Online trading scams rampant

Many fraudulent traders have managed to steal money from consumers via online trading activities by using simple tricks, while the legal regulation concerning this issue still remains incomplete.

Duong Thi Ngoc Giau, residing in the Mekong Delta province of An Giang, said earlier this year she fell into the trap of a fraud on the www.didongsaigon.net website.

The website advertised that many cell phones were discounted 50-percent, so she chose to buy a Nokia X6, she said.

On calling to the number displayed on the website, Giau met Khoa, who asked her to transfer money into his account in advance, and wait a few days for the product to be delivered.

However, two days after Giau had sent money to Khoa, the mobile phone had still not arrived . On asking for Khoa, she was replied that the man “was on a business trip.”

Losing patience, Giau called another trader of the website, and protested: “Why does this trading look like a scam?” To her astonishment, she was told: “ It is.”

Giau then telephoned VietcomBank, asking to have the bank account of the fraudulent trader blocked. However, the bank said she had to ask the police to fulfill that request, which discouraged her from continuing, since it would be a complicated process.

She also learned later that despite claiming to be authentic products, all of the discounted products on the website were Chinese made.

On the morning of February 19, your correspondent came to the address of the shop, as displayed on the website, at 700 Lac Long Quan Street, Tan Binh District, and was surprised to see that the mobile phone shop is actually a fruit store.

The fruit store owner said the phone shop had been closed for years, and she just re-rented the shop to sell fruit. Your correspondent asked Khoa, and was directed to another shop at 561 Lac Long Quan, where only a couple of cell phones were found on display. .

“Since the main store of our website is under construction, we have to display the products here temporarily,” an employee at the store told your correspondent.

Meanwhile, when asked why Giau has yet to receive the product although she had cleared payment 15 days previously, Khoa appeared to be confused, and said: “The product has been delivered.” Then he disconnected the call.

Tu, a resident of Hanoi’s Tay Ho District, has also been cheated, although he has purchased goods via website many times.

After browsing a number of online trading websites, Tu decided to buy a secondhand iPad for VND11 million from a man named Long in Ho Chi Minh City.

After exchanging contact information via the phone, Long confirmed with Tu that he only had to give him a deposit of VND5 million, and that the remainder would be settled after he received the product.

Convinced, Tu transferred the money to Long, and has since been unable to contact the trader by any means.

Nguyen Nam Vinh, head of the southern office of the Vietnam Standard and Consumers Association (Vinastas), said his institution received a number of complaints from consumers about fraudulent online trading activities on an annual basis.

Consumers do not know where to lodge their appeals, and from whom to ask for help, Vinh said, adding under the current legal regulation, consumers are not fully protected when it comes to online trading.

For his part, lawyer Nguyen Huu The Trach said online trading scams are not a new kind of fraud, and the swindlers can still be indicted and prosecuted as criminals.

However, since most of the trading activities are done via websites, consumers usually cannot prove evidence of their being cheated. Thus, it is not simple to indict the online fraud traders, he said.

Truong Hong Quang, an official from the Ministry of Justice, said that many loopholes in legal regulation regarding online trading activities remain.

The Ministry of Industry and Trade has issued Circular No 46 to stipulate the responsibility of the parties involved in online trading.

“However, the circular does not have any clause concerning whether or not the website owners are to be held responsible in case disputes arising from online trading activities,” Quang said.

Report spotlights 500 fastest-growing firms

Viet Nam Report Joint Stock Co yesterday published its first FAST500 – a list of 500 companies with the fastest growth rates in Viet Nam.

The 500 businesses have an average growth rate of 57 per cent in the period of 2007-10, while those last year was 54 per cent.

The top 50 firms grew at a rate of 127 per cent, while top 100 grew at 94 per cent.

The private sector this year showed its role in the economy as they accounted for 71.6 per cent of the list. State-owned businesses held only 22.2 per cent.

FAST500 which has been held for two consecutive years is aimed at highlighting effectively run companies with a fast growth rate.

The ranking showed businesses that have coped well in the global economic downturn and difficulties in the local economy.

A survey carried out by VNR last month showed that up to 70 per cent of private companies planned to expand their business and increase investment this year despite the global economic meltdown.

In addition, several FAST500 enterprises have been optimistic that their growth rate in the next two years would still be high.

The list revealed that the number of workers last year was more than 313,000, much higher than that of over 276,000 in 2010.

Ha Noi and HCM City still account for more than a half of FAST500 companies, including 144 in the capital and 120 in HCM City.

Some provinces with difficulties have also had businesses listed in the FAST500, such as central Nghe An Province and Central Highland Dak Lak Province.

Enterprises operating in agriculture and exports have continued to create jobs for the country.

FAST500 businesses have a role in ensuring social welfare.

Companies in processing, production and construction sectors also accounted for a large proportion of the list with 29 per cent. Petroleum trading and services firms held a majority of the turnover on the list.

FAST500's Top 10

1. Thanh Dat Steel Joint Stock Co

2. Van Diem Paper Joint Stock Co

3. Dong Thap Agriculture Development and Services Co

4. TMG Co Ltd

5. Viet Tin Nutrition Joint Stock Co

6. Vegetables and Fruit Co

7. Oxygen Chemicals Joint Stock Co

8. Viet Thai Commerce and Technical Services Joint Stock Co

9. Magic Flame Joint Stock Co

10. Lam Son Import-export Trading Co

Shares rebound after a bull-trap session

National stocks reversed yesterday's losses to add value during this morning's session.

On the HCM City Stock Exchange, the VN-Index advanced by 1.8 per cent over yesterday's trading to 418.41 points. Meanwhile, the VN30 also inched up nearly 1.9 per cent, reaching 470.97 points.

Gainers were nearly four times higher than losers.

After yesterday's alleged bull-trap, the value of trades on the southern bourse decreased by 6.5 per cent, totalling VND739.57 billion (US$35.2 million) on a volume of 54.9 million shares.

None of the major blue chips suffered losses. Meanwhile, almost all of oil and gas giant PetroVietnam's subsidiaries hit their ceiling prices. Other large-cap stocks to reach the daily increase limit included property developer Hoang Anh Gia Lai (HAG), steelmaker Hoa Phat (HPG) and financial conglomerate Ocean Group (OGC).

On the Ha Noi Stock Exchange, the HNX-Index added 2.8 per cent, closing at 65.70 points. Gainers largely overwhelmed losers by 204-58.

A 12.7-per-cent decrease in trading volume made the value of trades reach only 86 per cent of yesterday's level, standing at around VND557.6 billion ($26.5 million).

Habubank (HBB) became the most active code nationwide with nearly 12.7 million shares changing hands.

HCM City bourse to launch afternoon session

The HCM Stock Exchange (HOSE) said on Feb. 21 that it will launch afternoon trading sessions from March 5.

The market will trade from 9am to 11.30am in the morning and from 1pm to 2.15pm in the afternoons, from Monday to Friday.

The new trading session will help investors closely monitor information in domestic markets as well as compare movements in regional and international markets in order to make their own investment decisions.

According to HOSE regulations, members of the stock exchange are not allowed to place new orders, change or cancel orders or make transactions during the break period from 11.30am to 1pm.

VietJet to use Singaporean service company

The Singaporean Airlines Engineering Company (SIAEC) will soon provide VietJet Air’s fleet of Airbus A320s with Inventory Technical Management services.

An agreement was signed by SIAEC and VietJet Air at the recent 2012 Singapore Airshow, reported the Vietnamese air carrier on Feb. 20.

The Singaporean company will now support VietJet Air with its maintenance, repair and warehousing operations.

These services will help to ensure the fleet’s safety, save on maintenance costs and make more effective use of available warehousing held by both parties.

Key industrialisation planned for 2020

Five to seven industries will be selected as key national industries under a draft industrialisation strategy for the period from now until 2020, which is expected to be submitted to the Government by June.

At the recent fifth meeting in Hanoi of a special team charged with selecting the key industries, organised by the Central Institute for Economic Management (CIEM), participants agreed it is critical for Vietnam to set up an industrialisation strategy and proper action plans to transition from a low-income nation to an industrialised, middle-income country by 2020.

The list of key industries will be selected from 12 fields, including electronics, motor vehicles, shipbuilding, food processing, steel, petrochemicals, textiles and computer software.

A list of support industries will also be considered, mainly production industries such as engine manufacturing, flat steel products, agricultural products and raw materials including crude oil, composite plastics, artificial rubber, aluminium and synthetic fibres.

At the meeting, Minister of Planning and Investment Bui Quang Vinh said the industrialisation strategy and action plans toward 2020 and the list of key industries will play an important role in restructuring the national economy.

Minister Vinh said that improving the competitiveness of key industries needs to be part of the strategy, adding that the Government should call for international and domestic funding.

Sectors involved in the manufacturing of motorbikes, automobiles and heavy industries attracted the most attention at the meeting.

In terms of motorbike production, foreign experts said the high rate of local production – nearly 100 percent – made Vietnam the fifth largest motorbike market in the region and that domestic production could take advantage of this to export to South America and other Asian countries.

Meanwhile, several participants said a gradual process was needed to build domestic material industries such as petrochemicals and steel, in order to replace imported materials.

Other participants suggested that Vietnam focus on several other segments of the value chain and instead import materials from neighbouring countries in the region, arguing that industries producing such materials would require large amounts of capital and bring in low returns in the context of a fluctuating global market.

Many experts also noted bicycle and garment production as the strongest industries to develop.

Several participants said these two industries should be geared towards promoting exports, transfering technology, improving human resources and developing support industries.

Several foreign investors suggested the electronics sector is also one of the country's key industries, while Japanese experts said Vietnam should establish a petrochemical zone in the southern provinces and a bicycle production area focused on exports in the central region.

Several northern provinces have been developed as bicycle production centres for the domestic market, while electronics production zones are being expanded in HCM City and Hai Phong.

Textiles, agricultural products, seafood and software have traditionally been some of the country's leading exports, but there are doubts about the future of these industries.

Experts also say that the existing advantage of low-cost labour for garment and footwear producers will decrease in the future.

Vinatex pledges to reduce production costs

The Viet Nam National Textile and Garment Group (Vinatex) and its member companies have committed to reduce production costs in accordance with guidelines from the Government and the Ministry of Finance.

Under the guidelines, Vinatex set a target of decreasing managerial and production costs between 5 to 9 per cent to bring in profits of VND1.6 trillion (US$76 million).

To achieve this target, the group will focus on applying advanced management methods, trial models, focused materials and inter-inventory among business sectors to reduce liquid capital and save energy.

Vietnam aims at $14-16bln ODA disbursement until 2015

Vietnam is expecting to disburse $2.8-3.2 billion Official Development Assistance (ODA) annually from now to 2015, according to a project recently approved by the Prime Minister.

This is an important source of investment capital which helps Vietnam carry out its five-year socioeconomic development plan for 2011-2015, said the national project for attraction, management and utilization of ODA capital and preferential loans from other sources in the 2011-2015.

After officially joining the group of medium-income countries in 2010, Vietnam continues to cope with difficulties and challenges during the period.

As a result, the country must have suitable policies to ensure effective attraction and use of ODA capital in the new situation.

The project was based on the Vietnamese government's Socioeconomic Development Strategy and Public Debt Management Strategy for the 2011-2020 period, as well as the actual situation of ODA attraction and management from 2001-2010.

It also proposes policies to improve the effectiveness of activities related to the attraction and use of ODA capital and preferential loans from other sources.

ODA and preferential loans committed by foreign donors for Vietnam in the 2011-2015 are estimated to total $32-34 billion, of which $14-16 billion, equal to about 6 percent of Vietnam's total investment in development in the same period, will be disbursed.

About 50 percent of ODA capital to be disbursed in 2011-2015 is related to programs/projects signed in 2006-2010.

The Vietnamese government has been committed to maintaining tight cooperation with foreign donors and making every effort to ensure effective implementation of the tasks related to the disbursement of ODA capital in 2011-2015.

The project indicates that ODA capital and preferential loans from other sources will be used to serve the implementation of the five-year socioeconomic development plan for 2011-2015 and the ten-year socioeconomic development plan for 2011-2020.

It will also be used the plan for construction of infrastructures catering for the country's industrialization and modernization cause in 2011-2020, the national programs for 2012-2015 and important public investment programs/projects which can attract investment from the private sector or use commercial loans.

The sectors which are prioritized in terms of ODA attraction and disbursement from 2011-2015 will include infrastructure construction and modernization, human resource development, especially highly qualified human resources, science and technology development, and knowledge-based economy.

Agriculture and rural development, building laws and institutions related to the socialist-oriented market economy, protection of the environment and natural resources, coping with climate change, green growth, investment and trade promotion are also considered prioritized fields.

Priority will be given to poor provinces which are faced by numerous difficulties and remote areas.

The Asian Development Bank (ADB) last month said it would continue to support Vietnam to become a modern industrialized country by 2020 to address the challenges of a middle-income country with the goal of sustainable, stable and comprehensive growth, especially the ability to cope with climate changes and economic restructuring.

Specifically, ADB will give support priorities for economic growth investments, poverty reduction and sustainable natural resources management, said Tomoyuki Kimura, director of ADB in Vietnam.

Those supports will help boost the agricultural-rural development process, develop the financial sector diversification, offer technical assistances and targeted investments in the health and education, and the reform of small and medium-sized enterprises (SMEs) through a combination of program loans and technical assistances to strengthen the regional cooperation and integration.

Regarding the energy sector, the expansion of the transmission, distribution and generation capacity of electricity under a sustainable way in economy and environment to meet the increasing demand for electricity is a priority of the Vietnamese government, so ADB will also focus assistance in this area.

For the transportation sector, the capital demand for investment in the 2011-2020 is expected at around $16 billion a year.

As a result, based on current estimates, nearly half of which is expected to be able to mobilize and the private sector will offset the huge deficit, therefore it requires building an effective legal framework for the public-private partnership (PPP) model.

However, according to ADB, the private sector also has limitations on ability to access capital sources and financial management. Therefore, ADB has supported the reform of small and medium-sized enterprises (SMEs) through a combination of program loans and technical assistance.

ADB is also proposing a program to support cooperation between the public and private (P3SP) to promote more involvement of government in the dialogue process to address the public and private cooperation issues, aiming at providing a more favorable environment for this partnership.

Property firms record little profit

Most property companies registered little profit last year as the gloomy market continued to adversely affect their operations.

A sharp revenue drop and a build-up of unsold products caused by weak demand in the apartment segment coupled with rising borrowing costs have led to poor results of realty firms.

Market leader Hoang Anh Gia Lai saw its profit plunge by 89 percent year-on-year, from VND2.08 trillion in 2010 to VND224 billion last year.

The group explained its subsidiaries no longer enjoyed profits generated by the parent firm as the latter is now only in charge of management.

Sai Gon Thuong Tin Real Estate Company, better known as Sacomreal, recorded a loss of nearly VND40 billion in the final quarter of last year. The firm’s revenue from product sales and services in 2011 halved to VND540 billion from VND1.09 trillion in 2010.

Sacomreal’s profit was dragged down 83 percent to a mere VND80 billion last year, against VND485.5 billion in 2010.

Phat Dat Property Development Corporation didn’t fare any better.

The company in its financial statement reported its 2011 revenue totaled a mere VND127 billion, a drop of 92 percent from VND1.57 trillion in 2010. The company’s profit also dipped to VND4.5 billion, equivalent to 1 percent of the VND331 billion in 2010.

With the loss of over VND225 million recorded in the last quarter of 2011, the whole year’s profit of House Vietnam Joint Stock Company dwindled by 96 percent compared to 2010.

Similarly, Dat Xanh Real Estate Service and Construction Corporation witnessed its profit decline by a half due to the loss of over VND16.5 billion in the last quarter.

The business results of 10 major property companies show that their combined profits in 2011 are still lower than the profit of Sacomreal alone in 2010 and far behind the profit of Hoang Anh Gia Lai in the same year.

Most realty firms ascribed their dismal profits to the continued difficulties faced by the market and poor sales of products, while financial costs, specifically interest rates, put more pressure on many enterprises.

For instance, Thu Duc Housing Development Corporation (Thuduc House) had to pay an interest sum of VND49 billion last year, a significant rise from VND11 billion in 2010.
Sacomreal had VND249.5 billion in loan interest payables in 2011, or an increase of 10 percent year-on-year.

Pressure of loan repayment, along with stagnant trade, has forced several property enterprises to discount their products in order to rev up demand as well as quickly recover capital to withdraw from the market.

Most real estate companies are now debtors to the banks. To boost product sales to pay their debts is thus currently a big challenge to property enterprises.

In the outlook for the local property market this year, analysts of VietCapital Securities predicted 2012 would be another tough year for the market given the liquidity crisis and property lending restrictions.

Market observers forecast the trend of project transfer would continue in 2012, and the market would hardly pick up as real estate credit is still tightened.

Foreigners arrested for using fake credit cards

The Ho Chi Minh City police have arrested 6 foreigners for using fake credit cards.

2 of them, 22-year-old Saravanan Navanithan and 29-year-old Shankaran Shamugam, were caught when using 3 credit cards to buy a VND18 million tablet at a computer shop on Ton That Tung Street in District 1 on Friday.

After they had to use the 3rd credit card since the first two were found to have errors, the shop employees immediately reported to the card issuer, the Bank for Agriculture and Rural Development of Vietnam (Agribank).

As the information on the card was found to be different from Agribank’s database, the bank asked the shop to hold the payment until the police came.

The police then found out that the 2 foreigners had 13 other cards, all of which was fake.

The police went on to discover 4 other members of the same ring and found 20 other fake credit cards in their hotel rooms in District 1 and 5.

UK firms to explore trade possibilities in Vietnam

UK Trade and Investment (UKTI) is organising a trade mission to Vietnam to identify potential opportunities for British firms from northwestern England to do business in the country.

UKTI International trade adviser for northwest England, Peter Thompson, will head a group of delegates from seven companies travelling to Vietnam including Biglift, County Sales, Chase International, Connect Medical Systems, English in Chester, Glasgow Health Solutions and Hoshin.

The trade mission will be in HCM City from February 19-22 and in Hanoi from February 23-24.

Cbank withdraws VND134.5 trillion via OMOs

The State Bank of Vietnam (SBV) has withdrawn about VND134.5 trillion ($6.46 billion) that was pumped into the banking system for liquidity support via Open Market Operation (OMOs) during the pre-Tet (Lunar New Year) period.

It took out some VND23.356 trillion last week, and some VND111.18 trillion in the 2 previous weeks.

SBV supplied VND160 trillion ($7.64 billion) to ease the liquidity constraints of the local banking system before the Tet holiday.

The central bank last week allocated the credit growth ceilings for 4 groups of banks in 2012, ranging from 0 percent to 17 percent.

The maximum credit growth rates of 17 percent, 15 percent, and 8 percent will be applied for to 3 groups of banks, namely healthy, average, and below average, while those in the last group, the weak ones, are not allowed to lend more in 2012, according to the newly-issued Directive 01.

The caps for the 4 groups of banks will be reviewed after 6 months for any changes following the situation.

The liquidity of the banking system has been recovered with overnight rates hovering around 9.5 percent a year, said Saigon Securities Inc in a recent notification to stock investors.

The categorization of local banks can be considered as a basis for the reduction of interest rates, according to Saigon Dau Tu newspaper.

Some tens of local credit institutions are have been classified as weak and disallowed for credit growth this year, said SBV deputy governor Nguyen Dong Tien at a recent meeting.

"The credit institutions listed in group No.4 are struggling with severe lack of liquidity, on the verge of disruption and under restructuring process," said Tien at a press briefing in Hanoi.

However, Tien said the central State Bank of Vietnam would keep secret the identities of the banks belonging to this group, as well as the other groups, secret.

"We will not publicize but send specific notices to each credit institution," he said.

The SBV has already drafted policies to promote the participation of healthy commercial banks in the restructuring process, the Thoi Bao Kinh Te Sai Gon newspaper reported, citing its private source from the central bank.

Not only will state-owned lenders and equities banks at which the state holds controlling shares, but also other healthy credit institutions, will support weak banks during the restructuring process, Thoi Bao Kinh Te Sai Gon newspaper quoted a senior official of the central bank as saying.

Restructuring the banking industry aims to create the impetus and foundation for the development of the banking sector while seeking to minimize financial support from the government budget.

VN warned about exporting sugar

Vietnam should be careful about exporting sugar because there not may be enough sugar for domestic demands, an agriculture official said, referring to a proposal by the Vietnam Sugar Association to export 250,000 tons of sugar this year.

Doan Xuan Hoa, deputy head of the Agro-Forestry-Aquatic Product Trading, Processing and Salt Industry Department, said that approval for the proposal was unlikely in the immediate future.

Currently, the sugar crop has yet to end, and thus the sugar production volume and the domestic demand this year have not been known, Hoa said.

However, the Ministry of Agriculture and Rural Development and the Ministry of Industry and Trade will have a meeting to consider the sugar association’s proposal.

Even if sugar is to be exported, according to the department, the amount will not be substantial.

The Vietnam Sugar Association has sent a dispatch to seek approval from central authorities for exporting 250,000 tons of sugar this year to address surplus and buoy up prices.

According to the sugar association, the sugar production volume of the 2011-2012 crop will be 1.43 million tons, plus 70,000 tons imported under the quota pledged when Vietnam joined the World Trade Organization and 100,000 tons in the stockpile, making up a total of 1.6 million tons.

Meanwhile, the domestic demand this year is estimated to be around 1.3 million tons, and there will be an extra amount of 300,000 tons.

As a result, the association has asked for approval to export 250,000 tons this year while the remaining amount of 50,000 tons will be used to stabilize the domestic market when necessary.

Ahead of the lunar New Year, the wholesale price of sugar at factories was more than VND18,000 a kg inclusive of value-added tax, but it has dropped to VND16,000, or a fall of over 10 percent.

Previously, the Ministry of Industry and Trade has allowed the department to export 30,000 tons of sugar which has not all been shipped abroad.

Hanoi forum explores productivity

The Vietnam Productivity and Quality Centre (VPQC), in coordination with the Asian Productivity Organisation (APO) has held the 16th forum on productivity and quality in Hanoi, to discuss ways to renew management systems in order to develop businesses.

At the forum, more than 200 participating experts and enterprise leaders heard reports on productivity as well as strategies to raise productivity and collective factors related to the quality of economic growth.

They also exchanged experience and methods of increasing work productivity, introduced models and tools to improve the quality of management, and ways to enhance competitiveness through restructuring management systems.

Nguyen Anh Tuan, Director of VPQC, said Vietnam needs to launch a productivity revolution in order to maintain its current growth rate.

According to reports on productivity from the APO and Malaysia, Vietnam’s work productivity is only US$2,072 per labourer per annum, the lowest figure among nine other Asian countries including Thailand, India, Malaysia, the Philippines, Singapore, China, the Republic of Korea, Japan and Indonesia.

The annual forum has been applauded by many organisations and businesses since it was held for the first time in 1996.

WB committed to helping Vietnam with economic restructuring

The World Bank (WB) will provide Vietnam with financial and technical assistance to restructure State-owned enterprises, said WB Country Director Victoria Kwakwa.

Kwakwa made the statement at a February 17 working session with Vietnamese Minister of Finance Vuong Dinh Hue, who asked the WB to increase official development assistance (ODA), including direct assistance to the State budget, for Vietnam to develop its socio-economic infrastructure.

Hue proposed that the WB help the Ministry of Finance (MoF) carry out its project to restructure State-owned enterprises. He highly valued the WB’s research into investment mechanism for local infrastructure and expressed hope that the WB will join MoF in a project to exploit financial resources from land and traffic infrastructure.

Talking about the WB’s ODA projects for Vietnam, Hue affirmed that his ministry will work with other Vietnamese agencies and the WB to speed up the disbursement of the capital for some key projects, especially the Tax Management Project (TAMP) and the School Quality Assurance Programme (SEQAP).

Victoria Kwakwa praised Vietnam’s efforts in its economic restructuring and promised to cooperate with the Ministry of Finance in researching the project to exploit financial resources from land and traffic infrastructure.

She said the WB will also work with the MPI and other related agencies to provide US$250 million in loans for the “economic management to sharpen competition capacity (EMCC)” programme in 2012.

$1.4 billion for Hanoi-Lang Son expressway

A 158km expressway running through Lang Son, Bac Ninh, Bac Giang provinces, and Hanoi will be built at a total estimated capitalization of about US$1.4 billion, according to an official of Vietnam Expressway Corporation (VEC).

The final feasibility study report on this project was presented by VEC and representatives of the Asian Development Bank (ADB) to the Ministry of Transport in Hanoi on February 17, said Tran Ngoc Hoang, Vice Director General of VEC.

The future expressway will begin at the Huu Nghi (Friendship) Border Gate in the northern province of Lang Son and end at the crossroads of National Highway 1A and 5 in Hanoi.

It will have six lanes, allowing vehicles to travel at a speed of 80-120km per hour.

ADB will provide about US$500 million for the project, the government about $180 million. The rest will be sought from other donors.

VEC says the expressway aims to meet the increasing travel demand between Hanoi and northern provinces and facilitate trade between Vietnam and China, as well as boosting the development of the northeastern economic zone.

State firms to cut admin costs

All State-owned enterprises (SOEs) will have to try to reduce management costs by 5 percent - 10 percent starting from the second quarter.

Many CEOs say that the decision will not only help to raise production and make businesses become more efficient, it will also reduce the burden on the State Budget and create more financial sources that can be invested in social welfare.

The Bao Viet Insurance Group has become the first major conglomerate to carry out its commitment to reduce management costs.

According to Minister of Finance Vuong Dinh Hue, this policy will be adhered to by all SOEs.

Following Bao Viet, the Ministry of Finance will work with the Vietnam Textile and Garment Group (Vinatex), Electricity of Vietnam, the Vietnam National Oil and Gas Group and the Vietnam National Coal and Mineral Industries Group on the issue.

Hue said the Government’s premier task in 2012 was to restructure the economy as well as focus on public investment, SOEs and the financial system, to increase the economy’s efficiency and competitiveness.

More should be done to promote the leading role that the state economic sector plays and SOEs must contribute to sustainable economic development.

Vinatex’s Deputy Director General Duong Thi Ngoc Dung said that the textile and garment industry was also trying to produce as much as possible while keeping input costs minimal.

Chairman of Bao Viet Group Le Quang Binh said his group considered cutting management costs by 5 percent - 10 percent a political duty and planned to slash management costs by $145 billion.

Vietnam’s electronics attractive to Korean investors

An exchange between Vietnamese and Korean businesses was held in Ho Chi Minh City on February 16.

Jang Seok Jun, who leads a group of businesses from the Republic of Korean Electronics Business Association, said they tend to move their factories from China and some other countries to Vietnam, because the country has great potential for developing the electronics industry.

Le Ngoc Son, President of the Vietnam Electronics Business Association said there are great opportunities for Vietnam’s electronics industry to develop if it can take advantage of two investment waves from Japan and the RoK.

He insisted that businesses need to quickly shift the structure of production activity from manufacturing civil and household utensils to producing equipment for industry, health and other sectors. Vietnam’s electronics industry should also join the global chain of supply to maintain its long-term growth and competitive edge.

Three breakthroughs for industrial, processing and economic zones

Upgrading infrastructure, training human resources, and improving legal and institutional mechanisms are the three breakthroughs in the development of industrial, export processing and economic zones (IPEZs).

Deputy Prime Minister Hoang Trung Hai emphasized this at a seminar, held by the Ministry of Planning and Investment (MPI) in Hanoi on February 17, to review the development of IPEZs in Vietnam over the past 20 years.

Deputy PM Hai asked the MPI to work out effective management models to help them achieve these breakthroughs.

Participants in the workshop proposed boosting in-depth development, promoting cooperation, and increase the ratio of technology in the investment structure to ensure sustainable socio-economic growth.

According to the MPI, Vietnam now has 267 IPEZs, which contribute 40 percent of Foreign Direct Investment capital and 30 percent of export turnover and attract 1.6 million direct labourers.

IPEZs have helped develop modern industrial and urban areas, upgrade infrastructure for localities, and create jobs for local people. Those in the coastal and border areas have contributed to protecting the country’s territory.

However, there remain certain shortcomings in the management of these zones such as poor planning, ineffective land use, environmental pollution, and workers’ low living conditions.

Vietnam-Mexico trade turnover hits record high

Two-way trade turnover in 2011 exceeded US$1 billion, showing a sharp increase of 14 percent over the previous year.

Vietnam’s exports to Mexico rose 16 percent to more than US$973 million, but its imports from the country decreased by 19 percent to US$64 million.

Hoang Anh Dung, Vietnamese trade counsellor to Mexico, said the annual increase in Vietnam’s exports over the years has reflected Mexico’s actual economic development and trade exchanges.

However, economists suggested that the North American nation seek to balance trade with Vietnam to develop bilateral economic and trade ties in a sustainable manner.

Mexico’s total trade turnover in 2011 was estimated at over US$700 billion, with exports increasing by 17 percent, imports by 16 percent and import surplus staying at US$1 billion, showing a year-on-year decrease of 61 percent.    

Vietnam in spotlight as post-flood production base

Vietnam has emerged as a promising production site for Japanese businesses looking for nearby alternative locations after severe flooding crippled their factories in Thailand last year, according to Nikkei.

The Japan's leading business daily was quoted as saying that a series of Japanese enterprises are planning to build factories in Vietnam of which JS Group Corp. invested around ¥30 billion to set up a window sash plant and Kobe Steel poured ¥100 billion to construct a steel mill.

Meanwhile, Canon and Honda are boosting their presence in Vietnam with the total investment of around ¥300 million.

According to the Japan External Trade Organization (JETRO), in 2011, the number of Japanese investment projects increased two fold against 2010 to 208 with the total value of ¥145 billion.

Nikkei reported that Vietnam is appreciated for numerous advantages including abundant labour (75 percent under 40 years old) and low labour costs.

Realty industry hindered by capital shortage

Local real estate firms are facing a shortage of capital as they can’t easily access bank loans or borrow from their customers like before.

The majority of property firms only have about 20 percent of invested capital by using their own equities when developing fresh projects. This means they have to borrow money from banks and customers to cover the remaining necessary capital, with the ratio of banking loans accounting for the majority.

Due to this huge reliance on mobilized funds, the property market is especially vulnerable upon any monetary policy change, as seen in the current situation.

Credit applications from industry players are now not accepted by lenders, who themselves are having difficulty recovering debts from realty projects.

Due to the weak liquidity of the market, mobilizing capital from customers for new schemes is no longer easy either.

Meanwhile, attracting funds via the stock market has faced the same difficulty.

Several realty businesses that in 2009 and 2010 had decided to list shares failed to attract any fund from this channel last year as a result of the gloomy stock market.

A series of property firms were forced to cancel share issuance plans after failing to attract buyers.

The execution of many real estate projects has thus been suspended for lack of funds.

Tran Minh Hoang, chairman of VinaLand Limited, said property developers had to find their own ways to find funds. Transferring land to other partners is a recommended choice, Hoang said.

According to Hoang, land transferring is not a new trend as it has been seen in strategic investment cooperation among businesses under which a company will transfer its project partly or wholly to partners.

For instance, Singapore-based CapitaLand Limited has invested in a project of Khang Dien Co., in HCMC’s District 2 and another one developed by Quoc Cuong Gia Lai Joint Stock Co. in Binh Chanh District. Similarly, Him Lam Land has poured capital into the Hyco4 Tower scheme in Binh Thanh District developed by another.

Market observers predict the land-transfer trend will continue this year but say it is only feasible for totally new schemes rather than ongoing projects because complicated transfer procedures and the current economic downturn discourage merger and acquisition.

Meanwhile, Hoang of VinaLand said that realty trust investment funds and housing saving funds had yet to be deployed owing to the absence of support from the local financial system.

Since last year, high bad debt ratios coupled with weak liquidity have prompted many banks to distant themselves away from lending real estate schemes, especially new ones.

Truong Van Phuoc, general director of the Vietnam Export Import Commercial Joint-Stock Bank (Eximbank), said there was little room left for property credit growth at his bank.

It is because Eximbank now concentrates on four groups that are no longer treated as non-productive segments including low cost-housing projects, Phuoc said.

When asked about realty loans, a credit officer of the HCMC-based Bank for Foreign

Trade of Vietnam (Vietcombank) revealed that his bank would only disburse funds for property projects the bank has earlier pledged to finance.

Nam A Commercial Bank’s general director Tran Anh Tuan said his bank mainly served healthy and potential corporate customers besides actively collecting debts from property businesses this year.

Tuan hinted at limited new disbursement for the property industry at his bank until the market recovers.

Condo projects in HCMC prime locations restart

After a long hibernation, work on many apartment projects in the golden land plots in downtown Ho Chi Minh City has recently restarted at a time when the real estate market still remains frozen.

One of the latest players is the Saigon Centre project, which entered its second stage of construction last December.

The project, located in one of the most prime positions of the city center with three sides facing Nam Ky Khoi Nghia, Le Loi, and Pasteur streets, is invested by Keppel Land Watco with total investments worth more than VND3.3 trillion (US$158.4 million).

Meanwhile, the People’s Committee of District 1 said the office building and apartment project in the quadrilateral Ben Thanh market (cornered by Le Thi Hong Gam – Calmette – Pham Ngu Lao – Pho Duc Chinh streets) is also completing procedures to break ground in the first quarter of this year.

The 8,640-square-meter lot will see two 55-story office buildings. The main investor is Bitexco Group, which will spend VND4 trillion worth of investments for the project that is expected to reach completion after three years.

A huge project on Nguyen Dinh Chieu Street consisting of five 34-story buildings functioning as the apartment, trade center, and hotel is also expected to begin in the first quarter.

Two other projects near the Ben Thanh quadrilateral zone have been slated to begin site clearance and compensation this year.

Tran Thanh Xa, director of the Ben Thanh Housing Development Co Ltd, the main investor of the project on Nguyen Dinh Chieu street, said although the project had been initiated as early as 1996, it was delayed until now due to problems in site clearance.

In the first quarter, the company will begin construction on the 34-story tower as a resettlement place for the residents whose houses have been cleared to give place to the project, Xa said.

Commenting on the VND3.5-trillion capital required for the project, Xa said he would mobilize from other investors and bank loans.

“Many banks had accepted to offer loans for the company,” he said.

Similarly, Bitexco said its project was also delayed due to some changes in site clearance regulations, and other investment procedures.

Although the real estate market remains frozen, Bitexco will still implement the projects to give the city downtown a facelift, it said.

Conference lambasts industrial parks’ inefficiency

Many industrial parks (IP) around the country still yield poor economic effectiveness, while wasting land resources, said the Ministry of Planning and Investment yesterday at a meeting to summarize the IP development over the last 20 years.

As for last December, Vietnam is home to 283 IPs with total area amounting to 76,000 hectares. Of these, 180 IPs have been operational, spending more than US$9.5 billion on infrastructure development.

Meanwhile, the occupancy rate of the IPs and the export-processing zones (EPZ) is 65 percent, with around 10,000 hectares left unrented.

Around 4,100 FDI projects with total capital worth $59 billion are operating in the IPs. As of December 2011, the IPs and EPZs have created jobs for 1.76 million laborers. In the 2006-2010, the zones earned an export turnover worth $63 billion, and contributed $5.9 billion to the state budget.

Besides the IPs and EPZs, the Ministry of Planning and Investment said there are also 18 coastal economic zones, and 28 border gate economic zones around the country.

However, the ministry admitted that these economic zones have modest contribution to the localities' economy, while also demanded that the country not establish more zones.

The ministry pointed out six shortcomings of the IPs and EPZs, one of which is the fact that some zones have been established in localities that are not very attractive to investors.

Many localities are still seeking to increase the occupancy rate, while neglecting the need for high tech or environmental protection, the ministry stated.

Thus, high technology has little presence in many IPs across the country , while many EZPs have been found to contaminate the surrounding environment, it concluded.

The Ministry of Planning and Investment also said there are only 24 registered housing projects for workers at the IPs around the country, which are able to provide accommodation for only 125,000 laborers.

Laborer wage remains an unsettled issue since workers still find it hard to make ends meet with the current pay.

Also speaking at the meeting, many delegates have pointed out other drawbacks of the IPs and EPZs.

For instance, Vu Van Thai, an official from the Ministry of Home Affairs, said some provinces have been found to have 2-3 management bodies for the IPs, with some having none while it is stipulated that each locality has one.

Le Hoang Quan, chairman of the Ho Chi Minh City People’s Committee, suggested that social infrastructure be developed commensurate with the IPs infrastructure.

The plans to build houses for workers and other welfare construction projects should also be put into the IP construction planning, Quan said, adding investors developing housing projects for laborers should enjoy incentives from the government.

For her part, Nguyen Thi Nguyet Huong, chairwomen of the Vietnam Investment and Development Group, called on cutting red tape to attract investors.

The tax incentive policies should be continued, Huong added.

Conoco sells Vietnam units for $1.29 billion

Oil company ConocoPhillips said it would sell its Vietnam operations to Perenco for US$1.29 billion in the latest divestment of assets that has yielded the company more than $20 billion.

Under the agreements signed with a unit of privately owned Perenco, Conoco would sell its three wholly owned subsidiaries that own stakes in two offshore blocks and 16.3 percent interest in the Nam Con Son Pipeline.

The deal is expected to close in the first half of 2012.

Conoco will split into two companies later this year, with one arm focused oil and gas production and the other on refining and market operations.

Conoco had targeted asset sales of $15 billion to $20 billion by the end of 2012.

With the Vietnam operations sale and including the divestment of its stake in Russia's LUKOIL for $9.5 billion, Conoco has now exceeded it target, with proceeds from the sales now at $20.2 billion.

Shares of Conoco slipped 1 percent in premarket trading to $72.73.