HCM City inflation remains stable in January

The consumer price index (CPI) in Ho Chi Minh City for January logged in at a 0.4% increase, its lowest level in five years, on the back of a lackluster demand in the run up to the Lunar New Year (Tet) Festival.

Official statistics also report that large supermarkets, such as Big C and Coop mart, are reporting only modest increases in merchandise sales, with minimal increases in sales of non-food goods and home appliances.

Food prices saw only a modest increase of 0.16% month on month, while the prices of export rice remained stable thanks to market stabilization measures.

Nearly 7,800 stalls, which focused on providing basic necessities, such as eggs, cooking oil, sugar, and processed meat, were established throughout the city to ensure an adequate supply for Tet.

A recent adjustment in the retail price of oil and gas drove up the price of transport services and a number of Tet goods.

Other items in the CPI goods basket that saw modest rises include transport, housing, construction material, garments and textiles, footwear, and services.

Healthcare services, the only item in the CPI basket that declined 0.12% when compared to the previous month.

Meanwhile, the prices of domestic gold dropped by 1.37% and the exchange rate of US dollar (US$) and Vietnam dong (VND) by 0.04%, from a month earlier.

Vietnam-Singapore trade volume at record highs

Two-way trade turnover between Vietnam and Singapore jumped US$13.11 billion in 2013, up 10.7% compared to 2012, according to the Singapore Statistics Department.

The value of Vietnam’s exports to Singapore spiked 36.3% to US$3 billion in 2013 while its Singaporean imports rose moderately by 5.1% to US$10.74 billion.

The country mainly exports to Singapore machinery, equipment and spare part (US$477 million), telephones and components (US$468 million), and crude oil (US$295 million)

Vietnam imports petroleum and related products valued atUS$1.78 billion. Its imports included machinery, equipment and toolsworthUS$790 million and paper and industrial products valued atUS$580.2 million.

The Vietnam embassy trade office in Singapore projects that two-way trade turnover and the export turnover to Singapore will continue to grow in 2014 in line with recent increases of US$34.6% and 36.3% in 2012 and 2013 respectively.

Vietnam’s Australian cattle exports hit record 

Vietnam’s Australian cattle exports hit a record high of 68,000 heads of cattle in 2013, a sharp increase of 3,500 from a year earlier.

According to the Darwin-based South East Asian Livestock Services (SEAL), Vietnam has become the second largest importer of Australia’s live cattle, only after Indonesia.

The company credited the ranking to the country’s capacity to meet requirements of the Exporter Supply Chain Assurance System (ESCAS).

Vietnam is predicted to be a promising market for Australia’s live cattle export, it said.

Australia’s Northern Territory hopes to soon sell live buffaloes to Vietnam, which will be able to import up to 60,000 heads a year.

Plastic industry targets higher export growth in 2014

The Vietnam Plastic Association (VPA) has reported 2013’s plastic exports earned US$1.808 billion, a 13.3% annual improvement.

VPA Chairman Ho Duc Lam highlighted the efforts of local plastic producers in pushing plastic input material exports up 57% to a 2013 revenue exceeding US$407 million.

Vietnam’s plastics industry is expecting to grow an additional 13.5–16.5% during 2014.

Lam said producing the input material for plastics involves advanced technology, generating higher-value exports than common plastic products.

The VPA Chairman noted Vietnam’s plastics are used in agriculture, industry, telecommunications, and construction all over the world.

Plastics turnover was estimated at US$2.2 billion in 2013, 13% higher than a year earlier.

Lam said six of the 20 plastic categories exported to foreign markets generated more than US$100 million in turnover. Plastic bags, film, and garbage bags earned over US$150 million.

Plastic bag exports were up 27%, an improvement almost equalled by plastic interior decorations and furnishings’ 26.4% rise.

Out of the 151 countries and territories importing Vietnam's plastics, Japan, the US, Germany, and the European Union were standout customers.

Japan imports the most Vietnamese plastic products, with purchases totalling US$401 million and accounting for 19.9% of Vietnam's total plastics exports.

China has replaced the US as the second largest consumer of Vietnam's plastic exports, buying US$279 million or 14% of total plastics exports in 2013.

Lam urged local plastic producers and exporters to deepen their understanding of domestic and international markets, expand where possible and prudent, and guarantee the quality levels that lead to sustainable export growth.

Long-term strategy is essential to negotiating trade barriers and securing success abroad, he noted.

The VPA leader identified India and Brazil as two promising emerging markets. Vietnamese plastic exporters should capitalise on their advantages over regional Southeast Asian rivals in Cambodia, Thailand, Malaysia, and Singapore.

Vietnam, Cambodia forge cooperation in training

Cooperation in personnel training dominated a meeting between leaders of the National Bank of Cambodia (NBC) and the Banking University of Ho Chi Minh City (BUH) on January 21.

The Cambodian delegation is on a working visit to Vietnam at the invitation of the Governor of the State Bank of Vietnam Nguyen Van Binh.

At the HCM City meeting, Nguyen Anh Tu, Deputy Director of the BUH’s International Cooperation Department, expressed his hope that the visit will contribute to boosting cooperation in training and research between the university and the NBC’s units, thus helping realise cooperation agreements reached by the two banks’ governors.

Since the signing of a memorandum of understanding on training cooperation between the BUH and the NBC’s Training Centre in March 2012, the Vietnamese university has launched four courses for Cambodian banking officials in the country.

Another programme on training finance-banking graduates is scheduled to be implemented for NBC staff in the near future, he said.

Earlier on January 17, NBC Governor Chea Chanto and Binh devoted a lot of time during their talks in Hanoi to discuss cooperation in human resource development.

The two sides exchanged experience in supervising the banking system, managing the monetary policy and preventing dollarisation.

Vinataba targets 36,000 tonnes of sweets in 2014

The Vietnam National Tobacco Corporation (Vinataba) plans to produce 36,000 tonnes of confectionery this year in a bid to increase its market share in the domestic market.

Vinataba General Director Tran Son Chau made the statement at a conference on implementing the corporation’s 2014 production and business tasks in Hanoi on January 21.

At the event, Chau asserted that Vinataba targets more than US$56.4 million in profit, up 9 percent from 2013, and spares no effort to contribute US$390 million to the national budget this year, a year-on-year increase of 1.9 percent.

Together with holding its market share steady and shifting towards high-grade products, the business will continue to promote the brand names of its confectionery products and other foodstuff, he added.

Mentioning the confectionery sector’s restructuring, Minister of Industry and Trade Vu Huy Hoang required Vinataba to reduce competition between its subsidiaries and avoid the dispersion of resources, with the view to raising the member companies’ effectiveness.

The corporation needs to invest in new production equipment and technologies to create quality products with higher added value.

In 2013, the three Vinataba subsidiaries of Huu Nghi, Hai Ha and Hai Ha-Kotobuki saw a growth rate of three, six and eight percent respectively, providing over 32,600 tonnes of confectionery for the domestic market and shipping more than 3,000 tonnes abroad.

Japan helps HCM City develop high-tech industry

The HCM City Investment and Trade Promotion Centre (ITPC) agreed to partner with Mitsui Vietnam Limited Company to develop high-tech industries and information technology at a ceremony on January 21.

Addressing the function, Vice Chairman of the municipal People’s Committee Le Manh Ha expressed his hope that the partnership will help increase Mitsui as well as Japanese investment in the city.

According to the official, Japan currently ranks third in terms of foreign investment to the city, despite of increasing capital in recent years. HCM City is taking measures to attract more investors, including those from Japan, such as developing industrial zones, exporting and processing zones and creating favourable conditions for foreign investors.

By the end of 2013, the city attracted nearly US$33 billion in foreign direct investment, US$11 billion of which was in the industrial sector.

Japan invested a total of US$3 billion in the city, with US$1.3 billion going to the industrial sector.

Economic prospects linked to macroeconomic policies

Central Institute for Economic Management (CIEM) and the World Bank (WB) co-hosted a January 21 seminar in Hanoi to discuss global economic prospects in 2014 and approaches to high-income nations’ normalising economic policies.

Addressing the seminar, CIEM Deputy Director Vo Tri Thanh said 2014–2015 economic orientations should reflect macroeconomic stability, economic restructuring, and climate change amelioration.

International experts predict the global economy will gradually recover during 2014 despite slower growth in the US and European economies.

WB leading economist Andrew Burns said Asia-Pacific regional economic growth will proceed at a rate of 7.2% in 2014 before slipping back to 7.1% in 2015 and 2016.

Other economists noted economic prospects depend on both internal and external risks. If international sources of finance are suddenly tightened, regional economies will suffer repercussions.

Mr Burns said economic recovery in high-income nations will promote economic growth in developing nations. But reforms are still needed to increase labour productivity.

2013 trade turnover surpasses US$264 billion

Vietnam Customs has reported the nation’s 2013 trade turnover totalled an estimated US$264.26 billion, a 15.7% rise year-on-year.

Export earnings contributed US$132.135 billion of the figure, up 15.4%, while import value increased 16.1% to reach US$132.125 billion.

The foreign direct investment (FDI) sector earned US$80.91 billion from exports (up 26.3%), and spent US$74.43 billion on imports (up 24.2%).

State-owned enterprises’ US$108.92 billion trade turnover was 4.4% higher than 2012’s figure, comprised of US$51.22 billion in exports and US$57.7 billion in imports.

Vietnam’s key exports included telephones and spare parts (US$21.24 billion, up 67.1%); computers, electronics and spare parts (US$10.6 billion, up 35.3%); and garments and textiles (US$17.95 billion, up 18.9%).

Other impressive export earnings also came from footwear; machines, equipment and accessories; seafood; timber products; rubber; rice; cashew nuts; and coal.

Traditional markets in the US, European Union, Japan, the Republic of Korea, and China remained the largest importers of Vietnamese goods. Promising signs also emerged in India, the United Arab Emirates, Malaysia, and Hong Kong.

Vietnam, RoK aim for US$70 billion in trade

Vietnam and the RoK have agreed to accelerate free trade agreement (FTA) negotiations in the hopes of an early 2014 signing and US$70 billion in two-way trade by 2020.

Deputy Prime Minister Nguyen Xuan Phuc formalised the goal during January 21 talks with the Republic of Korea (RoK) Deputy Prime Minister and Minister of Strategy and Finance Hyun Oh-Seok.

The two leaders discussed specific measures to strengthen the Vietnam-RoK relationship and expressed their delight at the rapid and effective development of friendship and cooperation since the official establishment of their strategic partnership in 2009.

They agreed to promote reciprocal delegation exchanges to deepen mutual understanding and trust; bolster strategic dialogues on diplomacy, defence, and security; and boost investment and trade links in a balanced manner.

Hyun Oh-seok said the RoK will consider facilitating Vietnamese exports to the Korean market and step up cooperation with Vietnam in advanced technology and support industries.

He noted the RoK considers Vietnam an important regional partner and a lodestone of its ODA provision policy.

The RoK will continue offering Vietnam ODA funding for green growth, infrastructure development, and human resource training.

Deputy Phuc outlined how the Vietnamese Government used the Korean Government’s US$100 million preferential to improve its e-government capacity.

He also asked the Korean Government to support key projects and cooperation programmes such as a Vietnam-Korea Institute of Science and Technology (VKIST), a national counter-terrorism training centre, and the third phase of a project upgrading a national drug control coordination agency.

The two sides agreed to facilitate people-to-people exchanges in the interests of both citizenries’ legitimate rights.

Deputy PM Phuc applauded the two labour ministries for signing a Memorandum of Understanding (MoU) on labour cooperation and suggested the RoK provide quotas easing Vietnamese guest worker access to employment in the RoK.

Phuc invited his Korean interlocutor to visit Vietnam and his invitation was accepted with great pleasure.

Big deals still reached despite real estate downturn

A number of well-heeled developers have cashed in on the downturn of the real estate market last year to acquire properties. Report by the Vietnam Investment Review.

The Vietnam Infrastructure and Property Development Group Corporation (VIPD) struck the biggest deal last year, spending 470 million USD on the acquisition of Vincom Centre A from the Vingroup. Vinaconex - Hoang Thanh reached a deal to sell the ParkCity residential project in Hanoi’s Ha Dong district to Malaysia-based Perdanna.

Many other domestic developers have taken over projects, such as the FLC Group which spent nearly 300 billion VND (14 million USD) for acquisition of Alaska Land project and the Muong Thanh Group’s Lai Chau Construction Company No.1 which bought the VP6 Linh Dam project from Coma 18.

Several deals involved investors from Singapore and the Republic of Korea.

Lotte Hotels & Resorts Group purchased 70 percent of the Legend Hotel in Ho Chi Minh City from VinaCapital’s Vietnam Opportunity Fund for 62.5 million USD.

Maple Tree successfully closed the purchase of the CentrePoint office building, located in Ho Chi Minh City for 54 million USD.

Republic of Korea’s CJ bought the Gemadept office building in Ho Chi Minh City for more than 45.5 million USD.

Experts have predicted that many other transactions could well have taken place without public fanfare. These transactions immensely influenced the real estate market, and have prompted a shake-out of less financially capable investors.

Foreign investors, especially those from Japan, the Republic of Korea, Singapore and China, are searching to purchase offices for rent and shopping centres, while domestic investors are concentrating mainly on buying and selling accommodation.

The financial portal Stoxplus predicted the real estate market would continue to see more dynamic transactions, with foreign investors remaining interested in the retail sector. Projects with good locations, transparent legal situations and competitive prices will remain top targets.

According to CBRE associate director of investment Adam Bury, whilst the increase in investment enquiries and activities may sound like a silver lining to a particularly grey cloud for some active within the market, it is worth remembering that investors were also looking to Vietnam for opportunistic returns.

“To generate such opportunistic returns, of over 25 percent IRR for a project, the price at which an investor enters a project is key,” Bury asserted.

In addition to valuations, there are three other major hurdles which domestic groups must overcome if they are to secure foreign investment. Those projects must have a proven track record, prudent and efficient structuring and transparency to incoming groups.-

More efforts needed to make progress in forestry restructuring

Despite many efforts in restructuring the forestry sector, management, efficiency and quality control have still been poor, requiring more drastic measures to generate practical progress.

In 2013, Vietnam earned an estimated 5.4 billion USD from exporting wood and wooden products, up 15.24 percent over the previous year and exceeding the sector’s set target by 25.1 percent.

The surge was seen in major markets including the Republic of Korea (with 45.4 percent), China (30.7 percent), Japan (16.1 percent), and the US (8.6 percent).

However, except for wood, export of other forestry products reduced sharply to 227 million USD, equivalent to only 75.7 percent of the target.

Meanwhile, the total wood imports were 1.567 billion USD, a 14.6 percent rise year on year.

By the end of 2013, Vietnam had only 144,000 hectares of forest, including 50,800 hectares of natural areas, with Forest Stewardship Council (FSC) management certificates.

During the whole year, 9,528 hectares of forest in 37 provinces was used for other purposes such as mining, hydropower, irrigation, road construction, tourism, industrial parks, agriculture and national security and defence.

According to Nguyen Ba Ngai, Deputy Head of the Vietnam Administration of Forestry, there is a long way for the sector to go to fulfil all of its targets.

He said that currently the country has fulfilled only 88 percent of its forestation goals and the results of some key areas such as the Central Highlands and Northwestern regions have been particularly low at 56 percent and 24 percent of the set targets.

Meanwhile, forest quality has been poor with low economic efficiency and there has been an increase in the deforestation of some preservation areas, he added.

He said practical progress has not been seen in forestry restructuring and proposed that it is crucial to enhance forest’ quality and productivity by cultivating high-quality plant varieties in at least 60 percent of total areas.

Meanwhile, Deputy Minister of Agriculture and Rural Development Ha Cong Tuan said many drastic measures will be applied this year to take forwards reform of the sector.

The ministry will continue reviewing 16.245 million hectares of forest and forestry areas to apply stricter management and make timely adjustments in planning, he said.

At the same time, more forests will be assigned to organisations, communities, families and individuals to encourage them engage in the forestry management and investment and receive more benefits from local forest.

The ministry will also implement better policies for forest environmental service payment, he added.

The Prime Minister has instructed that the exploitation of wood in natural forests will be ceased in 2014, while reforms will be stepped up in the management of forestry products to ensure their origins are legal. Meanwhile, comprehensive measures will be deployed to boost wood processing, generating high-value products.-

Price, quality of rice exports to Africa scrutinised

Africa is considered as a promising market for Vietnamese rice. Increasing the export of high-quality rice to Africa will help Vietnam raise the value of the sale of the grain to this market. Report by the Vietnam Economic News.

According to the Vietnam Food Association (VFA), in 2013, Vietnam exported about 6.6 million tonnes of rice, and Africa was Vietnam's second largest importer of the grain, behind China (exports to Africa accounted for nearly 30 percent of the total export value of Vietnamese rice in 2013). In September, exports to Africa for the first time accounted for nearly 70 percent of the total export volume of Vietnamese rice, even higher than those to China. Currently, Vietnam exports rice to 30 out of the 55 African countries. Major African countries importing Vietnamese rice include Ivory Coast, Ghana, Senegal, Angola and Cameroon.

Thanks to competitive prices and high quality, Vietnamese rice has won the trust of a growing number of consumers from African countries. The price of Vietnamese fragrant rice exports to Africa is just half of that of Thai grain of the same kingd while they are equal in quality. However, Vietnamese businesses export rice to Africa mostly via intermediaries and this has pushed up prices, creating risks for domestic businesses.

These difficulties have been, to some extent, reduced through the signing of a number of memoranda of understanding (MOUs) between Vietnam and some foreign countries in the recent period. In late March, Vietnam signed an MOU on trade in rice with Guinea, under which Vietnam would export 300,000 tonnes of the grain annually in the period from April 1, 2013 to December 31, 2015. In early August 2013, Vietnam signed a similar document with Comoros, under which Vietnam would export 60,000 tonnes of rice to Comoros annually in the period from August 2013 to the end of December 2015. Besides, Vietnam has also signed an MOU with the Republic of Sierra Leone. These MOUs allow Vietnamese rice exporters to carry out transactions directly with importers, minimising payments through intermediaries.

Africa currently is the world’s largest rice consumer with annual demand for over 9 million tonnes, of which 6.4-6.5 million tonnes are imported. Vietnamese businesses can seek opportunities to boost rice exports to this potential market.

Africa is a new emerging market full of potential. To penetrate this market, in the opinion of Hoang Duc Nhuan, Director of the Africa Division of the African, West and South Asian Markets Department under the Ministry of Industry and Trade, along with exporting medium-quality rice to Africa, domestic businesses should promote the export of higher quality rice such as fragrant and parboiled rice. In 2013, sometimes the export volume of some kinds of rice decreased while the export volume of fragrant rice to Africa considerably increased. In the first eight months of 2013, Vietnam exported to Africa 600,000 tonnes of fragrant rice, nearly half of the total volume of rice exports to this market. Vietnamese rice currently has to compete with low-priced rice from India and Thailand and in this context, promoting high-quality rice exports is considered as the key to building a firm position for Vietnamese rice in the African market.

Nhuan added that Nigeria was the world’s largest rice importer with an annual demand for about 2 million tonnes, mostly parboiled rice. However, due to high production costs, the amount of rice Vietnam exports to Africa remains low. “Large, financially capable businesses should invest in technology to produce more rice of this kind for export to the Nigerian market,” he said.

To help businesses increase rice exports to Africa, in 2014, the Ministry of Industry and Trade will send trade promotion teams to Angola and Ivory Coast, which are large importers of Vietnamese rice, to seek possibilities for signing MOUs so that domestic businesses can export directly to these two markets. The ministry will also invite African businesses to come to Vietnam to seek partners.

Through its departments and overseas Vietnamese trade offices, the ministry will help domestic businesses verify information about African partners and provide them with consultancy so that they can avoid risks when exporting to Africa. It will also create favorable conditions for domestic businesses to open representative offices and bonded warehouses in African countries so that they can export rice directly to Africa.-

Mekong Delta’s largest trade centre makes long-awaited debut

Sense City Can Tho, the largest trade centre in the Mekong Delta region, officially opened in Can Tho city on January 20.

The four-storey shopping mall sits on an area of over 22,000 square metres, with total investment of more than 200 billion VND (9.4 million USD).

It is a complex of fashion, cosmetic and household goods shops and a 4000-square metre entertainment zone, as well as a multi-regional food court.

A cinema complex screening 2D and 3D movies belonging to the Megastar Media Company has also been launched for the first time in the region at the new centre.

Shoppers coming to Sense City Can Tho can enjoy a discount of up to 50 percent on various products such as fashion, cosmetics, jewellery and accessories.

The trading centre, run by Saigon Co.op Distribution Co., Ltd, is expected to cater the demand for shopping and entertainment of families, youth and visitors in Can Tho city and the Mekong Delta region at large.-

Mekong Delta region targets 800,000 ha for aquaculture

In 2014, Mekong Delta provinces will enlarge their aquaculture zone to 800,000 ha, up 5,000 ha compared to last year’s size to raise the region’s aquatic products to 2.4 million tonnes, an increase of 400,000 tonnes against last year’s figure.

To reach the goal, the provinces will focus on expanding prawn, freshwater, shrimp and tra fish hatching areas to 690,000 ha as well as promoting the raising of brackish aquarium fish species.

The region plans to upgrade its irrigation system for aquaculture activities, especially the breeding of prawn, intensify the inspection of wastewater treatment in aquaculture areas, and disseminate breeding techniques to local aquaculturists.

Meanwhile, the provinces will deploy food safety management systems and check the origin of aquatic products as required by the world market. Trade promotion and demand forecasting will be boosted while aquaculture certificates will be granted for the region’s farming areas.

They will help their aquaculturists better access loans to improve their aquaculture activities and facilitate processing businesses’ purchase of aquatic products. These localities strive to put an area of 5,500-6,000 ha to tra fish farming, which is expected to raise the output of tra fish to 1.2 million tonnes.

Last year, the region reached 2.2 million tonnes of aquaculture products, equivalent to 92.5 percent of the total output of southern provinces, including 310,000 tonnes of prawn and over 1 million tonnes of tra fish.    

Competition to force Vietnam Airlines to cut fares

Vietnam Airlines, which has announced a pre-tax profit of 533 billion VND (25.3 million USD) for 2013, said it would cut fares since it is faced with tough competition.

In a press release the carrier said despite the difficult global economic situation its profits exceeded the target by 34 percent.

Its revenues were 72.6 trillion VND (3.4 billion USD).

The airline transported 15 million passengers at a flight load factor of 79.5 percent, its highest ever.

Among the difficulties it faced last year were lower demand for air travel and a depreciation of certain currencies like the Japanese yen and Australian dollar against the US dollar, affecting revenues.

In an online conference organised by the Ministry of Transport on January 9, Pham Viet Thanh, Chairman of Vietnam Airlines, said the carrier suffered negative impact last year as Middle Eastern airlines began to fly on many routes, exerting great pressure on European and Asian airlines. As a result, some European airlines have suspended services to Vietnam.

In the domestic market, low-cost air carriers have expanded their services and fleets, making the competition more intense, Thanh said.

It would seek to cut costs to compete with local and international airlines, Thanh said.

The airline is also set to start the equitisation process this year and streamline its workforce to cut costs while hoping that the global economic situation will improve in 2014, helping boost travel demand.

The International Air Transport Association (IATA) has forecast the global aviation sector to continue to grow in the next five years.-

Kien Giang gains 3 bln USD in FDI capital

The southern province of Tien Giang is now home to 36 foreign direct investment (FDI) projects with a total registered capital of nearly three billion USD.

They include two projects licensed in 2013 with a total capital of 76.3 million USD. The amount of FDI capital disbursed during the year stood at 17 million USD, equal to 74 percent of the disbursement in 2012.

Meanwhile, the province licensed 40 investment projects by domestic businesses with a registered capital of over 4.2 trillion VND (197 million USD).

Kien Giang emerged as an economic spotlight on the Mekong Delta region in 2013.

The province’s economic growth rate struck 9.4 percent by the end of 2013, ranked fourth among the 13 provinces of the Mekong Delta region.

Rice production and shrimp farming were the main driving forces behind the development of the province’s socio–economy.

The 2013 rice output reached nearly 4.5 million tonnes, up 4.3 percent from 2012.-

Chan May-Lang Co economic zone strives for 1.5 trln investment

The Chan May-Lang Co economic zone in the central province of Thua Thien-Hue has set a target of attracting over 1.5 trillion VND (70.5 million USD) this year.

To realise this, the province has invested more than 1.9 trillion VND in infrastructure in transport, electricity, water and telecommunications in order to lure more investors to the area.

It will now focus on untangling knots for businesses while creating favourable conditions for investors and businesses to implement projects.

A total of 76 administrative procedures will be applied in the economic zone, covering areas such as employment, construction, environment, planning and land management.

The Chan May-Lang Co economic zone has, so far, attracted 32 projects with a total registered capital of more than 35.4 trillion VND, including 10 foreign direct investment projects worth 21 trillion VND.

Most worthy of note is the 875 million USD resort complex of Laguna Lang Co invested by the Banyan Tree Group of Singapore.

The first phase of the 280 ha project, which houses 427 rooms and a 18-hole golf course, has been put into service, helping generate jobs for about 600 people.

The economic zone’s management board has reclaimed five projects with a combined capital of more than 4.5 trillion VND because of their low progress. Another four projects are under consideration.

Bank rates lead to swaps

Some banks have complained that clients take loans and chase higher interest accounts at other banks.

As borrowing rates have reduced sharply, dropping as low as 6-7 per cent for good enterprises and enterprises benefiting from state preferential treatment, firms have made the most of their cheap loans to exploit short and long-term deposit rates of around 7 and 10 per cent respectively.

According to Nguyen Duc Vinh, general director of VPBank, due to the pressure to increase credit growth and reduce interest rates, many banks lowered their lending rates to 6 per cent. However, he said, some enterprises had just used such low-cost loans to deposit the cash at other banks to benefit from the 7 per cent interest, rather than investing in economic growth.

Another bank executive said “Enterprises that can take such low interest loans are often carefully scrutinised by banks and would have to show evidence of the projects they required the loans for.”

However, he admitted it could be possible. “Banks are generally only capable of tracing 10 per cent of their capital after releasing it to their clients.”

Economist Bui Kien Thanh said such speculative instances had been reported in 2009-2010 when the government launched the bailout credit package at a 4 per cent rate. “At that time, many enterprises that had access to low cost capital lent it at higher rates to other businesses or deposited the loans at banks to gain from the much higher interest rates,” Thanh said.

“To ensure cheap capital flows into production, we have to manage cash flow. Banks ought to keep track of where their capital is being invested, otherwise nobody will know whether low-cost capital is actually being used for something useful.”

Thanh also complained that a reason for the problem was that the loans were based only on collateral. “Banks only need collateral to grant loans without requiring enterprises to show invoices, business contracts or feasible projects.”

Japan’s Okasan cuts tech deal with Vietnamese brokerage

Tokyo-based Okasan Information Systems has signed a contract with Mekong Housing Bank Securities (MHBS) to provide the Vietnamese brokerage with a software and management system.

The system is called VGaia, a local version of the Gaia used in a number of Asian markets including Japan, Hong Kong and Shanghai. Vietnamese information technology firm Goline was responsible for adapting the system.

MHBS and Okasan did not disclose the value of the contract but the latter did say they want to build a long-term partnership to jointly develop financial services.

Okasan Information Systems is in charge of system development for the Okasan Securities Group, its parent corporation.

Dragon Capital fund enters solar energy market

Vietnam-based investment manager Dragon Capital’s clean development fund MBCDF has completed its fourth investment, a solar photovoltaic project in Thailand.

MBCDF, or Mekong Brahmaputra Clean Development Fund, has taken a stake in Symbior Elements Holding, directing the investment into the P.P. Solar (Nongno) plant in Khon Kaen, which generates up to 6.6 megawatts of electricity per day, Dragon Capital announced on January 17.

MBCDF and Symbior Solar, as well as other investors, will co-invest in six separate solar PV projects to be developed in Thailand from 2014-2015 with a total capacity of 30MW, added the fund manager.

Renewable energy currently accounts for 8 per cent of Thailand’s power capacity but that is set to grow to around 25 per cent by 2021. This will triple the country’s solar power capacity to 3,000MW and an estimated 20 per cent of renewables will be from solar power. There are currently 500MW of solar PV utilities installed in Thailand.

MBCDF director Joseph Hoess said, “This is an important milestone for MBCDF as it completes our set of investments in Cambodia, Laos, Thailand and Vietnam and it further establishes the fund’s expertise in clean technologies.”

MBCDF is a closed end limited partnership registered in Guernsey, the Channel Islands. It focuses on development using clean technology in the four Mekong countries and the Brahmaputra River region – Bangladesh, Nepal, Bhutan, and Sri Lanka.

Truong Hai face Hyundai Motor withdrawal

South Korea’s Hyundai Motor Company has threatened to end a technology transfer agreement signed in 2011 for Truong Hai Auto Corporation to manufacture engines, because of the slow pace of construction of the Vietnamese firm’s plant.

The proposal was sent to the largest Vietnamese car-maker Truong Hai and Quang Nam People’s Committee, where the Chu Lai-Truong Hai engine manufacturing project is situated, early this month.

“After negotiations, representatives of Hyundai said the effective time of the technology transfer contract had expired and the delay of this project would affect their production and sales plans for the ASEAN market. Representatives from Hyundai had proposed to end the contract and informed that they would ask their leaders to consider adjusting the technology transfer plans for 2016,” Quang Nam People’s Committee noted in a report.

The decision appears to underline Hyundai’s opposition to continued co-operation based on Truong Hai persisting in its manufacture of low-standard Euro 2 and 3 engines.

This came just a month after Truong Hai obtained the government’s permission to extend the timeline for the manufacture of Euro 2 and Euro 3-standard engines, as it failed to keep pace with its own roadmap for higher-environmental friendly Euro 4 engines.

In an announcement sent to the company in late November, Deputy Prime Minister Hoang Trung Hai stated the prime minister had agreed in-principle to allow the Chu Lai-Truong Hai engine manufacturing factory to manufacture and sell 100,000 diesel automotive engines by the end of 2018. But if Hyundai ends the contract, Truong Hai will lack the vital technology to complete the contract.

Chu Lai-Truong Hai was the first automotive engine manufacturing project in Vietnam. The project, situated in Chu Lai Economic Zone, Quang Nam province cost some $182 million.

According to Truong Hai, it signed a technology transfer contract with South Korea’s Hyundai Motor Company to produce about 20,000 Euro 2 and 3 emission standard engines a year.

Construction of the factory began in 2011, but it has been delayed while the local car-maker waited for permission from the government to extend the deadline for the sale of Euro 2 and 3 type engines and has still yet to be finished.

Fecon wins contract for Nghi Son oil refinery

Fecon has won contract to become piling supplier to landmark Nghi Son complex

In early 2014, Fecon Foundation Engineering and Underground Construction JSC has received an approval notification letter from Construction Corporation 1 to supply large volumes of pre-stressed high strength concrete (PHC) piles for the landmark Nghi Son refinery and petrochemical plant project at Nghi Son Economic Zone in north-central Thanh Hoa province. The contract, valued at more than VND206 billion ($9.8 million), is expected to raise the company’s annual profit.

Fecon has continuously been the trusted choice for many investors. It won contracts for PHC pile construction and provision to five large-scale foreign investment projects including the $20 billion Formosa steel factory in Ha Tinh province, the Samsung Electronics Vietnam Thai Nguyen (SEVT) hi-tech complex, the Samsung Electro-Mechanics facility, the LG electronics factory in Haiphong.

Limousine service opens in Hanoi

Hanoi-based Pacific Trade Services and Tourism JSC just launched a luxury car service branded as Luxtrans with its office located in the five-star JW Marriott Hotel Hanoi.

Luxtrans worked with DCar, a leading company in ASEAN focused on upgrading cars to limousine standards, to renovate 10 of the latest generation Ford Transit vehicles with top-of-the-line furnishings to offer passengers an airy, comfortable space.

The cars were fitted with business-class seats as well as an LCD TV, a DVD player, hi-fi music system, refrigerator, wine cabinet, 3G, and an internal telephone line. They also have an electric partition allowing passengers to separate themselves from the driver when necessary.

“We have a team of professional drivers carefully selected and trained in both driving skills and foreign languages who are totally committed to providing the excellent service we guarantee for each trip. Whether for business or holiday, we are in a position to satisfy every luxury transport need,” said Luxtrans director Nguyen Hoang Anh.

Luxtrans aims to increase its car fleet to 50 units of diverse models and types by 2015.

Cement firms stuck

There are likely to be few signs of improvements in the cement industry due to the government’s policy of cutting public investment and  the woeful real estate market.

Vicem general director Tran Viet Thang said, “We don’t expect strong growth and have forecast profits similar to last year.”

State-run Vicem is Vietnam’s largest cement maker.

In 2014 Vicem expects to reap VND500 billion ($23 million) in profits. Last year, Vicem only completed 90 per cent of its target. Its pre-tax profit dropped to VND528 billion ($25 million) in comparison with VND661 billion ($31 million) in 2012.

Besides the narrowed output market, the cement industry suffered from high interest rates and oversupply that dragged down profitability.

“The property market is stuck, new developments have already proved hard to sell and interest rates aren’t helping,” said Thang.

General director of Vicem But Son, Duong Dinh Hoi, said his company had invested VND730 billion ($34.7 million) in its production site in 2011. At that time, the company paid VND3,500 billion ($167 million) for the investment but it also suffered a loss of VND100 billion ($4.7 million) due to interest rates.

Vietnam is predicted to experience an oversupply of 8-12 million tonnes of cement annually due to far too many cement plants being put into operation. At present, Vietnam has 106 cement factories with total annual output capacity of 63 million tonnes.

This will worsen when the Vissai Cement Group’s new Vissai Ha Nam plant comes into operation in 2014, bringing the group’s production to 7.8 million tonnes per year.

In 2013, even if Vissai put consistent efforts into the export market and won major real estate projects, the group’s consumption is forecast to increase by only 5 per cent.

The Ministry of Construction estimated cement consumption would reach 62-63 million tonnes in 2014, a mere 1.5-3 per cent increase in comparison with 2013. The sector will maintain exports of 14 million tonnes.

Huawei announces its partnership with FPT Trading

Today, Huawei, the world’s third largest handset provider, announced that the company has signed a partnership agreement with FPT Trading JSC (FPT Trading), part of FPT Corp, Vietnam’s leading group in information technology and telecommunication.

According to the agreement, FPT Trading will be the exclusive distributor for Huawei’s smartphones and also distributer of Huawei’s tablet products in the local market. This partnership marks an important milestone in Huawei’s strategic plan for expansion in Vietnam.

To start off this partnership term, in early 2014, through FPT distribution channels, Huawei will introduce its three new products in Vietnam, including smartphone G610, smartphone Y320 and mid-range tablet MediaPad 7 Youth. These three items are all within middle & low range of products.

In 2013, Huawei was very active in local market with the launching of two smartphone, Ascend P6, the world’s slimmest smart phone and Ascend G700, a leading product in mid-range category.

To continue the success that Huawei has accomplished in 2013, the company believed that the partnership with FPT will build a stable platform for Huawei to develop more projects in 2014.

Allen Wang, director of the Consumption Commerce of Huawei Vietnam said: “While the handset and tablet market is growing and competing strongly with one another, by pairing up with FPT, a leading group in information technology and telecommunication in Vietnam, Huawei will be able to make steady & solid footsteps in order to possess a stable share in this great potential market. We highly valuate this partnership and hope that it will bring new opportunities for both parties in Vietnam mobile phone market.”

Cho Ray Hospital’s offspring opens in Phnom Penh

Ho Chi Minh City’s renowned Cho Ray Hospital has inaugurated its Cambodia offshoot in a joint venture capitalised up to $42.3 million.

Cambodian Prime Minister Hun Sen and his visiting Vietnamese counterpart Nguyen Tan Dung, together with other VIPs, cut the ribbon last week for Cho Ray Phnom Penh Hospital, the two countries’ first investment partnership in healthcare.

The new general hospital sits on a 5-hectare plot in Meanchey district’s Niroth commune, over 10 kilometres from Phnom Penh downtown. It operates as a sister facility to Cho Ray, a leading hospital in Vietnam today and southern Vietnam’s No.1 hospital before 1975.

Cho Ray Phnom Penh, a 70-30 joint venture between Vietnamese company Saigon Medical Investment and Cambodian multi-business group Sokimex, has 200 beds now and will increase the number to 500 in the second stage. It also has the paediatrics and obstetrics departments – ones Cho Ray in Ho Chi Minh City does not have.

The new facility, managed by the venture, is intended to reduce travel expenses for thousands of patients who every year flock to Vietnam for medical treatment. It now employs 75 Cambodian doctors and 20 Vietnamese doctors.

Cho Ray Hospital will continue to provide training programmes for Cambodian doctors, nurses and other medical workers to improve the quality of care and treatment at the sister facility.

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