BUSINESS IN BRIEF 31/12
Hong Kong investors buy Vinacafe shares
The Hong Kong-based GaoLing Fund has bought a 24% share in Bien Hoa Vinacafe (VCF) for VND877.5 billion.
The shares were purchased from the Vietnam Coffee Corporation (Vinacafe), which now possesses 12.85% of VCF.
GaoLing is VCF’s second largest shareholder behind Masan Consumer‘s 53.2% ownership.
The GaoLing Fund remains focused on Asia and particularly Southeast Asia. Its total investments are worth around US$773 million.
VCF share prices fell from more than VND200,000 each in the middle of this year to their current VND137,000 per share.
Its third quarter profit reached VND62.45 billion, up 28% from last year’s same period.
Quang Ngai revokes seven tardy projects
The management board of the Dung Quat Economic Zone in central Quang Ngai Province revoked investment licences for seven projects this year due to their slow progress, according to the board's deputy head, Le Van Dung.
Dung said the projects, which had been registered for two to three years, were mainly located in the Sai Gon-Dung Quat Industrial Zone. They involved trading, property and hotel services, and had a total registered capital of VND560 billion (US$26.67 million).
New steel plant opens in Dong Nai Province
Tien Len Steel Corporation inaugurated the VND400 billion (US$19.05 million) Bac Nam steel plant on Saturday in southern Dong Nai Province.
The plant was jointly built by the corporation and the Bac Nam Joint Stock Company, and covers an area of 3ha in the Tam Phuoc Industrial Zone. It will manufacture some 300,000 tonnes of steel per year.
Tien Len's major markets are the southern and central regions of the country, and plans to export steel to ASEAN nations and throughout the world.
Security industrial zone launched
The Ministry of Public Security has inaugurated the first phase of the Security Industrial Zone in Lai Yen commune, Hoai Duc district, Hanoi, after nearly six years of construction.
Addressing the inaugural ceremony on December 28, Minister of Public Security Tran Dai Quang praised efforts made by the General Department of Logistics and Technology to complete the work on schedule.
He emphasised the importance of the Security Industrial Zone, adding that it will create a premise for developing the security industry in Vietnam.
He urged required the logistics force to strictly implement the Party and State’s guidelines and policies on developing the security industry, build a specific roadmap and to work closely with other Central agencies and localities to help the industry develop in a sustainable manner.
The industrial zone covers 8.57 hectares.Fertiliser firm earns $26m in 2013 profits
Lam Thao Fertilisers and Chemicals Joint Stock Co earned about VND5.17 trillion (US$246.19 million) in revenues in 2013, up 3.65 per cent over 2012, company general director Nguyen Duy Khuyen announced late last week.
Profits reached VND555 billion ($26.43 million) in 2013, nearly 28 per cent higher than the annual target.
Khuyen said challenges facing the company included low market demand, falling prices, poor weather and stiff competition from imported products. The company will speed investments to improve product quality and expand into foreign markets.
The company was previously known as Super Phosphate Lam Thao Plant.
Exhibition sells local goods at a discount
A five-day exhibition at HCM City's Phu Tho Indoor Sports Stadium, the first held under the auspices of the city's People's Committee, is offering discounts on local products to stimulate sales demand during the holiday season when prices typically rise.
The event features booths of more than 250 domestic and foreign businesses, showcasing textiles and garments, footwear, agriculture-forestry-fisheries products, handicrafts, food, beverages, electronics, plastics and cosmetics.
The exhibition was organised by the local Department of Industry and Trade in collaboration with Thien Viet Trade Promotion and Advertising Co. It will end on Wednesday.
PVN signs contract for new power station
The National Oil and Gas Group (PetroVietnam) and a consortium of three companies signed a contract for the Long Phu 1 thermal power plant in Hanoi on December 28.
The consortium, which consists of Power Machines, BTG Holding and PetroVietnam Technical Services Corporation (PTSC), signed an engineering, procurement and construction (EPC) contract with PetroVietnam.
About 70 percent of the capital for the EPC contract will be funded through loans, while the remaining 30 percent will be funded by the project's investor, PetroVietnam.
The foreign contractors in the consortium, Power Machines and BTG Holding, will be responsible for arranging capital and ensuring that the project is completed and pilot operations begin.
PTSC, along with other domestic contractors, will be responsible for the construction and installation of machinery of the project.
Speaking at the signing ceremony, Do Van Hau, PetroVietnam's general director, said the group has been investing heavily in electricity generation as directed by the Government.
Hau said PetroVietnam aims to make up to 16 percent of the country's total power output and become the second-largest generator of electricity in Vietnam.
The US$1.39 billion project, which has a capacity of 1,200MW, will generate 7.8 billion kWh annually.
It is one of five thermal power plants that will be planned and executed by the group. It is expected to meet the demand for electricity in the Delta region between 2015 and 2020.
Deputy Prime Minister Hoang Trung Hai noted that the region is forecast to face a deficit in electricity supply by 2017 because of increasing demand as a result of economic growth. It is the main reason why the project has become a top priority.
He urged PetroVietnam and the consortium to accelerate the project's execution to ensure the adequate supply of power to the region.
The Long Phu 1 coal-fired power plant is one of three plants at the Long Phu Power Plant Centre, which includes Long Phu 1 (2x600MW), Long Phu 2 (2x600MW) and Long Phu 3 (2x1000MW), as well as other plants. Covering an area of 420.5ha, the centre is located in southern Soc Trang province's Long Phu district.
The Long Phu 1 power plant is designed to have two units, which will use a supercritical technology pulverised coal boiler, along with other systems for coal handling, limestone handling, ash handling and a water treatment system.
2013 rice exports earn US$2.95 billion
Vietnam earned US$2.95 billion from exporting 6.61 million tonnes of rice in 2013, down 17.4% in volume and 19.7% in value.
The Ministry of Agriculture and Rural Development (MARD) reported that approximately 396,000 tonnes of rice worth US$204 million was shipped abroad in December.
The average price of export rice in the first 11 months of 2013 was estimated at U$441.2 /tonne, falling by 3.4% annually.
China remains Vietnam’s rice importer, purchasing over 2 million tonnes worth US$849.36 million and accounting for 30.93% of Vietnam’s total rice export earnings.
Vietnam’s rice exports to the Chinese market went up by 6.22% in volume and 2.74% in value from the previous year.
Construction of tunnel on National Highway begins
Construction of a tunnel through the Ca Pass on National Highway 1A between Phu Yen and Khanh Hoa provinces in the central Vietnam started on December 28.
The project is 13.4 km long, including the 4km tunnel. It is scheduled to be completed in late 2016 and put into service in the beginning of 2017, helping shorten 8 kilometres in distance between the two provinces.
It is built by the Lung Lo Construction Corporation under the Defence Ministry with an investment of VND15.6 trillion (US$742.9 million). The project was designed by Japanese consulting firm Nippon Koei.
Vietnam among Cambodia’s top five investors
Vietnam’s 126 investment projects totally capitalised at US$3.023 billion had been licensed in Cambodia by October 2013.
The Association of Vietnamese Investors in Cambodia (AVIC) reported 16 new Vietnamese investors received Cambodian business licences during the year, adding an additional US$360 million in registered capital.
Major projects included the Sesan II hydro-electric power plant, a rubber planting project in Rattanakiri, a fertiliser plant in Kandal, and a sugar plant in Kratie.
AVIC Chairman Tran Bac Ha said Vietnam’s 2013 investments in Cambodia were six times higher than the level in 2010. The number of projects has also trebled.
Vietnamese businesses have injected over U$1.2 billion worth of foreign direct investment (FDI) into the Cambodian market, representing 40% of Vietnam’s total registered capital in Cambodia.
More than 50 Vietnamese-invested projects have officially entered operation, mostly in agro-forestry, aviation, finance, banking, post and telecommunications, industry, energy, transport, trade, electronics, healthcare, and services.
Vietnamese businesses in Cambodia generate jobs for around 30,000 workers, improve education and healthcare services for Cambodian people, and promote GDP growth.
They also contribute to reinforcing border security and strengthening bilateral diplomatic and economic ties.
Hai Phong lures $2.6 billion FDI in 2013
Northern Hai Phong Port City attracted over US$2.61 billion in foreign direct investment in 2013, or 2.06 times compared to 2012, while posting more than 200 per cent of its yearly plan.
The city also granted licences for 27 new projects valued at $1.84 billion and raised additional capital for 27 current projects.
Quang Nam Province approves new hotel
The People's Committee of central Quang Nam Province has approved plans for construction of the Marriot Hoi An resort and spa in Hoi An City.
The VND800 billion project is to be funded by Phat Dat Real Estate Development Company and managed by Marriot group.
The 33,000sq.m tourism complex will include three swimming pools, spa areas and tennis, all built to international standards.
The complex is expected to open by 2015.
Trung Thuy to develop new properties
Trung Thuy Group will develop another Lancaster building in Ha Noi worth VND600 billion, as well as an apartment project in HCM City valued at VND800 billion next year.
Duong Thanh Thuy, the group's chairwoman, said the second Lancaster building in Ha Noi will be located at 343-345 Doi Can Street and include some 120 high-end apartments and other service facilities.
Meanwhile, the project in HCM City will be built over 4,600sq.m, consisting of 210 apartments, as well as space for conventions and wedding parties.
The firm is the owner of The Lancaster buildings in HCM City and Ha Noi, along with spas and rest stops nationwide.
Tay Ninh targets US$2.2 bln in 2014 exports
The southern province of Tay Ninh will strive to earn more than US$2.2 billion from exports in 2014.
Of which, US$720 million will come from export activities through its border gates with Cambodia, up 20 percent from 2013.
The province has also defined its main products, including garments and textiles, footwear, plastics, handicrafts, cashew, rubber latex and sugar.
To reach the target, the southern province will continue enhancing the development of border gate economic and industrial zones to attract more investment.
At the same time, it will help businesses, especially foreign-invested firms, address their difficulties to help them operate more effectively in the province.
Tay Ninh will also intensify border trade promotion and facilitate goods exchanges between businesses and people in border areas.
The province’s 2013 export turnover is estimated at US$1.825 billion, a year-on-year increase of 16 percent. Its exports through border gates with Cambodia are expected to enjoy a rise of 18.6 percent, reaching US$600 million.
EVN to install more grids in the south
Electricity of Viet Nam's Southern Power Corporation (EVN SPC) plans to install more power projects and power grids in 21 southern provinces in 2014.
According to Nguyen Thanh Duy, director general of EVN SPC, the third power line of 500kV will connect central and southern Viet Nam.
The corporation will also use several power stations in the south, instead of depending on power transfer from the northern and central regions.
Since early 2014, EVN SPC will put into operation the thermal power stations of Vinh Tan and Vung Ang 1 (with power of 600MW), and the hydro-power station of Dak Ring (62.5 MW) and Nam Na 2 (22MW).
In addition, the undersea cable connecting Ha Tien town of southern Kien Giang Province with its Phu Quoc Island will be operable beginning January 1, with power of 110kV. The undersea cable, worth VND2.34 trillion ($110.82 million), has a length of 56km.
The EVN SPC plan for the south will help provide power to more than 6.2 million EVN customers and will also reduce the number of power shortages.
Tien Giang pledges investment incentives
The Cuu Long (Mekong) Delta Province of Tien Giang last Saturday unveiled a list of 13 projects that require investment.
Four of them, all of which are key projects, include the drainage and waste water treatment system in My Tho City, Tien Giang central square, Tan Phuoc Industrial zone, and the provincial administrative area.
The projects require a total investment of US$360.7 million.
The list also includes a project to build apartments for specialists and workers at the Tan Huong resettlement area and Tan Huong Trade Centre project. These two projects need combined investment capital of $21.5 million.
Investment is also required to develop Vam Lang fishing port, the Trung An residential area and projects in tourism and infrastructure at industrial zones.
Speaking at the conference held in HCM City, Nguyen Dinh Thong, deputy director of the provincial Department of Planning and Investment, said the province would provide incentives for investors, including land rentals, taxes, labour training, trade promotion and infrastructure construction.
Tran Kim Mai, deputy chairwoman of the Provincial People's Committee, said: "Currently there are still some shortcomings related to investment procedures, the province will work to improve this shortly."
Located about 70km from HCM City, the province has a convenient transport system on land and waterways. In addition, it can fully meet investors' electricity, water and telecom needs.
With its advantageous geographic position, Tien Giang is a gateway between Mekong Delta provinces and HCM City and other eastern provinces.
The province has the largest fruit cultivation area in the Mekong Delta region, with many specialty fruits like Hoa Loc mango, Vinh Kim star apple, Cho Gao dragon fruit, Tan Lap pineapple and Ngu Hiep durian. It also has a rich aquatic supply.
The province has several fruit and seafood processing facilities.
Thong said the province would focus on developing product diversification and "deeper food processing".
Industrial products that have competitive advantages will be promoted, with priority given to machinery for agricultural production and processing of farm produce.
They will also aim to strengthen co-operation with HCM City and provinces in the Mekong Delta as well as the southern key economic region in trade, services and eco-tourism development.
Despite many difficulties this year, the province still had an economic growth rate of 9.5 per cent this year, much higher than the country's average growth rate, Mai said.
She said the province's export revenue reached more than $1 billion a year, ranking third in the Mekong Delta region in export earnings.
The conference also witnessed the debut of the Tien Giang Businessmen Club in HCM City.
Nguyen Kim Lan, its chairman, said the club aimed to create a closer connection among Tien Giang businesspeople in trade and investment.
It will act as a bridge between the provincial authority and businesses to promote trade and support the poor living in the province or living and studying in HCM City, he said.
Ministry announces central region development plan
The North Central and Central Coastal Region will be further developed to become a convenient gateway for Vietnamese goods destined for Laos, Cambodia, Thailand and Myanmar.
This is part of a government’s master plan on socio-economic development in the region until 2020, which was announced by the Ministry of Planning and Investment and the Khanh Hoa provincial People’s Committee in Nha Trang city on December 27.
Under the plan, priority will be given to investment in four areas in the region, including the central key economic area that comprises the provinces of Thua Thien-Hue, Quang Nam, Quang Ngai and Binh Dinh and the city of Da Nang.
The plan also focuses on upgrading central urban areas in the cities of Da Nang, Hue (Thua Thien-Hue province), Vinh (Nghe An province) and Nha Trang (Khanh Hoa province).
Economic zones such as Chu Lai in Quang Nam province, Dung Quat in Quang Ngai province and Lao Bao in Quang Tri province will be upgraded in line with economic restructuring in the localities.
Additionally, more attention will be paid to improving roads, seaports, airports, irrigation works, the power system and infrastructure in the region, while focus will be placed on aquaculture, service and tourism development.
Da Lat forum highlights investment opportunities
More than one hundred representatives from economics institutes and Central Highland provinces gathered at an economic forum in La Lat city, Lam Dong province, on December 29.
The event was part of activities for Da Lat Cultural and Tourism Week, providing an excellent opportunity to introduce development potential in Lam Dong and other localities in the Central Highlands region.
Participants suggested boosting tourism development in the Central Highlands, central coastal region, and Ho Chi Minh City, and promoting knowledge-based economy in the south-central region to fully tap the potential of the Central Highlands.
They stressed the need to adopt incentive policies aimed at attracting more investors and concentrate on high-tech agricultural development, as well as tourism marketing and cultural preservation.
Central Highland-based Radio the Voice of Vietnam (VOV) radio station cooperated with the Lam Dong provincial People’s Committee to launch a 45-minute live programme on development potential of Da Lat-lam Dong tourism.
Delta fruit farmers prepare for Lunar New Year
Farmers in the Mekong Delta, the country's largest fruit cultivation area, are busy preparing speciality fruits for the upcoming Lunar New Year (Tet) festival, which begins on January 31.
Hoa Loc mango, Nam Roi grapefruit and Lai Vung pink mandarin are among the most in demand.
Nguyen Van Nghia, who planted 5,000sq.m of Nam Roi grapefruit in Vinh Long province's Binh Minh district, said he expected to harvest about four to five tonnes of grapefruits a few days before Tet.
"The price of Nam Roi grapefruit is expected to be higher or equal to the last Tet," he said.
In the previous Tet, Nam Roi grapefruits sold for 70,000-80,000 VND (3.3 - 3.8 USD) a kilo at wholesale markets.
Many grapefruit farmers earned large profits during the last Tet, Nghia said.
In Hau Giang province, the Phu Tri A Agriculture Extension Club in Chau Thanh district estimates that it will produce about 5,320 grapefruits shaped like a wine gourd.
The price of the grapefruit is expected to increase by 20 percent compared to the previous Tet, according to Vo Trung Thanh, the club chairman.
The gourd grapefruit sold for 300-700,000 VND during the previous Tet.
Pink mandarins in Dong Thap province's Lai Vung district are yielding 22,000-24,000 VND a kilo, up 4,000-5,000 VND against the same period last year.
With its beautiful pink colour and sweetness, Lai Vung pink mandarins are preferred by customers in Ho Chi Minh City and the central and northern regions.
Pham Van Lam in Lai Vung district's Long Hau commune said traders were now offering higher prices for Lai Vung pink mandarins.
Inclement weather has caused many Lai Vung pink mandarin flowers and young fruits to fall off plants too early, he said, adding that output could drop this year.
Lai Vung district has 1,120ha of pink mandarin, producing about 30,000-35,000 tonnes of fruit a year, according to the Lai Vung Agriculture and Rural Development Bureau.
Huynh Van Ton, deputy head of the bureau, said that farmers were pleased with the high price of pink mandarin at the beginning of the harvest.
Farmers said they could earn a profit of 200 million VND from one hectare of pink mandarin.
However, farmers in Tien Giang province predicted the supply of Hoa Loc mango would not meet the Tet demand because of low output this year.
Nguyen Thanh Nhon, chairman of the Hoa Loc Mango Co-operative, said his cooperative would supply about 20,000 tonnes of Hoa Loc mango for this Tet.
The price of Hoa Loc mango will be 75,000 VND a kilo, up about 20,000 VND compared to previous years, he said.
Coffee growers feel the grind of cold conditions
Coffee growers in north-western provinces are struggling to cope with lower prices and cold weather that has damaged hundreds of hectares of crops.
Quang Van Ta, a coffee farmer from Chieng Den Commune in northern Son La Province, has nearly three hectares of coffee plants. He said a kilo of coffee beans now only fetched VND6,000, while the wages for workers hired to pick them were around VND2,500 per kilo.
Costs of pesticides and fertilizer have also gone up.
Dried coffee beans are being sold to traders and businesses at VND25,000-30,000 per kilo, a decrease of VND10,000 compared to last year.
Quang Van Sam said his family and many households had to dry and process some of the coffee beans and put them into storage to wait for prices to rise. Otherwise, he said he would incur major losses.
Cold weather below 10 degree Celsius is not making it any easier for coffee farmers.
According to statistics from the Son La Department of Agriculture and Rural Planning, cold weather and frost had damaged at least 640 hectares of coffee plantations in Mai Son, Thuan Chau and Son La during December.
Tong Van On from Hua La Commune said his family used to make about VND100-150 million from growing coffee each year, but this year, his family suffered significant losses.
Hoang Van A, a farmer from the same commune with 20 years of experience, said many coffee trees had been damaged by hoarfrost.
Hoang Van Ton, head of the livestock and plant bureau under the Son La Department of Agriculture and Rural Development, said the province was working to assess the damage.
For now, coffee growers who have lost at least 30 per cent of plants will be compensated VND 1 million ($47) per hectare.
The province has also approved a development plan to reassess coffee plantations in the region from now up to 2020, and could include government subsidises for coffee growers when prices are low.
According to experts, a long-term solution was needed to promote sustainable farming and build a brand name to promote Son La coffee.
Vietnamese spend big on luxury goods
Despite economic difficulties, Vietnamese people still spent billions of US dollars this year buying luxury cars or mobile phones.
The General Department of Customs estimated Vietnamese people paid out up to US$1 billion purchasing high-class mobile phones this year.
Statistics show Vietnam consumed around 17 million mobile handsets in 2013, of which 7 million were smart phones.
The country’s smart phones market grew by 156% this year, ranking it first in Southeast Asia.
Over the past 11 months, more than 31,000 automobiles were imported into Vietnam worth US$640 million, up 29% in volume and 16% in value compared to the same period last year.
Luxury cars imported from the UK, France, Germany and the US are favourites with Vietnamese consumers.
Fisheries sector sets sight on 2014 exports
The fisheries sector plans to break into its potential markets such as the US, EU, Japan and South Africa to increase its exports.
Seafood export earnings this year hit US$6.7 billion, a year-on-year increase of 10%, according to the Ministry of Agriculture and Rural Development.
Vietnamese seafood products are exported to 156 countries and territories, and the US, EU and Japan are the biggest consumers, importing more than US$1 billion worth of the products each in 2013.
These three markets are expected to bring back US$2 billion in export value in 2014.
Tra (Pangasius) fish fillets are one of Vietnam's key seafood exports
Truong Dinh Hoe, General Secretary of the Vietnam Seafood Exporters and Producers (VASEP), says seafood businesses need support from the State, especially Vietnamese trade offices abroad, to overcome trade barriers, including anti-dumping lawsuits.
Trade promotion is one of the effective ways to penetrate the lucrative EU market. VASEP recently signed a memorandum of understanding with Belgium’s Zeebrugge port on building a Tra (Pangasius) fish distribution network in the EU.
After Pangasius, VASEP will boost trade promotion for other Vietnamese seafood products in this market, says Hoe.
Japan is also another leading Vietnamese seafood importer, consuming US$1.3 billion worth of the products this year, up 1% over 2012.
However, Japan’s technical specifications are barring Vietnamese shrimp from entering its market. Japan sets a low level of the Ethoxyquin content (0.01ppm) - a quinoline-based antioxidant used as a food preservative – as a prerequisite for importing Vietnamese shrimp.
VASEP worked closely with relevant Japanese agencies which are expected to increase the Ethoxyquin level by 20fold to 0.2ppm in April 2014, easing pressure on shrimp businesses.
The fisheries sector is seeking to develop newly exploited markets like China and Hong Kong which both consumed US$650 million worth of Vietnamese seafood in 2013, a year-on-year rise of 55%.
It needs support from Vietnamese trade counsellors to directly contact Chinese giants and penetrate deeper into the mainland rather than marketing products in Guangzhou province at present.
Vietnam also targets South America as a prospective market for its seafood. Export earnings from this region hit more than US$100 million this year, mostly coming from Brazil, Argentina and Mexico – three key markets.
VASEP is working together with Vietnamese trade offices in these markets to help seafood businesses get a firm foothold there.
Candy brands face down foreign rivals
Vietnamese confectionery brands are outselling foreign products in the run-up to Tet (the Lunar New Year).
Big brands like Duc Hanh, Thai Huong, and Linh Anh have improved quality, added new products, and offer competitive prices.
Supply is only 2% up from last year, and prices are 10-15% higher.
In wholesale markets like Ben Thanh, An Dong, Tan Dinh, and Binh Tay, traditional sugared lotus, coconut, squash, soursop, and sweet potato are popular.
Most are competitively priced at VND45,000-150,000 (US$2.14-7.14) per kilo.
Tran Thi Tuyet, who owns a stall in Ben Thanh Market, said though confectionery imported from Thailand, Malaysia, Switzerland, and the US are being bought by affluent customers, Vietnamese brands are doing remarkably well.
Customers like confectionery packed in colourful tin boxes by big brands like Kinh Do and Bibica and sold at reasonable prices, Tuyet said.
The HCM City Department of Health has ordered market and health officials to closely monitor food hygiene and safety before Tet when the market will be flooded with food and drinks.
Its inspectors will focus on sugared fruits and other processed foods.
They will look out for products without information about origin, fakes, smuggled goods, and expired food products.
But market officials said monitoring products in the market is plagued by several challenges like a lack of preventive health staff.
There are only 500 health officials to inspect more than 10,200 food production facilities in the city.
Supply chain key to textiles growth
Vietnam can significantly increase export of garment and textiles if it joins bilateral free trade agreements and multilateral ones like the Trans-Pacific Partnership, but only if it can set up a robust supply chain.
The problem has dogged the industry for nearly 20 years but remains unresolved despite local firms' efforts to create the chain.
Three-fourths of the country's 3,000 garment and textile companies are domestically owned, but they account for a mere 25% of exports.
FDI firms have invested in setting up their own supply chain to take advantage of incentives, resulting in immense value addition for them and profitability.
Garment and textile exports are growing by 18% annually, with the foreign sector chalking up 30% growth and their local rivals, 8 – 10%.
The gap in growth between local and foreign companies is widening their limited funding has meant Vietnamese textile and garment firms work mainly as subcontractors.
To become actual producers, local firms must link the supply chain made up mainly of cotton, fibre, textile, dyeing, and apparel.
The textile and dyeing aspects are the weakest points yet and a big hurdle to export efforts.
The Vietnam Garment and Textile Corporation (Vinatex), a leading player, has been investing strongly to develop the supply chain.
In the past each of its factories produced many different items depending on customers' demand, but could not maintain high quality.
"We have decided each fibre factory will focus on one only product and ensure quality," said Le Trung Hai, Deputy General Director of Vinatex.
It plans to build a series of plants to make quality products so that it can have its own supply chain and take on new markets.
Footwear achieves export target
The footwear industry is expected to reach a record export value of more than US$8 billion this year, according to the Ministry of Industry and Trade.
Footwear exports reached $7.9 billion as of the middle of December, a rise of nearly 15 per cent against the corresponding period last year, according to the General Department of Customs.
Of the total amount, the US accounted for the largest source of export revenue, followed by the UK, Belgium, Germany and Japan, the Netherlands, China, Brazil and Spain.
Last year, Viet Nam's footwear exports reached $7.2 billion. The footwear industry, however, still depends on material imports as it does not have enough local supplies.
A representative from the Viet Nam Leather and Footwear Association said local tanneries had met only 20-30 per cent of material demand of local shoemakers.
To get good quality materials, shoemakers have to import leather from Brazil, Italy and the US at high prices.
According to the ministry, Viet Nam imports 6 million square metres of tanned leather every year. Last year, imports amounted to more than $3 billion.
Many footwear importers are shifting their orders from China to Viet Nam because of lower labour costs and preferential tariffs that will be granted next year by the EU. The tariff will drop to 3-4 per cent from the current 13-14 per cent, according to the ministry.
Experts said the footwear industry would benefit when Viet Nam joins the Trans-Pacific Partnership (TPP) Agreement.
But to receive the full benefits, the industry must use local materials or imported materials from TPP members to enjoy zero tariffs.
Experts also urged domestic companies to make more efforts to improve quality and productivity. As the global economy has yet to recover, key markets for Vietnamese footwear have slumped, and, as a result, companies must plan accordingly.
This is vital because foreign-direct investment companies have contributed more than 76 per cent of the industry's total export value.
Currently, around 1,100 companies are involved in footwear production in the country, employing 720,000 workers.
In addition, there are thousands of individual producers and handicraft villages that take part in export activities.
With this capacity, the Vietnamese footwear industry is expected to meet increasing export demand.
HCM City plans 14% credit growth next year
The banking sector in HCM City will likely achieve a credit growth rate of 14 per cent in 2014, the State Bank of Viet Nam Governor told the city's People's Committee last week.
Nguyen Van Binh said the city's target was feasible given that many programmes were being implemented to strengthen cooperation between local banks and enterprises.
"The city's 14 per cent credit growth rate next year will make an important contribution to increasing the entire banking sector's growth rate to between 12 and 14 per cent," Binh said.
To realise the 14 per cent credit growth target, according to the municipal People's Committee, the city will work with the State Bank to implement monetary, credit and interest rate policies in ways that will ensure the stability of financial markets and operations of local banks.
Under these policies, several programmes will be carried out along with the city's key projects. They include links between banks and enterprises, social housing loans and investment stimulation.
The city will also help small- and medium-sized enterprises as well as the support industry to modernise and improve capacity for sustainable development.
In addition to its plans, city leaders have also proposed that the central bank reduce the lending interest rate of loans to priority sectors.
This would create conditions for eligible enterprises to further invest in their competitive ability.
In regard to social housing loans, the People's Committee suggested that the central bank coordinate with ministries and branches to perfect a legal framework for notary procedures and mortgage transactions. This would give banks collateral for loans.
The People's Committee has also asked the central bank to lower the interest rate of loans used to buy houses and lengthen the duration of housing loans from the current 10 years to 15-20 years for those who buy social housing.
In reply to the proposal, Governor Binh said that the central bank would work with agencies and make proposals to the Government to perfect credit policies in ways that would be more open and convenient for the banking sector's credit growth and business development.
"In the coming time, credit institutions will be given more rights to decide their lending activities," Binh said.
To increase the disbursement of the VND30 trillion housing-stimulus programme, the central bank will asked the Government to have a more open policy, thus creating conditions for civil servants and people involved in armed forces to get easier access to bank loans to buy houses.
In her report on the local banking sector's operations in 2013, the People's Committee vice chairwoman Nguyen Thi Hong said that total loans of banks in HCM City were VND 952.55 trillion (US$45.14 billion), a rise of 9 per cent compared to late last year.
Loans at an interest rate below 9 per cent, given to five priority sectors, accounted for 83 per cent, or VND 37.3 trillion, 64 per cent of which were offered to small and medium-sized enterprises, Hong said.
She also said that the local banking sector's bad debts stood at a high level and suggested that the central bank develop effective measures to effectively settle bad debts and make the sector's activities more transparent, safe and effective.
"Bank cross-ownership and group benefits need to be terminated soon," Hong said.
Remittances set for big surge ahead of Tet
The volume of remittances from overseas Vietnamese to the country in the months before the Tet (Lunar New Year) is expected to be 35 per cent higher than the figure recorded in the other months of 2013, according to the Dong A Remittance Co.
As the economies of developed countries have recovered from crisis, revenues of overseas Vietnamese in Australia, Canada, France and the US have increased, and their remittances are rising.
According to the Ministry of Labour, Invalids and Social Affairs, some 83,000 Vietnamese were sent to other countries as guest workers in 2013, contributing significantly to overseas Vietnamese's remittances this year.
The Bank of Investment and Development of Viet Nam estimated a total remittance of US$11 billion to the country this year, and the figure is expected to increase by 10 per cent next year.
Remittances through Sacombank Remittance Company's service was estimated at $1.7 billion, said Pham Huu Phu, chairman of the Board of Sacombank.
Nguyen Hoang Minh, deputy chief of the State Bank of Viet Nam, HCM City branch, said overseas Vietnamese remittances channeled into HCM City in 2013 is estimated at $4.8 billion to $5 billion, compared with the $4.1 billion in 2012.
"These figures are ‘realistic' as remittances to Viet Nam through HCM City - based banks in the first 10 months of the year amounted to $3.8 billion," said Minh.
He added that most of the remittances were received in the last months of the year.
Pham Thanh Ha, deputy head of Vietcombank, said remittances transferred into Vietnamese dong rose to 25 per cent (of total remittances) in 2013 from 20 per cent in 2012 and 10 per cent the previous year as the Vietnamese currency has become stronger.
The deputy director of Dong A Remittances Co, Trinh Hoai Nam, said due to the stability of the exchange rate (of Vietnamese dong) this year, clients tended to exchange the foreign currencies of their remittance into Vietnamese dong right after receiving it at banks.
The stagnant property market has affected projects for commercial houses as well as housing projects for families affected by urban development projects, as many of the developers of resettlement housing have apartments unsold.
The management board of the Thu Thiem Urban Area in District 2 has received only 2,878 apartments and 1,512 foundations for 12,500 houses planned for the district's re-settlement project, only 1,700 to 1,800 of these apartments were expected to be sold.
Many houses under other resettlement projects in HCM City have been left unoccupied.
These include the North Rach Chiec Residential Area Project in District 9 which was brought into use five years ago. So far, only a few apartments have been occupied in this five-storey building designed to provide housing to over 100 resettled households, who had to move to make way for construction of the Bac Rach Chiec property project.
According to residents in this area, poor access to the facility and difficulty in finding a job in the area are hindering households from resettling in this housing facility.
The 72-apartment Him Lam-Kenh Te Tenement on Nguyen Huu Tho Street has only a few tenants after seven years in operation, while the Phu My Tenement in District 7 has only 50 tenants for its 300 apartments.
Similarly, the investor of the Vinh Loc B Tenement in Binh Chanh District has to pay management and maintenance fees of billions of Vietnamese dong per month for the 1,132 unsold apartments at this tenement.
Not only investors but also authorities at district levels have to shoulder the burden caused by these resettlement projects. The People's Committee of District 12 paid VND60 billion ($2.7 million) to purchase resettlement apartments that are not accepted by households affected by urban development projects in the locality.
According to Sai Gon Giai Phong (Liberated Sai Gon) newspaper, households affected by urban development projects have to accept compensation for relocation of their homes at market prices. Therefore, they must be authorised to choose locations for their resettlement.
To solve the problems, the HCM City Department of Construction has proposed that 1,769 apartments under five resettlement projects in Districts 7, Binh Tan and Binh Chanh be converted into houses for low-income families.
The proposal, if realised, would help city authorities recover for the state budget thousands of billions of Vietnamese dong invested in these resettlement projects that remain unsold.