Seminar discusses Vietnam-Japan economic cooperation

A Vietnamese delegation led by Ambassador Doan Xuan Hung recently attended a seminar in the Japanese prefecture of Miyagi, which focused on highlighting economic cooperation opportunities.

At a reception for the delegation, Governor of Miyagi prefecture, Yoshihiro Murai expressed his sincere appreciation to the Vietnamese Government and people for their staunch support in reconstructing the locality in the wake of the 2011 devastating earthquake and tsunami.

For his part, Ambassador Hung, spoke glowingly of the Japanese spirit and great efforts in overcoming the consequences of the natural disaster and expressed his optimism for continued economic cooperation between the two nations in the reconstruction and development of Miyagi prefecture.

Under the framework of the visit, Ambassador Hung held a working session with Toshitake Ando, the President of the Council in the Miyagi prefecture.

President Ando said over the years, the prefecture has conducted visits for a group of parliamentarians and businesses to Vietnam to enforce friendship between Miyagi and Vietnam.

Both President Ando and Ambassador Hung were in agreement that a parliamentary association to promote economic, culture and people-to-people exchange between the two nations should be established.

During the seminar, Ambassador Hung reviewed Vietnam’s economic situation, the status of Vietnam-Japan relations and expressed his desire that cooperation among Miyagi and Vietnam’s businesses be expanded.

Vietnamese youth stand ready, willing and able to provide assistance to Japan in the reconstruction of Miyagi prefecture, Ambassador Hung reassured.

Delegates at the seminar also expressed a strong desire for enhanced cooperation between the two nations.

Japan-Vietnam support industry forum opens in HCM City

The Ho Chi Minh City Export Processing and Industrial Zones Authority (HEPZA) and the Japan External Trade Organization (JETRO) held a Japan-Vietnam support industry forum in HCM City on September 23.

At the forum, delegates gave opinions to a draft decree on the development of the support industry which had been compiled by the Ministry of Industry and Trade.

Delegates said  foreign-invested businesses should pledge to transfer science and technologies when they are operating in Vietnam.

In addition, the Government should be responsible for ensuring human resources to take proper support measures.

Le Hoai Quoc, head of the management board of HEPZA recommended that to enforce the decrees, there should be a liaison agency which can support businesses in a transparent and open manner.

Trade capacity building project launches in Vietnam

The Vietnam Association of Foreign Invested Enterprises in coordination with the Vietnam Small and Medium Enterprises (VINASME) in the Southern region on September 23 hosted a ceremony to kick off a trade capacity building project in Hanoi.

The EUR 525.000 European Trade Policy and Investment Support Project (EU-Mutrap) aims to accelerate the integration of trade between Vietnam and the EU.

The principal activities of the projects include trade and investment capacity building, the establishment of a committee designed to promote national policy consultation and trade and investment policy making and build a commercial nuclear model.

Economic restructuring brings opportunities to investors

Investment opportunities from the equitisation of state-owned enterprises (SOEs), the acquisition of bad debts and investment in the consumer goods and retail sectors are of great interest to experts and investors in the current context, said the Vietnam Economic News.

The Vietnamese securities market is said to offer great potential compared with other Southeast Asian countries and the equitisation of SOEs has attracted great attention from domestic and foreign investment funds.

So far, Vietnam has equitised 4,100 SOEs. Under the Prime Minister’s guidance, 432 SOEs must be equitised in 2014 and 2015. These include the Vietnam National Textile and Garment Group (Vinatex), three corporations established under Prime Ministerial Decision 91/TTg (Vietnam Airlines Corporation, Vietnam Cement Industry Corporation and Vietnam National Shipping Lines (Vinalines), 54 corporations established pursuant to Prime Ministerial Decision 90/TTg, and SOEs managed by different ministries, sectors and localities.

Nguyen Trong Dung, Director of the Government Office’s Department of Business Innovation, said that by September 10, 2014, the Prime Minister, ministries and sectors have approved the equitization plans of 65 SOEs including Vinatex and Vietnam Airlines. Vietnam Airlines’ equitisation plan was approved on September 10 with chartered capital of 14 trillion VND, 75 percent of which will be held by the state, 20 percent will be sold to strategic shareholders and five percent made available to other shareholders.

The acceleration of the equitization of SOEs will make the Vietnamese securities market more attractive in the time to come.

Central Institute for Economic Management Deputy Director Vo Tri Thanh said that the Government had showed a strong will to accelerate the equitization of SOEs, but the evaluation of SOEs had faced numerous difficulties related to land as well as difficulties in looking for strategic partners. In the equitization process, SOEs also have to cope with social problems related to employees and the pressure to list their shares on the securities market.

Along with accelerating SOE equitization, many investors have paid special attention to dealing with bad debts. According to Dr. Tran Du Lich, member of the National Assembly’s Economic Committee, by August 2014, about 210 trillion VND of bad debts have been dealt with and 161 trillion VND remained unresolved (including newly arisen bad debts). Bad debts have become a macroeconomic problem of great concern to the government, he emphasized.

Therefore, the debt acquisition market in Vietnam currently offers investors many opportunities. Nguyen KhacHai, Deputy General Director of the SSI Asset Management Company, said that the company had received many proposals from reputable foreign institutions regarding the association with Vietnamese partners in resolving bad debts but no action had been taken due to mechanism-related difficulties. Currently, the Vietnam Asset Management Company (VAMC), the debt management company of the Ministry of Finance and asset management companies of banks are allowed to be involved in debt acquisitions.

The Vietnamese economy has shown clear signs of recovery. Foreign financial investors are seeking opportunities to directly invest in different sectors of the Vietnamese economy.

The Vietnam Economic News quoted George Joseph Ghorra from the International Finance Corporation (IFC) - a member of the World Bank Group, as saying that in the recent period, IFC had invested in six different asset management company funds in Vietnam and most of its investment capital had flowed into the financial market. Compared with other markets in Southeast Asia, the Vietnamese securities market currently offers investors many favorable conditions. Vietnam also offers many investment opportunities in the banking sector as well as through merger and acquisition (M&A) deals.

Other sectors such as consumer goods, retail, education, banking, hydropower and renewable energy also offer investors big opportunities.

Saigon Co.op Chairman Nguyen Ngoc Hoa, said that the Vietnamese modern retail sector offered good prospects based on factors such as population and per-capita income growth and increasing middle class. Despite a slowdown in its growth in recent years, the Ministry of Industry and Trade has set a target to increase the percentage of modern retail outlets from 22 percent to 45 percent of total retail sales by 2020. Vietnam expects to have 1,200-1,300 supermarkets and 337 shopping centres by 2020. This means from now to 2020, Vietnam will have to develop an additional 550 supermarkets and 200 shopping centres, offering retail investors big opportunities.

Czech firms treasure Vietnam’s investment opportunity

Vietnam, with its open and large consumer market, is an ideal destination for investment, said Jana Ackermann, a representative from Euro-Vietnam Business Networking (EVBN) at a seminar in Prague on September 22.

The seminar aimed to encourage trade and investment cooperation between Czech and Vietnamese businesses.

Hoang Thuy Duong, Minister Counsellor of the Vietnamese Embassy in the Czech Republic, said economic cooperation between Vietnam and the Czech Republic has been developing strongly in recent times, with two-way trade doubling over the past 5 years hitting US$546 million last year.

However, the results do not match the two nations’ full potential, Duong said, adding the Czech Republic has only a mere 30 projects in Vietnam with a modest capitalisation, focusing on crystal glass and electrical equipment manufacturing, beer brewing, food processing, construction materials and mining.

Commercial counsellor Nguyen Thang Long said Vietnam is keen on importing machinery, equipment and hi-tech products from the Czech Republic as well as tools, materials and other products for domestic production and consumption.

The country is looking for Czech businesses to form joint ventures with Vietnamese partners in producing and supplying products in Vietnam or exporting to third countries.

Long revealed the two countries and governments have shown strong determination to boost trade cooperation. The government of the Czech Republic is preparing to cooperate on a wide array of projects with Vietnam, he said.

JW Marriott Hanoi win Best New MICE Hotel award

JW Marriott Hanoi, a leading five-star hotel, has received the prestigious award “The Best New MICE Hotel in Vietnam” at The Guide Awards 2013-2014 recently held in Danang city.

At the awards ceremony, the guide honoured 114 outstanding travel businesses chosen by its editorial board and readers as the winners of the event.

JW Marriott Hanoi hotel was inaugurated in the third quarter of 2013. It has total investment capital of US$250 million.

With nine storeys and 450 rooms, it is one of the largest hotels in the capital city.

The hotel offers 2,400 square meters for workshops, including two Ballrooms and a studio area for big events, as well as spaces for outdoor activities, with a chain of Europe-Asia restaurants, a fitness centre and other facilities meeting five-star ratings.

Pepper export value hits US$1bln for first time

Vietnamese pepper exports in the first nine months of the year hit an all time record high of 136,000 tonnes valued at US$1.022 billion, according to Vietnam Customs statistics.

In the first half of September alone, pepper businesses shipped abroad 3,556 tonnes and earned US$34 million in value.

By mid September, the total amount and value of exported pepper exceeded the corresponding figures of the whole of last year by nearly 4,000 tonnes, and over US$100 million.

The Vietnam Pepper Association (VPA) reports last year Vietnam exported 132,637 tonnes of pepper for US$889 million.

Vietnam accounts for approximately 30% of the world’s pepper yield total and about 50% of the world’s export volume.

The US, United Arab Emirates, Holland, and India are the leading consumers of Vietnamese pepper.

The average black pepper price in key growing regions is currently hovering around VND200,000 per kg, VND60,000 higher than last year.

The black pepper export price registers over US$8,000 per tonne while white pepper stands at US$10,000 per tonne.

Vietnam’s export to Laos hits 287 mln USD in 8 months

Vietnam earned 287.39 million USD from commodity exports to Laos in the first eight months of 2014, representing a year-on-year rise of 2.97 percent, according to data from the General Department of Vietnam Customs.

The humble increase was blamed for decreases in the export turnover of some staples such as steel, down 1.81 percent; petrol, 21.56 percent; fertilizer, 17.95 percent; and electric wires, 58.22 percent.

Only several commodity groups like machines and equipment, steel products, and ceramics enjoyed export growths of 30.12 percent, 16.81 percent and 30.02 percent, respectively.

In the eight-month period, Vietnam’s total export turnover reached 43.3 billion USD, up 39 percent over the same period last year.-

Dong Nai lures more FDI in support industry

Okatsune Vietnam, a Japanese firm, has inaugurated its 1.4 million USD factory operating in the support industry in Nhon Trach 3 Industrial Zone in the southern province of Dong Nai.

The information was revealed on September 19 by Mai Van Nhon, deputy head of the management board of Dong Nai’s industrial zones.

With this event, the zone has so far this year attracted 21 Japanese investors, he said, adding that most FDI projects here were poured into the support industry.

Dong Nai has to date lured 174 projects from Japan with a total registered capital of over 3.2 billion USD, ranking third among 39 countries and territories investing in the province.

According to Director of the provincial Department of Planning and Investment Bo Ngoc Thu, since the beginning of this year, the province has attracted nearly 1.2 billion USD in foreign direct investment (FDI), exceeding its set target of 700-900 million USD.

Of the total, 420.6 million USD was poured into 59 new projects, while the remaining was added to 58 existing ones.

In the reviewed period, the province revoked investment licenses of eight projects worth over 86.15 million USD due to their slow progress.

Since it began attracting foreign investment, Dong Nai has licensed a total of 1,449 FDI projects with a total investment of 25.52 billion USD, of which 1,124 projects worth 21.07 billion USD are valid.

HCM City banks face rising bad debt ratio

Potentially irrecoverable bank debts in HCM City now make up around 70 per cent of the total bad debts, according to the State Bank of Viet Nam's city branch.

Non-performing loans had accounted for 4.65 per cent of total outstanding loans as of late July.

Even Vietcombank is faced with an increase in potentially irrecoverable debts despite being a major and highly experienced lender.

Dau Tu (Vietnam Investment Review) newspaper reported that the bank's second quarter financial statements reported total overdue debts of VND9.03 trillion ($425.07 million), or 3.09 per cent of the total outstanding loans. Of this, potentially irrecoverable debts were estimated at VND4.765 trillion ($224.28 million), up 70.7 per cent from early this year.

Eximbank's potentially irrecoverable debts made up 61.7 per cent of total bad debts, equivalent to VND1.458 trillion ($69.43 million), up 36 per cent from six months ago.

At Sacombank the figure has risen by 31 per cent, and consequently the bank had to make VND216.5 billion ($10.31 million) worth risk provisioning in the second quarter, up 368 per cent from the same period last year.

Nguyen Hoang Minh, deputy director of the SBV's HCM City Branch, attributed the rise in "potentially irrecoverable debts" in the first seven months to banks' classification of debts and risk provisioning in accordance with Circular No 09/TT-NHNN.

Banks have already sold or written off bad debts worth VND8 trillion ($380.95 million) but their non-performing loans remain at high levels.

They have found it very difficult to recover debts in cash or sell collateral, Minh explained.

They are resorting to increasing risk provisioning and selling bad debts to the Viet Nam Asset Management Company, he said.

In the first eight months of this year banks sold over VND1 trillion ($47.08 million) worth of bad debts to the VAMC, and are expected to sell more before the year is out, he added.

Tran Du Lich, a member of the National Monetary and Financial Policy Advisory Council, said banks' bad debts amounted to 4.17 per cent of total outstanding loans as of late August.

About VND210 trillion ($9.9 billion) worth of non-performing loans have been disposed of one or the other, leaving VND161 trillion ($7.67 billion) worth of bad debts, including newly arisen debts.

"Bad debts are spreading through the economy and so the flow of capital is slower. Because of this, we cannot expect to dispose of all bad debts within a certain time," Lich said.

Ha Noi seeks to attract more foreign, high-tech investment

The capital city is exerting great efforts to diversify investment promotions to attract more capital, especially foreign direct investment (FDI), according to the municipal Department of Planning and Investment.

This city is aiming at potential investors from Japan, South Korea, Eastern Asia, the United States and the European Union and is prioritising large-scale projects using high technology, the department director, Ngo Van Quy told the investment news website baodautu.vn.

It is also aiming at further improving the investment climate and creating the best conditions for investors to implement their licensed projects, he said.

The Ministry of Planning and Investment's Foreign Investment Agency reported that in the first half of this year, Ha Noi had attracted US$583 million in FDI. This represents an increase of 30 per cent over that of the same period last year but accounts for only 45 per cent of the city's total 2014 FDI target.

The department attributed the result to the current difficult context, when businesses had to face numerous challenges and the global market had become increasingly competitive.

During the period under review, the city had licensed 145 new foreign-invested projects worth $116 million and allowed 50 licensed projects to increase their capital by $467 million.

The manufacturing and processing industry ranked first among industries that have attracted more FDI at more than 40 per cent of the city's total while trade attracted 20 per cent and science and technology, 14 per cent.

South Korea ranked first among foreign investors, accounting for 35.8 percent of total investments, followed by Japan at 35.7 per cent and Hong Kong and China at 12.3 per cent.

Trade shortfall hits nearly US$1 billion in two weeks

Vietnam’s trade deficit was estimated at US$955 million for the first half of September, reducing the country’s total export surplus since the beginning of the year down to US$2 billion, according to customs statistics.

The two-week trade turnover grossed US$11.8 billion, or 9% lower than the figure recorded in the preceding last two weeks of August.

From January to September 14, the country’s cumulative trade surplus hit US$2 billion, with US$6.5 billion attributable to foreign invested enterprises.

Key export items for the period included telephones and components, crude oil, seafood, footwear, computers, electronic products and spare parts.

Import value in the reviewed period saw a 6% increase to more than US$6.4 billion compared to August’s second half, mostly reported in seafood, dairy products, fruits and vegetables, and wheat.   

Banks eye growth in mobile banking

Commercial banks are eyeing mobile banking as a potential way to harness growing demand for online transactions, industry experts say.

Despite accounting for only a small portion of total market transactions, mobile banking is fast becoming a must-have product offered by Vietnamese banks.

"Mobile banking has been and will be an indispensable product for the banking sector," said Manager of Bac A Bank's Card and e-Banking department Pham Dang Khoa.

Nguyen Chien Thang, manager of internet banking at Sai Gon - Hanoi Bank (SHB), agreed that mobile banking will be favoured by Vietnamese consumers.

A rapid increase in the number of mobile subscribers, cheap smart phones, improving network infrastructure and a young population are key factors driving the development of mobile banking, he said.

Both representatives from Bac A Bank and SHB agreed that mobile banking has advantages over other products.

Thang said modern technologies integrated into smart phones will allow customers to make transactions whenever and wherever they need.

Banks need to provide applications for customers and offer them technical support to improve the quality of mobile banking, he added.

Meanwhile, Khoa believed that young consumers will be the focus of banks given the ubiquitous use of smart technology.

However, the biggest challenge facing mobile banking is how to approach customers, according to both managers.

"The banks have to design the application in the simplest way and instruct their customers to set it up on their phones," said Thang.

Khoa added that the youth is not the ideal group for product segmentation since they are not the ones with highest demand for banking products.

Additional obstacles lie in maintenance and large investments are needed to integrate current services with mobile banking, Khoa said.

However, the opportunities to deliver mobile banking to customers are increasing, according to Thang.

Around five years ago, modern technologies like smart phones, 3G connections or online payments were a rarity not trusted by customers.

Services requiring non-cash payments were even avoided by customers because of lack of confidence and credibility in online payment systems.

Thang said he believes that the success of mobile banking could eclipse internet banking in the near future. However, the Government has a role to play in creating confidence by creating a transparent legal framework, he said.

The popularity of mobile banking among consumers will also lie in the designing simple online applications that are secure and customer-focused.

However, banks should be patient and listen to their customers to improve the creditability of their products, said he.

Retailers urged to toss out outdated practices

The Vietnamese retail market has huge potential, but local investors are frittering away the advantage by failing to develop modern retail, a senior industry-trade official has warned.

The industry is dominated by traditional distribution channels and plagued by tiny investments, and is a sitting target for foreign investors, Nguyen Loc An, deputy head of the Ministry of Industry and Trade's Domestic Market Department, said.

According to ministry statistics, the retail industry accounts for 13-15 percent of GDP growth and provides over 6.3 million jobs.

With the national population at over 90 million, a third of it living in urban areas and having an average income of US$2,000 per year, the potential for modern retail is huge.

Besides, infrastructure has improved and expanded, creating favorable conditions for the easy distribution of goods.

But traditional delivery channels dominate. At the end of last year, there were 8,546 traditional markets of various kinds and around 1 million mom-and-pop businesses.

In comparison, there were only 724 supermarket outlets, 132 malls, and a few hundred convenient stores in the country.

The market share of modern retail is estimated at less than 25 percent, much lower than in neighbouring countries like Indonesia (43 percent), Thailand (46 percent), Malaysia (53 percent), and China (64 percent).

Even in HCM City , modern retail accounts for only 37 percent, compared to Shanghai (88 percent), Kuala Lumpur (63 percent), Bangkok (70 percent), and Jakarta (66 percent).

"Most of our traders are small or medium-sized, with 55 percent of retail enterprises having a capital of under VND100 million (US$4,700)," a member of the Vietnam Retailers Association revealed.

There are several foreign investors in the modern retail sector — like Big C (France), Lotte, Lock&Lock (the Republic of Korea), and Aeon (Japan) – who have speeded up development.

"The modern retail model will strongly develop in various forms," An was quoted as saying in Sai Gon GiaiPhong (Liberated Saigon) newspaper.

Last year, Saigon Co-op and Ocean Retail opened many new stores and plan to cover the whole country.

Foreign retailers are trying hard to complete the procedures required to enter the market.

"The traditional will also improve. Traditional retail has upgraded quality under competitive pressure," An said, adding that the former will continue be popular until 2020, especially in rural areas.

"Rural consumers are more and more important because they make up 70 percent of the population and can now buy everything — like electronic products, furniture, mobile phones, and motorbikes — not just essential goods like in the past."

The rural market is attractive to both manufacturers and retailers, he added.

According to the Vietnam E-commerce Association (VECOM), online and non-shop retail is quite big in the country.

Around 36 percent of the population uses the Internet and 57 percent of that number often shops online.

Vietnam ranks 16th in online shopping globally, and Master Card expects online retail to grow to US$8 billion by 2017.

The Vietnamese economy in general, and retail in particular, is expected to grow rapidly in this high-technology era.

In what is a new trend brought about by the economic downturn and high inflation, products made by retailers – distributors themselves or together with manufacturers are becoming more and more popular since their prices can be 10 – 30 percent lower.

Analysts expect this trend to sustain and forge ahead in the years to come when the economy recovers.

Businesses seek to gain consumer trust

Enhancing corporate social responsibility (CSR) to build up consumer trust in line with the vision of the United Nations Industrial Development Organization (UNIDO) is vitally important for businesses in international integration.

The statement was made by UNIDO Chief Representative Patrick Gilabert at a forum in Ho Chi Minh City on September 19.

To this end, UNIDO is providing conformance assurance solutions for Vietnamese businesses to implement a number of projects on food and pharmaceutical manufacturing.

Chairwoman of the Vietnam Retailers' Association Dinh Thi My Loan in turn echoed Gilabert’s view adding Vietnamese companies are facing tremendous future challenges of competitiveness as foreign retailers actively penetrate the domestic market.

The distribution and retail markets have already witnessed the arrival of retail giants such as Lotte and E-Mart from the Republic of Korea, AEON and Takashimaya from Japan and Aucham from France.

Vietnam is opening its markets in line with World Trade Organization (WTO) and free trade pact commitments, bringing with it both opportunities and challenges.

Vietnamese businesses need to revamp their business strategies to compete on two fronts. They need to struggle to maintain or expand production in the domestic market while simultaneously forging ahead and increasing outlets overseas.

It is no easy task, and instilling customer confidence in the business and gaining their  trust plays a critically key role for sustainable development, Loan said.

For his part, Florian Beranek, chief technical advisor of a project to help Vietnamese small and medium sized businesses adopt CSR policies, said communication is an effective tool for augmenting consumer trust.

Nguyen Thi Thien Phuong, Deputy Head of the Department for International Cooperation and Science Technology under the Vietnam Environment Administration (VEA), said a draft national action plan for enhancing consumer trust in Vietnamese businesses is in the works.

A national program on sustainable consumption and production (SCP) by 2020, focussing on effectively harnessing green growth and environment protection strategies as a means for elevating consumer trust in Vietnamese businesses, will help lay a solid foundation for sustainable development.

Thailand becomes top importer of Vietnamese tra fish

Vietnamese exports to Thailand of Vietnamese tra fish in the first seven months of the year skyrocketed up 40% on-year to US$27.98 million, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

As of late July, Thailand became the leading nation to import Vietnamese tra fish in the ASEAN bloc.

International Trade Centre (ITC) statistics show Thailand imported 10,070 tons of tra fish and frozen fish fillets in the seven month period, of which 99.8% came from Vietnam.

2014 rice exports to Russia decline in volume, sales

In the first nine months of the year, official statistics show Vietnam exports of rice to Russia dipped 12.6% in volume and 5.3% in sales to 485,000 tons compared to the corresponding period last year.

During the nine month period the average sales price of rice was down, hovering only around VND6,000 per kilogram.

Speaking at a recent conference reviewing year-to-date rice exports, Vice Chairman of Can Tho Municipal People’s Committee Truong Quang Hoang Nam acknowledged the rice exports to Russia were not great, comprising only 1.6% of total market share.

The Mekong Delta province of Can Tho should target to improve agriculture technologies and exports to Russia in order to improve the livelihood of Vietnamese farmers in the province, Nam said.

The province’s Department of Industry and Trade should co-ordinate with Can Tho city’s Investment and Trade Promotion Centre to effectively exploit the Russian market, update information on import tariffs and advertise trade names on Russian websites.

Green building construction is a must, experts say

Developing more green buildings and promoting green standards for construction works is a necessary and urgent step to save energy and natural resources in the country, the chair of the board of the Viet Nam Green Building Council has said.

Speaking at the seminar on "Green Building Development in Viet Nam", Professor Nguyen Huu Dung, who is also an architect, said: "The construction industry is the most developed, but the most polluted industry. It consumes 70 per cent of natural materials, 40 per cent of national energy, 30 per cent of fresh water and exhausts 30 per cent of gas, causing the greenhouse effect, climate change and higher sea levels.

"The industry must make changes to ensure sustainable development," he said.

According to the Asia – Pacific Green Building Network, Viet Nam has had a limited number of green construction projects.

Green building creates structures and uses processes that are environmentally responsible and resource-efficient throughout a building's life-cycle, including stages of design, construction, operation, maintenance, renovation and deconstruction.

"The development of green building in HCM City is like a bus without ignition to start the engine, which needs many people to push it," architect Tran Khanh Trung, president of HCM City's Green Architect Club, said.

"People" includes: government; organisations, associations; consultants, designers, and project management; construction contractors; suppliers; developers; universities; and media and users.

"The Government has released its Viet Nam Green Growth Strategy in 2012 along with national technical building regulations for energy-efficient buildings. Lotus green building rating tools have also been issued," Trung added.

Trung also noted that many design consultants had started providing green building consultancy, and several contractors have gained green construction experience. In addition, more developers have begun selecting green solutions for their projects.

"But as of September, HCM City has had only two buildings certified with the Green Mark and one building awarded with a LEED Certificate from the US Green Building Council. No project has received a Lotus rating," Trung said.

In order to create a green building market in HCM City, Trung said that building public awareness about environmental protection was very important.

"We should help people understand the value of green buildings, and increase demand for green buildings, and create a market," he said.

"Local government should be strict with the public in enforcing environmental protection laws, and also with investors and projects that commit violations. It should also provide more incentives for green projects and products," he said.

Associate Professor Do Tu Lan said: "Viet Nam should complete its own standards for green city development, which should be flexible and reasonable for different cities and regions."

Currently, the United Nations Human Settlement Programme (HABITAT) is supporting several towns and cities in Viet Nam, like Hoi An, to help them target green growth.

In addition, German experts from the German Federal Enterprises for International Cooperation (GIZ) are working with the Ministry of Construction and medium-sized cities to help them adapt to climate change, limit natural calamities and prevent flooding.

Sugar company plans foreign listing

The shares of sugar company Bourbon Tay Ninh (SBT) would be listed on a foreign stock exchange after it merges with the Gia Lai Sugarcane Thermoelectricity (SEC) firm.

At an SBT shareholder meeting, Pham Hong Duong, a member of the company's board, said, "Our plans for listing are proceeding well, and SBT will be listed abroad soon."

The shareholders approved the company's merger with SEC. SBT would issue shares that can be swapped with SEC shares at a 1:1.05 ratio.

According to Bao Viet Securities Co, the consulting agency for the merger, the deal would be completed this year.

SBT's total assets after the merger are expected to be worth VND5.2 trillion (US$245.2 million) by 2018, making it the largest firm in the sector.

It has a charter capital of nearly VND1.5 trillion ($70.7 million), while SEC has VND390 billion ($18.3 million).

In the first six months of this year, SBT's revenue and profits reached VND1 trillion ($47 million) and VND67 billion ($3.1 million) respectively. Between July 1, 2014 and June 30, 2015, the company hopes to increase the revenue and profits to stand at VND2 trillion ($94 million) and VND175.6 billion ($8.2 million) respectively.

Currently, the domestic sugar industry encounters a number of challenges while competing with imported products. Next year, as the ASEAN free-trade pact is finalised, the Vietnamese sugar market will open fully and the import duty will be reduced from 5 per cent to zero.

According to SBT chairwoman Dang Huynh Uc My, the company's target of paying dividend at 10 to 12 per cent for the July 2014 – June 2015 period was a hard nut to crack due to the context. However, during the first six months this year, the firm has received some good news, with the export of several tonnes of sugar to Singapore and the receipt of positive feedback from customers.

My expected her company's dividends to increase in the new fiscal year.

Viet Nam attracts $1.34b from German investors

As of August 31, Germany has pumped US$1.34 billion into 236 projects in Viet Nam, the Ministry of Planning and Investment's Foreign Investment Agency has reported.

The investment by Germany is the 22nd highest among 101 nations and territories that are investing in Viet Nam.

Among Vietnamese localities, HCM City was the most attractive destination for German businesses. They invested more than $234 million in 93 projects in the city.

It was followed by the southern provinces of Ninh Thuan and Dong Nai with two projects at $156.7 million and seven projects at $145.6 million, respectively.

The German investment came to a wide range of sectors including manufacturing, production, water, electric and gas distribution, retail and wholesale, agro-forestry and fisheries, wastewater treatment, finance and banking, insurance and science and technology.

Meanwhile, Vietnamese businesses have to date invested $92 million in 17 projects in Germany. They are investing in fields such as finance and banking, real estate, IT and trade.

A recent survey of the German ASEAN Chamber Network showed that German businesses were positive on Viet Nam's economic outlook and have high expectations for the next year in terms of sales, production, human resource demand and capital expenditure.

Seventy per cent of the German companies in the country confirmed positive market development over the past year and a good current situation leading to a more positive outlook than in 2013 on the overall economy, capital expenditure, and private and business consumption.

Around 50 per cent of the firms have performed better compared to last year and expect to continue this strong run, especially in sales where 56 per cent of the respondents forecast an increase over the next 12 months.

Foreign firms could see faster project buy-in times

Experts are suggesting the government permit foreign companies to buy long-delayed real estate projects without having to go through lengthy procedures to secure new investment licenses.

According to Dr Tran Du Lich, member of the National Assembly’s Economic Committee, skipping the requirement for foreign firms to secure a new investment license for already existing projects would help reduce time and slash unnecessary procedures, while also providing an effective way to stimulate the market.

Many real estate projects were still unlikely to be finished in the near future due to capital shortages.

Many of those had resolved their delays through selling projects or merging. Others were keen to engage foreign partners, but they had been hindered by red tape that insisted that the involvement of foreign firms would require developers to restart all their investment applications.

“This is unreasonable because it is a waste of time and creates concerns among the foreign partners that there may be a hitch,” Lich said.

Nguyen Manh Ha, head of the Ministry of Construction’s Housing and Real Estate Market Management Department, said that according to the current regulations, project owners who wanted to transfer their projects needed to have an investment certificate, the project needed to be on undisputed land and the investor needed the legal right to use the land.

In many cases, Ha said, the dispute between project and land plot owners were the original cause of the long delays in the first place.

New project investment licence holders needed to prove their financial capacity.

Ha said the Ministry of Construction was reviewing and resetting the whole system and unreasonable procedures would be dumped.

In the Housing Law, domestic developers were forbidden from directly selling their projects to foreign partners without permission from local authorities. This transaction currently has to be carried out by a third party – the local authorities – and these procedures were also overly complicated, lengthy and subject to abuse.

The lack of investment and downturn in the real estate market in recent years has left many developers unable to either complete their projects. However, positive signs in the real estate market have encouraged developers to attempt to finish their projects as demand increases. Prospective investors have been searching for delayed projects to inject cash into. Others have pursued mergers or acquisitions or entered partnerships. According to SohoVietnam, a consultant focused on M&A real estate projects, hundreds of projects are seeking new partners.

“Instead of long delays and sitting on deteriorating half-built stock, firms should be seeking new partners to agree joint ventures, or sell their projects in order to recoup some capital,” said Phan Xuan Can, chairman of SohoVietnam, a consultant specialised in real estate project transactions.

Experts: Backup power supply needs improvement

Energy experts have called for the electricity sector to carry out a host of measures to improve backup power supply and ensure supply stability for the country.

The experts mentioned the measures after Vietnam Electricity Group (EVN) said the national power system is capable of meeting demand and serving the country’s socio-economic development this year, according to Vietnam News Agency.

Tran Viet Ngai, chairman of the Vietnam Energy Association, said in the past three years, electricity supply has been virtually met thanks to an additional 9,900 MW, 110 power works of 110, 220 and 500 kV in operation.

Of the country’s power supply as of early this year, hydropower accounted for the highest proportion of nearly 48.8%, followed by gas- and oil-fueled generators 24.29% and coal-fueled generators 23.07%. Besides, stability of the power system in many areas has been improved thanks to many overload reduction works put in place.

EVN said it generated and purchased an estimated 12.41 billion kWh last month, bringing the total power volume in the January-August period to some 93.66 billion kWh, up 10.41% year-on-year. Commercial power supply reached 83.977 billion kWh in the eight-month period, rising by 10.43%.

According to EVN, electricity supply for agriculture, industry, commerce-hotel-restaurant, consumption management and others made up 1.5% (up 1.6%), 53.5% (up 13.14%), 4.7% (up 9.97%), 35.8% (7.76%) and 4.5% respectively.

Energy experts said though the power transmission output has achieved two-digit growth in the past three years, electricity consumption has also risen by 10.4%.

They were also concerned that the backup power capacity has not been improved much.

Do Mong Hung, head of technical and operational department at EVN, said overloads still occur in some areas and reliability of power supply is not high.

In fact, since last year, the 500kV power grid has always run at its full capacity, mainly to transmit electricity from the north to central and southern regions of the country. Meanwhile, due to difficulties concerning capital allocation, site clearance and compensation, many power projects have fallen behind schedule and therefore backup power transmission is not guaranteed, especially in the north and the south.

The transmission of electricity from the north to central and southern regions is projected to continue in the next three years.

“With a total length of over 1,500 kilometers stretching from the north to the south, it is not easy to transmit a huge power volume continuously,” Hung said.

Besides, there are many power lines operating at full steam and even higher than designed.

In the medium and long terms, Hung said EVN is adopting solutions to increase reliability and stability of transmission power lines in particular and the power system in general.

In the next four years, EVN targets to ensure the implementation process of power supply projects currently under construction in southern provinces, especially Vinh Tan 2, Duyen Hai 1, O Mon 1 and 2, Duyen Hai 3, extended Duyen Hai 3 and Vinh Tan 4 to increase power supply for the southern region and ease transmission overloads on 500kV lines.

South sees new wave of real estate offers

Southern provinces have witnessed a boom in property sales following the traditionally slow ‘Ghost Month’ that haunts buyers.

A lot of large scale property corporations have continued pouring their finances into real estate markets in Ho Chi Minh City, Dong Nai and Binh Duong provinces.

Novaland has announced 15 property projects worth millions of dollars.

Projects included the $500 million Sunrise City project in Ho Chi Minh City’s District 7.

The Hung Thinh Group also announced its intention to invest in several major projects in the near future.

According to Hung Thinh Group chairman Nguyen Dinh Trung, the company had successfully negotiated with the Binh Trieu Construction and Engineering JSC to develop the $95 million Binh Trieu housing project, located at Binh Thanh district, Ho Chi Minh City.

Similarly, the National Housing Organisation Joint Stock Company (NHO JSC) announced the development of 14 projects in Ho Chi Minh City, Hanoi, Quang Ngai, Binh Duong and An Giang worth a total of VND20 trillion ($952 million).

So far, NHO JSC has started the implementation of First Home project in District 12, Ho Chi Minh City and First Home in Binh Duong province. The company expects to start its First Home development in Ho Chi Minh City’s District 9 in October this year and First Home Hanoi at the end of this year.

Vingroup – another large-scale property investor - also kicked off work on the Vinhomes Tan Cang project worth $1.4 billion.

According to the plan, the 43ha project will be one of the most modern urban areas in Vietnam, providing huge amounts of housing for Ho Chi Minh City. The project is expected to be completed in 2017.

According to Luong Tri Thin, chairman of Dat Xanh Corporation, his firm was focused on raising capital for future projects.

Dong Nai and Binh Duong provinces are also experiencing property market recoveries.

In Dong Nai, Thailand’s Amata Group has received approval to invest in a new high-tech area and urban service area in Long Thanh district.

This 753 ha area will see $500 million in investment and will include 3 and 5-star hotels, exhibition and conference centre, shopping centre, and education and health care services.

Despite the gloomy Dong Nai property market, Amata has underlined its faith in the province as an investment destination.

Binh Duong has also seen a range of new investments. This September, Kim Oanh Real Estate Company signed an agreement with the Thanh Le Commercial Import Export Company and officially launched the sale of the Mall City urban area project located in Di An district.

Tac Dat Tac Vang Real Estate Company has also co-operated with Becamex IJC to develop the IJCcommercial urban area project based at the Vietnam-Singapore Investment Park in Binh Duong.

Deputy Minister of Construction Nguyen Tran Nam said the recent property market recovery was obviously reflected in the rapid increase in successful transaction figures.

Hanoi recorded more than 5,100 successful transactions in the first seven months of the year, double compared to the same period last year. Ho Chi Minh City saw 4,500 sales, a 30 per cent rise from a year ago.

Nam added many policies would affect the property market, including a batch of newly revised laws, the rising disbursement rate of the VND30 trillion ($1.4 billion) stimulus package and the extension of the loan period from 10 years to 15 years for mortgages which ad all helped the recovery.

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