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BUSINESS IN BRIEF 29/1

Former Ocean Bank chief arrested for economic fraud; Agro, forestry, seafood exports down; Collect $2.4b in arrears, Gov't told; FPT Software targets $1b in 2015 revenue; HCM City targets surge in retail sales; Second-home segment bouncing back

Former Ocean Bank chief arrested for economic fraud

A senior banker was arrested yesterday for alleged economic frauds.

Nguyen Minh Thu, 42, former CEO and Chairwoman of the Ocean Commercial Joint Stock Bank was arrested following orders of the Ha Noi Supreme People's Procuracy, police told local media.

Thu was alleged to be involved in a big fraud case which has so far resulted in the police arrest of Ha Van Tham, the former Chairman and Nguyen Van Hoan, the former Deputy CEO and former member of the credit council at the Ocean Bank, who have also been accused of violating the rules governing the credit institution. 

Sacombank offers soft loans

The Sai Gon Thuong Tin Joint-Stock Commercial Bank (Sacombank) will offer VND10 trillion (US$470 million) in preferential loans to individuals, businesses, households and co-operatives in HCM City's 24 districts and many other cities and provinces this year.

The interest rate on the loans will be 6.9 per cent per year.

Last year, Sacombank provided loans worth more than VND4.7 trillion ($223 million) at 7 per cent interest to hundreds of businesses and households nationwide to help them develop and expand business.

$12m coffee plant opens in Dong Nai

A US$12 million coffee processing plant was opened by the German group Neumann Gruppe on Monday in the An Phuoc Industrial Zone, Long Thanh District, southern province of Dong Nai.

Covering an area of 5ha, by 2017, the plant was designed to process about 26 tonnes of coffee per hour. The product will be exported worldwide.

The plant is the second backed by Neumann Gruppe in Viet Nam. The first was constructed in 1992 in southern Binh Duong Province.

Vice chairman of the Dong Nai provincial People's Committee, Nguyen Phu Cuong, said he hoped the plant would help expand coffee growing areas.

The German group has 46 coffee processing plants in 28 countries. They contribute 10 per cent of global coffee exports.

Agro, forestry, seafood exports down

Viet Nam earned an estimated US$1.95 billion from exports of agro-forestry-fishery products in January, reflecting a year-on-year decline of 13.8 per cent, the Ministry of Agriculture and Rural Development, reported.

Of this figure, the farming industry's export value reached $859 million, down 11.8 per cent, while exports of seafood saw a decrease of 25.6 per cent to $412 million and forestry product exports generated $520 million, down 8.2 per cent.

Nguyen Thai Phuong from the Viet Nam Seafood Exporters and Producers (VASEP)'s information centre said the reduction in the seafood export value in January was normal because importers around the world were quick to promote imports of seafood from Viet Nam at the end of 2014 for the Christmas and New Year festivals, but demand had slowed in early 2015.

As usual, seafood exports by Viet Nam would pick up again from May and June, she said.

The association expects Viet Nam's total export value to touch $8.5 billion for the whole year, higher than $7.9 billion in 2014.

To remain a key seafood export market this year, the fisheries industry would have to restructure its operations and focus on exporting seafood products to other potential markets, such as ASEAN, China, Russia and the Middle East, the association suggested.

Export items that have reported an increase include tea, cashew nuts, cassava and cassava products.

In January, Viet Nam shipped 9,000 tonnes of tea abroad, earning $17 million and reporting a 1.4 per cent increase in volume and 5.7 per cent in value year-on-year.

Meanwhile, cashew nuts earned $29 million from the 18,000 tonnes exported, representing a respective year-on-year growth of 16 per cent and 20 per cent.

However, rice exports generated $152 million, showing a year-on-year decrease of 12.7 per cent for a volume of 312,000 tonnes, down 14.5 per cent.

Coffee exports were pegged at $202 million, down 23.6 per cent in the reviewed period.

Collect $2.4b in arrears, Gov't told

The Inspectorate last year proposed that the Government reclaims VND51.5 trillion (US$2.4 billion) owed to the State Budget by companies and individuals committing various violations including over-invoicing and other forms of corruption.

The figure was an increase of 104 per cent over 2013, said Tran Duc Luong, deputy general of the Inspectorate.

The Inspectorate had also suggested that the Government takes back 1,682.6ha of land.

Reviewing his agency's 2014 performance, Luong said at a press briefing last weekend that they had issued fines of VND3.28 trillion ($156 million), proposed that the Government disciplines more than 2,000 organisations and 15,400 individuals and asked the police to investigate 55 cases.

He said that the Inspectorate conducted more than 7,000 administrative inspections and more than 233,800 non-administrative inspections last year, and most of the violations it found were in the economic, banking and finance sectors.

The agency also inspected ministries and their branches and units, checked the use of land resources and construction activities by provincial authorities and followed up on complaints and denunciations received.

Luong said that various Government agencies received denunciations and complaints from about 392,600 people, an increase of 3.2 per cent over 2013. Of this number, 12 ministries and 61 provincial administrations received petitions from about 87,000 citizens, he added.

The Government agencies resolved 85.9 per cent of 42,783 cases arising out of these petitions, reclaimed VND41 billion ($1.9 million) and 182.7ha. They returned VND198.8 billion ($9.46 million) and 85.3ha of land to the people.

The agencies proposed fines on 552 individuals and sent 39 cases to the police for criminal investigation.

In following up on denunciations received, the Inspectorate found 108 individuals involved in corruption and proposed reclamation of VND13.8 billion ($657,000). It also suggested that 25 individuals in these cases be investigated by the police.

Luong said that the Inspectorate will conduct five major inspections in the first quarter of this year: restructuring and capital management at the Vietnam National Coal-Mineral Industries Group (Vincomin) and the Vietnam National Textile and Garment Group (Vinatex); procurement and credit acitivities at the Mekong Housing Bank; implementation of the 2011-2015 Project for Consolidation and Development of Boarding Schools for Ethnic Minority Secondary School Students; and management and use of medical facilities and equipment.

The agency will also conduct 25 other inspections on several issues including the restructuring and equitisation of national enterprises under the Defense Ministry; and the construction of indoor sports stadiums in various provinces.

Ride economic recovery to market success, SMEs urged

Small and medium–sized enterprises (SMEs) have been urged to improve their competitiveness amid rapid global integration, to grab opportunities as signs of economic recovery are already emerging in 2015.

Bui Thu Thuy, deputy director of the Agency for Enterprise Development under the planning and investment ministry, said at a conference held by the Viet Nam Chamber of Commerce and Industry yesterday that SMEs would continue to struggle this year, despite their large contribution of 50 per cent of the GDP.

Thuy pointed out that SMEs were encountering problems of credit difficulties, small capital scales, outdated technologies and weak management capacity, despite their large contribution to the economy in the 2009-12 period.

She said that most domestic firms were of small scale, while pointing out that medium-sized enterprises in the private sector account for just 1.6 per cent. In addition, SMEs failed to keep pace with technological innovations, while the government's support remained limited.

She added that enterprises should also improve technologies and boost technology transfer to enhance quality, productivity and competitiveness, coupled with the government's support to encourage SMEs to participate in the supply chain.

The restructuring of the financial market, simplification of procedures and provision of preferential loans were also important measures to improve businesses' access to capital, Thuy said.

Vo Tri Thanh, deputy director of the Central Institute of Economic Management, said at the conference that the contribution of SMEs to the GDP of Viet Nam was lower than in several countries, while the advantages of participating in the global value chain remained limited due to low-quality technology and management capacity.

Thanh added that inflation was expected to be low this year, but difficulties remained and competition would intensify, especially with the formation of the Asean Economic Community, which would bring opportunities. However, in the long term, it would be critical for businesses to enhance their renovation capacity and competitiveness to seek higher added value.

At the conference, Nguyen Thi Thu Trang, director of the VCCI's WTO Centre, said that 2015 would be a year of preparation for new policies and a new stage of integration, with the negotiations for the new-generation free trade agreements (FTAs) to be concluded and signed.

Enterprises must understand clearly the opportunities as well as challenges arising from these FTAs in order to outline their strategies, Trang said.

Hai Duong IZs attract $122m in foreign direct investment

The northern province of Hai Duong reported positive investment results at its industrial zones (IZs), which attracted more than US$122 million in foreign direct investment (FDI) during January alone.

According to the Municipal IZs Authority, over $41.55 million of the total FDI has been invested by five newly-licensed projects, while the remainder of the capital is from three projects operating with growing levels of capital.

These projects include a $27 million plant on animal breed production, financed by Malaysia's Leong Hup Feedmill Viet Nam Co, and South Korea's Kefico Viet Nam Co's existing factory on manufacturing automotive components, which has raised capital by $65 million.

The Head of the Authority Pham Minh Phuong told Viet Nam News that with the newly added capital, the operating projects nearly doubled in size. This was a good signal, and reflected that the IZs-located enterprises experienced efficient business performances, while also proving their growing trust for the provincial investment climate.

Over the past few years, besides applying the "one-stop-shop" policy to attract more investment, the province also organised numerous direct dialogues with investors to resolve their obstacles in a timely fashion, Phuong noted.

Thanks to these efforts, Hai Duong had attracted 20 new foreign-invested projects to its IZs last year, capitalised approximately $336 million, while allowing 18 other projects to raise capital by $142 million, the authority's report revealed.

By the end of 2014, the provincial IZs had 149 foreign-invested projects, with capital totalling more than $3.02 billion. Of these projects, 144 have become operational.

Speaking at the licence granting ceremony on Sunday, the Chairman of the provincial People's Committee Nguyen Manh Hien, pledged that local authorities would always create favourable conditions for investors, including those from foreign countries, and help them implement their projects in the locality.

This year, the province has set the goal of attracting an additional FDI of $235 million for its IZs.

FPT Software targets $1b in 2015 revenue

FPT Software aims to earn US$1 billion in revenue, employ 30,000 workers, and join more software outsourcing markets in 2015.

The firm will boost development strategies in main markets, such as develop solutions and services based on modern technology in the United States and train 10,000 engineers for the Japanese market.

Nguyen Thanh Lam, general director of the firm, said this on January 24 in Ha Noi, at a conference to summarise the company's activities in 2014.

Lam pointed out that in the period 2004-2013, FPT Software's average growth rates in revenue and human resources were 49 per cent and 43 per cent respectively.

In 2013, its revenue rose to a record $100 million, and the enterprise aimed to earn $130 million and have 6,500 employees in the following year. In fact, its revenue increased by 35 per cent to touch $138 million in 2014. The firm had more than 7,000 employees, with nearly 1,000 people working in its 19 offices in nine countries.

FPT Software also won bids in important markets such as the United States, European Union and Japan last year. In the United States, the Vietnamese company continued its co-operation with DIRECTV, an American direct-broadcast satellite service provider. FPT Software is in charge of developing advanced technologies for broadcasting services that DIRECTV provides on a global scale.

In 2014 alone, the American market brought nearly $40 million for FPT Software, with a growth rate of 39 per cent. Its revenue in the European Union reached nearly $20 million, with a significant growth rate of 117 per cent. Japan alone contributed half of the firm's total revenue.

Vietnam beef imports from Australia surge

Lower priced foreign beef has caused imports to surge 65% on-year to 87,300 tonnes for the ten months leading up to February 2015, according to the Ministry of Agriculture and Rural Development (MARD) Department of Livestock Production.

In the month of January alone, the country has imported more than 2,350 tonnes of meat valued at US$4.6 million, principally from the Australia, which accounts for 70-80% of the market.

A representative from the department said that with advantages of quality and price, foreign meat is slowly overwhelming the domestic market adding that the price of domestic chicken is higher as well.

In the southern region, domestic chicken prices have been hovering around VND40,000-45,000 per kilogram, more expensive than imported fowl, which has been selling for VND35,000 per kilogram.

Work begins on RoK-funded project

Construction work on a Republic of Korea-invested garment factory kicked off on January 25 in the Mekong Delta province of Bac Lieu.

The US$5 million factory invested by Korean Pinetree Company is expected to enter operation in June with 2,000 local employees.

Provincial People’s Committee Vice Chairman Le Minh Chien pledged the best possible conditions for effective implementation of the project.

He also asked local authorities and constructors to keep the rate of construction progress on schedule and ensure its safety and quality.

Bac Lieu’s economic structure has been transformed towards higher proportions of industry and service sector.

The industry-construction sector currently contributes 24.71% to the locality’s total GDP, while services constitute 25.59% and agriculture 49.70%.

Trade deficit hits US$522 million in first half of January

Vietnam’s total imports and exports in the first half of January increased by 6.2% to US$12.11 billion compared to the same period last year, according to the General Department of Vietnam Customs.

However, comparing with the second half of December 2014, the trade balance registered a deficit of US$522 million, accounting for more than 9% of total exports revenue.

Vietnam earned US$5.79 billion from exports, down 2% (around US$115 million) against the same period last year.

Products saw decline in export growth including means of transport, tools, seafood, crude oil, rice and petroleum. Meanwhile some products enjoying high export growth were telephones and components, computers, electronics and components and footwear.

Foreign direct investment (FDI) businesses fetched US$3.92 billion from exports, an increase of 3.8% against the same period last year and accounting for 68% of total export revenue.

Korean business invests in high-quality rice production

A Korean business has decided to invest VND20 billion in the development of a high-quality rice cultivation area in the southwestern province of Tay Ninh.

A memorandum of understanding (MoU) was signed on January 22 by Vietnam Moc Bai joint stock company under the Republic of Korea’s Taekwang group and Tay Ninh Department of Agriculture and Rural Development (DARD).

Accordingly, the fund will be used to build dykes, irrigation system and procure machines and equipment.

Tay Ninh province will spend more than VND6.4 billion on building a storage area and a bomb and mine clearance project.

DARD Vice Director Nguyen Thai Son said experts and technicians will help farmers develop a modern rice cultivation model to bring about highest efficiency.

In 2010 Taekwang Group invested in building a Nike sports shoes factory in Moc Bai Economic Zone in Tay Ninh province with an annual capacity of 10 million pairs of shoes and has employed 15,000 local workers.

It is also building a 100ha garment industrial zone and plans to develop a hi-tech vegetable cultivation zone on 20ha in Phuoc Ninh commune, Duong Minh Chau district.

Tet gifts hit markets across HCM City

Supermarkets, markets and shops in Ho Chi Minh City are offering various kinds of Tet (Lunar New Year) gift hampers to meet the demand from businesses as well as individual customers.

Saigon Co.op, which runs Co.opmart supermarkets, is offering hundreds of varieties of hampers at prices ranging from 59,900 VND to 1.7 million VND (nearly 80 USD).

For the first time it has launched a free gift delivery services to receivers in any province and city where its stores are located under its "Tet Viet gan ket moi nha" (Vietnamese Tet connects every home) programme.

The Republic of Korea (RoK) supermarket chain Lotte Mart has gift baskets at prices ranging from 99,000 VND to 4 million VND (187 USD).

French supermarket Big C is offering gift baskets and boxes priced at 59,900 VND-1.7 million VND.

Traders at traditional markets like Tan Dinh, Thi Nghe, and Ba Chieu also have various kinds of Tet gifts. Nguyen Thu Van of Thi Nghe market expected sales to increase strongly from the middle of the 12 th lunar month which falls on February 3.

All of them mainly contain confectionery, tea, coffee, water melon seeds, wine, seasoning, and cooking oil.

HCM City targets surge in retail sales

Ho Chi Minh City is eyeing a 12-14 percent increase in retail sales and services this year to 740.55 trillion VND (34.75 billion USD), according to the municipal Department of Industry and Trade.

It has also targeted 34.95 billion USD from exports, an 8-10 percent increase over last year, Le Van Khoa, Director of the department, told a recent review meeting.

Exports, excluding crude oil, were worth 27.89 billion USD last year, a year-on-year increase of 12 percent, with shipments of industrial and processed goods increasing significantly from previous years, he said.

The city will strive to ensure balanced trade and prevent indiscriminate imports, especially of luxury goods. It will take measures to ensure inflation is lower than the national figure and to speed up the restructuring of the industrial sector so that it can play a greater role in the global value chain, Khoa said.

Amending zoning plans so that industrial parks, processing zones and industrial clusters specialise in certain industries, upgrading traditional markets, ensuring supply and demand are matched and strengthening market oversight is also on the cards for this year, he said.

The city will undertake programmes to resolve difficulties faced by companies and help them sell more in both domestic and foreign markets.

There will be focus on developing support industries to increase local content in industrial products,” he said.

Deputy Minister of Industry and Trade Do Thang Hai hailed the efforts made by the city's industrial and retail sectors last year, urging the city to implement measures to help businesses expand investment and trade and integrate more into the global economy.

He also suggested that it should improve the efficiency of its programmes like price stabilisation and Vietnamese people prioritise using made-in Vietnam goods and those to strengthen links between banks and businesses.

Germany inaugurates coffee processing plant in Dong Nai

A 12 million USD coffee processing plant was officially launched by the German group Neumann Gruppe on January 26 in the An Phuoc Industrial Zone, Long Thanh district, southern Dong Nai province.

Covering an area of 5ha, the plant is designed to process around 26 tonnes of coffee per hour or 100,000 tonnes per year by 2017 with finished coffee to be shipped worldwide.

The newly-built plant is the second of its kind invested by Neumann Gruppe in Vietnam, after the first constructed in 1992 in southern Binh Duong province.

Vice Chairman of the Dong Nai provincial People’s Committee Nguyen Phu Cuong expressed his hope the plant will help expand local coffee growing areas, and vowed to facilitate the company’s operation.

The German group currently has 46 coffee processing plants in 28 countries around the world which contribute to 10 percent of global coffee exports.

Second-home segment bouncing back

The second-home market is becoming livelier as the property market emerges from a long slump.

Dau Tu newspaper reported that the Vinh Thien Duong Company is wrapping up preparations for its 300 million VND Alma resort in Cam Ranh, comprising of 200 villas and 400 apartments meant as holiday homes.

Russian firm State Development is building the Cam Ranh Flowers Resort in the same town with villas, bungalows and apartments, and is scheduled to complete it in the first quarter of 2016.

In nearby Nha Trang, Hoan Cau Group, the developer of the 4-billion-VND Diamond Bay City, has unveiled its Diamond Bay Resort II. It is expected to be completed in the fourth quarter with more than 1000 apartments and almost 380 bungalows, all of four-star quality. An 18-hole golf course and a resort are already in operation.

The company's Business and Marketing Director Tran Ngoc Nhat hoped that the first 200 apartments on offer will soon find buyers since Nha Trang is a favourite destination for both Vietnamese and foreign tourists.

Phu Quoc Island is a beehive of activity with developers like BIM Group, Sungroup, Vingroup and CEO Group investing billions of dollars in luxury resorts.

Meanwhile, central provinces like Thanh Hoa and Phu Yen are emerging as new investment destinations.

FLC expects to turn the coastal Thanh Hoa Province into a new destination for second-home buyers with an investment of 5.5 trillion VND (250 million USD) in its FLC Samson Golf Links that will have a golf course, convention centre, luxury hotel, villas and townhouses.

Ian Fleming, general director of FLC Samson Golf Links, told Dau Tu newspaper that international coastal golf and resort properties have yet to be developed in the north of Vietnam, and that was why FLC decided to do the project.

In Phu Yen, the Rose Rock Group, founded by members of the US's wealthy Rockefeller family, has tied up with the Vung Ro Petroleum Company for a 2.5 billion USD project in Vung Ro Bay to tap the advantage of the location.

Matthew Powell, the Hanoi director of real estate services firm Savills Vietnam, said its long coastline, temperate climate and friendly people are among the factors that make Vietnam promising for the second-home segment.

Other second-home projects are under development not only in popular places like Phan Thiet, Da Nang and Nha Trang but also in Qui Nhon and Lang Co (Hue) in the central region and Ninh Binh and Quang Ninh in the north.

The segment is no longer only for the wealthy. VinaLingving, for instance, recently launched its golf course villas, the latest offering at its 260ha Danang Beach Resort project, at a price of 5.5 billion VND for a 250sq.m (250,000 USD) unit.

The price goes down to 2.6 billion VND for a commercial front-street house in the Little Vietnam project in Quang Ninh province.

Powell said his company has received positive feedback from buyers.-

Vietjet Air expands its presence

The low-cost carrier Vietjet Air has created flying opportunities for millions of residents, over 30 percent of which chose Vietjet Air for their first flight experience, said Vietjet Managing Director Luu Duc Khanh at the 2014 review conference held in Ho Chi Minh City on January 25.

He added that in 2015, Vietjet Air looks to foster sustainable development in the domestic market and conduct efficient joint ventures overseas.

Speaking at the event, Deputy Minister of Transport Nguyen Van The said VietJet’s development manifested the fact that Vietnamese aviation is an open market and Vietnamese investors are also reaching outside the country to popularise the nation’s image in foreign markets.

In 2014, 5.6 million passengers travelled with Vietjet Air, generating total revenue of 8.1 trillion VND (380 million USD).

Vietjet Air is currently operating 150 flights per day with 28 air routes, covering domestic destinations as well as a number of international flights to Singapore, Thailand, the Republic of Korea, Taiwan, and Cambodia.

In a bid to increase its domestic and international presence, VietJet Air plans to add 100 new aircraft to its fleet.

Experts believe in SBV's effort to keep forex rate under 2 pct

Experts said the State Bank of Vietnam (SBV) will succeed in keeping the VND-USD exchange rate from fluctuating to below 2 percent this year.

Some have been concerned that the continuing sharp fall in prices of oil, which is one of Vietnam's key exports, will negatively impact on foreign currency supply and demand.

However, Deputy Director of the Central Institute for Economic Management Vo Tri Thanh said at a recent conference that the SBV will successfully keep the foreign exchange rate from fluctuating to below 2 percent, owing to supply and demand of the country's foreign currency sources, as well as the central bank's competence in successfully managing the forex market for the past few years.

He added that Vietnam's foreign currency reserves have currently hit a record high of roughly 35 to 38 billion USD, while balance of payments this year are forecast to have reported a surplus of roughly 7 to 8 billion USD.

However, Thanh noted that it will be important to see how the central bank adjusts the rate to stabilise the forex market, while avoiding negatively affecting other indices.

The Bao Viet Securities Co. (BVSC) also forecast that the forex market will remain stable in 2015 as well. The company anticipates the exchange rate of the dong against the dollar to vary between 21,600 VND and 21,800 VND till the end of this year.

The forex market will still experience ‘rising waves.' However, the central bank will successfully intervene to keep the exchange rate fluctuation within the set target.

Trust in the SBV’s successful policies formulated over the last two years has also helped the central bank execute its policies more effectively, BVSC said.

However, BVSC said the central bank could consider the devaluation of the dong against the dollar and implement the devaluation with a certain timeline, in a bid to boost the competitiveness of Vietnamese exports.

Steelmakers’ inspired performance in 2014

Major businesses in the domestic steel industry have reported upbeat business results in 2014 thanks to well-conceived investments and strong restructuring efforts.

Leading private steel maker Hoa Phat Group (HPG) in its recently published 2014 annual report attests to a VND 3.2 trillion ($149 million) post-tax profit, topping early projections by as much as VND1 trillion ($46.7 million).

While metallurgy remained the leading segment of the HPG profile, contributing around 80 per cent to company revenue, other segments, such as home interior design and electro-cryogenics, have also been growing at a stable pace.

HPG’s general director Tran Tuan Duong has attributed the company’s stellar performance in 2014 to the tactic of ‘temporarily reducing self-extraction and taking advantage of low-cost imported ores and ores from local sources amid a nosedive in global ore prices which is forecast to continue this year’.

At present, 30-40 per cent of the total ore volume processed at the HPG steel and ore complex based in the northern province of Hai Duong is extracted by the company itself.

As global ore prices are forecast to dive further in the upcoming time, the company envisages increasing import volumes, mainly from Brazil and Australia.

“Despite the sharply growing competition pressuring the steel industry, Hoa Phat is confident to stay ahead of the competition, find the right markets and solutions for itself and capitalise on our present technology, management expertise as well as well-established value chains,” said Duong.

In its core field of steel production, HPG has set a record of selling more than one million tonnes of structural steel last year and is set to boost its sales volume by 20 per cent this year.

According to Duong, HPG is concentrating efforts to put its third kiln in operation in the first quarter of 2016.

Upon the 2016 completion of the third investment phase of the company’s steel complex, HPG is set to pass the two million tonnes margin in steel production capacity, further cementing its position as Vietnam’s leading steelmaker.

Apart from being a fruitful year to HPG, last year also marked sweeping changes at the leading state-owned steelmaker, Vietnam Steel Corporation (VNSteel).

After changing general director in April 2014 and embarking on a course of strong shake-up measures, its longstanding loss-making status was halted.

In particular, the company raked in more than VND70 billion ($3.2 million) in profits, more than double the target set in early 2014.

These figures look even more impressive within the context of VNSteel performance in 2012-2013, when the company’s cumulative losses surpassed VND800 billion ($37 million).

VNSteel’s member units posted VND151 billion ($7.05 million) in profits last year against the VND264 billion ($12.3 million) losses in 2013, whereas its affiliates registered VND696 billion ($32.5 million) in profits last year.

At the Thai Nguyen Iron and Steel Corporation (Tisco), another major player 65 per cent of whose chartered capital is owned by VNSteel, has managed to pay dividends due to strong restructuring measures.

Tisco’s average production costs were lowered by VND1 million ($46) per tonne in the second half of last year thanks to rigorous application of cost-saving measures.

Tisco reaped VND89 billion ($4 million) in profits last year while having to report more than VND290 billion ($13.5 million) in consolidated losses in 2013.

This year, Tisco has set out to implement a wide range of measures, including installing technical innovations to further save costs and boost labour efficiency.

Becamex IDC flat owners get ownership certificates

The Investment and Industrial Development Corporation (Becamex IDC) issued 200 social housing ownership certificates to owners of flats in the corporation's social housing project in the Binh Duong Province,

The flats are located in the Ben Cat Township of the southern province.

This is the first time that Becamex IDC issued such certificates to its customers. The construction corporation will continue to grant such certificates to more customers of the corporation's social housing projects in the province.

Becamex's scheme to build social housing for residents in the Binh Duong Province was approved by the province's People's Committee in 2011.

The corporation's projects cover a total area of 240 hectares in Thu Dau Mot City, the Thuan An, Di An Township and the Ben Cat and Tan Uyen districts.

The total investment for the social housing projects is estimated to be VND10.830 trillion or roughly US$510 million.

So far, Becamex IDC has built 5,000 flats in Thu Dau Mot City, the Bau Bang District, and Thuan An and Ben Cat townships.

The corporation also plans to build another 10,000 flats spread over 30 to 54 sq.m each, in the Viet Sing residential area of the Thuan An Township, and in Thu Dau Mot City's Dinh Hoa social housing project.

Customers of Becamex' social housing project are considered for favourable loan packages, worth VND30 trillion ($1.4 billion), which are extended by the Government.

Persons with an urgent need for accommodation, including civil and military officers, workers, students, and low income earners and resettled residents, are considered potential customers of Becamex.

Enterprises, which have demanded accommodation for their workers, are also target customers of the corporation's projects in the province.

Developers take a chance on depressed assets

Homebuyers in the Usilk City development are still waiting to move into their properties years after the supposed completion deadline as developers Song Da Thang Long ran out of funds.

Opposite the project, three buildings at the Duong Noi New Urban Area developed by Nam Cuong Group also remain abandoned at the foundation stage.

However, Pham Thanh Hung, chairman of Cen Invest and his partners claim they now have the finances to restart these long-abandoned developments.

Hung and his partners have signed a deal with Nam Cuong Group to take over the three buildings in the Duong Noi New Urban Area which includes 630 apartments. Cen Invest has poured around VND250 billion ($11.9 million) into the project.

“These delayed projects are an inevitable consequence of an over-heated property market. Several of these mothballed developments are just waiting for finance to restart,” Hung said.

“The real estate market has really recovered and now it’ll be about those developers who have vision,” Hung said.

Hung claimed that the sale of more than 10,000 apartment units in the capital last year was a good indicator for the real estate market, and warned that if the current rate of sales continued the city would face a shortfall in available properties.

Hung is also chairman of the Cen Group, which operates the STDA real estate transaction floor, and last year STDA sold more than 3,100 apartments in Hanoi alone in a range of projects like Vinhomes Nguyen Chi Thanh, Mipec Tower, Dolphin Plaza and HP Landmark Tower.

Figures from CBRE Vietnam show that there was a 50 per cent increase in apartments sold in the capital compared to 2013.

“The positive results in the apartment segment have encouraged investors to pour capital into property development. In our newly taken over project, we will focus on reasonable scale units at VND19 to 21 million ($904 to $1,000) per square metre,” Hung said.

Hung’s positive outlook has been shared by other developers such as Vingroup, Novaland and TNR Holdings.

Doan Van Binh, chairman of the CEO Group said however, that opportunities will not be available for all people and all segments.

Binh said that while apartments for sale were booming, other segments such as office for lease and retail were still facing challenges.

“Moreover, despite the apartment for sale segment seeing positive signs, the west of Hanoi is facing oversupply of high-end apartments, so we’re holding off on our plans to venture into this segment at the moment,” Binh said.

CEO Group however has decided to invest VND1 trillion ($47.6 million) into real estate development this year with a small amount spending on the construction of amenities at the Sunny Garden City in Hanoi and Riversilk City in Ha Nam province and a majority of the investment in Novotel Phu Quoc Resort.

CEO is currently constructing Novotel Phu Quoc with 400 rooms and 44 villas for lease, with the project expected to be finished by the end of 2015.

“I want to focus on Novotel Phu Quoc, rather than other projects, because we see very bright prospects for the island in the coming time. The island’s infrastructure has recently been upgraded with a new airport and tourism growth has been good. Phu Quoc now has the highest hotel room rates in the country,” Binh said.

“However, the opportunity won’t be around for ever. People are keen to get into the island and the early bird gets the worm,” Binh said.

He added that the company had contracted Accor Group to operate the resort with the aim to attract more European tourists whom other properties on the island did not focus on now.

Improved services promote projects in the east of Hanoi

Properties located across the Red River in Hanoi have benefited from lower population density and better public services, cementing their attraction with buyers.

Developments include Garden City, Berriver Long Bien, Vinhomes Riverside Hanoi, Gamuda City and Ecopark, sparking greater growth on the eastern bank of the Red River in recent years.

Located only some kilometres from the centre of Hanoi and connected by Thanh Tri, Vinh Tuy and Chuong Duong bridges, the area now has a very good infrastructure and growing popularity with developers. In addition to better housing stock, the area now boasts shopping centres, education and health services and entertainment.

Real estate expert Dang Hung Vo said that the area had managed to maintain its more rustic characteristics compared to other parts of Hanoi.

“Moreover, the east can be developed much more easily than the rest of the city as it’s on higher ground,” Vo said.

The east of Hanoi now is home to several completed villas and apartment projects, such as HUD’s Viet Hung new urban area, Viglacera Land Lam Vien and Dang Xa urban areas and Malaysia-backed Berjaya Berhad’s Hanoi Garden City. A little bit further, Vihajico’s 500ha Ecopark new urban area in Van Giang, Hung Yen province has also seen good progress.

According to Le Ngoc Quynh, director of the Nha Dat 24 Transaction Centre, sales of houses in the east of Hanoi have increased recently, particularly in projects near completion and in close proximity to the city centre.

In Gamuda City, the first phase of Gamuda Gardens, which was 364 terraced and semi-detached houses, saw houses handed over to owners last April. The second phase is now under construction.

Invested by giant property developer Vingroup, Vinhomes Riverside covers 183 hectares, and is being marketed as a new high-end residential area.

Hanoi Garden City developed by Malaysian backed Berjaya will be complete this year. The first phase of this project was finished with 148 apartments in 2012 and its second phase with 103 villas is nearing completion.

Other developments include Sai Dong new residential area over 42 hectares, Viet Hung with 302 hectares and Dang Xa with 30 hectares.

Apart from new residential areas, a range of other facilities are nearing completion, such as the Aeon Mall Him Lam. Located in Long Bien district, it is the Japanese developer’s first retail outlet in the north. Started in April 2014, the $200 million complex is earmarked for a late 2015 opening.

Located opposite Aeon, the 27-hole Long Bien golf course recently entered operation. These projects are now benefiting from better public facilities such as school, hospitals, trading and entertainment centres, which have made them more attractive and realistic propositions for home owners.

According to quarterly report from CBRE Vietnam, Gia Lam has dramatically benefited from improved public infrastructure with completed bridges and proposed metro-lines, boosting property prices by 2 to 9 per cent on-year.

Infrastructure to change Thu Thiem landscape

Thu Thiem New Urban Area, one of the biggest urban development areas in Ho Chi Minh City, is pushing forward with the construction of infrastructure to attract developers.

Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association, said Thu Thiem remained largely unattractive to foreign developers due to the largely non-existent infrastructure.

“Infrastructure is obviously needed to attract investors,” Chau said.

Twenty years have passed since Thu Thiem New Urban Area received prime ministerial approval, but while the site is beginning to see large developments, its infrastructure has been largely ignored.

In addition to Thu Thiem Bridge 1 and the tunnel under the Saigon River which have connected the area with the centre of Ho Chi Minh City, the municipal People’s Committee last month agreed a build-transfer (BT) contract with an investor for constructing four roads and 12 bridges in the Thu Thiem New Urban Area in District 2 worth $569.4 million.

The four roads will be constructed by Dai Quang Minh Real Estate Investment Joint Stock Company.

Upon completion, these routes will play a significant role in the development of the new urban area, linking it with Thu Thiem Bridge, Vo Van Kiet Highway and the Saigon River Tunnel.

In addition, the city authorities and the company also signed another BT contract for a 9-hectare central square and a 20-hectare riverside park. Local authorities are also planning to build a second bridge to Thu Thiem connected to Ho Chi Minh City’s centre.

However, Chau warned that due to the scale of this area, only major investors were in the running for the work.

According to the Thu Thiem Management Board, more than 10 projects have kicked off work in the area.

Dai Quang Minh Real Estate Investment Joint Stock Company is building a 37-hectare residential area featuring houses, apartments, school, park and cultural centre. Meanwhile Duc Khai Joint Stock Company has planned to build the Binh Khanh Residential Area over 39 hectares consisting of various apartment blocks varying from 3 to 25 storeys.

After completion, these two projects will serve as examples for other investors to follow.

Vingroup was also chosen to develop an international shopping, finance and housing development in Thu Thiem.

It will also be in charge of developing a shopping and housing area over 79 hectares on Thu Thiem Peninsula, opposite the city’s central business district.

Foreign investors have also started work in Thu Thiem, with South Korea’s Lotte working with a Japanese investor to build a complex of shopping centre, hotel, serviced apartments, offices and apartments. The $2 billion complex will be built over a 10 hectare site and be started soon.

Imperia sets sights on Hanoi

HBI Joint Stock Company – the developer of Imperia An Phu in Ho Chi Minh City – officially broke ground last week at its Imperia Garden complex in Hanoi.

Located on a 42 hectare site in Thanh Xuan district, Imperia Garden is a multi-function complex consisting of offices, residences, and a trading centre, and will cater for a population of 5,000.

It is adjacent to the ring road, and the elevated railway system which is currently under construction. This offers convenient access to the city centre and other new urban development areas. Other on-site facilities include a four-season swimming pool, healthcare services, a beauty spa, a gym, a supermarket and intelligent parking services. Ranging from 65 to 174 square metres, each apartment is designed according to modern and eco-friendly standards.

Imperia Garden will be developed in line with its sister project, Imperia An Phu, which was voted one of Ho Chi Minh City’s five best modern apartment projects. Scheduled for completion at the end of 2017, Imperia Garden will mark a strong step forward for HBI JSC into the real estate market of the northern region.

Vietnam’s phone import on the rise

The import turnover of phones and accessories reached US$8.47 billion in 2014, an increase of 5.32 percent over the previous year.

This group of commodity was ranked fourth in the top ten items that were most imported to Vietnam last year after machines and equipments, electronic products and components, and fabric types.

Input materials for domestic phone production depended on import. China was Vietnam’s largest supplier of phone and accessories with the import turnover of US$6.32 billion, increasing nearly 11 percent over 2013 and accounting for 74 percent of the total import turnover of Vietnam from China.

The second largest exporter to Vietnam was South Korea with US$1.71 billion.

The import turnover from Taiwan (China) went up 56.34 percent against 2013, Hong Kong (China) surged 111.16 percent and Japan rocketed up 342.14 percent.

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

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