BUSINESS IN BRIEF 29/9
Hanh Phuc gets assisted reproductive tech from foreign partners
Hanh Phuc International Hospital has entered into a strategic cooperation agreement with Genea Australia through its joint venture partner Thailand’s Superior A.R.T for fertility treatment and assisted reproductive technology as both have strong advantages in this area.
Nguyen Thuc Anh, chief executive officer of the hospital in Binh Duong Province, said the partnership would open the doors for people in Vietnam and other Southeast Asian countries as it would provide them with more choices of finding the same international standard fertility treatment at Hanh Phuc in Vietnam, Superio A.R.T. in Thailand or Genea in Australia.
Hanh Phuc inaugurated a fertility center in October 2011, which last month got RTAC accreditation, an international recognition and endorsement of high standards it maintains for the patients and their procedures. Anh said the center continued to seek to improve services and technology by joining forces with international partners in fertility, including the two foreign partners.
“The partnership (with Genea and Superior A.R.T.) is another milestone in Hanh Phuc’s history - to offer couples who have difficult conceiving in Vietnam and neighboring countries the hope of becoming parents through advanced science and technology,” Anh said.
Sarayuth Assamakorn, managing director at Superior A.R.T said the company has outstanding assisted reproductive techniques and know-how as a result of its affiliation with Genea and their standards in protocols, procedures and training, as well as cutting-edge research and development.
“This venture projects our vision of Superior A.R.T. and its collaborative partners, such as Hanh Phuc, being a fertility hub in Asia, helping more people have healthy babies and complete their families,” Assamakorn said.
Genea has built a reputation for fertility treatment and assisted reproductive techniques and technology.
Steven McArthur, scientific director at Genea, said in a statement that Genea takes 25 years of clinical insights at Genea Fertility and combines them with almost 25 years of investment in research and development to create and commercialize in vitro fertilization (IVF) laboratory technology for the global fertility market.
Hanh Phuc started operations in January 2011 as a women’s & children’s hospital and has been granted a multi-specialty hospital status. The hospital continues to focus on and expand its services for obstetrics, gynecology and pediatrics, with specialist clinics for women cancer, fertility and cosmetic surgery.
E-customs services yet to help speed up clearance
Despite the much-touted shift to e-customs services, goods clearance remains stagnant due largely to complicated procedures and poor Internet connection, traders said at an online dialogue held in HCMC last week.
The online dialogue was held by the HCMC Department of Customs to answer local firms’ inquiries relating to the Vietnam Automated Cargo Clearance and Port Consolidated System (VNACCS).
Many enterprises complained that they had paid export and import taxes but information about their tax payments was not timely updated at customs offices, which imposed sanctions by refusing to clear goods for such enterprises.
Meanwhile, the clearance process via the green or yellow channel based on the VNACCS/VCIS system also confused enterprises.
For instance, HCMC-based Thai Thuan Stainless Steel Company raised a question about how to choose a channel for steel products that must undergo special tests.
In response, Nguyen Thi Bong, an official at Saigon Port Customs Office, said the VNACCS/VCIS system will carry out this task automatically. Although steel products must go through special tests, they could still be categorized into the green or yellow channel if the company can prove that the code applying to such products is in line with current regulations.
Other enterprises said customs officers asked them to present relevant documents although their goods was categorized to be in the green channel. Nguyen Duc Khanh, deputy head of Tan Son Nhat International Airport Customs Office, said that companies can contact the warehouse inspection team to take delivery of goods and do not need to show those papers to the team in charge of goods clearance procedures.
In case the clearance form fell into the green channel and enterprises already paid tax but data was not updated, they can show relevant documents to the team responsible for goods clearance procedures to quicken the process.
The HCMC Department of Customs has reported to the General Department of Customs about the slow Internet connection linking banks, treasuries and the general department to update information timely and help enterprises save the time for goods clearance.
Nguyen Thi Thu Huong, head of the HCMC Department of Customs, said her office has implemented the VNACCS/VCIS system since June and this system is now available at 12 offices, which has helped clear nearly 600,000 batches of goods.
Although having faced difficulties at the beginning, customs officers and enterprises are now more familiar with the VNACCS/VCIS system, she said.
French firm wants to become strategic investor of ACV
The France-based airport management firm Aeroport de Paris (ADP) has expressed its interest in becoming a strategic investor of Airport Corporation of Vietnam (ACV) when the latter goes public.
Frederic Dupeyron, general director of ADP, put forward this proposal at a meeting with Minister of Transport Dinh La Thang last week.
According to the Ministry of Transport, the two sides also discussed the big-ticket Long Thanh International Airport under the public-private partnership format and ACV’s equitization plan.
The general director believed the equitization of ACV will help attract more investment into airport construction in Vietnam. He suggested ACV choose partners that could assist the local company in building the new airport and equitizing the firm.
He also expressed his desire to become a strategic shareholder of ACV in its equitization, as well as to financially contribute to the construction of Long Thanh airport.
Regarding the equitization, the transport minister informed ADP that his ministry has required ACV to proceed with its asset evaluation. The assessment will be completed within this month, and the equitization will be carried out from the first quarter of next year.
Meanwhile, the investment report for Long Thanh International Airport has been submitted to the Government by a national appraisal board prior to going before to the National Assembly. The project could be presented at the National Assembly session in October.
Currently, ACV operates and manages 22 airports nationwide.
The company’s revenue last year amounted to over VND8.4 trillion and its before-tax profit totaled VND1,350 billion. More than half of this revenue came from Tan Son Nhat and Noi Bai international airports.
At the end of fiscal 2013, ACV’s chartered capital was nearly VND14.7 trillion. The state will hold a 75% stake after the equitization, according to the transport ministry’s plan.
ACV’s equitization in 2015 is expected to help the company mobilize a large amount of capital for Long Thanh airport construction.
Hai Duong sees sharp rise in investment
The northern province of Hai Duong has attracted investments worth 480 million USD so far this year, a 3.2-fold increase compared to the same period last year.
According to Deputy Director of the provincial Department of Planning and Investment Nguyen Xuan Doan, the province saw 29 new investment projects worth 343.4 million USD.
Major projects include the 225 million USD Dai An Vietnam-Canada international hospital, a 19.5 million USD project by SD Global and a 13 million USD project by Chung Ley, he noted.
Doan added that Hai Duong was striving to attract an additional 510 million USD in investments and a disbursement of 213.2 million USD by the end of this year.
To this end, the province will run investment promotion campaigns targetting large and multinational groups, and work with central ministries to attract investments.
Meanwhile, the province will also step up its administrative reform, create better conditions for investors to operate in, and strengthen links with investors to increase their confidence, said Doan.
So far, Hai Duong has implemented 282 foreign-invested projects from 24 countries and territories around the world, with a total registered capital of 6.3 billion USD. FDI projects in the locality have disbursed 2.83 billion USD, meeting 44 percent of the province’s target.
The projects have also created jobs for 136,000 direct and thousands of indirect employees, Doan added.-
Vietnam aims for rice production restructuring
Rice plays a key strategic part in Vietnam’s agricultural sector, said a draft plan on restructuring Vietnam’s rice production to 2020.
The country continues promoting rice exports, maintaining its position as one of the world’s leading rice exporters, it added.
The value of rice production is expected to reach 120 million VND (5,714 USD) per hectare by 2020.
In addition to its traditional markets, Vietnam is looking towards new markets such as North Africa and East Asia, whilst focusing on the domestic market.
To realise the goals, the sector will use high-yield, high-quality crop varieties to supply its export markets, Deputy Director of the Department of Cultivation, Pham Dong Quang, told a recent conference on cultivation restructuring in Hanoi.
The Mekong Delta, the country’s biggest rice producer, will focus on export-oriented cultivation, while the Red River Delta is geared towards the domestic market, he added.
Additionally, Vietnam will maintain the cultivation of rice crops on approximately 7 million hectares by 2020 with the application of advanced production models such as VietGap, SRI.
According to the Vietnam Food Association (VFA), Vietnam exported over 3.6 million tonnes of rice for a free-on-board value of over 1.56 billion USD in the first seven months of this year.
As planned, rice exporters nationwide are working to ship 6.2-6.5 million tonnes of the grain this year.
Work starts on 9.4 mln USD habour in Dong Nai
A ground-breaking ceremony for a 200 billion VND (9.4 million USD) habour has been held in the Go Dau Port area in Long Thanh district, the southern province of Dong Nai.
Once operational in September 2015, the harbour is able to receiving 30,000 tonne ships, meeting the increasing needs on good handling of enterprises in Dong Nai and the southeastern region.
Nguyen Thi Bach Mai, General Director of the Dong Nai Port Co. Ltd, the construction of the harbour will take full advantage of the province’s natural features and pave the way for the Dong Nai port to become one of the country’s 10 most important ports.
The Dong Nai port system comprises Long Binh Tan Port and Go Dau Port with a total area of 443,000m2. Both ports are set to apply modern technology.
As set out in the master plan approved by the Prime Minister, the Dong Nai port system will be designated a national port.
HCM City licenses 130 million USD OneHub Saigon project
Ascendas-Saigon Bund Ltd Co. received an investment licence for its OneHub Saigon complex project on September 25.
The ceremony was attended by Former Prime Minister and Emeritus Senior Minister of Singapore, Goh Chok Tong, municipal high-ranking officials and representatives from the Ho Chi Minh City Hi-Tech Park.
The OneHub Saigon complex, valued at 130 million USD, is a joint venture between Singaporean enterprise Ascendas and Saigon Bund Capital Partners Ltd Co. It will span 11.9ha in the Hi-Tech Park, becoming the first OneHub venture in Vietnam, implemented by Ascendas and based on successful models in India and China.
Le Hoai Quoc, Head of the Hi-Tech Park Management Board said Onehub Saigon will be an urban complex that follows regional and international development trends, attracting high-quality human resources and adding value to the park.
With its unique design and plans, OneHub Saigon will act as an architectural focus for the park and the eastern part of the city, Quoc added.
Le Hoang Quan, Chairman of Ho Chi Minh City’s People’s Committee, believes the OneHub Saigon project will be successful thanks to Singapore’s expertise in hi-tech park development and Ascendas - Saigon Bund Ltd Co.’s understanding of the city. Currently, the City’s Hi-Tech Park, including OneHub Saigon, has attracted 2.5 billion USD from over 60 multinational companies, such as Intel, Nidec and Sanofi.
Action plans for prioritised industries announced
The Central Institute for Economic Management held a workshop in Hanoi on September 25 to present its action plans for the four prioritised industries of electronics, agricultural and aquacultural processing, environment and energy conservation, and agricultural machinery.
In total, six industries have been prioritised for development, including the shipbuilding and automobile industry, and spare parts production.
They are set to become Vietnam’s key industries which will take the lead in attracting investments, increasing labour productivity, developing products with a high added value, and applying cutting-edge technology.
The action plans mentioned above were approved by the Prime Minister last August.
Cao Bao Anh from the Heavy Industry Department under the Ministry of Industry and Trade (MoIT) said the new plan would encourage farmers to apply agricultural machinery whilst promoting the production of necessary equipment and creating a healthy business environment.
Regarding the environmental and energy conservation sector, Dao Xuan Diep from MoIT’s Science and Technology Department stressed the importance of fine-tuning policy and creating a productive business environment that attracted more investments to the sector. At the same time, Vietnam also needed to improve its capacity to develop and master technologies in the field.
Meanwhile, to develop the agricultural and aquacultural processing industry effectively, the sector needed to focus on products of strength, ensure sustainable high-quality supplies, and connect processors and farmers better, a representative from the Agriculture-Forestry-Fishery Processing Department under the Ministry of Agriculture and Rural Development said.
Vietnam bond market fastest growing in East Asia
The Government bond market in Vietnam has obtained an average annual growth rate of 23% in the past five years, the most rapid expansion in emerging East Asia and the ASEAN+3 regions, said the State Securities Commission (SSC).
An unidentified person holds Government bonds in this file photo. The Government bond market in Vietnam has obtained an average annual growth rate of 23% in the past five years - Photo: TL
SSC unveiled the growth rate at a conference held in Hanoi City yesterday to review the Government bond market in the past five years.
Since September 2009, the Hanoi Stock Exchange has raised over VND654 trillion from G-bond auctions to secure medium and long-term funding for development investments. Of which, the State Treasury has raised VND513 trillion, or 13 times higher than in 2000-2008.
Since 2012, bond auctions have become a major channel for raising capital, with mobilization value rising gradually. Last year, VND194 trillion was mobilized, or 18% of total investments in the economy.
In addition, there has been significant change in product quality with the number of bond codes falling from over 300 to 90. Each code has seen average scale improving to VND4 trillion.
Liquidity on the market has also improved strongly from VND365 billion a session in 2009 to more than VND2.7 trillion a session in the first six months of this year.
Treasury bill auctions at the State Bank of Vietnam have also been held on the G-bond market since August 24, 2012, creating a concentrated market to facilitate investor trading.
At present, banks are the main investors on the G-bond market, holding 86% of the bond portfolio value. Insurance firms, fund managers and foreigners have also joined the market.
Since 2011, the ratio of foreign participation has increased to 20-30% in the secondary market and 12% on the primary market.
In a related development, the Asian Development Bank (ADB) in a recently released report said that emerging East Asia’s local currency bonds have performed well so far this year but an earlier-than-anticipated U.S. rate hike, a slowing property market in China, and higher risk aversion and inflation due to Middle East tensions could undermine that.
Vietnam was the fastest growing local currency bond market, both on a quarterly and an annual basis, according to Vietnam News Agency. However, China remains the largest market in Asia, with US$4.9 trillion in outstanding bonds.
According to ADB, emerging East Asia comprises China, Hong Kong (China), Indonesia, South Korea, Malaysia, the Philippines, Singapore, Thailand and Vietnam.Vietnam’s city district resolute over plan to demolish busy market
The administration of Ho Chi Minh City’s Tan Binh District will not stop the implementation of a project to replace a local half-a-century-old market with a modern facility despite strong protests from traders, a deputy chairman of the district asserted.
Should the project be halted now, it will never begin, Le Son, deputy chairman of the Tan Binh People’s Committee, told Tuoi Tre (Youth) newspaper in an interview published Tuesday.
Tan Binh market, one of the largest fabric wholesale markets in the city, is poised to be replaced by a six-story market, as Son said the facility has become “severely deteriorated.”
“It is the traders who will suffer the worst damage in case of a fire, explosion, collapse, or storm,” Son said.
The proposed new Tan Binh market is scheduled to break ground in May 2016, and expected to open to traders in November 2018.
The revamp plan will affect 2,956 traders in the more than 50-year-old market, which receives 10,000 shoppers a day.
Traders complain that they have never been asked to provide feedback on the plan, and that they will lose frequent customers if they relocate to the new market.
But the district official said traders were informed of the demolition plan as early as 2009.
“We delivered survey sheets to all traders and received around 60 percent of them back,” Son asserted.
Son said most of the traders responded that they supported the plan, as the market was deteriorating.
He added that as the government is the manager of the market, it reserves the right to refurbish or rebuild it.
While traders currently sell on the ground floor of the market, their booths will be relocated to the second floor, and higher, at the new facility, raising concerns that customers might be hesitant about having to go from floor to floor while shopping.
Son admitted that people are not used to going to multistory markets, but added that “in the longer term, it will benefit both traders and customers.”
He called on traders to “share the difficulties with the government.”
“Traders should not oppose the project just because of these short-term challenges,” he said.
Tan Quang Co Ltd, a Vietnamese investment-construction firm, has won the contract to develop the new Tan Binh market, according to the district’s government. The company said investment is projected to be around VND2 trillion ($94.14 million).
The current Tan Binh market sits on a 22,000 square meter land plot facing Ly Thuong Kiet, Phu Hoa, Tan Tien and Le Minh Xuan Streets in the crowded district.
The proposed new market will only occupy 15,000 square meters, while the remaining 7,000 square meter land lot fronting Ly Thuong Kiet Street will be home to a 17-story mix-used trade center.
Son, from the district’s People’s Committee, said the ‘prime location’ is dedicated to the trade center, instead of the new Tan Binh market, because the modern shopping center “is the image of the district.”
The high-rise trade center will be developed by a joint venture between the Tan Binh Public Utility Services Co Ltd and Tan Quang Co, while the people’s committee retains possession over the land lot where the building will be erected, Son said.
“Profits generated from the trade center will be added to the state budget, not the public utility company,” he underscored.
Duties on cigarette, beer, wine to be increased
The National Assembly Standing Committee (NASC) agreed to the suggestion of the Ministry of Finance on raising excise taxes on cigarette, beer and wine during its September 25 session.
Accordingly, the current 65% tax on cigarette will be increased to 70% from January 1, 2016 and 75% from January 1, 2019.
The excise tax on beer, which is currently 50%, will be 55% from July 1, 2015, 60% from January 1, 2017 and 65% from January 1, 2018.
Meanwhile, the duty on wine over 20 degrees will be raised from 50% to 65% and that on wine below 20 degrees, currently at 25%, will be 35%.
Chairman of the NA Committee on Finance and State Budget Phung Quoc Hien said that the tax increases would not negatively affect businesses’ production but help raise the State budget collection and reduce the number of smokers.
However, Deputy Minister of Industry and Trade Do Thang Hai said that the Government studied the rises as it could lead to increased cigarette trafficking and decreased State budget collection.
Hien also suggested a rise of the excise duty on casino business from 30% to 35%.
In addition, the Government planned to suggest the NA remove personal income tax on casino players.
The NASC also agreed to the Government’s suggestions on removing the excise tax on several sustances used for gasoline blending and aircraft used for national defence and security, and supplementing prioritized tax on bio-fuel products.
The draft amendments and supplements to the Law on Excise Tax are scheduled to be approved in a NA session and come into effect in mid- 2015.
Overview of trade activities in Jan-Aug period
As of late August, total trade turnover touched nearly US$ 191.4 billion, representing a year-on-year increase of 12.5% or up US$ 21.31 billion in value, according to the General Department of Viet Nam Customs.
In the January-August period, export volume valued US$ 97.23 billion, marking a year-on-year increase of 14.4% or US$ 12.24 billion.
Up to 10 groups of commodities joined the US$ 1 billion export club including garments and textile (US$ 13.61 billion); telephones and spare parts (US$ 15.18 billion); footwear (US$ 6.69 billion); crude oil (US$ 6.22 billion); aquatic products (US$ 5.03 billion); coffee (US$ 1.27 billion);peanut (US$ 1.29 billion); rubber (US$ 1.03 billion); rice (US$ 2.04 billion) and computers and spare parts (US$ 6.51 billion).
Meanwhile, import turnover exceeded US$ 94.16 billion, representing a year-on-year increase of 10.7% or US$ 9.07 billion.
Major imports included machines and spare parts (US$ 14.19 billion); computers (US$ 11.16 billion); petrol (US$ 5.72 billion); iron and products (US$ 4.74 billion); fertilizers (US$ 2.49 billion); materials for garments, footwear (US$ 11.2 billion) and automobiles (US$ 806 million).
Trade Capacity Enhancement Project launched
The Viet Nam Association of Foreign-Invested Enterprises cooperated with the Small and Medium-sized Enterprises Association in the South to launch the Trade Capacity Enhancement Project (TRACE II) in Viet Nam on September 23.
The project will be invested with €525,000, of which €472,000 is sponsored by the EU.
The project aims to accelerate integration of the nation in the international trade system and enhance the trade relations between Viet Nam and the EU as well as optimizing benefits for economic development and poverty reduction.
The project includes enhancement of trade and investment capacity, establishment of a Trade Advisory Committee to increase the capacity of associations to make greater contributions into the national-level policy consultancy and trade and investment policy-making and setting up a trade model for the participation of SMEs at localities.
Sugar mills, growers on tenterhooks
Both sugar plants and growers have had many worries at the start of a new sugarcane crop as sugar inventories have doubled compared to the same period last year and sugar prices are falling.
The sugar in stock as of mid-August had been nearly 370,000 tons in the country, according to the Department of Processing and Trade for Agro-Forestry-Fisheries Products and Salt Production.
Nguyen Thanh Long, chairman of the Vietnam Sugarcane and Sugar Association and general director of Can Tho Sugar Joint Stock Company, said the local sugar sector has never been in much trouble like now. A kilogram of sugar in the Mekong Delta city of Can Tho is sold at around VND1,000 lower than a year ago.
Long calculated with the current price of VND900 per kilogram for the average commercial cane sugar (CCS) rate of 10% with delivery at the company’s mill, sugar plants can make profits if refined sugar products are priced higher than VND12,000 per kilogram (exclusive of VAT).
The after-tax average price of grade-one sugar ranged from VND12,300 to VND13,000 last month, down VND100 from July. Now, sugar prices are on the decline, pulling down sugarcane prices.
Le Van Chi, a sugarcane grower in Hau Giang Province’s Phung Hiep District, said as most sugarcane fails to meet the requirement of 10% for CCS, traders buy sugarcane at only VND700-800 per kilogram. Therefore, growers cannot gain profits and even incur losses.
With such sugarcane quality, the possibility of increasing cane prices is less likely.
According to the government of Ca Mau Province, Thoi Binh sugar mill in Thoi Binh District has incurred losses for many years and has not been able to invest in a wastewater treatment system as required. The Ministry of Natural Resources and Environment has therefore proposed shutting down the facility in the 2014-2015 crop.
More than 1.5 million tons of sugar was produced in the 2013-2014 sugarcane crop, up around 65,000 tons against the previous season.
This year, though the area of sugarcane has shrunk, the sugarcane output has increased significantly. This is a firm ground for industry insiders to forecast that the nation’s sugar output will reach 1.6 million tons in the 2014-2015 crop.
However, Long said the figure is no longer meaningful as much sugar is still being smuggled into Vietnam in border areas and hit local producers. Imported sugar products are favored on the domestic thanks to their lower prices and better packages than the local products.
Work starts on artery road for Van Don Economic Zone
Management of Quang Ninh Economic Zone has cooperated with Van Don District’s authorities to break ground for a 20-kilometer road costing VND1 trillion, which links major functional areas of Van Don Economic Zone.
A seven-kilometer section of the road, connecting Provincial Road 334 to Van Don Airport, will be constructed with a width of 32 meters, while other auxiliary works such as sidewalks, drainage and light systems will also be built in the first phase.
This phase, requiring VND700 billion, will be implemented within 18 months by a consortium comprising Cuong Thinh Thi Investment and Construction JSC, Thanh Trung Trading and Construction Co. Ltd., and Phuong Dong Investment Construction Trade Co. Ltd.
The project plays a vital role in enhancing transport in the economic zone, and connecting the functional areas together and to Ha Long-Mong Cai Expressway in the coming time.
The Prime Minister approved the zoning plan for Van Don Economic Zone development as an international transportation and trading hub and a luxury tourist and entertainment center in the northern key economic zone.
As per this zoning plan, the economic zone will cover an area of over 2,170 square kilometers with a population of 150,000 people by 2020. In addition, the annual number of tourists there is estimated at 1.7 million.
The Government this month has also agreed to construct Van Don Airport able to handle five million passengers a year besides separate functional areas to woo investors. As planned, Quang Ninh Province will cooperate with South Korea’s Joinus Co. Ltd., Korea Airports Corporation, and Posco E&C Co. Ltd. to implement the project under the build-operate-transfer (BOT) format.
The VND5.1-trillion airport will cover an area of 285 hectares, and it will service both civil and military flights.
In the first phase, the airport is envisaged having a parking area for four Boeing B777 and Airbus A321 aircraft, and handle two million passengers and 10,000 tons of cargo a year in 2020.
By 2030, the airport will have its aircraft parking area expanded to accommodate at least seven planes and will be able to serve five million passengers and handle 30,000 tons of cargo per year.
The Government has told Quang Ninh’s authorities to coordinate with the ministries of planning-investment, transport and defense as well as relevant agencies to map out and evaluate the feasibility study of the project.
PM urges removal of troublesome business procedures
Prime Minister Nguyen Tan Dung has called on relevant agencies to do a comprehensive review and simplification or abolishment of unnecessary administrative procedures to support businesses and investors in the country.
According to the Government portal chinhphu.vn, the Prime Minister has ordered the fast streamlining of administrative procedures related to business establishment, re-arrangement and dissolution, and the gradual lifting of huddles to business and investment activities.
The Prime Minister wants the time for processing paperwork to be halved in the fields of business registration, re-arrangement and dissolution prior to December 31 this year.
The Ministry of Planning and Investment has been told to review and remove all procedures that make life hard for businesses, and improve the process and formalities required for business dissolution to make it easy for those who want to get out of the market.
In addition, the Government has told the agencies concerned to speed up the application of information technology and improve the capacity of staff responsible for business registrations.
The national business registration information network must be enhanced and the one-stop mechanism must be expanded to enable quick market entry for businesses.
The Government leader has also required the ministry to quicken the improvement of the Investment Law and revise existing legal regulations to clarify the prohibited business and conditional areas.
The Prime Minister has got the nod to a proposal by the Ministry of Finance on some tax solutions to help local businesses out of difficulties.
Earlier, the Ministry of Finance submitted the Government a number of tax measures to remove obstacles for enterprises. These are planned to be presented to the National Assembly for consideration and approval at the eighth session of the legislature starting next month.
The ministry proposed removing the filing of sold or purchased goods invoices with respect to the taxes being declared every month or quarter as the declaration is named as one of the main reasons for time-consuming tax procedures in Vietnam.
To assist businesses with advertising and marketing to boost sales, the ministry also proposed amending the regulations on advertising and promotional costs with a view to abolish the advertising cost cap or only control advertising expenditure rather than promotional and marketing costs.
A corporate income tax rate of 20% is applied this year and next to enterprises operating in the agriculture sector, employing over 300 workers and purchasing farm produce from farmers who do not live in poverty-stricken areas. From early 2016, these firms will enjoy a tax rate of 17%.
However, as the ministry said few businesses will be able to meet the 300-employee requirement, it proposed the rule be removed.
HCM City to advance funding for new expressway
The HCMC government has plans to advance around VND662 billion from its 2015 capital construction budget for executing the Ben Luc-Long Thanh Expressway project that passes through the city’s outlying districts of Binh Chanh, Nha Be and Can Gio.
Binh Chanh will get an advance of VND513 billion for site clearance and residential relocation, while Nha Be and Can Gio will obtain respective sums of VND140 billion and VND9.5 billion.
Work kicked off on July 19 on the first package of the expressway which will connect the Mekong Delta province of Long An with the planned Long Thanh International Airport in Dong Nai and Cai Mep-Thi Vai seaports in Ba Ria-Vung Tau Province nearby. The project is expected for completion in mid-2018.
Speaking at the ground-breaking ceremony two months ago, Prime Minister Nguyen Tan Dung said Ben Luc-Long Thanh Expressway will play a crucial role in boosting socio-economic development because it helps link provinces in the southeastern and southwestern regions together.
As it takes four years to prepare and another four years to build the entire expressway, the Prime Minister told authorities of HCMC, Long An and Dong Nai provinces to pay close attention to site clearance, carry out the project on schedule and take care of the displaced citizens.
The four-lane expressway stretching a total of 57.1 kilometers is designed for vehicles to run at a maximum speed of 100 km per hour.
Of the total projected funding of nearly US$1.6 billion for the first phase of the project, US$636 million will come from Asian Development Bank (ADB), US$635 million from the Japanese government through Japan International Cooperation Agency (JICA) and the remaining US$337 million from the State budget.
HCM City backs early Long Thanh airport construction
The HCMC government has thrown its support behind a project to build Long Thanh International Airport in neighboring Dong Nai Province, saying it is more cost-effective than expanding Tan Son Nhat International Airport in the city.
Tan Son Nhat currently covers 1,500 hectares with around 590 hectares used for civil and military aviation activities but this international airport is located in an area of high population density, which makes expansion unviable.
The airport’s current capacity is around 20 million passengers per year, so the transport system connected to the airport is frequently overloaded, according to a recent report sent by the city government to the Ministry of Transport.
The report was sent after Airports Corporation of Vietnam (ACV) draw up a plan to expand Tan Son Nhat airport to make it possible to handle 26 million passengers per year pending construction of Long Thanh airport.
According to the city government, if the airport’s annual capacity is to be raised to 50 million passengers, it will have to be expanded to the north, with around 640 hectares to be cleared at an estimated cost of US$9.15 billion.
With such expansion envisioned, the transport system around the airport would be overloaded, resulting in severe congestion, said the city government.
In addition, expanding Tan Son Nhat airport would affect the environment as noise pollution and exhaust emissions would exceed permissible levels. Other factors concerning planning and airspace management of the Ministry of Defense would be impacted, the city government reasoned.
Therefore, the Tan Son Nhat airport expansion plan, in the view of the city government, is not cost-effective, so the city supports the Ministry of Transport’s plan to start work on Long Thanh Airport early.
According to a report of ACV, the maximum capacity of Tan Son Nhat is 25 million passengers per year. The airport is forecast to be overloaded in the 2016-2017 period while the first phase of Long Thanh airport with an annual capacity of 17 million passengers cannot be finished until 2023.
If so, in the six-year period between 2017 and 2023, Tan Son Nhat fails to meet the demand and this will leave an adverse impact on the city’s socio-economic development.
To minimize such negative impacts, the HCMC government has proposed the Ministry of Transport consider adjusting the implementation schedule so that Long Thanh can be put into operation sooner.
HCM City wants low interest on special home loans
HCMC authorities have proposed an annual interest rate of only 3% for the most preferential home loans to benefit the poor, and seek the Government’s approval to extend the disbursement of the VND30-trillion home loan package up to 60 months.
In a document just submitted to the Government, the city also suggested that poor people be subject to the so-called “social housing” policy, enjoying the 3% interest rate for loans of up to 15 years. This policy will help ease difficulties faced by low-income earners, workers and college students in the city.
The VND30-trillion credit package currently offers homebuyers a lending rate of 5% per annum, and the package was initially set to wind down within 36 months. However, only 10% of this credit line has been disbursed for both homebuyers and housing developers after more than 15 months of implementation.
Le Hoang Chau, chairman of the HCMC Real Estate Association (HoREA), told the Daily that the association earlier proposed the Government lower the annual interest rate for buyers of budget homes to 3-3.5% and offer a three-year grace period.
In the document, municipal authorities called for accelerating the disbursement of the VND30-trillion credit package by allowing enterprises to mortgage their land ownership certificates and projects as collateral.
The city also suggested establishing a support fund for individuals to buy, rent and repair homes.
Enterprises should be allowed to take out loans to build budget housing projects and convert commercial homes into budget ones. They should also be allowed to invest in housing for workers with zero interest loans.
Individuals and households who want to buy budget houses for lease and sale to workers, low-income people and students, among others, should be allowed to borrow from the credit package in line with Resolution 61/NQ-CP.
In related news, the Credit Department under the State Bank of Vietnam is mulling a low-interest credit package for civil servants and soldiers to buy homes. If realized, each household can borrow up to VND2 billion with a lending rate of 6-7.5% per annum in a maximum period of 10 years.
Northern provinces promote trade, industry activities
Despite economic difficulties, industry and trade sectors have recorded positive results in northern provinces , the Vietnam Economic News quoted Deputy Minister of Industry and Trade Tran Tuan Anh as saying.
In the first nine months of 2014, industrial production value in the region was estimated at 1,430 trillion VND, an increase of 8.92 percent compared to the same period last year, and equal to 70.28 percent of the annual plan.
Export value in the first nine months of this year reached 45.87 billion USD, up 21 percent over the same period last year and met 75 percent of the annual plan. As many as 21 out of 28 northern provinces and cities recorded remarkable export growths over the same period last year.
The region has developed an effective distribution network which has met the local consumers’ consumption demand.
According to Director of the Industrial Policy and Strategy Institute Duong Dinh Giam northern localities should create industrial development zones based on local strengths.
Member of the Northwest Steering Committee Dao Trong Chuong was quoted as saying that industry and trade sectors played a key role in terms of poverty reduction, especially in mountainous areas, and people’s living standard improvement. However, it was needed to further promote modern agriculture and goods distribution channels.
Northern provinces and cities should pay more attention to service industry such as industrial logistics to meet regional major industrial projects, said Vice Chairman of Ha Tinh’s People’s Committee Nguyen Hong Linh.
Deputy Minister of Industry and Trade Tran Tuan Anh said in the coming time, northern cities and provinces should work together to tackle with their difficulties and promote restructuring of state-owned enterprises in line with the government’s policy towards the formation of a regional value chain.
The northern region includes 28 provinces and cities with total area of 149,887.15sq.km, adjacent to Guangdong , Guangxi and Yunnan of China to the north, Laos to the west, and the Tonkin Gulf to the east.
One day cut on customs procedures saves US$1.6 billion
If the time on export import procedures reduces one day, businesses will be able to save US$1.6 billion, according to calculations by the United States Agency for International Development's Governance for Inclusive Growth Project (USAID GIG).
It was announced at a seminar on implementation of the Government’s Resolution 19 on export and import procedure simplification, hosted by the HCMC Investment and Trade Promotion Center, the Central Institute for Economic Management and the USAID GIG on September 25.
The resolution issued in March aims to improve business environment, and simplify export import procedures by cutting the time on customs clearance to 14 days.
According to the Mr. Pham Quang Vinh, an expert from the project, it now takes 21 days to do customs clearance for a cargo container and only 13-14 days in the ASEAN 6.
Surveys show that up to 60-80 percent of export and import commodity lists must come under specialized examination in Vietnam. Regulations of relevant agencies are overlapped and inconsistent causing difficulties and waste for businesses.
Hanoi strives to be Vietnam’s high-tech hub
Six decades after liberation, Hanoi has emerged from a small city with basic industries into a major industrial centre and an economic engine of the northern region.
In the early days after taking control of the city from the French, Hanoi’s residents entered a new phase of restoring economic activity. From 1955-1960 marked the establishment of many new factories, the earliest foundation of the manufacturing sector in Hanoi such as Hanoi Mechanical Factory, Tran Hung Dao Mechanics and Gia Lam Mechanics. The first industrial co-operatives of Hanoi as well as of the country were established including Nghia Do Co-operative, O Cach Jute Co-operative and Dan Chu Glassware Co-operative. Hanoi saw the rapid recovery of small and private industrial factories, laying the foundation for a self-controlled industry.
During the first Five-Year Plan (1961-1965), Hanoi’s fledgling industrial sector witnessed many important events. It saw the formation of the first large industrial zones in Thuong Dinh, Minh Khai, Yen Vien and Dong Anh, with tens of thousands of new factories. A range of State-owned enterprises were born out of this period such as Rang Dong Lighting Source and Vacuum Flask Company, Van Dien Phosphate Fertiliser Company, Dong Anh Mechanics and Mai Dong Mechanics. For the first time, Hanoi’s industrial sector was able to manufacture lathes, millers, transformers, diesel engines, car parts, hammering machines, punching machines and small generators. Products of the textile industry, such as sweaters and knitted jackets, began to be exported.
During 1965-1975, when the American war was in its most violent phase, Hanoi’s industrial sector was faced with many difficulties. Factories and industrial facilities had to be relocated to neighbouring provinces, workers had to carry out two duties at the same time: working and fighting. From national unification in 1975 until 1986, Hanoi’s factories were struggling very hard due to old-fashioned economic management mechanisms, reductions in foreign aid, and a serious lack of capital, materials and energy.
Only after the 6th Party National Congress in 1986 did Hanoi’s industrial sector undergo dramatic changes. In the early 1990s, private companies and factories were established and saw rapid development such as Geleximco, Xuan Loc Tho, Hoang Vu and Tung Lam. Many traditional craft villages in Hanoi were restored to help rebuild the rural economy and made a substantial contribution to the city’s export revenue.
For the first time, local factories were able to access new technology from developed countries, such as Xuan Hoa Bicycles, Viet Ha Beer and Hanoi Soap. Foreign direct investment (FDI) enterprises began to build factories and Hanoi underwent rapid development. Pioneers of the capital’s industry were joint ventures between Hanoi’s Hanel Company and major Asian companies such as Daewoo Hanel, Orion Hanel and Sumi Hanel in the Sai Dong B Industrial Park in the mid-1990s.
In early 2000, the presence of big Japanese corporations such as Yamaha, Canon and Panasonic in the Thang Long Industrial Park drew investment from dozens of enterprises in the auxiliary industry from Taiwan (China) and the Republic of Korea.
Over the past 60 years, Hanoi’s industrial sector has seen continuous growth from several dozen State-owned factories and several hundred handicraft co-operatives to nearly 100,000 industrial facilities as of 2013, including 131 State-owned enterprises, 10,700 people-run factories and businesses, and 410 FDI enterprises.
In addition, Hanoi has over 1,200 handicraft villages and tens of thousands of craft-making households. The structure of industrial sub-sectors was re-arranged in a more appropriate way, in line with the master plan to form specialised and high-tech industrial zones.
International integration allows Hanoi to become a strong magnet for foreign investment and to adopt new technology transferred from advanced economies. In addition to traditional products such as machine tools, transformers, light bulbs, tyres, beer and confectionery, Hanoi’s industrial sector had new key products such as printers, optical parts, computers, motorbikes, food processing lines and granite.
The value of exported manufactures now account for 30% of total industrial output, including high value added products such as IT products, machines and electrical equipment. The Hanoi Capital Region appears on the global industrial map as a major manufacturing centre of mobile phones, printers, scanners and motorbikes.
Hanoi’s industrial production now has a large portfolio including thousands of types of products and there has been big changes in both the scale and quality of industrial production. The contingent of Hanoi workers has growing stronger, to more than 700,000.
About 60% of industrial enterprise managers have Bachelor degrees or higher. Enterprises have been adopting advanced production management and quality control systems from the US, Europe and Japan to create new breakthroughs in management and administration.
Currently there are over 500 enterprises with their respective annual revenue exceeding VND100 billion (US$4.7 million). In the future, the city will focus on developing high-tech industries, so as to transform Hanoi into a high-tech industrial hub of the country, a modern industry based on knowledge, technology and high-quality human resources.