ETF restructuring delivers mixed results

The benchmark indices went in opposite directions on both national exchanges last week, as the market witnessed an improved liquidity after some exchange-traded funds (ETFs) completed restructuring of their investment lists.

On the HCM City Stock Exchange, the VN-Index closed the week 0.3 per cent lower at 504.45 points, while the HNX-Index on the northern bourse gained 1.9 per cent to 67.5 points.

According to Vietstock.vn, the restructuring of the investment lists of two ETFs did not have a large impact on the market last week. However, investors showed caution, which resulted in low liquidity levels during the start of the trading week.

The domestic petrol price hike on Wednesday did not seem to affect the market significantly, and liquidity improved on the last two trading days of the week as the ETFs completed their restructuring.

On the northern bourse, the trading volume averaged 90.411 million shares, with an average trading value of VND1.473 trillion (US$70.14 million).

The trading value reached a high level on Friday, as 142.42 million shares were traded at a total value of VND3.03 trillion ($144.7 million), which is twice the average of the bourse's weekly trading value.

The VN-Index managed to increase on Tuesday and Thursday, but the increases failed to support the benchmark index to close higher at the end of the week.

On the northern bourse, an upward trend was maintained until Thursday, but the trend reversed on Friday. An average of 316.628 million shares changed hands, while average trading value was VND483.07 billion ($23 million).

During the past trading week, there were signs of recovery in speculative stocks from the real estate and construction sectors, such as the FLC Group (FLC), An Duong Thao Dien Real Estate (HAR), Viet-Han Corporation (VHG), Petroland (PTL) and Hoang Quan Real Estate (HQC). These stocks witnessed strong increases during the week and attracted cash investments from investors.

Foreign investors took turns at being net sellers and net buyers during the past week. On Friday, in particular, foreign investors became net buyers of shares valued at VND735.5 billion ($35.02 million), in particular, strongly buying shares of Vinacafe Bien Hoa (VCF).

HCM City-listed real estate giant Vingroup (VIC) lost up to 7 per cent last week. According to Vietstock Finance, the decline was due to the net selling of a total of VND63.8 billion ($3.038 million) by foreign investors as a result of the ETFs' restructuring.

According to FPT Securities, the restructuring of the ETFs generated strong selling pressure for bluechips on Friday, causing the benchmark indices to decline on both the national stock exchanges.

Real estate sector stocks were in the limelight last week, according to Bao Viet Securities, which noted there were no signs, however, that the trend would continue over the long term. It added that opportunities only existed for real estate companies that successfully implemented debt restructuring schemes.

Bao Viet Securities also forecast that stocks of gas companies and securities firms would be potential leaders of the next wave of stock gains.

The US Federal Reserve's move to taper its stimulus package by $10 billion a month to $75 billion is forecast to benefit Viet Nam's economy in the long term since it is a large trading partner in general, and the stock market, in particular, through foreign capital inflows, according to stock analysts.

Transport contractors courted

Contrary to expectations, Vietnam’s state-owned transport infrastructure contractors have proved attractive to investors.

The Ministry of Transport (MoT) has just submitted an equitisation plan for the Civil Engineering Construction Corporation 1 (Cienco 1) to the prime minister which states that three strategic investors are eager to partner with the MoT’s member company.

Prospective partners include domestic Yen Khanh and FECON JSC companies which have applied to buy seven million shares tantamount to 10 per cent of Cienco 1’s chartered capital, and Japan’s Hassyu Limited which wants 7.7 million shares or 11 per cent of Cienco 1’s chartered capital.

The MoT has apparently welcomed the proposals only if the prospective partners will directly negotiate on pricing at a rate not less than VND10,000 per share.

“We want Hassyu Limited to become our strategic partner to take advantage of Japan’s leading bridge construction experience,” said Cienco 1’s chairman Pham Dung.

Dung said Cienco 1 had to say no to several proposals to co-operate with the company as the firms did not offer any improvements in technology or access to new markets.

According to an evaluation report, as of June 30, Cienco 1 was valued at VND3.133 trillion ($149 million) with state capital investment of VND478 billion ($22.7 million).

In the upcoming initial public offering, Cienco 1 envisages distributing 70 million shares, with the state likely to retain a 35 per cent stake while the remainder would be sold  to outside shareholders and company employees.

Besides Cienco 1, the MoT is looking to restructure its Transport Engineering Design Incorporated (TEDI), despite modest chartered capital of $6 million, it has attracted  

local partner FECON and a fairly famous Japanese investor - Oriental Consultants Limited, who registered to buy 15.4 per cent of TEDI’s chartered capital.

Cienco 4 and Thang Long Construction Corporation, which recently completed penning their equitisation plans, are also likely to reach an agreement with local credit institutions as their strategic partners.

The Saigon-Hanoi Bank (SHB) has applied to become a strategic shareholder of the firms via an estimated stock purchase of VND60 billion ($2.8 million) in Cienco 4 and  VND30 billion ($1.4 million) in Thang Long.

The Vietnam Waterway Construction Corporation (Vinawaco) which wallowed in debt in previous years also received three investment offers from private consulting units  operating in transport infrastructure engineering.

According to a veteran investor, there were two reasons why state transport contractors were so appealing to investors.

First, most of the firms actually had the capacity to deliver on contracts and possessed more modern equipment compared to their private sector rivals, and secondly there  was no shortage in prospective infrastructure contracts.

Apart from Cienco 8 facing financial woes, most of the ministry’s other firms had racked up profits ranging from $1.9 million to $4.7 million per year.

“With active engagement from prospective partners, the equitisation of eight ministry firms in the first quarter next year seems doable,” said a MoT Business Management  Department executive.

Marlboro case could be stubbed out

Can Tho Department of Customs has proposed the city’s people’s court reject tobacco producer Vinataba-Philip Morris’ law suit regarding license rights.

Late last month, Vinataba-Philip Morris Limited (VPM), a joint venture between Vietnam’s state-owned National Tobacco Corporation and PT Hanjaya Mandala Sampoerna  

Tbk, a PM Global Brands Inc. affiliate, sued director of Can Tho Department of Customs Nguyen Huu Co in a case lodged with Can Tho People’s Court and petitioned for the tax assessment to be re-examined.

Its claim related to a dispute over a copyright license fee which has lasted for more than a year following the local customs department presenting a claim for duties to the company in March 2012.

The department claimed that the company had paid a copyright license fee for Marlboro products for the entirety of 2011 to its partner PM Global Brands Inc. (PMGB), but the payment had not been calculated in the taxable value.

Specifically, according to the contract between Vinataba-Philip Morris and PMGB, in order to use PMGB’s commercial brand-name, Vinataba-Philip Morris must use imported materials as specified by PMGB and that Vinataba-Philip Morris were obliged to pay 12 per cent of its sales from the products to PMGB each quarter.

The total amount paid to PMGB reached $2.95 million for the entirety of 2011.

Can Tho customs authorities claimed that the licensing rights that Vinataba-Philip Morris paid to PMGB would have taxable value.

Can Tho Department of Customs then issued Decision 219/QD-HQCT demanding outstanding tax payments of VND4.95 billion ($235,714) with an additional fine of 10 percent on the tax duty.

However, Vinataba-Philip Morris claimed the contract just regulated trading of materials between two parties and did not mention any licensing rights. Therefore, the licensing rights were not related to imported materials.

After receiving the customs department decision, the company paid duties as previously required and lodged two unsuccessful bids for the decision to be over-turned.

Can Tho Department of Customs director Nguyen Huu Co refused to comment when contacted by VIR last week. The General Department of Customs in a document in reply to Vinataba-Philip Morris in late 2012 agreed with Can Tho Department of Customs that its decision was completely justified under current regulations on defining the taxable value of a licensed copyright.

SCIC to retain key stakes in some prominent firms

The government last week approved the State Capital Investment Corporation’s restructuring plan for the next three years.

Accordingly, the State Capital Investment Corporation (SCIC) will continue to maintain long-term investment in Vinamilk, FPT Telecom, Hau Giang Pharmaceuticals, and Vietnam National Reinsurance Corporation (Vinare).

SCIC represents the interests of state-owned capital in enterprises.

The plan conflicts with advice by foreign investors that the state should sell stakes in non-essential sectors including dairy production, to offset the budget deficit.

Many experts also said that selling state-owned shares in such companies would help improve corporate governance and bolster the development of these sectors.

SCIC currently holds 375.7 million shares in Vinamilk, equivalent to 45 per cent of the company’s charter capital. Thanks to this holding SCIC will receive up to VND1.73 trillion ($82.4 million) in dividends from Vinamilk this year.

FPT Telecom will provide dividends of 40-50 per cent per year, Vinare 20 per cent and Hau Giang 25 per cent. SCIC’s ownership ratios in these three firms stand at 50.2 per  cent, 40.36 per cent and 43.31 per cent, respectively. It is expected that these three companies would bring about more than VND2.07 trillion ($98.57 million) from their dividends to SCIC in 2013.

Under the restructuring plan, SCIC will retain a 100 per sent stake in SCIC Investment, An Giang Quarry and Processing Company, and Vinaconex Investment and Mineral Trading Company.

SCIC will also retain a controlling stake in Dien Bien Services, Tourism and Trading Company, and Lai Chau Mineral Company following equitisation.

Meanwhile, SCIC will reduce its ownership ratios at 376 companies including major players such as Vinaconex, Bao Viet Holdings, FPT, Traphaco, Binh Minh Plastics and Tien Phong Plastics.

By 2015, SCIC’s charter capital will be raised to VND50 trillion ($2.38 billion) from the current VND5 trillion ($238 million).

IMF: Deferred economic reform erodes confidence

International Monetary Fund’s Chief Resident Representative for Vietnam Sanjay Kalra has urged the Government to speed up economic reform to buoy up business confidence after the macro economy has been stabilized.

Otherwise, postponement of the reform process will erode confidence of international donors and prolong the period of stagnation, Kalra said at the Vietnam Development Partnership Forum in Hanoi City last week.

Slow economic reform will curb economic growth at a level that cannot create enough jobs for the rising labor force and improve standards of living, he said.

Kalra said that bank restructuring should be prioritized to solve problems related to asset quality, bad debts, and risk reserve fund deduction. This move will help build up an environment for banks to transfer savings of the nation to effective investment.

IMF noticed that these problems remain in Vietnam although the nation has been trying to restructure the banking system.

In addition, Vietnam Asset Management Company (VAMC) should not be made a vehicle giving prolonged liquidity supports to insolvent banks. Otherwise, banks will lose the motive for restructuring.

Besides, it is necessary to publicize the financial status of State-owned economic groups and corporations, including incomes, audited balance sheets and bank loans, Kalra added.

Although the macro economy has been stabilized, the fundamentals for the recovery are fragile. The nation’s economic growth rate stays low at around 5-5.5% between 2012 and 2013, the chief representative said.

The real estate market has still seen many difficulties. Domestic sectors though making some improvements have not obtained solid foundations.

Besides, late austerity measures have led to high budget deficit, which is expected at 5.25% of gross domestic product (GDP) this year.

IMF warned that the gloomy outlook of the global economy may result in capital outflows and weak foreign reserves.

Vietnam has little policy resources to cope with international shocks and the nation should try to rebuild foreign and domestic backups, Kalra said.

However, the report of the Government at the forum suggested much improvement in economic indicators.

Foreign reserve increased from six weeks of imports in late 2010 to 6.5 weeks at the end of 2011 and to around 12 weeks late last year and now.

In the Jan-Aug period of 2013, bad debts posted an average growth rate of 2.52% per month, a strong drop compared to 3.91% in the same period of 2012.

Lending rates have dropped to levels in 2005 and 2006. Lending rates for the priority sectors are from 7-9% per annum while those for other sectors range from 9-11.5% per annum.

At present, around 80% of State-owned enterprises are making gains, accounting for over 33% of GDP.

Vietnam’s auto industry opportunities may slip away: Toyota

Japan’s top automaker Toyota warned on Tuesday that Vietnam will lose opportunities to develop the automobile industry if the Government fails to release suitable policies from now to 2025.

Yoshihisa Maruta, general director of Toyota Vietnam, said that if the Government has no policies to secure the gap in production costs between complete knocked-down  

(CKD) and complete built-up (CBU) cars, it will be a challenge for Vietnam to maintain the auto industry.

Speaking at a seminar organized by Bank for Investment and Development of Vietnam (BIDV) and Japan’s Shinkin Central Bank (SCB) in Hanoi, Maruta said that import  

tariffs within ASEAN will be removed, resulting in a sharp fall in imported car prices and giving a boost to the automobile market.

Maruta urged the Government to apply supportive measures for the industry. “Now is the most important time to decide the future of the auto industry,” he said.

Vietnam should learn from Thailand that had successfully developed the auto industry before opening the door. After that, the nation has continued to develop the auto industry.

The seminar also discussed other fields of cooperation between Vietnam and Japan.

Phan Duc Tu, general director of BIDV, said that Japan currently is the biggest official development assistance (ODA) donor and foreign direct investment (FDI) investor in Vietnam.

Bilateral trade between the two nations is expected to hit US$29 billion in 2013. By late September, Japanese firms had invested in 2,100 projects in Vietnam.

BIDV has been trying to seek cooperation opportunities to speed up Japanese FDI in Vietnam. The local bank has chosen SCB as one of first Japanese strategic partners to develop the Japanese client segment.

SCB is the sixth biggest bank in Japan and the 80th in the world. It can be called the ‘central bank’ of 270 people’s credit institutions in Japan with thousands of corporate customers from many countries, including Vietnam.

Commenting on the partnership model between Vietnamese and Japanese banks to speed up FDI capital in Vietnam, Do Nhat Hoang, head of Foreign Investment Agency under the Ministry of Planning and Investment, said that this is a good model to support enterprises.

As of November, Japan is the biggest investor in Vietnam with total committed investment capital of US$34.5 billion.

Chinese bicycles increase presence in Vietnam

There are up to 80 Chinese manufacturers of bicycles and components showcasing their products at Vietnam Expo 2013 that opened on Wednesday at Saigon Exhibition  and Convention Center in HCMC’s District 7.

According to the exhibition’s organizer - Vietnam National Trade Fair and Advertising Co. (VINEXAD), the number of Chinese enterprises tripled at this year’s exhibition.  

They come to seek Vietnamese partners to distribute their products.

The participation of Chinese enterprises is organized by the China Bicycle Association (CBA), the China Council for the Promotion of International Trade (CCPIT) and CCPIT  Shanghai Sub-Council to encourage manufacturers to seek opportunities in potential markets.

According to CBA, this is the third time Chinese bicycle manufacturers have joined Vietnam Expo, which will last until Saturday this time.

Chinese manufacturers want to boost consumption in the Vietnamese market as a large number of people tend to use bicycles to reduce pollution and save fuels.

Ma Zhong Chao, chairman of CBA, said that the bicycle and electric bike market in Vietnam started quite late but its growth rate was rapid. The Government has provided  

policies to call for energy saving, protect the environment and promote sustainable development, he added.

Small alley homes sell well in Hanoi

While the real estate market in Hanoi City has yet to make clear improvements, transactions of small homes along alleys in the inner city remain strong, generating big profits to investors.

Prices of alley houses in the capital have declined by 30% compared to the golden age of the property market. Therefore, a lot of customers who have a real demand for  

accommodation are considering buying the properties due to low prices and convenient locations.

Some retail investors and brokers have paid attention to the segment given the high market demand. Nguyen Trong Bang, former director of a property exchange center, said  

that he has focused on the alley house segment. The condo segment has been quiet in recent times but many clients have been seeking houses priced at around VND2 billion each.

Most Vietnamese people still prefer a private landed home to an apartment, especially as some condo project investors have hurt the confidence of customers. Therefore,  

more and more people are seeking to buy private homes, Bang explained.

From a small investor, Bang has called for his friends to invest in the alley home business. His group has conducted nearly 10 successful transactions since earlier this year.

Tran Van Hien, a manager of the real estate exchange center at nhadat24g.net, said that his center has also shifted to small houses from 30-50 square meters each this year. While the condo segment is still in hibernation, small house transactions are still profitable, Hien said.

Nguyen Huu Thu, a property investor in Cau Giay District, said that he has joined the alley home business after many homebuyers have come to his area to seek a small house.

Over the past three months, Thu has been involved in seven transactions in Thanh Xuan, Dong Da and Cau Giay districts. The houses have been sold at VND1.5-2.5 billion each.

Bang said that residential land in some alleys has declined sharply in price. In Cau Giay and Thanh Xuan districts, houses measured around 30 square meters each have  

been offered at around VND900 million each, down by around VND300-500 million compared to late 2007.

In districts nearer to the city center, prices of alley houses have also declined by VND4-5 million per square meter against the peak. Therefore, many homebuyers have rushed to buy small alley homes from 25-40 square meters each at VND2 billion each or less.

Bang said investment in alley homes can fetch high profits due to the ready-made infrastructures in the central area, advantageous locations and reasonable prices.  

However, to gain success in transactions, it is necessary to build up a team to conduct all steps such as buying houses, making procedures, repairing and launching products onto the market.

Pham Trung Ha, general director of Hoa Phat Land Company, said that condo supply is huge just now but many customers still want to buy private homes.

Nguyen Viet Hai, general director of VIC Investment Joint Stock Company, said that the transaction of small alley homes has reported high liquidity and is the safest segment at the moment.

Luxury apartments to be converted into showroom

The magazine of luxury items Robb Report yesterday announced its cooperation with the developer of the Kim Cuong Island condo projects to turn a couple of apartment units there into a showroom featuring famous brands worldwide.

Around six brands including designs and lighting solutions will showcase their products at the site in HCMC’s District 2. Kusto, the developer and operator of the condo project, will set aside two floors of the condo building to make it a luxury brands showroom.

Michael von Schlippe, CEO of Indochine Media Venture which publishes Robb Report, said the cooperation model has been successful in many countries worldwide. He said the cooperation model is a way of bringing products closer to consumers instead of from newspapers only.

When in place, the showroom covering 800 square meters will be a venue for organizing events for luxury brands.

The magazine Robb Report covers a wide range of products and solutions, from luxury cars and jets and yachts to watches and jewelry items among others.

New JV set up to develop residential area in Binh Duong

The Vietnam-Singapore Industrial Park (VSIP) developer has joined forces with a Singaporean partner to set up a joint venture to implement a residential development project in Binh Duong Province.

Vietnam-Singapore Industrial Park Joint Venture Co. and Sembcorp Development Vietnam Pte. Ltd. have got a license to establish VSIP-Sembcorp Gateway Development Co. to execute the Gateway housing project.

The project will cover 4.1 hectares at VSIP in Binh Duong Province’s Thuan An District and be developed in phases over a period of eight years with a total of 1,380 apartments and other amenities. Gateway is expected to turn out around 250 apartment units in the first phase.

The establishment of the joint venture is part of a plan for providing more amenities for the enterprises operating at VSIP in the province.

Vietnam-Singapore Industrial Park Joint Venture Co., which is 49% owned by Becamex IDC Corp and 51% by a Sembcorp-led Singapore consortium, has developed five  

industrial-residential-service integrated areas in Binh Duong, Haiphong, Bac Ninh and Quang Ngai.

The VSIP projects have grown from traditional industrial parks to industrial, urban and service areas to provide a working, living and entertaining environment.

Vietnam-Singapore Industrial Park Joint Venture Co. said it would consider investing in more such areas in other provinces.

The VSIP projects in Vietnam have attracted nearly 500 investors from 27 countries and territories in the past 17 years with total investment pledges of over US$6.4 billion and created jobs for over 140,000 people.

HVG offers 30 million new shares

Shareholders of Hung Vuong Corporation (HVG) during the extraordinary shareholder meeting last Friday agreed on the issuance of 30 million new shares to raise funds for its business expansion.

The enterprise will offer the first batch of shares by June 30, 2014 and the remaining shares by December 31, 2014. The shares will be sold to a Singaporean investor at not below VND28,000 each.

Duong Ngoc Minh, chairman of the enterprise, said that the Singaporean partner has been selected as it has a good relationship with a supermarket group in Indonesia, facilitating HVG’s plans to take part in trade and the food supply industry overseas next year.

Given the cooperation, the group will launch its products in the Indonesian market with a large population. HVG also has plans to invest in farming and processing in the country, Minh said.

Besides, HVG will also cooperate with the owner of the U.S.-based H&T supermarket system to launch its products in 16 markets.

The U.S. currently buys around one quarter of Tra fish of the local fish processor.

This year, the enterprise targets consolidated revenue of VND12 trillion, up by over 50% from 2012.

200,000 hectares of coffee recognized as sustainable

By deploying a sustainable coffee farming program, Vietnam has developed 200,000 hectares of coffee meeting international sustainable requirements, which is to be expanded to 300,000 hectares by 2015, heard a seminar organized in HCMC last week.

At the seminar on sustainable coffee development through public-private partnership in Vietnam last Thursday, Nguyen Tan Trung, a coffee farmer in Di Linh in the central highlands province of Lam Dong, said that thanks to the program, farmers had been able to apply new technologies in farming, harvesting and processing coffee to improve the farm produce’s quality.

According to Lam Dong’s Department of Agriculture and Rural Development, there is over 40,000 hectares under coffee cultivation in the province given the certificates on meeting international sustainable criteria such as 4C, UTZ or RTA.

Intimex Group Joint Stock Company that has been among the country’s top ten coffee exporters in recent years now is also investing in sustainable coffee farming. However, Intimex general director Do Ha Nam complained that the scattered coffee farming areas had pushed up input expenses, making it difficult for his firm to instruct the new production methods to farmers.

“As farmers are used to planting coffee in traditional ways, it would cost us a lot of time and money to encourage them to switch to the new farming methods,” Nam said.

Under the sustainable coffee development plan, the total coffee area meeting prescribed criteria will be around 300,000 hectares in 2015 and around 480,000 hectares by 2020, the Cultivation Department under the agriculture ministry reports.

HCM City to help enterprises access capital sources

The HCMC government will work with banks to launch a capital supply program in the 2014-2015 period, ensuring that enterprises with stable outlets will be able to access capital sources to maintain production and business.

Speaking at the closing ceremony of the 16th congress of the city’s Party Committee last Thursday, Party Committee Secretary Le Thanh Hai said that capital and market for enterprises are the most crucial issues the city has been trying to solve.

Local authorities in the meeting said that small and medium-sized enterprises have met many difficulties in securing credits despite falling lending rates.

Nguyen Thi Hong, vice chairwoman of HCMC, told the Daily that the city has connected enterprises having capital demand with banks this year. Nearly VND12 trillion worth of loans have been extended to 600 enterprises in apparel, food, chemical, steel and farm produce sectors.

Banks will provide loans for enterprises with feasible projects while those meeting difficulties can call the hotline of the central bank’s HCMC branch to ask for help. Only firms with bad debts and unfeasible projects cannot reach bank loans, Hong said.

The Department of Industry and Trade and the HCMC Business Association are making a list of enterprises in need of capital. The city’s government will pass the list over to the central bank’s HCMC branch to consider helping such enterprises access capital in 2014, she added.

Hai said that the city’s gross domestic product (GDP) has obtained average growth rate of 9.6% annually over the past three years. The annual growth rates, at over 10% in 2011, 9.2% in 2012 and 9.3% in 2013, are reasonable, and the city expects to gain a GDP growth rate of 9.5% next year.

However, the danger of high inflation and macro uncertainties will remain high in the following years. The most worrying sign is that total investment capital in the city’s economy will be low.

Last year, the city’s total investment capital hits nearly VND226 trillion, a 4 percent year-on-year rise.

To solve the shortage of investment capital, Hai said the city will fully exploit land-related incomes.

The city expects to attract around VND8 trillion in official development assistance (ODA) capital next year and VND12 trillion in 2015 to supplement infrastructure investment capital.

Legal compliance corporate program kicks off next year

Small- and medium-sized enterprises (SMEs) having low import-export value but strictly observing customs regulations will be subject to preferential treatment on customs procedures under a legal compliance program for companies by the General Department of Customs starting from next year’s second quarter.

According to the customs authority, enterprises joining the legal program are companies with stringent customs law compliance history and they do not have to meet requirements on large import-export value.

The target firms will be given incentives when performing import-export procedures, including having their commodities cleared in a shorter time and having their goods grouped into the green line like enterprises of the prioritized corporate program under deployment by the general customs department currently.

A representative of the general customs department ascribed the introduction of the compliance corporate program to the fact that the prioritized corporate program had been piloted with many tough conditions in the past. For instance, local companies must achieve export value of up to hundreds of millions of U.S. dollars annually and have a few years of being considered as good law observers to win the right to join the program, said the representative.

In fact, many firms complained that the high-value export revenue requirement was a tough condition hindering multiple SMEs and others in the logistics industry despite the fact that they were always good legal observers. The department therefore has mapped out the legal compliance corporate program with much more simple conditions to support these firms.

As the program is set to kick off from the second quarter next year, the target enterprises need to take control over the legal compliance within their companies from now on, said the customs authority’s representative. Besides, he noted that along with the program, customs agencies will assess those companies failing to conform to law by different activities to increase their self-awareness and have stricter control.

The prioritized corporate program under deployment by the customs authority at present was launched by the Ministry of Finance two years ago with an aim to identify exporting and importing companies meeting certain conditions. The program has carried out many changes after two years of operation, with its conditions and procedures partially simplified for relevant enterprises.

Trading firms told to keep fuel prices steady, for now

The Ministry of Finance on Thursday ordered fuel trading firms to shelve any fuel retail price hike plans for now though they are said to be losing hundreds of Vietnamese dong for each liter of fuel sold.

Instead the Ministry of Finance and the Ministry of Industry and Trade allow fuel traders to get more from the fuel price stabilization fund as of 2 p.m. on Thursday. Therefore, these traders automatically receive VND300 for every liter of petrol sold and VND500 for a liter of diesel oil, up by VND100 and VND200 respectively.

Meanwhile, they do have a preset profit margin for diesel oil and kerosene just as before but it is down to VND100 per liter rather than the mandated VND300. The two ministries, which oversee the fuels market, explained the differential between the actual retail price and the base price is getting bigger after the prices of finished fuel products have risen.

From November 4 to December 3, RON 92, DO 0.05S, kerosene and fuel oil 180 cst were priced at US$112.15, US$123.70, US$122.98 per barrel and US$604.96 per ton respectively. Therefore, the retail price is now VND467-968 per liter lower than the base price.

The price stabilization fund currently covers losses with VND200 for a liter of petrol and VND300 for a liter of diesel oil.

However, to control inflation, stabilize the macro economy, ensure social security, guarantee benefits for both consumers and firms, and balance the State budget, the ministries decided to use the price stabilization fund to cope with the current situation.

With this solution, the base prices of petrol and diesel oil are still VND167 and VND126 higher than the retail levels, so fuel trading firms get lower profits, according to the two ministries.

Traders have complained the more they sell the bigger their losses. However, they still pay VND600-700 for each liter sold by their agents before renewing their contracts next year.

Tet bonuses lower than last year

Tet bonuses for employees at Vietnamese enterprises are expected to be less than previous years due to the economic downturn, said a representative from the Ministry of Labour, Invalids and Social Affairs (Molisa).

Tong Thi Minh, head of the Molisa’s Labour and Salary Department, said this year, Tet bonus will be divided into three groups, the highest bonuses will be in the hundreds of millions of VND; the second, for medium-level employees and the third group may get nothing.

Pham Van Thanh, head of Labour and Salary Board under the Hanoi Department of Labour, Invalids and Social Affairs, said, in 2013 nearly 2,000 companies in Hanoi went bankrupt, most of them in the areas of construction and real estate.

In Hanoi, Tet bonuses at in the foreign-invested sector which are usually among the highest, is forecast not to surpass VND30 million (USD1,428) per employee. The situation has been attributed to the fact that fewer companies in this sector have made profits this year.

Employees working in other sectors in the city are expected to receive an average of VND2-7 million each. Those from state-owned companies will get VND5-7 million each.

Meanwhile, businesses in many northern localities, such as Hai Duong, Hung Yen, Haiphong and Bac Ninh have not yet reported their Tet bonus plans to the local departments of labour, invalids and social affairs. However, the departments said it is unlikely that bonuses this year will be higher than last year.

In Bac Ninh Province, employees at companies a variety of types of companies are expected to receive VND500,000-2 million each, equal to their 13thmonth salary.

Foreign-invested companies in HCM City and Binh Duong Province have planned Tet bonuses for their workers, which average between VND3-5 million. Besides the bonuses, employees also receive gifts such as cooking oil, rice and seasoning powder.

The HCM City Export Processing Zone Authority (Hepza ) has urged companies to submit Tet bonus plans no later than December 20.

Fleet customers highlighted

The leader in the country’s luxury sedan market, Mercedes-Benz Vietnam has been the top choice of five-star hotels and premium resorts as well as business conglomerates for their VIP transport. The deals have mostly been conducted as purchases of fleet customers.

The last month of the year has just deepened the presence of Mercedes-Benz Vietnam’s two fleet customers, InterContinental Asiana Saigon and Six Senses Con Dao.

To distinguished guests who are frequently on the move, the first impressions upon a deluxe hotel are not only its facilities and services but also its transport means—in terms of both brand name and quality. That said, which automakers to choose for a five-star hotel’s or a top-end resort’s transport fleet is always of prime importance to hotels and resorts. Such a choice pertains to a wide range of standards which embrace safety, comfort and trademark prestige.

Among the first-rate hotels in HCMC, InterContinental Asiana Saigon has recently received a fleet of five brand-new Mercedes-Benz E-Class cars. This is the first set in diamond silver color by Mercedes-Benz Vietnam with each being equipped with a wifi hotspot and a removable iPad on the back seat, which substantially facilitates Internet connection while on board. The latest installation, according to Mercedes-Benz Vietnam, will help passengers stay connected with colleagues or customers anywhere, anytime. Mercedes-Benz Vietnam also says the E-Class’s back seats can be even translated into a “mini-office” where business people will do their jobs at ease.

“At InterContinental Asiana Saigon we believe in providing the best services to our guests and, like us, the Mercedes-Benz brand is internationally recognized and is synonymous with top quality and elegance,” Fergus Stewart, director of operation for IHG Thailand and Indochina cum general manager of InterContinental Asiana Saigon, said in a press release. “To have an iPad with wireless Internet connection for guests to use in our new E-Class cars, we’re adding a new dimension to our impeccable service.”

In fact, this five-star hotel has since its first days in Vietnam in 2009 worked closely with Mercedes-Benz Vietnam to provide first-class transport services for its VIP guests. And now InterContinental Asiana Saigon has also become the German car manufacturer’s first fleet customer to opt for the diamond silver color.

InterContinental Asiana Saigon is no exception. The five-star hotel chain, also present in Danang and Hanoi, has put Mercedes-Benz car fleets in use.

“We are proud to renew our partnership with InterContinental Asiana Saigon and I’m confident that guests will equally enjoy spending time in the new E-Class as they do at this luxurious hotel,” said Michael Behrens, Mercedes-Benz Vietnam chief executive officer.

Behrens added that in the coming days, Mercedes-Benz Vietnam will transfer another car fleet to Six Senses Con Dao to bring to a close another successful year which highlights strengthened partnership with Vietnam’s top-of-the-line hotels and resorts. This year alone and in the hotel field only, nearly 20 luxury cars worth VND37 billion have been transferred by Mercedes-Benz Vietnam to its fleet customers.

Behrens said to date more than 70% of first-class hotels in Vietnam have chosen Mercedes-Benz cars for their fleets—such as InterContinental hotels group, Park Hyatt Saigon, Caravelle, Vinpearl Luxury, New World Hotel, Melia Hanoi, and Six Senses, to name just a few. And the car of choice is the E-Class as this category has been picked by high-end customers. The luxury E-Class can also be named as “economical” because its fuel consumption is about six liters per 100 kilometers and the service maintenance lasts for two years.

Despite the backdrop of a lukewarm domestic market, Vietnam’s hospitality industry has sustained an uphill task, registering impressive growth when international tourist arrivals in the first 11 months posted a 10% growth rate year-on-year. In other words, Vietnam continues to be a fascinating destination for international travelers. Furthermore, the country’s foreign direct investment attraction has gone beyond all expectations topping US$20 billion compared with the projected VND13-14 billion. Given these developments, Behrens said fleet customers in Vietnam have great potential. Moreover, quite a few businesses and organizations are in need of buying car fleets for their transport requirement to assert their corporate image. This stands a chance for Mercedes-Benz Vietnam, said the CEO.

Another factor that affects Mercedes-Benz Vietnam’s success in attracting luxury projects is the carmaker’s sale and service network that spans across Vietnam and is capable of reacting to customer requests at a moment’s notice.

Aside from luxury partners in Vietnam’s metropolises such as HCMC and Hanoi, hotels and resorts across the board have chosen Mercedes-Benz Vietnam cars due partly to its 10 sale and service centers nationwide. For instance, Victoria Hoi An picked Mercedes-Benz because An Du Danang is at its service; and Victoria Can Tho embraced Mercedes-Benz because Haxaco Can Tho is ready out there all the time. The Mercedes-Benz availability has outperformed its most formidable rivals. “We have invested more than US$33 million in our national customer service network which allows us to better access our new potential clients in the country’s fastest-growing regions,” said Mercedes-Benz Vietnam CEO Behrens. “In the coming time, we want to show our partners that Mercedes-Benz always renews itself. Aside from introducing top-of-the-range cars, we have integrated innovative features diverse enough to meet their requirements.”

Mercedes-Benz Vietnam’s fleet customers have not only enjoyed the best price offers but also received the best service quality, such as special aftersale services and training for chauffeurs, and free parking in HCMC’s and Hanoi’s downtown. Furthermore, Mercedes-Benz Vietnam is capable of meeting clients’ customized demands. For instance, installation of wifi hotspot and iPad on board, or special training for chauffeurs, have been conducted.

Experts explain that carmakers have chosen high-end hotels and resorts as their fleet customers because this form benefits both partners. Apart from the customers’ benefits as mentioned above, carmakers have taken advantage of the chance to reach rich travelers who are guests of luxury hotels and resorts. The benefit gained from the fleet customer policy is being boosted by deluxe carmakers.

According to InterContinental Asiana Saigon, the country is emerging as a destination for the affluent holidaymaker and is atop of Asia in hotel growth. That’s why Mercedes-Benz Vietnam has given this channel a great momentum.

Motorola Solutions docks at two local seaports

Motorola Solutions is implementing its state-of-the-art radio, mobile computing and wireless technology solutions at Vietnam’s two major seaports.

Motorola said its mobile computing and wi-fi technology was already in place at Danang port, the biggest seaport in the central part of the country. Motorola was selected based on its leadership in the information and communications technology industry and reputation for reliability. More importantly, it was well-acclimated to the port’s development plans.

“Motorola Solutions’ mobile computing and wi-fi technology provide Danang port full and reliable coverage, helping the operations and ensuring the management is more productive and efficient,” noted a Motorola press release which added, “The easy to use Windows CE platform is compatible with many of today’s mobile applications.”

Motorola’s solutions have helped improve the efficiency of the port’s container handling operations.

With a data transmission speed of 15 megabytes a second and intuitive graphic feature, operations have been streamlined and have become more accurate. Controllers are able to monitor and record container movements in real time and at exact locations, reducing manpower needs and paperwork. Loading and unloading time has also been reduced and capacity has increased.

“Once the IT system was upgraded, the container capacity at Tien Sa, one of the port’s major terminals, increased by 20 per cent on average over each of the past three years,” said Danang port deputy general director Nguyen Xuan Dung. “Modern technology and less manual labour as well as reduced auxiliary equipment needs and paperwork have made Danang port a safer and smarter place to work.”

In the past, less advanced technologies using the DOS operating system and old-fashioned radios caused inefficiencies. The port lacked a cable network and fiber-optic cables to connect fleets with the container yards.

Motorola’s technical solutions have also been used in Cai Lan International Container Terminal (CICT), a newly-established seaport located in the famous Halong city in the northern province of Quang Ninh. Solutions include MOTOTRBO capacity and a digital radio system that can be easily deployed and manage group communications. CICT’s evaluation of two-way radio systems was a critical part of the upgrade to ensure teams had consistent and constant communication. Efficiency and cost-effectiveness were two factors primary in the decision making process.

“We selected Motorola because of its solid references, notably SSA Marine, and compared to other providers it has solid after-sales services, a reliable warranty policy, and extensive installation support,” said Cai Lan port’s customer relations director Nguyen Thai Hoa.

The system has the advantage of a ‘trunking feature’ which provides clearer signal, longer battery time, and clear channels under an expanded capacity for the terminal. Most importantly, it has greatly enhanced efficiency. The 36 group talks among the fleet can easily communicate and coordinate through the sharing of 10 trunked channels. Using the call feature, the operation can also contact the entire fleet in an instant. The system has been lauded for its reliability, coverage, and capacity.

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