Hanoi to reform customs, taxes in bid to boost trade

Hanoi will hasten administrative reforms in customs and tax and create favourable conditions for production in an effort to boost the city's exports.

The capital city aimed to achieve an export growth of 7.5 percent to reach a turnover of 12.2 billion USD this year, seeing not only great opportunities but also challenges arising from free trade agreements (FTAs).

According to the municipal People's Committee, the formation of the ASEAN Economic Community and the participation of Vietnam in new-generation FTAs were opening the doors for the city to boost exports, given the elimination of many tariff lines.

In addition, the application of the amended enterprise and investment laws would also power local production and business.

However, the increasing trend of protecting local production and high quality requirements of import markets as well as the competition from other exporters, especially countries which devaluated their currencies were among major challenges.

Addressing those challenges, the capital city was developing a project to boost exports in the 2016 to 2020 period with a vision to 2025.

Besides speeding up administrative reforms, during this year, the city would continue to provide preferential loans for firms in the country to promote production and while developing human resources to meet the demand of labourers for the production of export products.

The city said that focus would also be placed on developing the infrastructure, including major industrial zones, high-technology industrial zones and building a supply chain of high-quality agricultural products, coupled with the implementation of trade promotion.

Supervision would be tightened to ensure quality and hygiene of export products.

Hanoi urged local firms to enhance product quality, apply high technology and build the brand to improve competitiveness amid rapid integration.

Major export products of the city were garments and textiles, footwear and leather products, electronic components and glass products.

Vietnam embraces opportunities from economic integration: experts

Vietnam will benefit from plenty of opportunities through economic integration and reform, however they can only be realised with suitable policies, said Director of the Central Institute for Economic Management (CIEM) Nguyen Dinh Cung.

According to a report on macro-economy in 2015 and prospects for 2016, Vietnam’s economy is shifting from recovery to development and integration. Vietnam has also paid more attention to microeconomic reform and the conditions for the business community to take-off.

The international economic integration process has opened significant opportunities for enterprises, while highlighting motivations for reforms geared towards a market economy in the country.

Vietnam’s economy sees optimistic signs in 2016 as economic growth continues to enjoy a strong recovery, with investors and the business community believing it is currently very robust, the director stated.

Cung said the international economic integration process has progressed remarkably with several free trade agreements signed in 2015, including the Republic of Korea and the Eurasia Economic Union.

He added the formation of the ASEAN Economic Community (AEC) and conclusions of negotiations on the Trans-Pacific Partnership agreement and the FTA with the European Union will be important turning points in the country’s reform.

He went on to say that despite considerable improvement in macroeconomic indexes, motivation for growth is only slightly changed, together with underperforming factors such as public debt management, exchange rate monitoring and competitiveness, which is hindering economic progress.

Economic experts have said that many challenges come along with reform processes and economic integration; those might include insufficient awareness of reform and integration procedures, as well as the State and the government’s roles in economic management.

Regarding the State budget, Cung suggested some measures to ensure financial security in the short-to-medium term, such as capping overspending at 4 percent and reducing regular public spending.

He concluded by saying a suitable policy environment should meet international commitments and the country’s development targets, as well as nurturing the growth of the business community.-

Firms propose improved investment mechanism in agriculture

Businesses recommended the Ministry of Agriculture and Rural Development improve the investment mechanism in order to attract more investment in agriculture, during a meeting in Hanoi on February 19.

General Director and President of Intimex Import Export JSC Do Ha Nam said the processing industry requires large investment, which discourage domestic companies. When some companies do make investment and reap some success, foreign partners are willing to pay high price to acquire their business.

Nam proposed that the ministry should encourage and facilitate investment in specific products to increase their values.

Director of the Nafoods Group – a leading brand in the field of production, packaging and distribution of vegetables in Vietnam, Nguyen Manh Hung, said proper planning and strategy will help orient businesses and localities.

Minister of Agriculture and Rural Development Cao Duc Phat took note of the aforesaid proposals and asked relevant departments to improve the investment mechanism.

Work starts on Vigrlacera’s industrial park in Thai Binh

The State-owned glass and construction ceramic corporation Viglacera on February 19 began construction on the first phase of its Tien Hai-Viglacera Industrial Park in the northern province of Thai Binh.

Covering 446 ha, the project has a total investment of more than 174 billion VND (7.78 million USD). Its first phase will be built on about 32 ha.

Once completed in September this year, the park is expected to generate jobs for nearly 30,000 labourers.

Speaking at the groundbreaking ceremony, Deputy Minister of Construction Pham Hong Ha praised new investment plans made by Viglacera to develop urban and industrial zones. He asked local authorities to facilitate the implementation of the project.

The same day, Vigracera inaugurated the expansion of its Granite tile factory in Thai Binh province, which uses natural fuel instead of coal gasification technology .

The factory has a combined capacity of 2 million square metres of products a year, creating 150 jobs. Its tile products will be sold on the domestic market and exported to Europe, Indonesia and others.

Viglacera is also implementing the second phase of the expansion of its clinker tiles plant in the northern coastal province of Quang Ninh, helping increase the combined capacity of the facility to 4 million square metres of products a year and creating nearly 100 more jobs.

The expansion aims to create a more professional production process and improve employees’ skills, thus creating high-quality products that can meet consumers’ demands.

Malaysia, Mexico potential markets for Vietnam rice

Malaysia and Mexico as members of the Trans-Pacific Partnership (TPP) agreement will become potential markets for Vietnamese rice as tariffs on the staple food are removed in line with the trade pact.

Currently, Pacific Rim countries impose high export tariffs on rice.

According to a report by the Ministry of Agriculture and Rural Development, Vietnam’s rice export shipments reached 6.59 million tons valued at US$2.8 billion last year, up 4% in volume but down 4.5% in value versus 2014. The average export price stood at US$425.6 per ton, down 8.2% against the previous year.  

China remained Vietnam’s biggest rice importer in 2015, accounting for 30% of the total, with a rise of 4.8% in volume and a drop of 3.6% in value.

Last year saw higher rice exports to Indonesia (up two times in volume and 77% in value), Ghana (up 13.6% in volume and 5.2% in value) and Ivory Coast (up 19.6% in volume and 10.4% in value). In contrast, shipments to the Philippines, Singapore, Hong Kong and the U.S. dipped.

China is the biggest buyer of Vietnamese rice but export prices stay low and trading remains unstable. Therefore, the TPP trade pact is expected to help Vietnam find more markets ready to pay higher prices.

The TPP bloc is not a key market for Vietnamese rice. At present, Vietnam sells rice to the U.S. but volume is limited.

A latest report of the Institute for Policy and Strategy of Agriculture and Rural Development (IPSARD) indicated that among TPP member countries, Japan, the U.S., Mexico and Malaysia are huge potential markets for Vietnam’s rice.

Vietnam will likely face big hindrances to selling rice to Japan and America. Japan imposes a hefty import tax on rice as this is a politically sensitive commodity.

According to a recent announcement of the Japanese government, despite raising the rice import volume from 87,000 tons to 850,000 tons, only the U.S. and Australia are qualified to become exporters.

“Vietnam has little chance of entering the Japanese market,” said the report.

Meanwhile, Mexico is considered a potential market for Vietnamese rice. At present, Mexico imports rice from the U.S. and Uruguay with export tariff exemptions, and from Thailand with 20% in tax.

In 2014, Vietnam’s free on board (FOB) price was US$453 a ton and US$417 a ton for Thai grains. If Mexico cuts the import tariff on Vietnamese rice to zero from 20%, the Southeast Asian nation would have an edge over Thailand, which holds 15% market share in Mexico.

Under its commitments to the TPP agreement, Mexico will maintain a tariff of 20% in the first five years and reduce it gradually in the following five years. Tariff exemptions will be applicable from the beginning of the tenth year.

Therefore, no strong rises in Vietnam’s rice exports to Mexico can be seen in the short term.

Vietnam can boost rice sales to Malaysia and gain bigger market share when tariff exemptions are in place. Malaysia currently quotes an import tax of 20% on Thai rice and 40% on Pakistani rice.

Rice exports up strongly in January

The Vietnam Food Association (VFA) said its member companies shipped abroad a total of 416,770 tons last month, up 247,000 tons compared to the same period last year.

The volume fetched total revenue of nearly US$170 million, rising by US$90 million year-on-year.

Meanwhile, a source said Vietnam’s total rice exports, including of non-VFA members, from January 1 to 26 increased more than 75% year-on-year to 751,000 tons.

With the rice exports, Vietnam was the world’s second largest rice exporter last month after Thailand. According to the source, Thailand exported one million tons of rice, India 598,000 tons, Pakistan 552 tons, and the United States 193,000 tons in January.

Regarding supply and demand of grains last month, the Food and Agriculture Organization of the United Nations (FAO) said conditions tended to turn favorable for rice exporting countries in terms of rice production and global consumption.

FAO predicted that global rice output would fall slightly from 494.3 million tons in 2014-2015 to 491.8 million tons in 2015-2016 as rice output dropped in some countries including Indonesia due to water shortages.

However, global rice consumption is projected to rise by 1.1% to 498.4 million tons in 2015-2016 from 492.8 million tons in 2014-2016. Meanwhile, rice inventories in the world would fall by 3% to 166.6 million tons this year against 172.1 million tons last year.

FAO forecast that global rice trade would increase 1.4% to 45.4 million tons this year versus 44.8 million tons last year.

Domestic prices of rice and paddy remain stable despite the long Lunar New Year holiday (Tet). Fresh IR 50404 paddy harvested by combine harvester is sold at VND4,500-4,600 a kilo while the price of unprocessed IR 50404 rice is priced at VND6,500-6,600 a kilo.

Meanwhile, export prices of rice stand at US$350-360 a ton for 5% broken type, US$340-350 a ton for 25% broken type and US$425-435 a ton for Jasmine fragrant rice.

Tra fish farmers suffer losses despite price rise

Although prices of unprocessed tra fish, or Pangasius, in the Mekong Delta are bouncing back after having dropped to new lows, farmers are still racking up heavy losses as the selling price is far below production cost.

According to tra fish farmers in key tra farming provinces in the Mekong Delta, unprocessed tra fish is sold at around VND18,800-19,900 a kilo, rising by VND800-1,300 compared to early this month.

The An Giang Fishery Association (AFA) said unprocessed tra is priced at VND19,100-19,900 a kilo for white-meat fish and VND18,800-19,700 for yellow-meat fish, up VND800-1,300 over early February.

However, the prices are VND4,500-5,500 a kilo lower than in the same period last year.

Tran Hieu Trung, a fish farmer in Can Tho City, calculated that losses would total around VND3,000-4,000 for one kilo of tra fish after all investment costs are deducted.

Nguyen Ngoc Hai, chairman of the Thoi An Trafish Co-operative in Can Tho City, said the U.S. anti-dumping duty and new requirements of Farm Bill for tra fish imports have affected tra prices in Vietnam.

Vietnamese tra fish exporters have faced more difficulties as the currencies of many tra fish importing countries like China and Europe depreciated against the U.S. dollar last year.

Smartphones seen taking bigger market share this year

Domestic market share of smartphones is poised to rise rapidly this year, according to market research.

Retailers including The gioi Di dong, FPT Shop and Mai Nguyen Luxury Mobile said the smartphone segment will grow over 30% this year and overtake feature phones as the mobile phone market leader in Vietnam.

Huynh Phuoc Cuong of GfK Vietnam said smartphone sales are expected to account for 65-70% of the total sales volume of mobile phones on the local market. Smartphones priced at VND2.5 million (more than US$100) to less than VND5 million draw more customers at mobile phone outlets.

IDC’s market report indicated that smartphones made up 51% of mobile phone sales in the second quarter of 2015 with 3.3 million units. The average price of a smartphone was VND4 million in the quarter.

According to statistics of The gioi Di dong and FPT Shop, smartphones costing VND3-7 million a unit contributed significantly to their strong sales growth. These products abound in major retail systems and make up 24-35% of total mobile phones.

Customers have paid more attention to smartphones.

Developers and distributors of locally-made smartphones like Mobiistar, Q-Mobile and FPT have introduced many products with strong configurations but with prices lower than foreign items.  

Ngo Nguyen Kha, general director of Mobiistar, said competition among producers of smartphones priced at VND4-5 million has intensified and that the enterprise is making many stronger smartphones with good prices.

Market research firms said smartphones with screens of five inches or bigger make up 60-70% of total smartphone sales. This is why producers and distributors have unveiled many new products with large screens in recent times.

Cuong of GfK Vietnam said producers are focusing on products with faster chips and better cameras. For instance, two-megapixel cameras are displaced by eight-megapixel or even 13 megapixel ones. Over-five-inch smartphones accounted for 40% of the total in 2014 and the percentage now rises to 70%.

Underground section of Metro Line No.1 ready in 2019

The 2.6-kilometer underground track of Metro Line No. 1 in HCMC from the central station near Ben Thanh Market to Ba Son Shipyard will be completed in February 2019, contractors said.

According to the HCMC Management Authority for Urban Railways (MAUR), Package 1B comprises the underground section, two underground stations and a 1,315-meter tunnel. The four-storey station near the Opera House will be 40 meters deep and contractors are working on this 190-meter-long station round the clock.

Contractors of the package said one of the major problems with construction of the underground track is the relocation of underground infrastructure facilities whose layout plans are nowhere to be found. Therefore, relocation work is time-consuming.

However, the contractors are pinning high hopes that the underground section and stations could be finished in February 2019.

MAUR said the 17-kilometer-plus elevated track of Metro Line No. 1 from Ba Son Shipyard in District 1 to Long Binh in District 9 is being built along the Hanoi Highway. Precast viaduct parts for the section are being placed on concrete supports and installation work should be finished in 2017.

MAUR plans to put into service the overhead track in 2018 before the entire section is complete.

Metro Line No. 1 is designed to be 19.7 kilometers long running from the central station near the landmark Ben Thanh Market to Suoi Tien Park in District 9 and have three underground and 11 overhead stations. The entire section is scheduled for completion in 2019 and will start operation in 2020.

The project’s original cost was US$1.09 billion, financed by Japan’s official development assistance (ODA) loans and the State budget. However, the figure has been revised up to US$2.49 billion due to changes of some components of the project and exchange rate fluctuations.

After the entire line is put into use, it will take passengers about 29 minutes to commute between downtown HCMC and Suoi Tien Park at a maximum speed of 80 km per hour on the underground track and 110 km per hour on the elevated track.

VND5.9 trillion for Hai Van tunnel expansion project

Deo Ca Investment Joint Stock Company will expand the existing tunnel under Hai Van Pass in central Vietnam to four lanes at a total cost of around VND5.9 trillion (US$264 million).

The company said local lender VietinBank has clinched an agreement to finance the Hai Van Pass tunnel expansion as part of phase two of the tunnel project. VietinBank will provide VND4.18 trillion for Deo Ca Investment Joint Stock Company to carry out the second phase of the project.

The company was picked to implement the Hai Van Pass tunnel project under the BOT (build-operate-transfer) form with a total investment of VND7.3 trillion (US$326.8 million), including VND1.4 trillion for phase one and VND5.9 trillion for phase two.

Work on phase two of the tunnel project is scheduled to begin in May this year and be completed in the first quarter of 2020.

Deo Ca Investment Joint Stock Company is also the investor of Ca Pass and Cu Mong tunnels. As scheduled, Ca Pass tunnel will be opened to traffic in 2017 while Cu Mong tunnel will be up and running in 2018.

After completing Ca Pass tunnel, Cu Mong tunnel, and expansion of Hai Van Pass tunnel projects, the investor will collect tolls at seven stations on National Highway 1A.

Property brokers required to have practicing certificates

Property brokers will have to take a test to get a practicing certificate as required by the Ministry of Construction’s new regulation that took effect on February 16.

The rule is part of Circular 11/2015/TT-BXD issued by the ministry to ensure the quality of brokering services on the market.

The circular regulates the issuance of practicing certificates for property brokers as well as provides guidance on how to train property brokers and operate real estate exchanges.

Under the circular, property brokers who want to get certification must pass a test on laws on real estate trading, property market and investment, anti-money laundering, real estate services, and brokering and relevant skills.

Local construction departments will organize such tests and issue certificates for applicants who must have high-school diplomas or higher education decrees. The certificate is valid nationwide for five years from the date of issuance.

So far, around 26,000 property brokers have gained certification, according to the ministry.

Previously, those wanting to get certification needed to finish a short training course and applied for a certificate at the local construction department. But the new circular specifies more requirements for applicants.

Property experts have expressed concern over the new regulation. The leader of a real estate company, who wants to remain anonymous, said it would be difficult to force all property brokers to gain certification.

Many large real estate trading floors have 500-700 employees each and the figure can be in the thousands while property brokerage activities are diverse, he explained.

The director of a property exchange firm which has 100 staff in HCMC’s District 2 said most property brokers of the company have different academic backgrounds and levels, and have joined courses on real estate brokering services organized by the company. But just a few brokers of the company have had practicing certificates.

An executive of another real estate exchange said the regulation is not feasible because only one or two people are needed to establish and operate a property trading floor while other staff do their job freely. This makes it difficult to manage them all.

Year of the Monkey begins with a power shipment to Vinh Tan power plant

Doosan Vina’s Boiler Shop yesterday shipped 354 tonnes of high tech boiler components to the Vinh Tan 4 thermal power plant in Binh Thuan province. This shipment is also the first for Doosan Vina of the year.

The shipment had a total weight of 354 tonnes and included coils, panels and headers.  This is the 12th of 17 planned shipments that will be required to send the nearly 35,550 tonnes of “Made in Vietnam” power plant equipment to the Vinh Tan 4 project.  

All the boiler manufacturing for the power plant is being carried out in Vietnam by Vietnamese.  Nearly 2,500 skilled Vietnamese engineers and technicians at Doosan Vina’s state-of-the–art heavy industrial complex in central province of Quang Ngai have been working on the project.  The final shipment is due to take place at the end of June, right on schedule.

“With this first shipment of 2016, the Year of the Monkey is off to a great start, I want to thank and congratulate all the employees of the Boiler Shop who have worked so hard to meet the deadlines and deliver the product on time, they also deserve high praise for their excellence in workmanship that has produced a high quality product that was made by Vietnamese in support of the country’s industrialisation goals,” Kim Yong Soo, deputy general director of Doosan Vina said.

The Vinh Tan 4 thermal power plant broke ground on March 9, 2014 and is a project of Electricity of Vietnam (EVN). The project consortium includes EVN and Power Generation Corporation 3, Doosan Heavy Industries & Construction, Mitsubishi Corporation, Pacific Corporation and Power Engineering Consulting Joint Stock Company 2.

The project consists of two 600MW units, for a total installed capacity of 1,200MW. The annual power output is expected to be about 7.2 billion kWh. The total investment for the project is over $1.7 billion.

MoIT: Vietnam prioritizes RCEP

Vietnam will give priority to the Regional Comprehensive Economic Partnership (RCEP), Director General of Multilateral Trade Policy Department under Ministry of Industry and Trade, Mr. Luong Hoang Thai, told the Commercial Counselor Conference 2016 held in Hanoi on February 17.

When asked by the Commercial Counselor of India about a free trade agreement (FTA) between the two, he said there was yet to be any official announcement and that the RCEP, of which India is a member, was the focus. “The RCEP is one of the three largest FTAs in the world,” Mr. Thai explained.

Vietnam being signatory to the TPP and now the RCEP, he emphasized, is not because of power balances between the “North” and the “West”. In the TPP the US is the most powerful nation, whereas in the RCEP it is China. “There is no possibility that Vietnam will cooperate with one country and ignore others,” he said. “Any cooperation must be based on economic benefit and competitive advantages.”

Issues raised at the conference by Vietnamese commercial counselors from around the world included whether ASEAN should follow the EU in removing the consensus rule, how to enhance trade between Vietnam and Spain, and the differences between the Vietnam - Japan FTA and the TPP, given that the two are TPP members.

KIDO's pre-tax profit down sharply

The consolidated financial report of the KIDO Corporation (KDC) for the fourth quarter of 2015 reveals total revenue of more than VND442 billion ($19.89 million), down 66 per cent against the fourth quarter of 2014.

Gross profit was almost VND138 billion ($6.21 million) in the quarter, a sharp decline of 74 per cent quarter-on-quarter and down from 40 per cent of revenue to 31 per cent.  

Profit before tax reached only VND68 billion ($3.06 million), down 45 per cent compared to the fourth quarter of 2014. However, consolidated net profit reached over VND111 billion ($4.9 million), up 19 per cent compared to the same period of 2014 due to corporate income tax refunds.

According to a representative from KDC, it selling its confectionery business and investing in new segments lay behind pre-tax profits falling 45 per cent over the same period in 2014.

For 2015 as a whole, however, KIDO recorded impressive profits as the first two quarters saw revenues from the sale of shares in its confectionary business to a foreign partner. Net profit was therefore over VND5.2 trillion ($234 million), up sharply compared with the VND547 billion ($24.6 million) recorded in 2014.

Short-term financial investments by the group were also up significantly, from VND700 billion ($31.5 million) to over VND1.9 trillion ($85.5 million). At the same time, investments in associated companies and joint ventures recorded higher profits compared with 2014, at VND86.3 billion ($3.88 million).

In July last year, KDC sold 80 per cent of shares in its subsidiary the Kinh Do Binh Duong JSC (BKD) to Mondelez International. In 2014, despite the economic difficulties, KDC still recorded stable growth, with revenue of over VND4 trillion ($184 million), up 8.6 per cent compared with 2013, and profit before tax of VND663 billion ($30.8 million), or 10 per cent higher than planned.

$161 million heads to Ba Ria Vung Tau

The Ba Rai Vung Tau Provincial People’s Committee presented investment licenses to five investors on February 16 with total registered capital of nearly VND3.6 trillion ($161 million).

The investors included the Zincox Resources Company PLC (UK), which will develop a steel furnace dust treatment plant at the Phu My 3 Industrial Park worth $115 million, the CJ Cheiljedang Corporation (South Korea), with a $18.3 million feed plant at the My Xuan B1 - Tien Hung Industrial Park, and the IREX Energy Joint Stock Company's project at the Phu My 1 Industrial Park producing hi- tech equipment for renewable energy plants, with capital of VND385 billion ($17.2 million).

The two other projects are the construction of warehouse and logistics services by Soltrans with total capital of VND135 billion ($6 million) at the Phu My 1 Industrial Park and the expansion of Duc Hanh Port in Tan Thanh district by the Duc Thanh Traffic Construction JSC, with investment of VND80 billion ($3.6 million).

“We will work closely with investors and continue to handle any difficulties and obstacles they face, improve the investment environment, and create the most favorable conditions possible for their business activities,” said Mr. Nguyen Hong Linh, Secretary of the Provincial Party Committee. “In the near future the province will review and issue a full list of projects calling for investment.”

As at the end of 2015 Ba Ria Vung Tau had 295 foreign investment projects with total registered capital of nearly $27 billion and 434 domestic investment projects with total registered capital of more than VND240 trillion ($10.7 billion). Its foreign investment accounted for 10 per cent of the national total, putting it in second place behind Ho Chi Minh City.

Betrimex looks to boost value of coconuts

The Ben Tre Import Export Joint Stock Company (Betrimex), a prestigious brand for 40 years in coconut product processing, has invested $20 million in setting up a coconut water and coconut milk plant in the Mekong Delta’s Ben Tre province.

According to Ms. Dang Huynh Uc My, Chairwoman of Betrimex, investing in advanced manufacturing technology is a new direction for the coconut processing industry in the future.

In its initial operating stage the plant launched canned coconut water called Cocoxim in four flavors: Green, Lotus, Kumquat, and Pineapple. After winning favor among customers in Ho Chi Minh City the products are now being distributed nationwide and exported to countries in Asia, Europe, the Americas, and Africa.

Betrimex is one of the leading businesses in Ben Tre investing in the coconut processing industry, producing high-quality finished products to meet demand domestically and for export.

Known as “a multipurpose plant”, coconuts have been part of human life for centuries. Coconut trunks, for instance, are used as timber to build houses, package goods, and manipulate handicraft products. People use its leaves to roof houses and its stems to make handmade arts. People also use its shells as activated carbon, its fibers as rope, and it is also an ingredient in fertilizer.

Coconuts have brought much benefit to growers in Ben Tre. Rich in minerals and vitamins, coconut water is a natural cooling drink that provides a good source of nutrients. Moreover, coconut rice is an ideal raw material in food processing. The combination of the lightly sweet coconut water and fatty coconut rice certainly gives an unforgettable aftertaste.

Among the richest provinces in the Mekong Delta, Ben Tre is famous for its high-quality coconuts, with a total growing area of nearly 67,000 ha. With a wide array of economic values, coconuts are closely associated with the daily life of regional farmers.

How to optimize the benefits of coconuts is a common question requiring cooperation among farmers, enterprises, and local authorities. Efforts aim at realizing the increasing value of local agricultural products, advertising and popularizing coconut products nationwide and worldwide.

BIDV releases 2015 financial report

The Bank for Investment and Development of Vietnam (BIDV) has recently released its consolidated financial report for the fourth quarter of 2015 and the year as a whole.

Net revenue in the fourth quarter reached VND5.65 trillion ($252.21 million), an increase of 15.2 per cent against the same quarter of 2014. Annual revenue was VND19.37 trillion ($864.67 million), or 15 per cent higher than in 2014.

In the fourth quarter profit from services stood at VND726 billion ($32.40 million), securities investment VND340 billion ($15.17 million), foreign currency trading VND238 billion ($10.62 million), and securities trading VND57 billion ($2.54 million), which lost VND71 billion ($3.30 million) over the course of the year.

Operating costs in the fourth quarter increased to VND3.4 trillion ($151.77 million), a rise of 22.3 per cent against the fourth quarter of 2014, for profit before provisioning of VND4.2 trillion ($187.48 million), a decline of 9.5 per cent against the same period of 2014.

In the fourth quarter the bank’s provision was down 35 per cent, to VND1.8 trillion ($80.35 million) against the third quarter, making profit before tax rise 30 per cent quarter-on-quarter, to VND2.4 trillion ($107.13 million).

For 2015 it recorded VND7.99 trillion ($352.65 million) in profit before tax and VND6.38 trillion ($284.8 million) in profit after tax, increases of 26 per cent and 28 per cent, respectively, against 2014. Including the losses from the merger with MHB of VND552 billion ($24.64 million) and dividend payouts of VND12 billion ($535,680), profit after tax of the post-merger bank reached VND5.84 trillion ($260.69 million).

Post merger with MHB, as at December 31, 2015, BIDV had total assets of VND850.74 trillion ($37.97 billion) and charter capital of VND34.18 trillion ($1.52 billion). Customer lending stood at VND598.46 trillion ($26.71 billion) for the year, an increase of 34.2 per cent against 2014, and deposits were VND546.58 trillion ($24.33 billion), up 28 per cent compared to 2014. Non-performing loans were VND9.69 trillion ($432.56 million), 7 per cent higher than in 2014 and accounting for 1.62 per cent of total lending.

HCMC chairman appears heavy handed to heedless agencies in investment environment improvement

Ho Chi Minh City People’s Committee Chairman Nguyen Thanh Phong encouraged businesses to call him if they meet with slackness or problems by any authorized agency at a meeting yesterday morning.

Chairman Nguyen Thanh Phong said that it unacceptable to let the slackness of authorized agencies to affect the city’s investment and trade environment.

On the sprit of immediately going on implementation of socioeconomic missions this year, Mr. Phong asked the agencies and districts to reduce meetings to have more time for businesses and solve their difficulties.

In case it is necessary to hold meetings, they should invite the right participants, avoid wordy generalities and go right on specific issues to save time.

Besides, they should focus on measures to boost production and trading, clear obstacles for businesses to develop and improve investment environment.

He said that a very important task which relevant agencies including Planning and Investment, Finance, Natural Resources and Environment, Planning and Architecture and Construction Departments should be clearly aware of their responsibilities in to more and more improve the city’s investment environment, facilitate businesses’ activities because their performances will contribute to boost economic development, enhance competitiveness and meet deep and wide integration requirements.

They should strengthen measures to manage technical infrastructure projects especially those behind schedule and step up administrative reform, he added.

To do this, he urged to uphold responsibilities of leaders of agencies and districts, further propaganda and openness to the press to supply timely, sufficient and accurate information to obtain citizens’ consensus in carrying out the Party and State policies.

During the Tet holidays, there was no goods scarcity or price rocket, reported deputy chairman of the city People’s Committee Le Thanh Liem.

Total goods value prepared by businesses for two months before and after the Tet was VND16,208 billion (US$725 million), up VND462 billion from the previous holiday.

The city also spent over VND512 billion (US$22.9 million), a year on year increase of VND15 billion, to take care of workers unaffordable for returning their hometowns for Tet celebration, disadvantaged families, those under special treatment policies, children of them and of soldiers in the Spratly Islands and Platform DK1, economics-science-service complex at sea.

ODA disbursement expected to reach US$25-30 billion during 2016-2020

Vietnam plans to disburse between US$25-30 billion of official development assistance (ODA) over the next five years.

The target was revealed via a proposed scheme on ODA attraction, management and use over the 2016-2020 period recently approved by the prime minister.

The Party and State have relied mainly on internal strength for national development while considering ODA and other preferential loans as importance sources of finance.

Data shows that an estimated US$22 billion in ODA and concessional loans from the 2011-2015 period are yet to have been disbursed, therefore one of the key tasks over the next five years is to complete ODA-funded projects as scheduled.

In each of the next five years, ODA disbursement is expected to reach US$5-6 billion, up 14% from the previous period.

Thaco aims for 2016 sales of 100,000 autos

Truong Hai Auto Joint Stock Co. (Thaco) has set a target to sell some 100,000 autos with revenue amounting to VND65 trillion (US$2.92 billion) this year, according to the company’s chairman Tran Ba Duong.

The volume includes 40,000 trucks and 3,000 buses, Duong said in a document sent to employees on the occasion of the Lunar New Year. If the target is realized, Thaco would continue to be the market leader.

Thaco looks to assemble and sell 57,000 passenger cars of Kia, Mazda and Peugeot brands.

The company delivered a total of more than 80,420 autos to customers last year, beating the year’s target and surging 90% over 2014. The figure accounted for almost one-third of the 245,000 autos sold throughout Vietnam last year.

Of the total sales, Thaco sold 42,213 Kia, Mazda and Peugeot cars, up a staggering 100% year-on-year. However, the number was still lower than the 50,285 passenger cars sold last year by Toyota Vietnam.

Duong said this year Thaco will continue investing heavily in production and distribution networks as well as research and development plans this year. The company will boost manufacturing auto parts in Chu Lai-Truong Hai automotive engineering complex in the central province of Quang Nam in a bid to increase local content.

Thaco is proceeding with a new project to assemble 100,000 trucks a year with the annual capacity of 50,000 units in phase one. The company will expand the truck assembly facility to export products and materialize a plan to manufacture vehicles for bus rapid transit services in major cities.

Thaco will spend big on a new factory to assemble 100,000 Mazda cars per year while upgrading the existing assembly lines for Kia and Mazda cars.    

The Chu Lai-Truong Hai complex will be expanded to 112 hectares by the end of this year to make room for enterprises in supporting industries to set up shop.

As part of its development strategy, Thaco will open 51 showrooms, including 16 for Kia, 18 for Mazda, seven for Peugeot, 10 for commercial autos, as well as have 15 new sales agents to increase the total to 202 this year.

Thaco said it is stepping up investment to cash in on increasing demand for autos in Vietnam. The local auto market is projected to expand 5-10% this year compared to last year.

In the first month of 2016, Thaco sold more than 8,900 autos, soaring 35.9% year-on-year and accounting for 40.7% of total auto sales in the country.

In addition to auto business, Duong said Thaco has a stake in Dai Quang Minh real estate company, the investor of Sala urban area in Thu Thiem New Urban Area in HCMC’s District 2.

Dai Quang Minh plans to hand over homes in the Sala urban area to buyers and inaugurate a five-hectare Sala park this year. The company will put into use Saroma Villa project at the end of this year.

Dai Quang Minh is expected to complete work on four major roads in the Thu Thiem Urban Area in February 2017 and Thu Thiem 2 bridge in 2018, and will fasten preparations for an a central square and a riverside park in District 2.

UK firm: BR-VT good to invest in furnace dust treatment project

The UK’s Zincox Resources PLC said Ba Ria-Vung Tau (BR-VT) Province is a good destination for it to develop an arc furnace dust recycling facility worth US$115 million.

The company got in-principle approval for the project with an annual processing capacity of 100,000 tons at Phu My 3 Industrial Park in the southern province on Tuesday.

According to Zincox Resources, industrial parks in Phu My of Ba Ria-Vung Tau are home to many steel mills, so it is an appropriate place for the company to build a plant to treat electric arc furnace dust. These steel mills account for more than two-thirds of Vietnam’s steel production.

Therefore, the investment project of Zincox Resources is necessary as the province’s steel industry needs an appropriate measure to recycle electric arc furnace dust emitted from steel mills.

Like other recycling facilities of Zincox Resources around the world, the output of the facility in Ba Ria-Vung Tau is zinc oxide of high purity, which can be used by the rubber and ceramics industries.

It will take Zincox Resources a couple of months to negotiate with local steel mills to ensure long-term supplies for the facility as well as prepare an environment impact assessment.

Zincox Resources expects to provide steel mills in Ba Ria-Vung Tau with a good dust recycling service and rubber and tire producers with more zinc oxide supply.

According to experts, Vietnam’s steel industry is not environmentally sustainable as dust emitted from electric arc furnace has not been recycled effectively. Zinc oxide contained in each car tire or rubber product accounts for 2-5%.

Seven operational steel mills in Ba Ria-Vung Tau are operated by Southern Steel, Fuco, Pomina 2, Pomina 3, Dong Tien, Posco Vina and Vina Kyoei. These facilities have a combined capacity of about five million tons of steel ingots per year.

Environment experts estimated with millions of tons of steel produced, over 800 tons of dust and slag are emitted a day.

Le Tan Cuong, head of environmental protection in Ba Ria-Vung Tau, told the Daily on February 17 that emissions from steel mills are hazardous.

The Ministry of Natural Resources and Environment has permitted three environmental firms specializing in treating hazardous waste in the northern provinces of Thai Nguyen and Hai Duong to collect and transport dust from steel mills in Ba Ria-Vung Tau to the north for treatment, he added.

Back in 2014, the government of Ba Ria-Vung Tau decided not to call for investment in steel production, particularly construction steel and steel ingots, and seven other sectors as they pose a high risk of water pollution.

SCIC’s subsidiary buys many Vinamilk shares

SCIC Investment One Member Co Ltd (SIC), a subsidiary of State Capital Investment Corporation, has registered to buy 790,000 shares of Vietnam Dairy Products JSC (VNM), with 210,000 shares already acquired.

SIC said in a statement sent to the Hochiminh Stock Exchange that 210,000 VNM shares were acquired between mid-January and February 5 as a finance investment and that it failed to meet the purchase target due to volatility on the local stock market.

SIC now holds 210,011 VNM shares, equivalent to 0,016% of Vinamilk’ shares.

SIC chairman Le Song Lai is the representative of the firm’s stake in VNM.

Foreign investors currently hold a combined 46% stake in VNM and SCIC a 45.08% stake.

In October last year, Prime Minister Nguyen Tan Dung allowed SCIC to withdraw all capital from 10 enterprises including Vinamilk.

Nguyen Son, head of the Market Development Division at the State Securities Commission, told reporters on January 19 that Vinamilk is among the enterprises from which the Prime Minister has permitted SCIC to divest all capital. SCIC must report the procedure and method of its divestment to ensure transparency and benefits for the State.

The dairy firm on Tuesday announced it will seek shareholders’ approval to withdraw from seven business sectors such as husbandry, cultivation and printing, and adjust its investments in two other sectors. The deadline for collecting shareholders’ comments is end-March.

The withdrawal from the sectors is to pave the way for raising foreign ownership in Vinamilk.

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