Synthetic fiber manufacturer to hold IPO

Century Synthetic Fiber Corporation plans to make its initial public offering (IPO) of shares on December 9 and get listed at the HCM City Stock Exchange after that.

The State Securities Commission allowed the new company, a synthetic fiber manufacturer, to issue three million shares at a reference price of VND18,000 (US$2.8) each.

The company and its major shareholder, Red River Holding, held a roadshow yesterday to introduce the potential of the stock.

After holding the IPO and issuing its audited financial report for this year, Century Synthetic Fiber will file for the listing of its shares at the HCM City Stock Exchange sometime in the second quarter of 2015.

The IPO aims to raise funds for the company's VND729-billion ($34.3-million) factory expansion plan which began last May at Trang Bang in Tay Ninh Province, company officials said.

The company also plans to put 50 per cent of the factory's capacity to commercial use in the third quarter of next year.

According to Dang Trieu Hoa, chairman of the company's board of directors, Century Synthetic Fiber had to enhance capacity because of the increasing demand of its clients, all suppliers of large brands such as Nike, Adidas and Uniqlo, as well as Zara and The North Face.

From 2008 to 2013, the company's revenues increased by 39 per cent and its profits, by 65 per cent. It expects the expansion to help increase by about 20 per cent its revenues, to VND2.3 trillion ($108.4 million), and its profits, to VND132 billion ($6.2 million), in 2016.

In the first nine months of 2014, its revenues reached more than VND1 trillion ($47.1 million) and its profits, VND82 billion ($3.8 million).

Local companies focus on brand evaluation

Brand evaluation is now a top concern of many Vietnamese businesses, especially as more merger and acquisitions (M&A) occur, Vu Thu Hang, deputy director of HCM Ctiy branch's Viet Nam Chamber of Commerce and Industry, said at a seminar held yesterday in HCM City.

Hang said analyzing challenges and opportunities would help businesses assess their brand value in M&A deals and reduce pressure from competitors.

Richard Moore, chairman and general director of Richard Moore Associates (RMA), said that local companies' brand value could deteriorate if the firms did not evaluate the effectiveness of their brands.

Viet Nam has seen a rising number of M&A deals, including one from the Japanese Unicharm Group, which bought all Diana Vietnam Company shares worth about $128 million.

Masan Consumer has acquired Vinacafe Bien Hoa, while Highlands Coffee has bought the chain Pho 24 for an estimated $20 million.

Many brand values are assessed at tens of million of dollars, and though asset value and revenue can be measured, the brands have an invisible value that is not easily evaluated.

This can confuse both buyers and sellers when they attempt to assess brand value.

Nguyen Duc Son, brand strategy director of RMA, said for big brands, the brand value accounted for 40-60 per cent of the company's value.

He said that RMA's programme helped assess invisible values of brands, using 11 factors including market, customers, market share, brand culture and brand recognition.

The seminar was organised by the Viet Nam Chamber of Commerce and Industry in collaboration with Richard Moore Associates, LeBros Communications Co. and Nielsen Viet Nam Market Research.

New system to heighten safety for depositors

The Deposit Insurance of Viet Nam (DIV) and FPT Information System Company Ltd. (FPT IS) yesterday agreed to install a new information and communications system to tighten security for depositors.

The agreement that DIV and FPT IS signed forms part of the World Bank's Financial Sector Modernisation and Information Management System project in Viet Nam.

The project assists the State Bank of Viet Nam (SBV), Credit Information Centre and DIV in upgrading their main functions to the level of international standards.

The agreement, called DG#1, aims to design for the DIV a centralised information and communications platform connecting to the SBV database. In addition, FPT IS will develop software programmes for daily activities and a backup centre to ensure data security and continuous operations for DIV.

DG#1 will be fully implemented 22 months from December. Authorities believe its success will strengthen the DIV's effectiveness in executing the Law on Deposit Insurance and protect depositors, especially small ones, when data from credit institutions, financial markets and SBV operations is captured in one platform.

As this centralised core banking system is completed, information will be used to support policy and supervision functions, as well as meet SBV disclosure obligations.

DIV Chairman Nguyen Van Thanh expects the system to transform DIV into an effective arm of the SBV in dealing with financial turmoil.

According to Le Manh Hung, director of the SBV information technology department, DG#1 is the World Bank project's last bidding component.

Food producers urged to add value

Enterprises in the food industry should focus more on improving production technologies to create products with added value, delegates said at a conference in HCM City yesterday.

Ta Hoang Linh, deputy general director of the Viet Nam Trade Promotion Agency, said Viet Nam's varied geographic and climatic conditions enabled it to grow a diverse range of agricultural crops.

The products not only meet domestic demand but also exports, Linh said, adding that Viet Nam is the world's largest exporter of many farm produce such as cashew nuts, coffee, rice, tea and seafood.

However, export revenue remains low since most products were exported as raw materials with very little processing.

Dam Ngoc Nam, deputy head of the Department of Processing and Trade for Agro-forestry-Fisheries Products and Salt Production, agreed, saying that the deep processing rate in the cashew sector (salted cashews, fried and spicy cashews, mixed nuts, cashew confectionery), for instance, is modest, with only 6 per cent.

The ratio is about 10 per cent for fruits and coffee sectors, he said.

Although enterprises involved in agricultural, forestry and fisheries production have invested significantly in modern technologies and equipments, a large number of firms have not invested in equipment to enhance product value, mostly because of financial difficulties, he said.

Ly Kim Chi, chairwoman of Food and Foodstuff Association of HCM City, said local firms should invest more in upgrading production machinery, strengthen market research, and diversify products to fit the tastes and habits of each market and customers.

Building brands, enhancing trade promotion, and expanding distribution systems to increase sales both at home and abroad are also very important, she said.

Reindert Dekker, an expert at the Netherlands' Centre for the Promotion of Imports from Developing Countries (CBI), said producers should differentiate products through packaging and ingredients, and diversify their products to meet different groups of customers as well as build brands for their goods.

Convenient packaging has become a growing trend as consumers' daily schedules have become busier, he said, adding that the global demand for natural ingredients would remain strong and not just in traditional markets. Producers need to pay attention to that, he said.

In addition, development of support industries to cater to the development of the processing industry is needed to improve promotions, Nam said.

Demand for clean foodstuff and deeply processed products is increasing both at home and abroad, Chi said.

With the world population expected to reach 8.2 billion in 2030, it will be a major challenge to meet food and foodstuff needs.

The international conference on Viet Nam's food industry was organised by the Ministry of Agriculture and Rural Development in collaboration with the Viet Nam Trade Promotion Agency and the Netherlands' CBI.

Cement consumption on the rise

In spite of continuing economic difficulties, cement and clinker consumption next year will reach roughly 71 million to 73 million tonnes, a four- to seven-per cent year-on-year increase.

The Ministry of Construction made this prediction and added that of the total, about 52 million to 53 million tonnes would be consumed in the domestic market and the rest would be exported.

Domestic cement production currently meets demand. The country currently has 74 cement production lines with a total output of 77 million tonnes per year.

The ministry has required concerned agencies to scrutinise the investment and construction process of cement plants. It has also instructed cement producers to cut costs and streamline their trading networks to boost consumption.

In the first 10 months of 2014, cement producers sold 56.54 million tonnes of cement and clinker, meeting 88.2 per cent of the industry's annual target.

The ministry estimated total cement consumption this year to reach 68 million tonnes, a three-per cent year-on-year increase. Of the total, about 49 million tonnes will be consumed in the domestic market.

According to the Viet Nam Cement Association, cement exports this year could earn as much as US$1 billion via the export of 20 million to 21 million tonnes of cement and clinker, a 15-per cent year-on-year increase in value.

Figures from the General Customs Department showed that the shipment of cement and clinker increased in both volume and value from January to October this year to nearly 18 million tonnes.

Tran Viet Thang, director general of the Viet Nam Cement Industry Corporation (Vicem), which provides 34 per cent of the cement sector's output, said Vicem alone exported about 1.8 million tonnes of cement and clinker in the first three quarters of 2014 and planned to sell one million tonnes more in the last quarter of the year.

HCM City to host Viet Nam Expo 2014

Over 400 businesses will showcase their products at the Viet Nam Expo 2014, which opens on December 3 in HCM City.

Participating firms come from 15 countries and territories: Poland, India, Belarus, Taiwan, Indonesia, Hong Kong, South Korea, Malaysia, Nepal, Japan, France, Slovakia, Switzerland, China and Turkey.

Electric machines and equipment, electronics, bicycles and electric bicycles, exterior, interior and household products will be shown at 450 booths in the four-day event.

Organised by the Viet Nam National Trade Fair and Advertising Co (Vinexad), the expo promotes trade among domestic and international firms, especially those in the Asian region. The Viet Nam Two-wheel Vehicle International Exhibition (Inter Cycle 2014) and Turkey products Exhibition (Turkey Expo 2014) will be held during the event.

New coffee roasting plant opens

Italian beverage group Massimo Zanetti on Tuesday opened its first coffee roasting plant in Viet Nam, with its products to hit the market – both domestic and export – next month.

The US$6 million facility is in the My Phuoc 3 Industrial Zone in the southern province of Binh Duong and has an annual capacity of 3,000 tonnes of roasted coffee, equivalent to around 50,000 sacks of coffee.

It will produce various kinds of roasted coffee. In deference to traditional blends, it will roast Segafredo coffee for the Asian market.

"For the group, the inauguration of this new plant represents an important step on our path in the Asian market," Massimo Zanetti, the group's chairman, said. "With the production capacity of this new plant, we will be able to support our growth in these high-potential markets, where by 2017 we estimate growth rates of between 6 and 15 per cent."

Massimo Zanetti Beverage Group was the world's first private group in the coffee market, and its international brands include Segafredo Zanetti, Chock full o'Nuts, Kauai, Hill Bros, and Meira.

Sharp rise in Visa transactions

Visa's online transactions increased by 52 per cent year-on-year in the nine-month period between September 2013 and June this year, with online shoppers using their Visa debit cards more than ever to make purchases, said a company official.

"We have seen 19 per cent of our payment volume from Vietnamese cardholders coming from e-commerce in the period," Sean Preston, Visa's country manager for Viet Nam, Cambodia, and Laos, told a press briefing on Tuesday.

Debit cards accounted for 39 percent of Visa's online transactions in Viet Nam during the period after growing by 67 per cent during the period.

HDBank is best cash manager

Housing Development Bank (HDBank) has been named ‘The Best Local Cash Management Bank' for the fourth consecutive year by financial magazine Euromoney.

HDBank won this award thanks to its creative cash management solutions, best liquidity management solutions, payables and receivables, outstanding business strategies, best capacity online technology, and after-sales service.

In September HDBank had won a similar award from Asiamoney magazine, a leading Asian finance magazine, this time for the third consecutive year.

Can Tho to boost trade promotions

The Cuu Long (Mekong) Delta city of Can Tho aims to increase trade promotion with Japan and South Korea next year in order to improve its provincial competitiveness index (PCI).

The province will boost trade promotion with Japan to attract projects in hi-tech agriculture, information and technology, manufacturing and equipment for agro-aquatic processing, said director of the city Department of Investment, Trade and Tourism Promotion Centre Nguyen Khanh Tung. The move also aims to create opportunities for business co-operation in key sectors such as rice exports, seafood, garments and textiles, pharmaceutical products and fertiliser.

Italian investors keen to invest in industrial parks

Italian enterprises are particularly interested in pouring money into projects at industrial parks in Ho Chi Minh City, Dong Nai and Binh Duong provinces, said Chairman of the Italian Chamber of Commerce in Vietnam (ICHAM) Michele D’Ercole at a business forum on November 26.

Italian investors are keen on various fields from engineering, energy, infrastructure and transport to support industry, garment and textile, added Michele D’Ercole.

Additionally, Italian investors also eye to set up joint ventures with local businesses in the areas of science and hi-tech manufacturing.

Deputy Director of the municipal Centre for Trade Promotion and Investment Ho Xuan Lam said Ho Chi Minh City welcomes foreign investors, including those from Italy, to invest in areas of electronics, information technology, engineering, chemical – plastic – rubber, and food processing.

The city also encourages businesses to develop new urban and high-tech areas.

Currently the city is home to 17 industrial parks and processing zones, he noted.

Dong Nai invites NGO funding for development

The southern province of Dong Nai is set to mobilise 120 billion VND (5.7 million USD) from foreign non-governmental organisations (NGOs) to a total of 81 projects across economics, education, medical and social security between now and 2015.

The news was announced by the provincial chapter of the Vietnam Union of Friendship Organisation (VUFO) during a conference in the locality on November 25.

The province will offer all possible support for NGOs, including surveys or administrative procedures support, the chapter said.

Projects calling for foreign investment are in the fields of sustainable environment development, healthcare, vocational training and economic development.

The province is now home to 107 foreign NGOs which are conducting 62 projects and non-projects worth nearly 20 million USD, including 22 projects and 8 funding packages recorded last year, notably a project on employment and social security for people with disabilities by Handicap International, said Vice Director of the provincial Department of Planning and Investment Pham Minh Thanh.

Over 1.8 billion USD to expand Duyen Hai power plant

The Power Generation Company 1 (GENCO 1) under Electricity of Vietnam Group inked a deal with Japan’s Sumitomo Corporation on November 25 on the expansion of the Duyen Hai 3 thermal power plant.

Accordingly, the expansion work will be done by the Japanese corporation under an Engineering, Procurement and Construction (EPC) contract worth over 891.6 million USD, of which 85 percent comes from both domestic and foreign commercial loans.

It will include the construction of a turbine with designed capacity of 660 MW, which will help the plant, whose construction was kicked off in 2012, generate 3.9 billion kWh.

At the signing ceremony, GENCO 1 Chairman Nguyen Loan said the Duyen Hai 3 plant covering an area of over 878 hectares in Dan Thanh commune, Duyen Hai district, is amongst the 4 thermal power plants with total capacity of 4,200 MW in the Mekong delta province of Tra Vinh.

Tsutomu Akimoto, a representative of Sumitomo Corporation, expressed his confidence on the firm’s technical reliability, which was attested by the EVN’s first thermal power plant, the Pha Lai 2 plant, which was built a decade ago and is operating smoothly.

Construction of the expanded Duyen Hai 3 plant will start this December with a total investment of 1.82 billion USD.

It is expected to be operational from 2018 onwards to help the country solve electricity shortage for the southern region, particularly during dry seasons.

Samsung to make smart TVs at latest $3bn Vietnam facility

Smart TVs are among many electronic devices in addition to mobile phones Samsung is planning to start producing in a northern Vietnamese province under a fresh multibillion-dollar investment, the provincial administration has said.

The South Korean electronics titan is reportedly investing another US$3 billion in Thai Nguyen, where a $2 billion facility has already been operational since March.

The Thai Nguyen administration said last week Samsung’s new investment was still under consideration, and it could not give any details.

But in a proposal submitted to the provincial People’s Council early this week, Samsung’s intentions for its second Thai Nguyen facility have been revealed.

The document is intended to list the preferential treatments the Thai Nguyen administration is seeking permission to award to Samsung.

Samsung is expected to produce not only mobile phones and parts but also make and assemble laptops, digital cameras, vacuum cleaners, smart TVs, medical equipment, and other electronic devices at the new facility, according to the proposal.

A smart TV, also known as a connected TV or hybrid TV, is a TV with integrated Internet capabilities or a TV set-top box that offers advanced connectivity and computing abilities, according to Reuters. Smart TVs allow users to install and run advanced applications based on specific platforms.

The Thai Nguyen administration proposes that Samsung enjoy a 10 percent corporate tax for 30 years, with an exemption for the first four years. Vietnam currently imposes a 20 percent corporate tax rate on businesses.

The proposed preferential treatments also include zero land leasing fees for the whole life of the project, and a 50 percent reduction in the infrastructure leasing fee in the Yen Binh Industrial Park, where Samsung’s existing plant sits.

The province’s administration also sought to reduce the number of required standards in terms of research and development for Samsung.

Once the new Samsung facility is commissioned, it will create a ‘miracle’ for the economic development of Thai Nguyen, as the world’s leading smartphone maker will attract many suppliers to the province, according to the provincial administration.

Thai Nguyen will thus become one of the world’s top technology cities, it said.

The South Korean firm’s investment in Vietnam has hit nearly $7 billion.

Samsung is operating a $2.5 billion complex in Bac Ninh, also a northern province, where another $1 billion LCD plant is slated for construction, according to an agreement its screen-making unit inked in June.

Samsung is also poised to build a $1.4 billion consumer electronicsfactory in Ho Chi Minh City’s Saigon Hi-Tech Park.

If the 70-hectare plant in Thai Nguyen is licensed, Samsung’s total investment in Vietnam will rise to roughly $10 billion, making the Southeast Asian country one of the most important production bases for the electronics behemoth.

The company also signed a memorandum of understanding last month to develop a $2.5 billion thermal power plant in the north-central province of Ha Tinh.

Global sugar prices may rise in the coming time, thus leading domestic sugar and sugarcane prices to edge up, said an expert.

Ha Huu Phai, a sugar expert, told the Daily that local enterprises have tried to keep sugarcane prices at high levels but the previous price falls had forced many farmers to abandon cane cultivation, affecting cane output.

Cane was purchased from farmers in the 2013-2014 crop at around VND800,000 per ton, down by VND100,000 per ton compared to the last crop, but this price was still higher than recommended by the Ministry of Agriculture and Rural Development.

Slashing sugarcane to shift to other crops has been seen in some places where farmers and firms do not have contracts, while some big sugar refineries like Lam Son and Nuoc Trong have still bought sugarcane at a high VND800,000-900,000 per ton.

According to a survey of the Vietnam Sugar and Sugarcane Association, the ratio of return to cost shrunk from 50.4% in the 2011-2012 crop to 33.4% in the 2012-2013 crop, in which the southeastern region and the Mekong Delta saw a lower fall from 36.5% to 24%.

Statistics on the profit ratio of the 2013-2014 crop are not available but input costs have kept rising while sugarcane selling prices have been in decline. Therefore, growers in some areas are no longer interested in farming sugarcane.

However, Phai predicted sugar prices might increase. “The global sugar production cycle often lasts five years. Currently, the global sugar price is at the bottom of the curve and is about to rise,” said Phai.

Several years ago, the International Sugar Organization forecast that a global sugar oversupply was 10 million tons, and this figure fell to four million tons in the 2012-2013 crop. This crop was predicted to have a balance between supply and demand, but sugar prices remain low due to large inventories.

The world oil price fall and the London white sugar price surge to US$420 per ton in the last two months have shown signs of recovery in the sugar industry, Phai noted.

Relief for software firms

The Ministry of Information and Communications has issued a new circular making clear software production activities in a move to remove obstacles faced by enterprises in the process of implementing the revised Corporate Income Tax Law.

According to the revised law, software processing firms can get some incentives such as a tax rate of 10% for 15 years, tax exemption for four years and tax reduction of 50% for the following nine years.

However, software firms said it is difficult to distinguish between software processing and software services. Therefore, many software outsourcing companies have not been able to benefit corporate income tax incentives because, according to provincial authorities, they are deemed as software services providers.

The new circular, which will take effect at the beginning of next year, makes clear the process of manufacturing software products, making it easy to determine who are software producers and who are software services providers to facilitate the provision of tax incentives.

The process of software production consists of seven stages including identifi cation of requirements, analysis and design, programming and coding, testing, packaging, installation and transfer, and distribution.

VND3.6 trillion lent to road upgrade project

A contract was struck in Hanoi on November 20 to offer over VND3.6 trillion for the Hanoi-Bac Giang section of National Highway No. 1, according to the Government portal at chinhphu.vn.

The credit is syndicated by Vietcombank,  Vietinbank, and LienVietPostBank, with the first serving as the lead lender.

The project to upgrade the Hanoi- Bac Giang section of the highway is being carried out under the build-operate- transfer (BOT) format.

Construction of this project started on February 22 and is scheduled for completion in June 2016. When in place, the section would help boost social-economic development of localities along the road.

Nguyen My Hao, director of Vietcombank transaction office, said that seeing the eff ectiveness of the project, the bank has provided funding and other banking services for investors to finish construction work on schedule.

A representative of the Ministry of Transport said the road would also meet transport demand of locals and ease traffic congestion in the area.

In addition, it will enhance social-economic development as well as defense and security.

Gov’t okays passenger port on Phu Quoc

The Government has approved in principle a proposal for developing an international passenger port on Phu Quoc Island off mainland Kien Giang Province to cater to cruise ships that can carry 5,000-6,000 passengers each.

A dispatch signed by Deputy Prime Minister Hoang Trung Hai says Kien Giang, the Ministry of Transport and relevant agencies can proceed with the construction of an international port on the island, with the provincial government picked as project owner.

The province will cooperate with ministries and agencies to decide on the scale of investment and the amount of State capital. The provincial authorities suggested at a meeting with the transport ministry last month that 50% of the VND1.25 trillion cost of the project would come from the State budget.

According to a design prepared by project consultant Portcoast, the port would consist of a 400-meter pier with a main section measuring 240 meters in length and 19 meters in width, which allows ships to dock on both sides. A two-storey terminal covering nearly 4,500 square meters and a 1,020-meter bridge would be also constructed to serve tourists.

The consulting firm suggested two phases of development, with the first phase estimated to cost nearly VND1.1 trillion including VND537 billion for a breakwater. The province plans to develop the project under the public-private partnership (PPP) format, and call for Vingroup Joint Stock Company to participate.

Stricter requirements for imports from VN

If Vietnam enterprises want to enter deeper into the world market, they should attend more to requirements that importing countries have applied, said Ishan Palit, managing director of Product Service Division of Singapore-based TUV SUD PSB Pte. Ltd.

Apart from strict requirements in the U.S. and the European Union (EU), many other countries have also introduced stricter quality requirements on imported products to protect consumers, Ishan Palit told the “CEO talks” conference held on November 20 in HCMC.

Six months ago, Indonesia standardized and put some regulations on quality of imported products into law.

Vietnamese firms should also be aware of China’s increasingly-stricter regulations on apparel products.

At present, Chinese customs does not allow containers storing both footwear and apparel products to enter the country, as the two commodities must be stored in different containers.

Patil added that foreign buyers in general have tightened their inspections on seafood imports, and the only way for Vietnamese firms to cope with such rules is to study their requirements and set up risk management systems which will check product quality from the beginning to save time.

HCM City’s customs nearly meets tax target

The HCMC Department of Customs had collected VND74.3 trillion in taxes for the State budget as of November 12, meeting 99.3% of the VND74.8 trillion target set by authorities.

Speaking to the Daily, a customs official said the city’s imports this year stood at a high level, equal to that of last year, thus generating big import duty revenues. The strong import volume also indicates that business is going well in the city.

In addition, the process of debt collections was also conducted smoothly. As of November 15, the amount earned from tax debts and fines totaled VND819.5 billion, accounting for 86% of the VND952.8 billion target.   

The amount of newly-arising debt is small as enterprises from July 1 last year had to pay tax before completing customs clearance procedures.

Indovina Bank introduces IVB-VISA credit card

Marking the 24th anniversary of its establishment, Indovina Bank (IVB) is scheduled on November 21 to issue IVB-VISA credit card as part of a plan to expand its services to domestic individual and corporate clients.

This credit card is made based on innovative technologies Payment Card Industry Security Standard (PCI DSS) and 3D-secure service. The first technology requires issuing banks to keep customer data confidential as regulated by the VISA card organization while the latter enhances security for clients to make online payments as it requires cardholders to enter a one-time password for each transaction.

IVB will exempt customers from service fee in the first year of card usage. In addition, the first 200 early birds will be given VND1 million when they make a successful transaction and the bank will also refund VND100,000 per transaction to those using the IVB-VISA card to pay for goods and services. This promotion program starts from November 21 this year to February 21 next year.

Jan Yei Fong, general director of Indovina Bank, said the issuance of the IVB-VISA card is in line with the State Bank of Vietnam’s policy for encouraging the use of cards to pay for goods and services.

When it was established in 1990, Indovina Bank, a joint venture between Vietnam Bank for Industry and Trade (VietinBank) and Taiwan’s Cathay United Bank, mainly offered services for foreign-invested enterprises at industrial parks and big cities in Vietnam. But now it is expanding its services toward local individual and corporate customers.

Banks ready to cash in on rising year-end demand

Banks in HCMC have set aside a combined VND46 trillion to meet the increasing demand of corporate borrowers for cash to scale up business and production for a year-end shopping spree.

Lenders said they see the year-end as a good opportunity to improve sluggish credit growth. As of the end of October, HCMC-based banks reported credit growth of 7.5% compared to late 2013.

Nguyen Hoang Minh, deputy director of the central bank’s HCMC branch, said demand for cash accelerated at the end of the third quarter and early the fourth quarter as enterprises needed to boost production and business activities for the year-end sale season.

Banks in the city added around 1.4 percentage points to credit growth in each of September and October. Local banks are expected to post a credit expansion rate of 11% at the end of this year, Minh said.

However, most banks early this year found it hard to provide loans to customers as businesses scaled down activities due to the protracted economic malaise. Despite many measures to inject capital into the economy, the city may miss the year’s credit growth target of 12%, he added.

But, local banks still have made around VND46 trillion in loans available for the year-end business season, up around 10% against 2013.

Phan Huy Khang, general director of Sacombank, said the bank has slashed short-term lending rates for enterprises in need of working capital. The lender now offers annual short-term rates of 7-10% and long-term rates of 10-12%.

Sacombank hopes that the competitive lending rates will help lure more corporate borrowers. The lender has reported a credit growth rate of 13% in the year to date and expects to reach around 14% at the end of this year.

Pham Linh, deputy general director of VietABank, said credit has picked up strongly in recent times.

VietABank currently applies short-term lending rates of around 10% per annum. However, to attract borrowers, the bank has launched a preferential credit program with an annual interest rate of 7% for loans with tenors of less than six months.

With the credit program, VietABank is pinning high hopes that it will obtain higher credit growth at the end of this year, Linh said.

An entrepreneur in the food industry said bank loans have become more accessible now and many banks have launched preferential loan packages for customers.

However, the businessman will not take out huge loans for the upcoming sale season given the current state of the economy.

Ending October, the nation saw credit rise 8.63% compared to late last year, a strong improvement compared to the 6.62% recorded on September 22, according to the State Bank of Vietnam.

Kinh Do expands to instant noodle sector

Ki Do Limited Company, an affiliate of local confectionery giant Kinh Do, has marketed instant noodle products bearing Dai Gia Dinh brand in Vietnam a long time after the corporation unveiled its ambitious plan to join the food and flavor sector.

The new products available in sour and spicy shrimp, sautéed beef and onion, sour fish soup, crab and pork flavors are sold at around VND3,500 a packet. Kinh Do said the products are part of its strategy to diversify products to meet the food needs of local customers and to beef up its business growth.

Last June, the enterprise revealed a plan to participate in the country’s instant noodle market via partnership with Saigon Vewong Co. Ltd., which has been known for its A One instant noodle brand on the local market. Through the Taiwanese firm, Kinh Do will launch instant noodles and sauces under the original equipment manufacturer (OEM) form.

Saigon Vewong has gained much experience in producing instant noodles while Kinh Do has established a vast network of around 300 distributors and 200,000 retail points across the country.

Vietnam’s instant noodle revenue is put at US$2 billion per year. Demand for this product has increased remarkably in the past years, from 4.3 billion packets in 2009 to 5.1 billion packets in 2012.

Statistics of the World Instant Noodles Association showed that Vietnam ranks fourth after China, Indonesia and Japan on the global market in terms of instant noodle consumption.

At present, there are many instant noodle producers in Vietnam but the market is mainly dominated by Acecook, Asia Food and Masan. As a new player, Kinh Do will have to overcome a host of challenges if it wants to have a firm stance on the home market.

In addition to instant noodle, Kinh Do also plans to expand operations to the cooking oil and coffee sectors by acquiring stakes of Vietnam Vegetable Oils Industry Corporation (Vocarimex) and Phin Deli Company.

Leaders of Kinh Do have approved a scheme to buy more shares of Vocarimex to raise its ownership from 24% to 51%. If this scheme progresses smoothly, Kinh Do will place a big impact on the country’s oil industry as Vocarimex is now a major player in this sector.

The firm has yet to detail its investment in the coffee market, but said it would hold a controlling stake in Phin Deli.

Kinh Do said confectionery remained its core business and that it is investing heavily in this sector.

Early this month, Mondelez International announced a plan to spend US$370 million acquiring 80% of Kinh Do’s confectionary stake. Kinh Do’s board of directors is expected to discuss with shareholders about this matter at an extraordinary shareholders meeting on December 1.

HCM City uses counter capital more efficiently

HCMC has seen its budget use for development investment projects faring more efficiently as the ratio of the capital the city has had to allocate as reciprocal capital to these projects has shrunk significantly in recent years, the Secretary of the HCMC Party Committee said.

Le Thanh Hai told the closing session of the committee’s 20th meeting on Sunday that one Vietnam dong from the city’s budget attracted 8.5 dongs worth of development investment capital in 2006-2010 but 12.5 dongs in 2011-2014.

Hai said despite the falling ratio of the city’s budget for development investment projects, gross domestic product (GDP) has improved. This meant the use of budget capital has brought about better results as the counter capital has helped attracted more investments.

In 2011, the city reported total development investment capital of VND203 trillion out of VND576 trillion for the GDP in that year, or 35.2% of the GDP. The proportion is expected to drop to 28.5% this year when the capital is poised to increase to VND250 trillion out of VND880 trillion for the GDP.

At the opening day of the meeting last Saturday, HCMC chairman Le Hoang Quan said that the city aims for increases of 9.5-10% for the GDP and 8-10% for exports next year. The city targets total development investments to account for 30% of the GDP and consumer price index (CPI) to be lower than the national level.

Next year, the city will continue great efforts to attract investments to supporting industries, resolve difficulties of the real estate market, and maintain a fair playfield for enterprises of all economic sectors.

The local government will also try to make the most of official development assistance (ODA) loans for development projects, complete important infrastructure projects, and speed up private investments in environment projects.

Quan said the city expected the GDP to near VND879 trillion this year, up 9.5% against the previous year, and GDP per capita to exceed US$5,100, rising by 13% from 2013.

Hai said the city will provide small and medium-sized enterprises with incentives and financial support and boost manpower training in support of supporting industries next year. The city will also reduce exports of raw materials and monopoly in supplies of life’s necessities for citizens while combating drug criminals.

VCCI cooperates with HKVCC

The Vietnam Chamber of Commerce and Industry (VCCI) last Friday inked a cooperation agreement with the Hong Kong-Vietnam Chamber of Commerce (HKVCC) in HCMC.

Speaking at the signing ceremony, Jonathan Choi, chairman of HKVCC and of Sunwah Group, said the agreement would help enterprises of Hong Kong, China and Vietnam expand business ties.

This cooperation deal will pave the way for setting up a forum for businesses from both sides to share ideas and explore business opportunities.

Doan Duy Khuong, vice chairman of VCCI, said HKVCC and authorities in Hong Kong have coordinated with VCCI to support Vietnamese companies to do business with China and Hong Kong partners.

Over the past years, Vietnam-Hong Kong trade ties have been growing. As of October, bilateral trade reached US$4.96 billion, up 22.68% year-on-year. Vietnam’s exports to Hong Kong amounted to US$4.11 billion, up 30.38% against the same period last year, and its imports totaled US$850.5 million, down 4.59%.

Vietnam-Hong Kong trade involves fabric, garment, textile, footwear, computer, electronic devices, spare parts, machinery, seafood, timber and timber products.

Hong Kong had had 853 projects with total investment pledged capital of US$14.1 billion in Vietnam as of October 20.

In 2015, the ASEAN-China Free Trade Area will come into force with over 7,000 products enjoying a tariff of 0%.

Vingroup gets nod to upgrade routes from Tan Cang to city center

HCMC authorities have approved in principle a proposal by Vingroup Joint Stock Company (Vingroup) to build and upgrade some major routes connecting Tan Cang area in Binh Thanh District with the city center, said a source from the company.

According to the source, HCMC Vice Chairman Nguyen Huu Tin last week agreed with Vingroup’s proposal to build and upgrade those routes with an aim to completely solve the flood around the area. The routes will also facilitate the traffic flow to and from a new property complex being developed by the group in Tan Cang.

In line with the plan, Vingroup will upgrade Nguyen Huu Canh Street, build a riverside street from Ton Duc Thang Street to Ngo Tat To Street, and expand Ung Van Khiem Street.

The project of expanding Ung Van Khiem Street is in fact part of the second phase of the Binh Trieu 2 Bridge and Road project which has not been carried out after many years. Meanwhile, Nguyen Huu Canh and Ngo Tat To Streets are usually flooded seriously.

The city government has assigned the Department of Planning and Investment to cooperate with relevant departments and work with Vingroup to study the project of upgrading and building routes from Tan Cang to the inner area.

Vingroup has suggested building and upgrading those routes under the BT (build and transfer) format.

In July, the group broke ground for a multi-functional urban area called Vinhomes Tan Cang at a total cost of VND30 trillion on an area of 43 hectares at the Tan Cang area.

The complex includes the 81-storey Landmark tower, which will comprise serviced apartments and offices for lease.

The group expects to put high-class villas, schools and a Vinmec hospital of the complex into operation next year, and the entire complex will be inaugurated in 2017.

In July last year, the city authorities appointed Vingroup as investor of the international finance-banking-trading-services center, covering an area of 17 hectares in Thu Thiem Urban Area. The group is also investor of a multi-functional trading-services- residential complex on an area of 7.9 hectares in this urban area.

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