doing and sharing experiences will make the circle of prosperity grow for the benefit for everyone in society," said Vu Thi Vinh, general secretary of ACBN.
Firms urged to host technology transfers
Vietnamese businesses could benefit from governmental policies to promote exports and expand the scale and scope of the domestic market, noted speakers at a conference on competition and technology.
The conference, held in Ha Noi yesterday, referenced a survey from 2012, which pointed out that a small number of enterprises enjoyed technology transfers funded by foreign direct investments (FDIs) and had demonstrated higher productivity.
For the survey, technology was specifically analysed in gauging the competitiveness of more than 8,000 Vietnamese businesses.
The research was conducted by the Central Institute for Economic Management (CIEM) in collaboration with the General Statistics Office (GSO) and the Department of Economics (DoE) at the University of Copenhagen.
The survey report pointed out that numerous large businesses have invested in technology upgrades and renovation, while small businesses focused on developing new products.
Survey results from these businesses showed that most of them have implemented mandatory measures that fall under the banner of social responsibility, including
protecting labourers' rights, providing social insurance, and ensuring the protection of the environment.
The report noted that enterprises faced challenges while investing in new technologies because of limited capital and restricted access to government support.
Authorities suggest policy makers continue to support FDI activities and encourage technology transfers among domestic businesses.
It also urged domestic firms to acquire existing technologies instead of developing new expensive technologies through research and development activities.
Technologies transferred in Viet Nam were considered to be as good as or better than those that already existed.
However, these technologies were considered average when compared with other countries in the region.
Statistics revealed that 80 per cent of FDI-funded firms in Viet Nam used average technologies, while 5-6 per cent used advanced technologies and 14 per cent used outdated technologies.
The report stated that FDIs and suitable policies to upgrade technologies will be necessary for Viet Nam, which has a young population and a large number of labourers working in the agriculture sector, to support sustainable and stable economic development.
A long-term solution that creates favourable conditions for businesses to adjust and improve their technologies was also suggested as being necessary to further boost economic growth.
Vietnamese tea exports slump to $186m this year
Viet Nam has shipped more than 115,000 tonnes of tea within the first 10 months of 2013, earning US$186.6 million, according to the Ministry of Industry and Trade.
The country's tea exports saw a 5.5 per cent decline in terms of volume and a 0.2 per cent decrease in value over the same period last year.
Of note, Pakistan remained Viet Nam's largest tea importer during the period, having purchased over 17,000 tonnes of tea worth $34.6 million.
However, the import turnover dropped 11 per cent in volume and 18 per cent in value compared with the corresponding period last year and accounted for 18.5 per cent of the total export value.
Taiwan was the second-largest tea importer, having purchased 19,500 tonnes, valued at $26.5 million, an increase of 2 per cent and 6 per cent in terms of volume and value, respectively.
Russia followed the top two, with 9,800 tonnes of tea, producing turnover of $15.9 million.
Tea exports to Poland, the United States and India maintained their growth rate from the same period last year, holding 19 per cent, 24.8 per cent and 31.1 per cent, respectively.
According to the Viet Nam Tea Association, some 90 per cent of Vietnamese tea was exported in the form of raw materials and only 10 per cent left the country as a finished product.
State Bank of Viet Nam mulls local gold purchases
The central bank was considering a plan to buy gold from local sources after selling over 1.7 million taels of gold to the market, said an official.
Head of the State Bank's Forex Management Department Nguyen Quang Huy announced the plan to the participants at a workshop in the capital city, adding that it would increase forex reserves in Viet Nam.
Huy said that global gold prices were unlikely to increase following the positive global recovery. The domestic economic outlook had also recovered well, so investors were looking at other forms of investment.
Huy did not mention when the bank would start to buy back gold, but said they were well prepared for any situation.
SBV said that its intervention in the gold market had helped curb inflation and stabilise the economy.
According to Huy, the central bank's gold auctions had helped reduce speculative activity in the market. The measure had helped minimise gold imports and increase foreign reserves.
Since March 28 this year, the central bank has held 70 auctions and sold 1.7 million taels to local credit institutions.
Under Government Decree No 24/2012/ND-CP dated April, 2012 on gold business activities, SBV is responsible for purchasing and selling gold in the domestic market, and mobilising gold as regulated by the Prime Minister.
Seminar on investment into Vietnam held in Italy
Intensifying trade information exchange between Vietnam and Italy, and seeking investment partners and the best cooperation mechanism to promote potential of the Vietnamese market were spotlighted at a seminar on cooperation and investment into Vietnam held in Genoa, Italy on November 19.
The event was part of the “Vietnam Days in Genoa” held by the Vietnamese Embassy and the Italy-Vietnam Friendship Association to celebrate the two countries’ 40-year diplomatic ties.
Addressing the seminar, Vietnamese Ambassador Nguyen Hoang Long spoke highly of bilateral trade ties in recent times. However, trade has yet to match potential, he said.
Italy now ranks ninth among countries and territories investing in Vietnam. As of September, the country poured investment into 50 projects in various fields in Vietnam with the total capital of 257 million USD.
In recent years, many business delegations from Italy’s Emilia-Romagna and Toscana regions have visited Vietnam to seek partners.
On the day, potential of the Vietnamese market, its main products and investment and cooperation opportunities in the country were introduced at an international workshop on trade in Salerno, south Italy.
A number of economic seminars were held in Italy recently, offering local businesses the chance to meet and establish partnership with Vietnamese partners.
A Vietnam economic office is scheduled to be set up in Lombardia in 2014 and another in the Puglia region is under discussion in order to provide investors with necessary information about the Vietnamese market and promote investment into the country.
Consumers opt for local goods
A campaign launched three years ago to encourage Vietnamese consumers to purchase locally made products is showing signs of success, according to the Ministry of Industry and Trade.
Up to 59 per cent of consumers have prioritised using Vietnamese goods, while 38 per cent have advised their families and friends to choose home made products and 36 per cent have stopped buying or have bought fewer imported goods, having replaced them with local goods, said Le Viet Nga, deputy director of the ministry's Department of the Domestic Market.
According to the ministry's statistics, the number of consumers who believe the quality of local products has improved has increased to 77 per cent compared with just 23 per cent before the campaign was launched.
After running the campaign for three years, locally made products accounted for 80-90 per cent of goods on shelves in supermarkets such as Big C (90 per cent), Saigon Co-op and Vinatex Mart (nearly 95 per cent).
In order to further boost Vietnamese product sales, Nga emphasised the importance of continuing to improve awareness among local consumers about locally made goods, improving the competitiveness of domestic enterprises and developing effective distribution channels.
Vu Thi Kim Hanh, president of the Business Association of High-Quality Vietnamese Goods, noted that assistance should be provided to enterprises, especially small and medium-sized firms (SMEs), to ensure their products appear on supermarket shelves.
SMEs faced many difficulties when negotiating with supermarkets to stock their products and often lost out to competition from multinational companies, she added.
Under the draft project created by the ministry to develop the domestic market in line with the awareness campaign for locally made products, a database of distribution systems will be set up along with store chains to ensure the availability of products with stable prices across all 63 cities and provinces.
The draft project targetted seeing 90 per cent of Vietnamese consumers using made-in-Viet Nam products, while raising the turnover of these goods through major distribution channels nationwide to over 70 per cent by 2015.
Tea industry urged to target added value
Tea production, processing and consumption have seen high growth in the past few years in Vietnam. Despite Vietnam’s fifth position among the global tea producers, its export revenue ranks only 10th as about 90 percent of Vietnamese tea was exported in the form of raw materials. Insight from Vietnam Economic News.
Every year, Vietnam’s tea industry earns hundreds of millions of US dollars in export revenue. However, 90 percent of the tea export volumes are from raw tea products or in the form of mixed materials. The industry is in need of an effective solution for the added value problem.
The Ministry of Agriculture and Rural Development said that in the first 10 months of this year, Vietnam exported 116,000 tonnes of tea, worth 187 million USD and is currently among the world’s five top tea producers and also fifth leading tea exporter.
However, in terms of export revenue, Vietnam’s average export price has only reached 1,200 USD per ha, much lower than that of other exporters like Srilanka (1,200 USD per ha), Kenya (6,000 USD per ha) and only accounts for 60 percent of the global average price.
According to Deputy Director of the Domestic Market Department under the Ministry of Industry and Trade Le Viet Nga, the reason Vietnam tea export value remains low is that about 90 per cent of Vietnamese tea was exported in the form of raw materials. There are few companies having invested to develop tea brands while there are so many companies involved in exporting tea. The latter only care about profits and willing to offer low quality tea products, which then affects the prestige of Vietnam's tea industry.
Bui Minh Hien, head of the Industrial Promotion Department, Industry Promotion and Consultancy Centre No.1, the Agency for Regional Industry Development (ARID) also pointed out that, the low Vietnamese tea export prices were attributed to problems in the chain of production and consumption of the tea industry today: small scale, lack of links in production, standards and policies on quality, food safety and hygiene management. In particular, the products slowly adapt to changes of the market tendencies and therefore were still considered as mixed products in order to reduce costs.
There is a big contradiction between the export volumes and value in Vietnam's tea export. It is a very necessary to figure out a suitable solution to this problem, though not easy because there are still some disagreements about an orientation of the tea industry development.
Doan Xuan Hoa, Deputy Director of the Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salt Production under the Ministry of Agriculture and
Rural Development said to improve tea export turnover, Vietnam should raise export prices equal to the average level in the world market (2,200 USD per ton) and expand the tea cultivation scale, taking the large scale rice field model as a good example.
Based on experience and success of the tea processing and trading model of small households in Japan, Taiwan and China, Dr. Nguyen Duy Thinh from the Hanoi University of Science and Technology said that the combination of this model with the development of tea culture tourism is a suitable solution to Vietnam’s tea industry.
Moreover, with tea growing and processing experience of Vietnamese tea growers, they can entirely produce high quality tea in large quantity and offer these products at high prices.
He also said the tea processing scale should be at least 500kg per day which means each production unit can produce 30-40 tonnes a year.
The development of Vietnam’s tea industry on industrial or households-oriented scale needs inspection and research of functional agencies. However, no matter the orientation is, the mechanisation in production and the shift of product structure which then bring higher added value remain the top priority of the industry.
Indochina Land taps affordable housing market
The luxury property developer and fund management firm Indochina Land has started to invest in reasonably priced housing in Vietnam to capitalise on burgeoning demand.
Indochina Land and Vietnamese property developer Nam Long announced on November 12 their 35-65 stake partnership to develop the latter’s EHome 3 affordable housing project in Ho Chi Minh City’s Binh Tan District.
The VND1.467 trillion (about $70 million) project will consist of 14 apartment blocks with more than 2,000 flats, with first-phase sales already launched last year. Nam Long’s chief operating officer Nguyen Vinh Tran said Indochina Land’s 35 per cent holdings included both investment capital and loans to Nam Long, with interest rates based on the profit from sales.
Explaining this new investment, Indochina Land CEO Peter Ryder said, “Affordable housing has huge potential in every market in the world. In Vietnam, we believe Nam Long’s affordable housing is the best in the market, and we’ll continue to invest in this segment.”
He added Indochina Land, as a fund management firm, put money in places where it could gain profits.
“Nam Long has plans to provide 14,000 EHome apartments over the next five years. If they agree more deals with us, we’ll invest in their other projects” said Ryder.
“However, we’re just an investor in this segment and will not be a property developer.”
Nam Long’s property development includes finding investment opportunities, securing land, planning and design, construction and project management, marketing and sales. However, it focuses mainly on affordable housing with EHome as an established brand.
Nam Long chairman Nguyen Xuan Quang said Ho Chi Minh City needed around 70,000 reasonably priced flats per year but his firm could supply just 2,000.
Ho Chi Minh City to host 10th ASCOPE conference
The 10th ASEAN Council on Petroleum (ASCOPE) Conference & Exhibition is scheduled to be held at the Saigon Exhibition and Convention Centre in Ho Chi Minh City from November 28-30.
The information was released at a press briefing given by the Vietnam National Oil and Gas Group (PVN) in Ho Chi Minh City on November 20.
The Organising Board reported that the event, under the theme ‘Innovation and Co-operation - The way forward’, is expected to welcome 300 delegates from 120 domestic and international oil and gas companies as it is hosted by PVN for the first time.
Participants will have a chance to share the latest information about the ASEAN oil and gas industry and state-of-the-art technologies and equipment in the field.
The event offers ASEAN oil and gas companies a chance to tighten co-operation with regional partners, as well as with partners from Russia, the US, the Netherlands, France, Norway and several Middle East countries.
ASCOPE was established in October 1975. The conference takes place every four years. Vietnam became a member of ASCOPE in 1996.
The council groups ten petroleum companies from the ASEAN countries: Brunei National Petroleum Company, Cambodian National Petroleum Authority, Pertamina from
Indonesia, the Department of Electricity under the Lao Ministry of Energy and Mines, Malaysia’s Petronas Oil and Gas Company, Myanmar Oil and Gas Enterprise,
Philippines National Oil Company (PNOC), Keppel Corporation from Singapore, Thailand’s PTT Oil and Gas Company and Vietnam National Oil and Gas Group.'Designs for highway, ring road completed.
The design plans of urban areas along Tan Son Nhat-Binh Loi-outer ring road and Hanoi Highway have been completed and will be presented to the HCMC government soon, according to the city’s Department of Zoning and Architecture.
Huynh Xuan Thu, director of the Planning Information Center under the department, told the Daily on Tuesday that the two plans, if approved, would serve as a basis for construction of houses and other structures along the roads. Since 2010, the issuance of house construction permits has been suspended to wait for the design plans, he added.
According to Thu, the suspended issuance of construction permits has affected the legitimate rights of local people, as no new homes have been allowed to be built.
LienVietPostBank, EVN SPC in fee collection deal
LienVietPostBank and EVN Southern Power Corporation (EVN SPC) inked a cooperation agreement on electricity bill payments on Monday.
The cooperation will make it possible for corporate and individual customers to pay their electricity bills through the bank’s transaction offices, post offices, e-banking services and home fee collectors.
LienVietPostBank will extend the service to 21 provinces and cities. The lender also has plans to launch the service across the country.
The bank also struck a similar deal with Binh Duong Power Company, a member of EVN SPC, at the signing ceremony.
IT crucial to retail banking
As retail banking is expected to become the most important segment after 2015, local banks have seen the need to invest in information technology (IT) infrastructure to better exploit retail banking services.
Speaking at the ASEAN Banker Forum in HCMC on Tuesday, Ha Huy Tuan, vice chairman of the National Financial Supervisory Commission, said local banks have concentrated too much on large customers while ignoring the retail banking segment. However, those same big clients have failed to fetch banks high profits given the current economic challenges.
There have been shortcomings in provision of banking services and the individual client segment is still ignored. Just 20% of adult consumers are expected to use banking services, Tuan said.
Retail banking has strong development potential in the country thanks to a large population and rising income per capita. Meanwhile, small and medium-sized enterprises always have strong demand for capital.
To develop retail banking, lenders must be creative enough to diversify credit products. Banks also have to invest in IT infrastructure and risk management, Tuan added.
Le Cong, general director of Military Bank, said that Vietnamese banks have advantages in selecting and applying latest technologies in retail banking, approaching individual customers and small and medium-sized enterprises.
Customers nowadays do not have to transact directly at banks. They usually make banking transactions at home, in their cars or anywhere else. Banks should consider this mobile tendency as a strategy to develop their retail banking channel, Cong said.
In addition, the strong growth of non-cash payments is also a factor to develop retail banking in Vietnam.
Nguyen Tu Anh, general director of Smartlink Card Service Joint Stock Company, quoted statistics of the central bank as saying that the cash payment ratio dropped from 20.3% in 2004 to 14% in 2010. The ratio is around 12% at present.
E-payment and e-transaction means are expected to develop strongly. Within the next three years, non-cash payment channels will replace traditional transactions. Therefore, banks should modernize IT infrastructure to develop retail banking and keep up with the tendency, Anh said.
At the seminar, banks such as ANZ, HSBC, VIB and Visa card center and specialists from Oracle, Diasoft and Geneys also shared their experiences in IT system application.
The annual event is organized by International Data Group and Vietnam Banks Association.
2030 Businessmen Club connects companies for Tet sales
The joint promotional sales program for the forthcoming Lunar New Year holiday or Tet initiated by the 2030 Businessmen Club under the Saigon Times Club will kick off today.
The 2030 Businessmen Club is in charge of connecting member enterprises to sell products, expand trade exchange opportunities during the Tet holiday and takes responsibility for the quality of commodities.
Trinh Van Thanh, chairman of the club, informed that the program attracts eight member companies who will sell goods at the best prices. The items are confectionery, tea, wine and beer products among others with prices 20-30% lower than those on the market.
All products of the program are goods made in this year’s fourth quarter. The program offers packages of six sizes priced between VND487,000 and nearly VND3.7 million each.
With the program, participating firms are looking to form a group of enterprises cooperating to bring commodities to members and other businesses as well as their staff members and partners.
The special program will last until January 20 next year, with 10% of the total sales donated to the club’s charity fund, which will be handed to needy students with good academic performances or school libraries in remote areas next year.
Since August, the Biz Group of the 2030 Businessmen Club has launched numerous promotional sales targeting workers of member firms active in export-processing zones and industrial parks in HCMC and the neighboring province of Long An.
After the Tet holiday, the club will continue working with the management authorities of export-processing zones and industrial parks in the southeastern region to deploy periodical and long-term special sales programs there.
The 2030 Businessmen Club has over 350 members. Nearly 100 members have registered to purchase goods of the promotional sales program for Tet, with each ordering 20-100 packages.
To order commodities of the Tet sales program, contact Mr. Nguyen Bac on 0908 747266, Mr. Xuan Bach on 0983 858453 or the hot line 0913 254449.
ODA disbursement hits nearly US$37.6bil
International donors have pledged US$78.195 billion in official development assistance (ODA) for Vietnam over the past 20 years.
Of this figure, agreements worth US$58.463 billion have been signed, and US$37.597 billion have been disbursed.
Many ODA-funded projects have already been implemented, providing fresh impetus for socio-economic development and contributing greatly to poverty reduction.
In recent years, ODA has become a crucial tool for developing infrastructure, stimulating economic growth and improving living standards for local Vietnamese people.
At recent policy talks, regarding Japanese ODA loan for Vietnam, international donors praised Vietnam’s ODA management and disbursement, stating the money has been invested properly
Japan granted ODA loans to assist Vietnam in developing important infrastructure projects such as roads, bridges, and ports, creating a firm foundation for economic growth in Vietnam.
However, despite the substantial funding received over the years, ODA disbursement has failed to achieve the necessary breakthrough required for socio-economic development.
Garment exports to RoK surge nearly 50%
Vietnam’s garment and textile exports to the Republic of Korea (RoK) fetched US$1.37 billion in the past ten months of 2013, up 49.2% compared to last year’s figure, according to the statistics of General Department of Customs.
Vietnam is the RoK’s second largest trade partner in terms of garment and textile. Its key commodities exported to the RoK included coats, jackets, trousers, shorts, sportswear, T-shirts and gloves.
Textile and garment exports to the RoK are forecasted to pick up in the coming time.
The US was the largest importer of textile and garment products from Vietnam which saw its shipments increasing by 14.6% to US$7.17 billion, followed by the EU by 10.5% to US$2.2 billion.
The country’s total export turnover reached nearly US$14.8 billion in the past ten months of this year, a-year-on-year increase of 18.5%.
Ha Nam prioritizes Japanese businesses
Ha Nam provincial People’s Committee Chairman Mai Tien Dung has affirmed his province’s willingness to give priority to Japanese businesses, particularly small-and medium-sized enterprises (SoEs) and those of support industry.
At a November 20 meeting with a delegation from the economic association of Japan’s Hiroshima prefecture, Dung said the province is improving infrastructure to welcome Japanese businesses.
Association Chairman Nagano Masao stated that his organization has become interested in Ha Nam since its delegation’s recent visit to Hiroshima prefecture, noting that Hiroshima businesses are keen to seek investment opportunities in the locality.
He said he hopes that both sides will further strengthen their ties in various fields in addition to economics and investment.
The 40 visiting Japanese businesses operate in many areas-- medical equipment production, mechanics, electric devices, tourism and communications services.
HCMC hosts Vietnam CFO Forum 2013
Ho Chi Minh City gave host to the Vietnam CFO Forum 2013 themed “Resilience Strategies in Hard Times” on November 20.
The event was co-organised by Vietnam Chief Financial Officers (VCFO), Japan Association for Chief Financial Officers (JACFO) and the Association of Chartered Certified Accountants (ACCA).
Attendees included 300 delegates from the International Association of Financial Executive Institute (IAFEI), VCFO, JACFO, and ACCA members, as well as representatives from international and domestic financial associations, chief financial officers, and financial leaders.
Vietnam CFO Forum 2013 is part of activities launched by the International Association Financial Executives Institutes (IAFE) aiming to share local and international experiences, skills, knowledge and information in the field of corporate finance governance.
IAFEI is a prestigious institution with 16 chief financial officers (CFO) association members and more than 18,000 individual members.
The event focuses on strategies to overcome currentdifficulties, a priority concern of many leaders in the face of heavy debts, huge losses and the ever threatening loss of liquidity.
The forum aims to give participants an overview of Asia andVietnam's economic outlook for 2014 and demonstratehow CFO can assume the role of a resilient business partner.
Experts will share their practical experiences on creation and implementation of resilience strategies, effective treasury management, and methods to develop a professional financial management team for future growth of enterprises.
HCM City fuels investment interest in energy industry
The 10th ASEAN Council on Petroleum Conference & Exhibition (ASCOPE) is due to take place in Ho Chi Minh City from November 28-30.
The event, “Fuelling the future of ASEAN towards Sustainable Development”, is expected to attract around 500 delegates from the energy industry.
Their main objective will be to share and discuss topical issues surrounding the oil and gas business.
More than 300 exhibits will showcase the latest technologies in oil and gas exploration and exploitation, as well as transport and control systems in the field.
ASCOPE is an excellent opportunity for oil and gas companies in Southeast Asia to advertise their products and take full advantage of opportunities to develop new partnerships.
The event, which is organised every four years by ASEAN members in rotation, outlines up-to-date information on opportunities, challenges and solutions in the regional oil and gas industry.
It also aims to attract interest from leading oil and gas firms and introduce the huge potential for investment and cooperation in the region.
Pakistan becomes Vietnam’s largest tea importer
Vietnam has shipped a staggering 17, 204 tonnes of tea to the Pakistani market, earning in excess of US$34.66 million over the past ten months.
According to figures from the Ministry of Industry and Trade (MoIT), by October of this year the country had already exported 115,832 tonnes of tea, reaping a total revenue of over US$186.682 million, down 5.5% in volume and 0.2% in value, from the previous year.
Pakistan has taken the lead in becoming the country’s largest tea importer accounting for 18.5% of Vietnam’s total tea export turnover, closely followed by Taiwan (China) with 19,509 tonnes worth more than US$26.518 million, and Russia, 9,804 tonnes valued at US$15.941 million.
Other markets experiencing significant growth in tea trade with Vietnam in the first three quarters of the year, include Poland (up 19%), the US (up 24.8%), and India (up 31.1%).
Debts restructured to support ailing firms
Credit institutions have restructured nearly VND300 trillion (US$13.63 billion) in debts, accounting for 10 percent of total outstanding loans.
According to Governor of the State Bank of Vietnam 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 percent 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 Vietnam 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 (US$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 (US$1.818 billion). The company is currently reviewing debts for future deals.
Making loan package more accessible to homebuyers
Low-cost homebuyers will be able to gain access to the VND30-trillion dong loan package as the package’s strict conditions are being removed gradually by relevant authorities, creating more business opportunities for housing developers.
In recent times, many homebuyers have failed when applying for the loan package given the slowness of local authorities in certifying the housing status of the applicants as one of the requirements they need to satisfy to get home loans.
To remedy the lamentable situation, the HCMC government has directed authorities in wards, communes and towns to certify home registration and housing status for applicants seeking soft home loans in line with the regulations of the Ministry of Construction.
After over five months of launching the circular instructing the hefty loan package’s implementation, the construction ministry has also realized the shortcomings causing the slow disbursement of the home credit package. The ministry therefore issued Circular 18 on October 31 with amendments to Circular 07 issued earlier, under which homebuyers are subject to loosened conditions to take out home loans.
In particular, with the previous circular, every household was only allowed to get a home loan once. Meanwhile, the new law stipulates that children and nephews or nieces of the head of a family having the same permanent or temporary residence address who are married are also considered as independents and able to ask for a home loan.
Notably, under the new circular, those having legal land areas smaller than the regulated level for housing construction based on the rule of provincial governments are also allowed to get special home loans.
Besides the removal of the current strict conditions, residents on low incomes who are in dire need of housing will have their financial burden relieved with the special tax policy, with VAT cut by 50% for commercial apartments subject to the home loan package. This means low-cost homebuyers not only get low-interest loans but also enjoy lower housing prices thanks to a helpful tax policy.
According to Nguyen Van Duc, deputy director of Dat Lanh Real Estate Company, the VAT reduction really benefits homebuyers, especially those with low incomes.
As such, this is the first time low-cost homebuyers have enjoyed so many incentives, prompting property companies with housing projects subject to the credit supporting package to race to launch products to seek customers.
For instance, Nam Long Investment Corporation has launched the second sale phase of some 172 condos of the Ehome 4 Bac Saigon housing project in Thuan An District in the southern province of Binh Duong. The company has also struck a deal with Vietcombank to offer the VND30-trillion dong loan package to customers.
In the meantime, the State Bank of Vietnam is urging five lenders – Agribank, Vietinbank, BIDV, Vietcombank and MHB – to boost disbursement of home loans from now until next year and report difficulties in lending for homebuyers in the near future.
TPP to set harsh conditions, trigger disputes: experts
Strict standards of intellectual property rights the U.S. has suggested during negotiations of the Trans-Pacific Partnership (TPP) are forecast to cause challenges to Vietnamese enterprises and prompt many related lawsuits.
Speaking at the TPP training course organized by the HCMC Department of Industry and Trade, the WTO Center and Thoi bao Kinh te Sai Gon on Monday, many experts warned that local firms would face big troubles as Vietnam is the least developed economy among 12 members in the negotiation.
The gap of development levels has caused many problems that remain to be addressed, such as State-owned enterprises, certificates of origin and intellectual property rights that have yet to be solved, they said.
Dinh Quang Thang from Fulbright Economics Teaching Program said that the U.S. has asked for more and more standards regarding copyright such as brand, design, sound and fragrance that local enterprises have never applied. Meanwhile, the U.S. has downplayed geographic indications, a strong point of Vietnam.
Vietnam now has around 933 products and services attached to 721 geographic names, including around 800 renowned trademarks. However, only 136 products have been granted with appellation certificates so far.
Many countries have reportedly opposed to strict requirements from the U.S. and intellectual property rights remain a big challenge during the negotiations.
Experts at the training day said that Vietnam’s negotiation team must be determined in objecting to the regulations and should try to maintain current regulations in the Trade-related Aspects of Intellectual Property Rights (TRIPs). Otherwise, the nation has to revise the intellectual property law and enterprises will have to face many lawsuits related to the issue.
Concerning the “yarn forward” ROO (Rule of Origin), which requires the TPP nation to use a TPP member-produced yarn in textiles in order to receive duty-free access, Vu Xuan Hung, deputy director of the legal department of the Vietnam Chamber of Commerce and Industry (VCCI) of HCMC, said the rule will help boost investment in the fiber industry.
However, for the negative side, the nation will meet challenges as investment in the sector is very costly. Therefore, foreign investors may reign over the yarn industry in Vietnam.
As negotiation documents and suggestions of member nations remain confidential, the experts made predictions basing on private agreements or information leaked in the Internet.
In a related development, the U.S. Ambassador to Vietnam David Shear will deliver a speech on TPP at Can Tho University on November 21.