return icon Vietnamnet.vn

BUSINESS IN BRIEF 30/8

 Vinpearl doles out 4 million USD for Nha Trang Port stake; Experts forecast M&A surge in property sector; FDI disbursements surge 45% in eight months; More industrial parks licensed in HCM City; Gov’t introduces tax relaxation measures

Vinpearl doles out 4 million USD for Nha Trang Port stake

Vinpearl JSC, a subsidiary of Vingroup has been allowed to buy 85 billion VND (4.04 million USD) worth of shares in Nha Trang Port JSC from the Vietnam National Shipping Lines (Vinalines).

The company is working with the Nha Trang Port to develop an investment plan in the direction of turning the port into a special facility serving tourism.

Nha Trang Port is undergoing the equitisation process but its shares have failed to attract buyers due to its ineffective operations over the past time.

The port’s value is assessed at 245 billion VND (11.6 million USD). More than 2.3 percent of the company’s chartered capital was offered to its employees and Trade Union organisation, and 22.6 percent of chartered capital was put up for auction.

Investment attraction far beyond expectations: HEPZA

The Export Processing and Industrial Zone Authority (Hepza) on Tuesday announced the total investment capital reached US$566.05 million as of August 19, accounting for 103 percent of this year plan and up 48.28 percent over the same period last year.

Hepza planned to attract US$550 million investment capital this year and the number has gone beyond the plan for four months.

Foreign direct investment totaled US$286 million, up 0.56 percent over the same period last year. Domestic sector invested VND5,892 billion (US$280.11 million), 188 percent year on year increase.

Experts forecast M&A surge in property sector

After a minor upswing in the first half of the year, mergers and acquisitions (M&A) in Vietnam’s real estate market are expected to further take off in the coming time, said experts.

Statistics from the Ministry of Planning and Investment showed that the country attracted $5.7 billion in disbursed FDI in the first half of the year, a 1 per cent increase on-year.

FDI into the property sector accounted for around 10 per cent of the total, mainly via M&As, it noted.

Several M&As have been reported recently, such as the Movenpick Saigon Hotel, Pico Plaza, the Bay Water project, and Alma Resort.

As well as foreign-invested M&As, local transactions have also been more widely reported.

According to Su Ngoc Khuong, associated director of investment at Savills Vietnam, the reviving property market and improved liquidity is a result of the government’s efforts to stimulate the real estate sector.

“Also, some property developers have been eager to sell their projects to ease financial burdens, while financially strong enterprises are looking to acquire projects to take advantage of the improving market,” Khuong said.

As a result, several M&A deals have been closed. The gradual completion of infrastructure and roads in major metropolitan areas and satellite cities has also made the property sector more attractive.

Real estate M&A in Vietnam is expected to continue its uptrend, given that Vietnam is still one of the most promising growth markets.

Another factor is the pending Trans Pacific Partnership Agreement (TPP), which would support the growth of the national economy and increase FDI inflows to Vietnam.

Khuong added that the market has continued to see residential development projects changing hands, and not only apartment, but also landed property and township projects.

“Investors have a big appetite for operating assets with stable yields and lower risks. Within the hotel sector, fast rising tourist numbers, both domestic and international, are the rationale behind investment in urban hotel projects and also resorts. This is further supported by the rapid growth in the number of direct international flights to multiple provincial airports,” Khuong explained.

Interest from Japanese and Korean investors, who have accounted for the majority of M&A activities over the last two years, is expected to stay strong.

There is also growing demand from Singaporean and Taiwanese groups for both residential and commercial office buildings. There is likely to be continued activity in these products over the coming months and into next year.

At the latest conference on M&A activities in Vietnam, held recently organised by VIR, experts predicted that there will be a “second wave” of M&A in Vietnam over the next five years, when the economy recovers and foreign direct investment surges.

Foreign experts at the event forecasted that by that time the country may see $20 billion in M&A transactions.

Apart from the TPP, free trade agreements with the EU and South Korea, and an FTA with the Russia, Belarus and Kazakhstan customs alliance are expected to be signed by next year, which will also see the beginning of the ASEAN Economic Community.

According to Deputy Minister of Planning and Investment Nguyen Van Hieu, there is a strong growth in the number of M&As in Vietnam, with the total value of deals reaching $5 billion last year, compared to a mere $1 billion five years ago.

Can Tho, Israel enhance hi-tech cooperation

Israel is desirous of augmenting cooperation with Can Tho province in the application of high-technology in agriculture, human resource development, E-Government and health care.

Israeli Ambassador to Vietnam Meirav Eilon made the proclamation at a working session with Chairman of the Can Tho City People’s Committee Le Hung Dung on August 27.

The Israeli diplomat emphasised that Israel came from a country which has a high population relative to its agricultural land that led to exhaustion of soil fertility and many difficulties in its agriculture industry.

“However thanks to advances in agricultural science and technology, the nation overcame many of the obstacles and, as a result, has benefited tremendously,” Ambassador Eilon said.

Israel is currently carrying out a dairy cow breeding project utilising applied modern technology in Binh Chanh district. Leading experts from Israel are closely monitoring the project and they are working hand in hand with experts from Can Tho can, Eilon said.

Eilon extended an invitation to representatives from Can Tho to attend an international scientific and technological conference hosted by Israel in April, 2015.   

He said the Israeli Government has plans to exchange students and trainees between its universities and Can Tho University and Can Tho College of Engineering Technology.  It is also set to organise hi-tech agriculture conferences in Can Tho.

For his part, Dung introduced the city’s socio-economic situation and its advantages saying the city is specifically seeking investment in hi-tech agriculture, human resource training, health care, water management and use.

He affirmed that Can Tho will create the best possible conditions in terms of administration procedures and infrastructure and offer incentives for Israeli businesses investing in the city.

FDI disbursements surge 45% in eight months

In the first of eight months of the year disbursements of foreign direct investment (FDI) surged 45% on-year to US$7.9 billion, according to the General Statistics Office (GSO).

Since last August the number of newly registered FDI projects in Vietnam increased by 29% to 992 with total investment capitalisation of US$7.246 billion.

During the same period, 349 existing FDI projects licensed supplementary investment capital of US$2.3 billion.

FDI projects were licensed in 45 provinces and cities across the country. Bac Ninh province led the country in FDI attraction, followed by Ho Chi Minh City,Quang Ninh and Haiphong.

The Republic of Korea is Vietnam’s largest foreign investor with registered capital of US$2.467 billion, followed by Hong Kong (US$1 billion) and Japan(US$769.9 million).

IATA forecasts rapid growth of aviation sector

The aviation sector of Vietnam is projected to be the world's seventh fastest growing market during the 2013-2017 period and achieve international passenger and international commodity transport rates of 6.9% and of 6.6%, respectively.

The information was released by International Air Transport Association (IATA) Director General and CEO Tony Tyler at a conference on the occasion of Aviation Day on August 27.

He said that aviation is the country’s strategic economic sector that need  proper attention from Vietnamese functional agencies.

Currently, the aviation industry contributes on average US$6 billion to the country’s gross domestic product (GDP) and generates 230,000 jobs.

In the 2008-2013 period, the number of tourists using Vietnamese air routes nearly doubled.

Thai garment firms seek opportunities in HCM City

Thai trade and investment promotion agencies are actively implementing an array of programmes to connect businesses and support them in seeking business investment opportunities in Vietnam.

These activities are seen as preparations for future opportunities after the establishment of an ASEAN Economic Community (AEC) in 2015, Thai Consul General Malinee Harnboonsong told an exchange between Vietnamese and Thai garment businesses in HCM City on August 27.

Bilateral trade relations have seen strong development in recent years with two-way trade turnover reaching nearly US$9.5 billion last year and nearly US$5 billion in the first half of this year.

Many Thai businesses highly appreciated the Vietnamese market’s potential and long-term cooperative opportunities with Vietnamese partners, she said.

Thai businesses, through the exchange, want to introduce prime quality products and services to distributors and agents to enable Vietnamese customers be in favour of Thai products, Malinee said.

A Thaiwahknit Wear Co representative said the company is keen to expand business in Vietnam, particularly in HCM City aiming to seek importers, agents and outlets for knitwear and sports wear production.

According to the Ministry of Industry and Trade, bilateral garment trade turnover reached US$160 million in the first half of this year, including US$20 million from Vietnam’s exports and US$140 million from its imports.

Nguyen Van Tuan from the Vietnam Chamber of Commerce and Industry (VCCI)’s branch in HCM City suggested garment businesses from two countries should find the best ways to bridge the different gap of their export turnover and increase trade exchange for mutual benefits.

HCM City steps up efforts to foster tourism industry

Ho Chi Minh City have been implementing a range of measures to boost tourism, from improving the quality of services and increasing network linkages to offering attractive promotions.

HCM City - Vietnam’s tourism hub - is the first city to effectively develop attractive tourism products through creating links with other localities.

Recently, the city diversified its products on offer in an attempt to draw in more visitors. In addition to HCM City’s well-known sights, the city is planning to develop a variety of interesting and affordable tours throughout the city.

A number of the tours on offer are organised in cooperation with other localities with a high potential for tourism development, such as Ben Tre, Tien Giang, Can Tho and Phu Quoc.

These tours are extremely popular with domestic and foreign visitors.

The tours enable holiday-makers to gain insight into the cultures and daily lives of the local inhabitants through visiting historical sites and manufacturing sites for traditional crafts and goods.

The city has been working to develop the domestic tourism market through running promotions to encourage Vietnamese people to travel within the country. Concurrently, HCM City has also intensified promotional efforts abroad.

The city has identified a range of target tourism markets for the near future, including Northeast Asian and Southeast Asian nations, Western European nations, the US, Russia, India and the Middle East.

Along with the improvement of tourism products and infrastructure, the city is planning a series of cultural and sports events as well as promoting the programme “HCM City – 100 interesting facts”, which aims to further introduce the city’s sights and attractions to tourists.

The 10th International Travel Expo 2014 (ITE HCMC 2014) will take place in the city from September 11-13, which aims to promote the tourism industry in the Mekong Sub-region whilst also creating the opportunity for businesses to expand their markets further.

To diversify the types of tourism in anticipation of increasing numbers of tourists, the city developed a plan to boost waterway tourism from 2013-2015, and a vision for 2020. HCM City invested in the construction of five key routes for this type of tourism, whilst also upgrading and building ports and access roads to tourism sites throughout the city.

In the first five months of 2014, the city welcomed approximately 1.8 million international tourists, which marks a 9.7 percent rise compared to the same period in 2013.

The majority of visitors were from Japan, the Republic of Korea, Singapore, Malaysia, Indonesia, Thailand, and European countries.

A growing economy needs strong support industry

Manufacturing is truly the backbone of Vietnam’s economic growth, and the challenge now to making the sector’s comeback a sustainable reality comes down to developing the support industry.

The support industry is the decisive factor in developing and enhancing the nation’s competitiveness in terms of price, quality and timeliness of production. Without a well developed support industry, sustainability is little more than an elusive dream.

However, it is no easy task to develop the support industry as Vietnam is facing numerous difficulties.

Over the past decade, many foreign firms have either failed or refused to make good on their commitments to back the development of Vietnam’s support industry. This is true even though they negotiated for and received many incentives from the Vietnamese Government in return for the commitment.

The fact is that the number of domestic businesses in the support industry remains inadequately low, resulting in the industry failing to reach its set targets and woefully out of alignment with the Vietnamese government’s commitments contemplated when joining the World Trade Organisation (WTO) and the ASEAN Free Trade Area (AFTA).

It’s difficult, if not impossible, to get a solid handle and pin down exactly the causes of all the inconsistencies between commitments made by multinational groups and the resultant reality.

On the one hand, multinational companies may have tried in earnest to fulfil their commitments to develop the support industry but failed.

However, on the other hand, they may not have negotiated in good faith or even tried to realise their commitments and the deal they struck with the Vietnamese government may have simply been tactical gamesmanship.  

Despite the shortcomings, the industry should not be dissuaded from accomplishing its targets, and developing it is pivotal to propelling economic growth forward.

Yet, efficiently developing the industry is still a thorny issue in Vietnam’s current context when the country is deeply and intensively integrating into the global economy. This means that the State subsidies for the domestic manufacturing sector are not available, thus posing a huge challenge.

Japan and the Republic of Korea which have gained tremendous achievements in the support industry had applied the closed-door policy to protect their support industry until it reaches a stage of maturity and sustainability.

Another challenge results from shortcomings in macroeconomic management over the past decade. A real estate market that has attracted a huge amount of resources and a stock market in its infancy have negatively impacted the whole national economy.

In such a context, Vietnam’s support industry needs a more surgical and narrowed approach singling in on more specific goals, with a focus on developing a niche market.

The country needs to concentrate its attention on producing high added value products and reducing production costs to take part in the global supply chain – an uphill task to struggle.

Last but not least, Vietnamese businesses in the support industry must improve their management capacity and competitiveness to stand firm on the world market. As most of them (about 97%) are small and medium sized, they should take a path of cooperating with foreign firms.

If support industry firms cooperate with foreign businesses to supply products to big multinational groups, their odds of success will be greatly enhanced as they are not in a position yet to compete directly with the giants. They will also benefit from the more experienced foreign firms that will lead to greater future prosperity.

Industrial production maintains upward trend

The index of industrial production (IIP) for August picked up 6.7% on-year due to an upturn in consumption, bringing an 8-month IIP to 6.3%, the General Statistics Office (GSO) announced.

In eight months, the manufacturing and processing sectors achieved a growth rate of 8.1%, and the power generation and distribution sector rose 11.2%, according to a GSO report.

Several industries attaining high IIPs included electronics, computers and optics production (up 34.5%), automobile manufacturing (up 20.2), and leather making (up 20.2%).

The GSO report shows the consumption of manufactured and processed products recovered in July, rising 2.7% over the previous month and 9.2% compared to the same period last year.

In the seven-month period, electronics, computers and fibre optical products obtained the highest sales growth of 33.9%, closely followed by leather products (22.2%), and automobiles (15.9%).

However, as of August 1, 2014, the inventory index of the manufacturing and processing sectors rose 13.4% over the same period of 2013. Major industries showing higher levels of inventory included paper production (54.1%), costume making (46.1%), and manufacturing of means of transport (42.6%).

Opportunity for women’s participation in economic development

The Australian Government hosted a forum for partners from across the region on “ASEAN Integration and Women’s Economic Empowerment in the Mekong” in Hanoi on August 27.

The forum focuses on how women can reach their full economic and social potential. It is also an important channel of discussion between multiple stakeholders to ensure women get the most out of economic development in the context of ASEAN integration.

The Mekong region is becoming more interconnected, and opportunities to examine issues from a regional perspective are very important, said Australian Ambassador to Vietnam, Hugh Borrowman.

He hopes the forum will help devise innovative solutions to critical regional development issues.

ASEAN integration can be a huge boost for women’s economic participation. However, gaps caused by gender inequality such as access to finance, business skills and markets can slow down economic growth. The United Nations has valued the ‘gap’ caused by women ‘missing’ economic participation at US$89 billion in the Asia Pacific each year.

Women can encounter multiple barriers such as unequal laws, inability to meet collateral requirements due to lack of property ownership, harassment in the public sphere, and insufficient business knowledge, capacity and financial literacy. Women also face both direct and indirect discrimination because of gender stereotyping. Traditional beliefs which undervalue women’s capacities and potential are an invisible barrier to their participation.

"Gender Equality" is not only an obligation towards collecting accurate development statistics, but rather a sensible opportunity, as the benefits of including women will pay off with tangible value added in the long term, said Cambodian Minister for Women’s Affairs, Ing Khanthaphavy.

In the context of many social prejudices, the role of women can be enhanced and gender equality achieved only when women are empowered in economic, political and social spheres, said Le Kim Dung, Director General of the International Cooperation Department of Vietnam’s Ministry of Labour, Invalids and Social Affairs. “As part of a general ASEAN trend, Vietnam has been actively promoting gender equality, empowerment, and women’s economic participation in Vietnam.”

The forum is also an opportunity for participants to share their experiences as women social leaders and entrepreneurs from all sectors, including civil society, academia, the private sector and business associations.

More industrial parks licensed in HCM City

The HCM City Export Processing Zones Authority has issued licences for two new industrial parks in the city.

They are the 99ha Cu Chi Auto Mechanism IP to be built by the Hoa Phu JSC in Cu Chi District's Hoa Phu Commune and the 320ha Le Minh Xuan IP No 2 in Binh Chanh District's Le Minh Xuan Commune.

HEPZA said necessary formalities have been completed for licensing the 300ha Le Minh Xuan IP No 3 to be developed by Sai Gon Investment VRG Co.

Meanwhile, the Government has decided to scrap the 114ha Phu Huu IP from a list of industrial parks to be developed by 2015.

The Tan Tao IP will be reduced from a proposed 175.57ha to 161.35ha while its expansion plan will be reduced from 204.58ha to 182.55ha.

The Phong Phu IP will be reduced from 148.4ha to 134ha, with half the area becoming a technology complex.

SBV battles to control bad debts

Total funds provided to cover any risk reached VND77.3 trillion (US$3.6 billion) by the end of June, up 10.9 per cent over the 2013-end figure. If the funds are put to use, the entire bad debt ratio will fall to 2.2 per cent.

Deputy Chief Inspector of State Bank of Viet Nam's Dao Quoc Tinh told Dau Tu Chung Khoan (Securities Investment) that by the end of June, total bad debts stood at VND160.94 trillion ($7.6 billion).

The Vietnamese commercial banks' bad debt ratio rose to 4.84 per cent by late June 2014, up from 3.61 per cent in late 2013.

"Risk provisioning at credit institutions is on the rise. Thus, the issue of bad debt is under control and not worth worrying," Tinh said.

Nguyen Hoang Minh, deputy director of the State Bank of Viet Nam's HCM City branch, said that bad loans in the city have been showing an upward trend. Debt facing capital loss risk (potentially irrecoverable debts) now amounts to more than seven per cent of the total outstanding loans in HCM City, compared to the previous level of 4.6 to 4.8 per cent.

In Viet Nam, debts are classified into five groups based on the degree of risk: (1) standard debts, (2) debts needing special attention, (3) subprime debts, (4) doubtful debts, and (5) potentially irrecoverable debts.

Commenting on the rise in instances of "potentially irrecoverable debts" during the first half of the year, Tinh said that among the reasons was complicated and time-consuming handling of collateral, and a rather dull property market.

However, he said that the system was trying its best to control and handle potentially irrecoverable debts by ramping up risk provision funds.

"I think bad debts increase through the year and will be falling by the end of the year," Tinh said.

Several small Vietnamese banks posted losses in Q2 after setting aside risk provision funds to mitigate any risks and push ahead with restructuring.

Thoi Bao Ngan Hang newspaper (Banking Times), a unit of the State Bank of Viet Nam, reported that PGBank announced a loss of VND12 billion ($566,000).

The bank had to put all its profits into risk provision funds because the total overdue debts reached VND1.7 trillion ($80 million) as of June 30, equivalent to 12 per cent of the total outstanding loans.

In the first half of this year, National Citizen Bank, till recently known as Navibank, gained VND598 billion ($28.2 million) in pre-tax profits, up 26 per cent when compared to the same period last year. After risk provisioning, profits came down to VND3.76 billion ($177,400).

VietA Bank spent VND600 billion ($28 million) on risk provisioning by the end of June, leaving its Q2 profit thin at VND150 billion ($7 million), down 12.8 per cent over the same period last year.

According to Thoi Bao Kinh Doanh (Business Times), An Binh Bank's Q2 financial report showed that the bank increased risk fund provision by ten times in H1 this year to VND107.64 billion ($5.1 million), from VND11.54 billion ($540,340) in H1 last year.

The large risk funds trimmed An Binh's pre-tax profits in H1 by 80 per cent to VND170.35 billion ($7.997 million), down from VND214.36 billion ($10.06 million) during the same period last year.

Vietcombank, one of the country's four largest banks on the basis of assets, spent half of its pre-tax profits, equivalent to VND2.4 trillion ($108.6 million), to build risk provision funds in the first six months of this year.

VIB transferred 75 per cent of pre-tax profits, or VND447 billion ($21 million), to risk funds in H1.

Experts said that the motivation behind the banks' moves toward risk provisioning was to prepare themselves better before the new debt regulations in Circular No 09/2014/TT-NHNN issued by the central bank are officially implemented.

The circular dealing with classification of bank assets, setting up risk provisions, and the way provisions against credit risks are to be deployed will force an increase in risk provisioning. The document will also allow banks to continue restructuring existing loans and retain them in the same debt group until April 01, 2015, instead of reclassifying them by using more rigorous standards by June 1, 2014, as planned previously.

SBV keeps deposit interest rate steady

The State Bank of Viet Nam has not decided to lower the 6 per cent interest rate cap on short-term deposits, Deputy Governor Nguyen Thi Hong told baodautu.vn on Tuesday.

Hong made the statement in response to the recent public expectation of a deposit interest rate adjustment, following a 0.2 percentage point cut in interest rates to 4.8 to 4.5 per cent for one-month deposits at the two biggest banks by assets, Vietcombank and BIDV.

At Vietcombank, the rates for two – to nine-month term deposits have been cut by 0.2 percentage point to 5 to 5.7 per cent, and to 6.8 per cent for terms of 24 to 60 months.

Experts saw the cut as a boost for increasing the benefit margins for banks, not necessarily reflecting a new trend of the system.

Hai Phong greenlights two FDI projects

The management board of the Hai Phong economic zone has granted licences for two foreign direct investment (FDI) projects.

Of those, the Hong Kong's Warehousing Workshop Worldwide will invest US$15.5 million in a warehouse and hiring office project in the Dinh Vu Industrial Park. The construction will start in December and be operational by June next year.

Japan's Taiyou Denki KK will invest $7 million to build a loudspeaker factory in the Viet Nam - Singapore Industrial Park (VSIP) in the northern Hai Phong City. The project is expected to be ready in October next year.

Korean insurer to open branch in capital

The Ministry of Finance has issued a licence to Seoul Guarantee Insurance to open a branch in Ha Noi.

The South Korean company, established in 1969, set up a representative office in Viet Nam in 2007.

It has been providing guarantee services through reinsurance companies to South Korean companies and individuals in Viet Nam as well as local companies.

It had applied for the licence last year and will open the branch in October.

The company's chairman, Byung Ki Kim, said guarantee insurance is a good financial tool to address business risks and plays an important role in developing a economy.

Vietnam, Thailand seek stronger industrial cooperation

Vietnam and Thailand should increase cooperation on industrial and commercial development, Ms.Ladda Khaikham, a representative of Thailand’s Industry Promotion Agency, said in a joint meeting between Vietnamese and Thai businessmen in Hanoi on August 27.

Representatives of a number of big Thai companies attended the meeting, including producers of spare and automobile parts; oil and lubricants; automated machinery; and electrical and laser equipment.

The meeting aimed to provide Thai businesses with a better understanding of the Vietnamese business environment and create opportunities for businesses from both countries to network and collaborate, said Pham Quang Thinh, Deputy Director of International Relation Department of Vietnam Chamber of Commerce and Industry (VCCI).

Bilateral trade between Vietnam and Thailand has increased from 5.78billion USD in 2009 to more than 9.4 billion USD in 2013. In 2013, Thailand was Vietnam ’s biggest importer of mobile phones and components worth 692 million USD, according to VCCI.

Meanwhile, Vietnam imported 493 million USD worth of automobile parts and 485million USD worth of home appliances and components from Thailand, according to the General Department of Vietnam Customs.-

Gov’t introduces tax relaxation measures

The Government will extend time for paying value added tax (VAT) for machines and equipment imported by businesses to create fixed assets to 60 days.

The imported machines and equipment must total VND100 billion or above.

VAT refunds shall be completed within five working days after tax agencies receive businesses’ valid documents requesting for the tax returns.

For real estate transfer, individuals shall be allowed to select one of the two ways for tax payment. They can pay 25% of the total income per each transfer or 2% of the selling price per each transfer.

Regarding securities transfer, individuals shall pay 20% of their annual income or 0.1% of the selling price per each transfer.

Tax payers with total revenues from VND 50 billion/year shall make tax declaration on the quarterly basis.

The Government also proposed tax relaxation measures which will be submitted to the eight  session of the National Assembly for approval in October this year.

Specifically, a project capitalized at least VND 12 trillion and disbursed within five years  since receiving investment certificate may be considered for a preferential tax rate of 10% for 15 years, four-year corporate income tax exemption, and 50% corporate income tax reduction for the next consecutive years.

A 20% corporate income tax rate may be applied for agriculture enterprises employing over 300 regular laborers in 2014 and 2015. Since January 1, 2016, tax rate may be lowered to 17%./.

Company bankruptcies on the increase

Between January and August of this year, about 44,500 companies in Vietnam declared bankruptcy or were dissolved, up almost 13% from the same period last year, according to the General Statistics Office.

Between January and August of this year, about 44,500 companies in Vietnam declared bankruptcy or were dissolved

Of the total, there were 6,400 companies that went bankrupt and 7,600 that have temporarily halted operations. The rest have permanently closed their doors and have not renewed their tax codes.

The areas of arts and entertainment, agri-forestry and fisheries, real estate and IT have been hardest hit. But the wholesale, retail, tourism and construction sectors have also been adversely affected.

The department also reported that Vietnam licensed 5,052 companies in August, with a total registered capital of VND27.3 trillion (USD1.28 billion), down more than half a percent in numbers, but up 13% in capital from July.

Between January and August of this year, 47,500 companies were licensed, with a total registered capital of VND289.8 trillion (USD13.9 billion), down 9.5% in the numbers, but up 14.2% in the capital value against the same period last year.

The average capital of a company is estimated at VND6.1 billion (USD285,714), up 26% from the year before. Still, newly-licensed companies are estimated to have generated more than 700,000 jobs, up 1% on-year.

In the first eight months of the year, 10,900 companies resumed operations after a temporary halt, up 2.6% against from last year's figures.

Vietnam’s animal husbandry depends on imports

Despite being an agricultural country, Vietnam is still dependent on imports worth billions of USD each year in animal feed and other products to support the husbandry industry, and even continues to import meat.

A report by the Ministry of Agriculture and Rural Development (MARD)’s Animal Husbandry Department showed that Vietnam spent USD1.45 million on importing over 1,600 pigs for breeding in the first seven months of this year. This figure was up 1.7 in value and 1.9 in volume compared to the same period last year.

Even though the importation of chickens for breeding fell by about one percent in value over the same period, the industry in Vietnam still depends on these imports.

Apart from breeding animals, the country also spends billions of USD every year on importing animal feed. During the first seven months of the year, Vietnam imported USD2.42 billion in animal feed, nearly a 30% increase from the same period last year.

Animal feed imports, most of which come from China, also showed a slight increase.

Even though the country is trying to foster its own husbandry and meat production industry, nearly two tonnes of pork were imported so far this year, an increase of 9.4%. Chicken imports increased by 20.7%.

Hoang Thanh Van, director of the Animal Husbandry Department, explained that this trend is to be expected because Vietnam does not produce pure-bred animals for breeding.

“Vietnam has the capacity to produce over one tonne of maize per year while actual domestic demand is five to six tonnes.We are in the process of transforming some of the land currently used for rice cultivation to the production of maize,” Van said.

In order to increase the competitiveness of the animal husbandry industry, the minister of Agriculture and Rural Development has urged relevant authorities to be more innovative in their ways of thinking to increase productivity, raise production values and increase the incomes of farmers.

“In the future, we expect that the trend for the production chain will continue to rely on the international market," he added.

Nearly 11,000 recent enterprise revivals seen as sign of economic recovery

Domestic production and business activities are showing positive signs as the number of un-operational enterprises resuming their operations has increased considerably in the Jan-Aug period, according to the General Statistics Office (GSO).

In the last eight-month period, 10,900 enterprises have restored their operations, an increase of 2.6% over the same period in 2013.

Notably, in August alone, as many as 1,496 enterprises have come back into operation, up 35.2% compared to last month. However, this month saw a decrease in the number of newly-established enterprises and registered capital with 5,052 enterprises and VND27.3 trillion, down 0.6% and 13.2% respectively when compared with July.

In the Jan-Aug period, 47,000 enterprises have been set up with a total registered capital of VND289.8 trillion, down 9.5% in the number of enterprises established but up 14.2% in registered capital against the corresponding period last year. The average registered capital per enterprise was VND6.1 billion, a year-on-year increase of 26.2%.

The report from the GSO indicates that in the last eight months the electricity, water and gas production and supply sectors were among the sectors displaying the most positive economic signs as the number of newly-established enterprises went up by 12.4% and the number of un-operational or dissolved enterprises fell by 27.9%.

In the meantime, several sectors still face many difficulties such as the wholesale, retail, automobile repair, tourism, job services sectors among others.

CII borrows VND2.6 tril. to build water plant, expand road

HCMC Infrastructure Investment Joint Stock Company (CII) on August 26 signed two contracts to borrow VND2.65 trillion from the Vietnam Bank for Industry and Trade (VietinBank) to build a water plant in the city and expand a road in Ninh Thuan Province.

Specifically, VND960 billion will be invested in Tan Hiep Water Plant No. 2 which is due to start construction next month for completion in the first quarter of 2016. Once completed, it can supply 300,000 cubic meters of clean water a day for HCMC.

Truong Khac Hoanh, deputy general director of CII, said the water plant project requires a total cost of VND1,200 billion, to which CII contributes 43%, Saigon Water Corporation (Sawaco) 25% and Refrigeration Electrical Engineering Corp. (REE) 32%.

Clean water from the plant will be sold to Sawaco so that the company could supply residents in HCMC’s Binh Chanh District and in the west of the city.

Currently, CII is the investor of three water plants in the city, the other two being Thu Duc 3 and Kenh Dong.

The city’s water demand is forecast to rise to nearly 2.8 million cubic meters per day in 2015 and 3.8 million cubic meters in 2025.

Water used in the city is exploited from the Saigon River and Dau Tieng Reservoir with 0.95 million cubic meters per day, the Dong Nai River and Tri An Reservoir with nearly 1.5 million cubic meters, and groundwater with nearly 0.5 million cubic meters.

Meanwhile, the remaining VND1,688 billion will be used for expanding a section of National Highway 1 going through Ninh Thuan Province.

Le Vu Hoang, chairman of CII, said that his company will boost construction so that the road can be completed at the end of 2015 when other sections of National Highway 1 are also finished.

The project to expand this 37-kilometer section under the build-operate-transfer (BOT) format requires VND2,100 billion.

CII said it will collect toll on the section for over 22 years to recoup the investment capital.

Gov’t approves VAT exemption for animal feed

The Government has agreed with the Ministry of Finance’s suggestion to slash value added tax (VAT) on animal feed to zero from the current 5% in order to support the husbandry industry.

Most livestock farmers have faced losses recently and the tax exemption will help them cut input costs to generate profits, according to the Husbandry Association of Dong Nai Province, which is home to the country’s biggest pig herd.

Chairman of the association Nguyen Tri Cong said farmers have suffered great hardship due to the high cost of animal feed along with falling prices of poutry and livestock on the market.

Prices of materials for animal feed such as corn and soybean have decreased on the global market in the past time, so it is expected that prices of animal feed on the local market will be stable in the coming time, Cong said.

According to the Ministry of Agriculture and Rural Development, Vietnam has imported around US$2.25 billion worth of animal feed and materials in the first eight months, a year-on-year increase of 9%.

The three biggest suppliers in the period are Argentina, accounting for 33% of Vietnam’s imports of feed and materials, the U.S. with 14% and China with 11%.

Corn is the major imported ingredient during the period with 2.83 million tons worth US$734 million, increasing 2.3 times in volume and 1.8 times in value over the same time last year.

Brazil, India and Thailand are the three biggest corn exporters, respectively accounting for 49%, 21% and 7% of the import spending on the farm produce.

 

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

MORE NEWS

Control of bad content on social networks should be tightened

Tik Toker No O No, who criticized the poor, was boycotted by the community and forced to shut down by the authorities. He is not the first Tik Toker that has posted bad content on social networks.

Businesses struggle to keep workers as exports slow

Businesses have been struggling to maintain and support their workers as the Lunar New Year approaches.

Only in Vietnam: Shrimp-chip straws, dragon-fruit noodles

VietNamNet sums up the “odd news” in Vietnam last week.

Vietnam in need of more village-based midwives

Vietnam is in need of village-based midwives as the country has more than 7,000 remote and disadvantaged villages where women do not regularly get antenatal care at medical facilities.

Fuel supply estimated to surge 10-15% in 2023

The Ministry of Industry and Trade has drawn up two scenarios for the minimum fuel supply in 2023, requiring key fuel enterprises to increase the overall figure by 10-15% in 2023, according to the local media.

Da Nang to hire more IT staff to meet digital transformation goals

In the 2022-2025 period, Da Nang needs at least 7,500 more information technology (IT) workers a year and in the 2026-2030 period, the figure is 8,000.

Ho Chi Minh City looks to cash in on new travel trends

Ho Chi Minh City expects to fully exploit bleisure travel - a novel type of tourism combining business travel with leisure time.

A special English class in Hanoi for the older generation

For the past four years, a special English class has been held in Hai Ba Trung District in Hanoi for students 60 to 90 years old.

VIETNAM BUSINESS NEWS DECEMBER 3

Strong economic growth creates platform for M&A market

VIETNAM NEWS HEADLINES DECEMBER 3

Hanoi Tourism Ao Dai Festival 2022 opens

Use of e-cigarettes by youth rockets with easy availability at shops

Many students and young people have been hospitalized in a deep coma after using e-cigarettes, which are easy to buy.

How will telecom carriers fare in a highly competitive market?

The traditional telecom market is getting saturated and facing upheavals, including a drop in revenue from traditional calls and SMS, a tighter management policy and changes in technology.

Number of international visitors to Vietnam sets 'record' after pandemic

Vietnam welcomed 2.95 million foreign visitors in January-November 2022, 21.1 times up year on year, but still down 81.9% compared with pre-pandemic levels in 2019.

Su-30MK2, Mi helicopters rehearse in Hanoi

On December 2, Su-30MK2 fighters performed in a rehearsal to prepare for the upcoming Vietnam International Defense Exhibition 2022.

Vietnam sends condolences over passing of former Chinese leader Jiang Zemin

Vietnamese leaders on December 2 cabled messages of condolences to Chinese leaders over the death of former General Secretary of the Communist Party of China (CPC) Central Committee and former President of China Jiang Zemin.
back_to_top