Foreign direct investment in HCM City surges 47 percent

Ho Chi Minh City attracted 4.6 billion USD in foreign direct investment (FDI) in 2015, up 47 percent from previous year, according to the municipal People’s Committee.

During the year, the city granted licences to 566 new projects with total registered capital of 2.87 billion USD, rising 31.9 percent and 0.8 percent, respectively, compared to the 2014’s figures. In addition, 181 other projects got approval for capital addition.

The UK remains the top investor in the city with 10 projects valued at more than 1.2 billion USD, accounting for 42.8 percent of total capital, followed by the Republic of Korea with total investment worth 465.1 million USD (16.6 percent), British Virgin Islands with 370.3 million USD (13.2 percent), Singapore with 140.8 million USD (5 percent) and the US with 135.1 million USD (4.8 percent).

Regarding sectors, real estate drew the largest amount of foreign capital (1.5 billion USD), chased by industry (767.4 million USD), technology and science (169.4 million USD), trade (167.3 million USD) and information and communication (32.1 million USD).

The city is currently home to 5,765 valid foreign projects with total investment of over 40.5 billion USD.

Nation's manufacturing up almost 10% this year

Viet Nam witnessed a growth rate of 9.8 per cent year-on-year in index of industrial production (IIP) for this year, an official of the General Statistics Office (GSO) said.

The growth in IIP this year was the highest over the past three years, Nguyen Bich Lam, head of GSO, said. The IIP reached a year-on-year increase of 5.9 per cent in 2013 and 7.6 per cent in 2014.

Industrial production in all quarters of this year was between 9.2 per cent and 10.2 per cent. The processing and manufacturing sector, accounting for 70 per cent of the national total industrial output, surged 10.9 per cent as compared with last year.

Many industrial products registered a high growth rate as against last year because of higher consumption in the domestic and export markets. These included automobiles with a growth of 54.5 per cent, mobile telephones of 31.6 per cent, steel products of 18.6 per cent, and milk powder of 18.5 per cent, in addition to fresh milk which grew 15.4 per cent, animal feed, 16.5 per cent, and liquefied petroleum gas (LPG) at 15.7 per cent. The other products that witnessed high growth rates were electricity at 11.6 per cent and cement at 10.7 per cent.

Lam said the increase in consumption was a good sign for industrial production and also the economy because that meant inflation was low.

The consumption price index (CPI) this year rose by 0.63 per cent against 2014, lower than the National Assembly's target of 5 per cent for 2015, according to the GSO. The low CPI growth rate supported production and sale of goods at low prices.

Higher consumption also ensured that the industrial sector's goods inventory this year registered a lower growth of 9.5 per cent against 10 per cent in 2014.

Some provinces and cities reached high growth rate of the IIP such as Thai Nguyen, which was up 97 per cent, Quang Nam at 35.3 per cent and Hai Phong at 16.6 per cent.

However, Lam said a stable growth in industrial production would be affected by reduction in the world oil prices and fall in global consumption.

The GSO reported that some industrial products reported a lower growth rate or reduction in production, of which the output of motorcycles dropped 12.7 per cent in comparison with last year.

Supermarkets launch sale season

Supermarkets around the country have launched promotions to attract customers during the New Year holiday.

Co.opmart and Co.opXtra supermarkets are offering discounts of up to 50 per cent on thousands of items like household utensils, cosmetics, fashion products, and dried and fresh foods from today through January 10 for the New Year.

The supermarkets will also gift some 100,000 coupons worth VND150,000 each to customers buying for a certain amount.

Big C supermarket has six promotion programmes running from December 15 to February 7 with discounts of up to 49 per cent on thousands of products, including fresh and processed foods, cosmetics, beverages, and confectionery.

Lotte Mart also has promotion programmes on several products like beer, beverages, and roasted chicken from December 23 to January 4.

On December 31 SC VivoCity will remain open until midnight, with famous fashion, cosmetics, accessories, and electronic brands like Dorothy Perkins, Miss Selfridge, The BodyShop, ECCO, Aldo, An Phuoc, and Adidas offering discounts of up to 50 per cent.

After 10pm the three customers with the biggest bills will get a Macbook Air, Ogawa massage mattress, or a VND5 million Co.opXtra voucher.

On New Year night SC VivoCity will have entertainment in the form of a circus, magic show, and concert by stars.

Supermarkets are also offering various kinds of Tet (Lunar New Year) gift hampers to meet the demand from businesses as well as individual customers.

Co.opmart and Co.opXtra have begun to sell 48 different kinds of gift hampers for Tet at prices ranging from VND 69,900 to over VND2 million (US$88.8). Each contains delicious cakes, traditional jams, Yellow Label tea, and other gifts.

In addition, they are offering confectionery products, beverages, sausages, and pork pies in new spring-themed packaging and at reasonable prices.

Big C has 16 kinds of Tet gift hampers at VND65,000-990,000.

Lotte Mart has more than 20 kinds ranging from VND99,000 to VND1.8 million.

Entrepreneurs indifferent to integration

The results of a study on "Vietnamese businesspeople's awareness of integration" were released by the PACE Institute of Management in HCM City yesterday.

They reveal that Vietnamese entrepreneurs pay little heed to the country's integration into the global economic community, with 56.8 per cent of those polled ignoring/knowing very little about the ASEAN Economic Community (AEC), 40.9 per cent ignoring the Trans-Pacific Partnership (TPP), and 33.4 per cent knowing very little about the World Trade Organisation (WTO).

Of the respondents, 85.5 do not know about AEC provisions, while for the TPP and WTO the numbers are 77.8 per cent and 66.3 per cent.

But most are fully aware of the economic benefits of integrating with the global community.

The media is considered among the major influences on businesspeople's awareness of integration, with 74.8 per cent saying they know from the internet, 64 from the print media, 54 from TVs, and 50.6 per cent from radio.

The study comes at a time when Viet Nam has concluded negotiations for the TPP and preparations for the AEC, which comes into being on December 31 this year.

The two are economic events that will have a huge impact on Viet Nam's economy, according to a press release from PACE.

It is the first study in the country to take a comprehensive look at businesspeople's awareness of integration.

It polled 493 entrepreneurs mostly in southern cities and provinces, especially HCM City, considered the locomotive driving the country's economic growth.

Farming enjoys trade surplus

Agro-forestry-fishery recorded a trade surplus of US$7.1 billion in 2015, despite a slight reduction in export revenues.

This year, the sector exported $30 billion worth in commodities, being a slight annual decrease of 0.8 per cent. Its import value, however, was estimated at $23 billion, up 5.5 per cent year on year.

Of note, cashew and peppercorns enjoyed higher selling prices compared to 2014.

Viet Nam sold 328,000 tonnes of cashew nuts abroad, bringing in $2.4 billion. While the quantity grew just 8.3 per cent annually, the value increased by 20 per cent.

Likewise, peppercorn exports fell to approximately 135,000 tonnes, however, they saw a five-per cent revenue gain, with total revenues reaching $1.7 billion.

However, some major farming produce, such as coffee, rubber and rice, experienced falling prices in foreign markets.

According to Nguyen Nam Hai, General Director of the Viet Nam National Coffee Association, coffee suffered from highly volatile prices, which were high at the beginning of the year and have continuously fallen. Viet Nam exported 1.28 million tonnes of coffee, earning $2.5 billion, down 25 per cent in quantity and 28 per cent in value.

Rubber price also followed a downward trend in recent years without a hint of recovery.

Further, rice exports recorded a higher volume, at almost 6.7 million tonnes. However, falling prices caused a 2.9-per cent dent in revenues from last year.

Also, marine products generated $6.5 billion, down 17 per cent year on year. The fall was due to significant price decreases in major markets, such as the US, Japan and the Republic of Korea.

Labour quality needs to be improved during integration

Vietnam ranks third in ASEAN in the labour force participation rate – an important factor for competition, but the quality of Vietnamese workers remains low, heard a workshop in Ho Chi Minh City on December 24.

According to a study of the World Bank, Vietnam lacks skilled workers. Its labour quality is marked 3.79 out of 10, ranking 11th among the 12 Asian nations participating in WB rankings. Meanwhile, Thailand and Malaysia – other ASEAN countries – get 4.94 points and 5.59 points, respectively.

Moreover, Vietnamese labourers are not well prepared, in terms of knowledge, skills and psychology, for their movement to other ASEAN countries.

Under an agreement of the ASEAN Economic Community (AEC), which will be formed on December 31, workers can enjoy free movement in the eight sectors of odontology, nursing, engineering, construction, accounting, architecture, surveying, and tourism. However, the agreement requires workers to be skilled and proficient in foreign languages, especially English.

In fact, Vietnamese employees’ level of English remains low, and a few learn the languages of ASEAN nations like Thai, Lao and Cambodian.

These weaknesses are challenging Vietnam, requiring the country to seek measures to better vocational education to serve its deeper integration into the ASEAN Community.

As such, the Ministry of Labour, War Invalids and Social Affairs is preparing for the implementation of a project on international integration on education and vocational training until 2020.

According to Director of the National Institute for Vocational Training Vu Xuan Hung, the project will focus on bettering mechanisms and policies on vocational education to meet integration requirements, implementing the application of a national standard framework, which refers to the ASEAN framework, and training the eight sectors mentioned in the AEC agreement.

Lending growth hits 19.5% this year in capital

The credit growth of Ha Noi reached 19.5 per cent this year, more than 2 percentage points higher than the banking industry's goal, according to the municipal Statistics Office.

Statistics showed that the outstanding loans totaled VND1.208 trillion (US$53.69 million) as of December, in which short-term outstanding loans rose by 17.9 per cent and medium- and long-term outstanding loans rose by 22.3 per cent.

The total capital raised during the past twelve months rose by 21.8 per cent against the same period to total VND1.45 trillion ($64.45 million).

According to the statistics office, this was due to the central bank's efforts to boost the credit accessibility for businesses during the year-end months.

Other economic indicators also revealed the capital city's growth this year.

The city's gross regional domestic product (GRDP) rose by 9.24 per cent over the previous year, largely driven by the industry and construction sectors which grew by 9.11 per cent and the service sector which rose by 9.91 per cent.

The statistics office said that the State management agencies, during the past twelve months, raised measures to tackle difficulties for firms while improving the business climate and national competitiveness.

The total retail sales of goods and services of the capital city increased by 11.7 per cent, statistics showed.

The city collected VND146.58 trillion ($6.51 billion) to the budget 2015, 3.5 per cent higher than the estimate for the full year.

Phu Tho among top five localities in investment attraction

The northern midland province of Phu Tho reeled in 17.2 trillion VND (781 million USD) of investment this year, becoming one of the top five localities in terms of development investment attraction.

According to the provincial Department of Planning and Investment, the figure represented a 24.2 percent increase from 2014, of which over 9.2 trillion VND (418 million USD) was from businesses and the public, 3.5 trillion VND (159 million USD) from ministries and State-owned enterprises, and 1.1 trillion VND (50 million USD) from foreign investors.

The capital inflows were poured into schools, urban infrastructure, transport, irrigation, environment cleanup and health care.

Some of the major projects are the Noi Bai – Lao Cai highway, Viet Tri – Ba Vi bridge and Phu Ha, Cam Khe and Phu Ninh industrial parks.

Next year, Phu Tho sets the goal of drawing over 18.9 trillion VND (859 million USD) for development, up 8.7 percent from 2015.

The province also plans all possible support for investors, working closely with ministries and agencies to hasten the progress of key projects in Viet Tri, Lam Thao and Phu Ninh districts.

It will intensify the supervision of the quality of works while issuing regulations for investors, project management boards and contractors to prevent construction delay.-

HCM City to focus on drawing OV investors

Connecting overseas Vietnamese (OV) investors with small and medium enterprises in Ho Chi Minh City will be one of the southern hub’s top priorities to prepare for the international integration, especially when free trade agreements come into effect.

Next year, Ho Chi Minh City’s Committee for Overseas Vietnamese, in collaboration with the municipal Investment and Trade Promotion Centre and relevant agencies, will hold a dialogue with OV businesses to address difficulties facing their investment and production in the city, Committee Chairman Pham Van Hai said at a conference held in the city on December 25.

He highlighted that the city will enhance the popularisation of the Party policies and the State laws as well as the country’s socio-economic situation to Vietnamese people living abroad.

At the conference, OV representatives suggested the city should renovate methods to lure OV resources. They said that HCM City needs to pay attention to Vietnamese students and workers in foreign countries while linking OV experts with domestic professionals to serve its socio-economic development in the context of deep integration.

According to statistics from the State Bank of Vietnam’s Ho Chi Minh City branch, the city received the flood of remittances worth over 5.5 billion USD in 2015. By November this year, the city welcomed 384,000 overseas Vietnamese.

The OVs have made great contributions to the city, presenting 200 scholarships to disadvantaged students and building ten bridges in rural areas.

Vietnamese construction firms stands 3rd in Cambodia

Vietnam ranked third in the number of companies licensed to operate in the construction sector in Cambodia, said Sui Nara, Head of the Construction General Department under the Cambodian Ministry of Land Management, Urban Planning and Construction.

Meanwhile, China was named the largest investor in this field this year with 135 firms running 83 projects worth 946 million USD.

Since 2000, the Republic of Korea has been the biggest investor in the construction sector with 45 companies registering a total investment capital of 1.56 billion USD.

Other top foreign investors include Japan, Thailand, Taiwan (China), and Malaysia.

The foreign-invested projects focus on high-rise buildings, urban areas, property business, and construction design consultancy.

Aquaculture sector targets sustainable development

The aquaculture sector needs to take comprehensive restructuring measures for sustainable development, said Minister of Agriculture and Rural Development Cao Duc Phat.

During a conference reviewing the achievements of the Directorate of Fisheries in 2015 and setting plans for 2016 on December 25 in Hanoi, the Minister urged the sector to improve product quality and safety in a bid to enhance its competitiveness in international markets.

The sector should focus on its key products while promoting application of such standards as VietGAP to better meet market’s demand, he said, adding the VietGAP standards also need to be improved to catch up with reality.

Deputy Director General of the Directorate, Nguyen Thi Thu Nguyet highlighted the difficulties facing the sector in 2016 including impacts from the global sluggish economic growth and the El-Nino phenomenon on aquaculture activities.

While new FTAs will open up new opportunities for export, the sector will also has to tackle trade and technical barriers in import countries, she added.

According to the Deputy Director General, in the 2011-2015 period, the sector’s aquatic produce output has seen an average annual growth of 3.8 percent, and the export value has increased by an average 2.4 percent.

Statistics of the Directorate showed that in 2015, the sector produced 6.56 million tonnes of aquatic products, up 3.6 percent from last year, of which 3.53 million tonnes came from aquaculture.

The 2015 export value hit 6.72 billion USD, 10.4 percent short of the year’s target.

Coconut products account for 30 percent of Ben Tre’s exports

Southern Ben Tre province earned 737 million USD from shipping aboard coconut products over the past five year, accounting for 30 percent of its total export revenue.

In 2015 alone, exports of the projects reached 660 million USD, fulfilling almost 91 percent the yearly plan, according to the provincial Department of Industry and Trade.

Currently, Ben Tre produces 30 kinds of specialties from coconuts. Of the products, dried flesh, milk powder and tinned milk see an upward trend while sweets and fibre thread are experiencing the opposite trend for difficulties in seeking consumption markets.

According to Tran Van Duc, head of the Ben Tre Import Export JSC, coconut prices have been fluctuated in recent years, taking a toll on growers and exporters.

He proposed local authorities devise policy helping stabilise the prices and improve quality.

Vice Chairman of the provincial People’s Committee Nguyen Huu Lap shared Duc’s opinion, urging the connection between businesses and growers to boost consumption and to cut out the intermediaries.

The area growing coconut trees, one of Ben Tre’s key plants, has been expanded in recen years from 55,870ha in 2011 to 68,167ha in 2015.

The province exported coconut products to 105 countries in 2015 compared to 70 countries recorded in 2011.

Tien Giang has three more GlobalGAP agricultural establishments

The Mekong Delta province of Tien Giang on December 25 granted Global Good Agriculture Practices (GlobalGAP) certificate to three fruit production establishments in the locality.

GlobalGAP specifies requirements for agricultural production to meet international standards of farm produce and protect the environment.

The awardees included a dragon fruit farm in Thanh Tan commune, Tan Phuoc district; a durian cooperative in Tam Binh commune, Cai Lay district; and a dragon fruit cooperative in My Tinh An commune, Cho Gao district.

By the end of this year, Tien Giang had about 631 hectares of vegetable and fruit products granted VietGAP and GlobalGAP certificates, including over 30 hectares of rice, 130 hectares of fruits, and 67 hectares of vegetables.

In the period from 2013-2015, the “Quality and Safety Enhancement of Agricultural Products and Biogas Development” (QSEAP) project presented GAPs certificates to 25 agricultural farms and cooperatives in the locality, according to Tran Thanh Phong, Director of the provincial Department of Agriculture and Rural Development’s Agricultural Promotion Centre.

Tien Giang boasts the largest fruit-tree area in the Mekong Delta with over 85,000 hectares, generating an annual yield of 1.3 million tonnes. It is also home to over 43,000 hectares of vegetables.

Appliance firms eye integration

The home appliance industry should see promising growth amid more economic integration with the world, experts said at a conference in Ha Noi.

The conference held by the Ha Noi Stock Exchange (HNX), VietinBank Securities Company and Son Ha Sai Gon JSC forecast a bright picture of development for local home appliance production.

Vo Van Quyen, head of the domestic market department from the Ministry of Industry and Trade said home appliance consumption accounts for 9 per cent of total personal consumption worth US$12.5 billion to $13 billion.

Quyen said the growth came from the high number of population between 18 and 45 years old and higher income which led to changes in consumption. It was also from the interest in buying a local brand from both urban and rural areas in the country.

At the same time, Quyen said the possible Trans Pacific Partnership, the ASEAN Economic Community, the Free Trade Agreements with Japan, South Korea and other partners had opened up opportunities and challenges for the industry as they could enjoy tax incentives with many countries when exporting their products.

Phan The Rue, former Minister of Trade, said with a population of over 90 million and about 100 million people by 2020, the demand for home appliances would be huge.

Khong Phan Duc, General director of VietinBankSec, said Vietnamese spent 66 per cent of their total personal income on home expenses, much higher than 32 per cent spent by the Singaporeans. He said spending on home appliances ranked second after food and beverages.

As one of the leading manufacturers of metal tanks, containers and storage instruments, Son Ha Sai Gon JSC has been spreading its distribution to the rural areas of Viet Nam to attract local buyers.

It has also exported to the neighbouring countries of Laos and Cambodia and produced high-end products to export to the US and Canada.

Nguyen Xuan Phu, chairman of Sunhouse Group, a local manufacturer and distributor of cookware and electric home appliances in Viet Nam, thought that the home appliance industry which uses basic materials could benefit from the cheaper prices of materials in the next three years.

However, Phu also brought up some challenges from integration when the country faces strong competitors such as Thailand and South Korea who will also benefit from the zero per cent tax. He thought the risk of losing the local market was very large due to the consumer trends of buying foreign products.

The Sunhouse Chairman forecast Vietnamese businesses in the industry would face difficulty in the same period. He targeted foreign markets as potential markets, however, he said there were not many supporting policies for the export business.

Meanwhile, Nghiem Phu Hung, CEO of Son Ha Sai Gon JSC, said technology was still a shortcoming for many of the local businesses in the industry, as a result, most of the local products were not special or outstanding compared with others. Hung added while an improvement in technology was urgent, it was not easy work.

At the conference, former minister Rue said the dependence of imported materials from non-partnership countries would bring more challenges to the industry.

VTC's profit grows 60% from year ago

VTC Corporation's profits reached VND123 billion (US$546,000) this year, 20 per cent higher than the annual target and over 60 per cent more in comparison with 2014.

Total revenue in 2015 reached VND3.5 trillion (US$155.5 million), six per cent higher than planned as well as 9 per cent growth compared to last year.

The company's production of digital content, television and telecommunication all exceeded the annual target.

This is the third consecutive year VTC has turned over a profit following restructuring under the direction of the Ministry of Information and Communications.

In 2016, VTC targets 10 per cent growth and 26 per cent of profit.

HCM City receives robust remittances in 2015

Overseas Vietnamese (OVs) remittances to the homeland have steadily risen by roughly US$1 billion annually over the past few years and the trend is forecast to continue into the foreseeable future, reports Vietnam News' BizHub.

Year-to-date through November total OVs remittances sent back to Vietnam are estimated at US$12.5 billion, with the largest portion of US$5.5 billion flowing into the nations southern hub of Ho Chi Minh City.

“The government's new policies encouraging OVs to assist in the doi moi (renovation) have helped to spark the higher remittance levels,” said Deputy Director Nguyen Hoang Minh of the State Bank of Vietnam's Ho Chi Minh City branch.

Additionally, the remittance director at the Dong Nam A Bank told BizHub that local banks are beginning to focus their marketing efforts on non-traditional remittance markets like Japan and Malaysia.

He said the booming real estate market in Ho Chi Minh City has been one of the key selling points in nurturing collections from both the traditional markets of Canada, the United States and Australia as well as the non-traditional markets.

Meanwhile the State Committee for Overseas Vietnamese Affairs reports nearly 5 million Vietnamese reside in 103 countries around the globe and there is a strong correlation between the higher numbers of OVs and remittances.

Vietnam trade gap with China hits historic high

Vietnamese bought record amounts of goods from China in 2015, pushing the trade gap to a historic high, according to the latest statistics from the General Statistics Office (GSO).

Preliminary estimates of imports for the year from the Asian giant hit US$49.3 billion while exports tallied in at US$17 billion, resulting in a trade deficit of US$32.3 billion, up 12.5% from last year.

Much of the increase in imports from China was fuelled by a surge in buying of cell phones, computers, machinery and equipment while exports failed to pick up significant steam as the norther neighbour’s economy showed signs of slowing.

Other GSO statistics show the trade deficit with the Republic of Korea rose 28% to US$18.7 billion while that with ASEAN shot up 45% to US$5.5 billion and Japan registered a US$300 million shortfall.

Vietnam state firms point out challenges in gov’t privatization plan

The implementation of a major plan to have most of the enterprises and corporations under its management go public is not as smooth as the Vietnamese Ministry of Industry and Trade has hoped.

Managers of such firms were encouraged to tell the truth about what they think about privatization during a rare meeting the ministry held in Hanoi on Thursday, which in the end showed it is still a long way for the plan to become a success.

Even though 279 out of 299 of the ministry-run enterprises have gone public, there are still many problems that need solving, such as the small number of shares sold to investors during the privatization process.        

According to the plan, the ministry, which manages the state holdings in the firms, will find investors for the government’s shares to improve performance for the businesses and increase their capital.

“However, there are firms that only managed to sell 0.07 percent of their stakes because few investors were interested,” Phan Dang Tuat, head of the ministry’s reform panel, admitted at the meeting.

“Other enterprises do not have proper archives of financial documents and papers, and there are executives who hesitated to have their companies privatized.”

Some enterprises only publicized unclear and inadequate information about their financial and operational state, so investors were not willing to open their wallets, Tuat added.

“There are also companies who encouraged their own managers and executives to acquire the shares to complete the privatization, and had no hope of attracting any outside shareholders,” he said.

The faults, however, are not always on the businesses’ side, the official noted.

“Businesses had to seek permission from higher authorities, but the response only came months thereafter,” he elaborated.

Tuat said most investors want to buy at least 51 percent of the firms to acquire the controlling stakes, to which the government would not agree.

“Investors always want to buy at least 51 percent because they prefer to take control of the companies, and we should seriously consider this,” Vo Thanh Ha, chairman of Sabeco, the country’s largest beverage maker, said at the meeting.

The government still holds an 89 percent stake in the Ho Chi Minh City-based company, the maker of such popular brands as 333 or Saigon Beer, after it went public in 2007.

According to an order by the trade ministry, Sabeco will have to sell the government’s shares two more times in the future to reduce the state holdings by 40-60 percent, Ha revealed.

“So what’s left for us when we sell the entire stake?” he wondered.

Ha added that it is not really necessary that a state company be able to improve performance following the privatization.

“Sabeco did report impressive growth eight years after going public, but its performance is largely due to the improved living standard and drinking habit of Vietnamese people, not privatization,” he said.

Government backs privatization plan

Nguyen Trong Dung, deputy head of the national board set up to oversee the reform of state firms, argued that the privatization plan has been doing businesses good.

“Some 4,000 firms in Vietnam have gone public and it has been proven that [privatization] is an effective solution,” he told the meeting.

Directly addressing the case of Sabeco, Dung admitted that the company would remain a strong player without having to go public, but “once privatized, its business performance will only become better.”

“Vinamilk, which went public in 2003, is generating some VND7 trillion [US$312.5 million] profit on an annual basis, something that could never be achieved if they did not undergo the privatization process,” he added.

The government currently owns 45.1 percent of Vinamilk, but revealed in October that it will sell the entire stake in the country’s largest dairy producer to rake in some $2.5 billion.

“The privatization plan means nothing if after all, the government still holds a share of 94 or 95 percent,” Minister of Industry and Trade Vu Huy Hoang said at the meeting.

The ministry will thus continue privatizing more firms in 2016, and will “hold forums to call for investment in enterprises that have already gone public such as Sabeco and the Hanoi Beer Alcohol and Beverage JSC,” the minister said.

Dung, of the state firm restructuring board, also said the government is poised to sell its shares in such big state enterprises as oil and gas giant PetroVietnam or power utility Vietnam Electricity, and will only retain a 65 percent stake there.

“Our vision is that there should be as few companies that are 100 percent owned by the government as possible,” Dung said.

“In the end there will be only two common state holding ratios: 51 percent and more than 65 percent.”

Ho Chi Minh City falls short of $2bn for infrastructure plans in 2016-20

Ho Chi Minh City will fall short of capital for its infrastructure development in the 2016-20 period, and is therefore in need of a special mechanism to solve the money issue, a finance and investment firm said Friday.

The southern metropolis needs VND203.11 trillion (US$9.07 billion) for infrastructure development in the next five years, mostly to fund traffic congestion reduction and flood prevention projects, according to the Ho Chi Minh City Finance and Investment State-Owned Co. (HFIC).

“But the city will only be able to arrange around VND123.21 trillion [$5.5 billion], plus an additional VND37 trillion [$1.65 billion] from a private placement agent,” general director Pham Phu Quoc said at a meeting to recap the company’s 2015 operations.

Quoc therefore suggested that the city’s administration call on the Prime Minister to allow HFIC to retain all of its post-tax profit to make up for the VND42 trillion (($1.88 billion) capital shortage.

The HFIC was founded following a directive by the city’s administration in 2010, and is tasked with mobilizing capital and developing urban infrastructure.

The company also functions as the representative of the state holdings, possessed by the municipal administration, in businesses, similar to the State Capital Investment Corporation (SCIC).

However, while the SCIC is allowed to earmark all of its post-tax profit to its infrastructure development fund, the HFIC has to contribute 70 percent of the earning to the state budget and can only keep 30 percent for its fund.

Quoc, the company director, has therefore urged the Ho Chi Minh City administration to seek government approval for it to be treated the same as the SCIC when it comes to the post-tax profit, so that it will have more money for the infrastructure development fund.

Tran Du Lich, deputy head of the delegation of Ho Chi Minh City lawmakers, also said the city needs a “local financial institution" to be able to mobilize investment from the private sector.

“So the city’s infrastructure development will be both funded by public and private capital,” he said.

In 2015 HFIC and its member firms are expected to post VND1.56 trillion ($69.64 million) earnings, surpassing target by 19.5 percent.

The company is expected to contribute VND2.91 trillion ($129.91 million) to the state budget.

As of the end of last month, the HFIC has earmarked VND1.9 trillion ($84.82 million) for multiple projects, 42.7 percent of which went to the infrastructure sector.

Investment for the finance, and healthcare and education accounted for 49.5 percent, and 4.3 percent, respectively.

FDI in real estate among highest

The latest figures from the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment reveal that in the fourth quarter real estate remained among the leading sectors in terms of foreign direct investment (FDI) attraction, with total capital of $2.32 billion.

During the closing months of the year 29 projects were newly-registered in real estate and ten projects given permission to increase their capital. The capital of $2.32 billion accounted for 11.5 per cent of the total investment capital coming to Vietnam this year and ranks real estate third in attracting FDI.

FDI into real estate has been on the rise in recent times. The majority of capital in foreign property projects, however, has been mobilized inside Vietnam. The amount of foreign capital is therefore less than committed. While this is not in violation of the law it will have a negative effect on the aim of bringing in external resources to the country.

The flow of foreign investment in property should be directed to projects such as hotels, resorts and urban areas, while projects in general that apply green technology should be prioritized

Most experts believe foreign capital will continue to flow in increasing amounts into the real estate sector in the future, with the emergence of a number of billion dollar projects.

SBV reports on performance of banking sector

On December 24 the State Bank of Vietnam (SBV) held a press conference to summarize activities in the banking sector during 2015.

The amount of money poured into the economy has been fully managed in accordance with the aim of keeping exchange rates stable, controlling inflation, and increasing credit at a reasonable rate.

Total payment means as at December 21 had increased 13.55 per cent year-on-year, which is suitable with the current macro-economic conditions, monetary policy, and management of the SBV.

As at December 21 capital raising had increased 13.59 per cent compared to 2014, assisting credit institutions to provide capital to the economy.

Interest rates fell by 0.2 to 0.5 per cent, making a positive contribution to business and production activities while ensuring stability in the money market and foreign exchange market.

For 2016 the SBV expects credit growth to come in at 18 to 20 per cent. It will proactively manage the foreign exchange market and the gold market to reduce the influence of dollars and gold on the economy. This will also promote the use of non-cash payments.

The central bank will also implement proactive and flexible monetary policy in coordination with fiscal policy and macro-economic policy to control inflation to less than 5 per cent, to contribute to economic growth of 6 to 7 per cent and stabilize the macro-economy.

In 2015 the SBV maintained the interest rate ceiling on VND while lowering the ceiling on USD, in order to establish a reasonable gap between the two.

Seafood export reduces over 14 percent this year

Seafood export turnover has reached US$6.72 billion as of December, down 14.3 percent over 2014 and 10.4 percent compared to the target set for 2015, reported deputy head of the Directorate of Fisheries Nguyen Thi Thu Nguyet.

According to Minister of Agriculture and Rural Development Cao Duc Phat, despite of facing difficulties this year, the seafood industry has still remained stable growth rate in the phase of 2011-2015.

Total seafood output increased 3.8 percent a year, 9.3 percent higher than the five year period’s plan. Of these, fishing output hiked 4.7 percent and farming output raised 3 percent.

Export turnover moved up an average of 2.4 percent a year.

The ministry has set its targets of 6.4 million tons of seafood output and US$7.6 billion of export turnover next year.

Minister Cao Duc Phat instructed the seafood industry to speed up restructuring towards sustainability and quality development.

Formosa Ha Tinh Steel Corporation produces first batch of steel

The Formosa Ha Tinh Steel Corporation (FHS) has announced the successful production of its first batch of hot-rolled coil steel, the first of its kind to be made in Vietnam.

Head of the Ha Tinh Economic Zone Authority Ho Anh Tuan said the FHS has completed the first stage of the Son Duong Steel Complex and Deepwater Port project after seven years of construction.

According to FHS’s leaders, the production of the first hot-rolled steel is significant not only to the company but also the Vietnamese market because the country previously had to import all of its hot-rolled steel.

FHS believed it could soon capture the Vietnamese market with an appropriate business strategy and quality products from the most modern steel mill in Southeast Asia.

The corporation’s mill is capable of producing 4 million tonnes of hot-rolled coils a year, meeting nearly half of Vietnam’s annual demand of 10 million tonnes of hot-rolled steel.

Sonasea Villas & Resort Phu Quoc calls on investors

Real estate and construction firm CEO Group is calling for customers to invest into their latest project, Sonasea Villas & Resort, on Truong (long) Beach, one of the most beautiful locations on Phu Quoc Island off Kien Giang Province.

According to Nguyen The Lam, a representative of CEO Group, the 80-hectare project has a total investment of VND4,500 billion, with nearly VND1,000 billion of it going to infrastructure facilities like external and internal roads, and power supply system.

Sonasea Villas & Resort consists of Novotel Phu Quoc Resort, Sonasea Villas, Sonasea Condotel, pedestrian and shopping streets, an office and trade center complex, and an entertainment park. CEO Group is in cooperation with some local and international partners, including Savills, Accor, The Ascott, Site Asia, Kume Asia and CotecCons to develop the project.

It takes tourists five minutes from Phu Quoc International Airport and about 10 minutes from Duong Dong Town to get to Sonasea Villas & Resort. Tourists can visit nearby popular sightseeing spots like Tranh Stream, Da Ban Stream, Cau Palace, Ho Quoc Pagoda, and the National Park of Phu Quoc. The beachfront destination leans on Duong To Mountain.

Basic infrastructure for the project has been completed and the Novotel Phu Quoc Resort with 400 guest rooms and sea-view villas is expected to be up and running in early January 2016. Novotel Phu Quoc Resort so far has been the largest international hotel on the island to be managed by Accor.

CEO Group announced its Phu Quoc project in Hanoi in late October with the presence of around 300 customers.

Phu Quoc is expected to attract two to three million tourists by 2020 and seven million tourists by 2030.

Key bridge to go up in Dong Nai

Dong Nai Province is making final preparations for construction of a bridge connecting highways 1 and 1K to Highway 51 that runs through Bien Hoa City, according to the provincial Department of Transport.

Work on the BOT (build-operation-transfer) project is scheduled to start at the end of this month. The bridge will help ease traffic congestion in Bien Hoa City and traffic density at the city’s eastern gateway when it is in place.

The 500-meter-long, 23-meter-wide An Hao bridge will be built at the location of An Hao ferry terminal and have six lanes with four of them for autos. The project costs VND1.3-1.5 trillion including VND338 billion planned for the bridge over a branch of the Dong Nai River.

The government of Dong Nai sent the Ministry of Transport and the Government an investment plan for the bridge project early this year. As designed, the bridge will link Hiep Hoa Isle (Pho Isle) and the intersection of highways 1 and 51 near Vung Tau Intersection.

Tran Van Vinh, vice chairman of Dong Nai Province, said the province has requested the investor to collaborate with relevant agencies to quickly complete procedures to break ground for the An Hao bridge in late December so as to open it to traffic in 2016.

Vinh said An Hao bridge and nearby roads will help connect the financial, commercial and service center built at the premises of Bien Hoa 1 Industrial Zone to Pho Isle cultural and ecotourism center in Bien Hoa City.

As Construction Corporation No.1, the investor of the New Dong Nai Bridge project, finances the An Hao Bridge project, it will be allowed to collect tolls to recover capital for the BOT project.

Le Quang Binh, deputy director of the Dong Nai Department of Transport, said tolls for the An Hao bridge project will be collected at Dong Nai Bridge toll station as it was approved as part of the New Dong Nai Bridge project.

In October this year, the Prime Minister approved the An Hao bridge project and its related components to be added to the New Dong Nai Bridge project.

HCM City wants no-bid road contracts for Vingroup

The government of HCMC has proposed the Government approve no-bid contracts for Vingroup to upgrade and build roads in the city.

If Government approval is forthcoming, Vingroup would upgrade Nguyen Huu Canh Street and build a riverside road between Ton Duc Thang Street and a street under the Saigon Bridge.

The upgrade of Nguyen Huu Canh Street, a major road linking downtown HCMC and the city’s eastern part, costs some VND527 billion (US$23.4 million). After many years of use, the road has deteriorated, so it can be easily inundated by heavy rain or high tides.

The city wants to pick Vingroup to construct a riverside road between Ton Duc Thang Street and a street under the Saigon Bridge at a cost of VND696 billion.

The two projects will be carried out under the build-transfer (BT) format.

Last year, the firm sought the city’s nod to develop those roads to ease flooding in the area. The roads will facilitate traffic flow to and from a new property complex being developed by the firm in Tan Cang area.

Covering nearly 43 hectares in Tan Cang Sai Gon area in Binh Thanh District, the Vinhomes complex worth VND30 trillion will be ready in 2017.

Authorities of HCMC earlier appointed Vingroup as the investor of the international finance-banking-trading-services center covering 17 hectares in Thu Thiem Urban Area.

The company is also the investor of a multi-functional trading-service-residential complex covering 7.9 hectares in the urban area in District 2.

Thailand seeks to woo Vietnam business visitors

Vietnamese business visitors to Thailand for exhibitions and conferences next year will be able to get cash refunds, a free two-night hotel stay and other incentives if they meet certain conditions.

Such incentives will be offered by the Thai government through the Thailand Convention and Exhibition Bureau (TCEB), which specializes in promoting and developing MICE (Meetings, Incentives, Conventions and Exhibitions) tourism for Thailand.

Explaining the preferential treatments, Nguyen Ba Vinh, TCEB representative in Vietnam, said that over the years, Vietnam has always stayed as one of Thailand’s top five ASEAN markets in terms of visitors to that country for both business and leisure travel.

Last year, Thailand attracted 2,460 Vietnamese business travelers, the fourth highest in ASEAN. The number has kept rising this year, Vinh told a conference held in HCMC yesterday to introduce new promotion programs for the Vietnamese market.

Next year, TCEB will launch two new programs titled “Thailand Exhibition Extra” and “Trade Promoter Reward Program.” With these programs, groups of business visitors to exhibitions in Thailand will be refunded US$100 per person if they have at least three matching sessions at the events regardless of results.

For individual business visitors, exhibition organizers will provide a free two-night stay at hotels if he or she meets several conditions.

Moreover, trade promotion agencies, exhibition organizers and travel companies will get bonuses based on the number of guests they bring to Thailand.

Vinh said the Thai government and TCEB have streamlined procedures for beneficiaries of the programs.

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