SBV issues currency regulations

Organisations and individuals residing in Viet Nam will be required to have corresponding foreign currency capital if they want access to foreign currency loans, according to a new circular.

The Circular No 7 issued by the State Bank of Viet Nam (SBV) on last Friday (March 25) and will take effect on May 6.

According to the SBV, this circular follows up on the Government's Resolution No 11/NQ-CP on measures to curb inflation, stabilise the macro-economy and ensure social welfare to ensure that the government's new policy is implemented effectively.

Under the new circular, credit institutions will be allowed to provide foreign-currency loans of short-, medium- and long-term for individuals and organisations that need to pay for their imports of commodities and services.

However, in order to qualify, they must have a similar amount of foreign currency raised from their trading and production activities. They can also buy or borrow from other credit organisations. If they do so, they must provide proof and a commitment in writing.

Credit organisations will also be able to provide short-term foreign currency loans for individuals and organisations to carry out their projects involved in trading and production of commodities exported via Viet Nam's border gates.

However, borrowers must prove to have enough foreign currency that will be raised from their export business to pay the debt.

Individuals and organisations that want to get foreign-currency loans for their domestic trading and production activities will be required to sell the amount of the borrowed foreign currency to their lenders in accordance with the form of foreign-exchange spot trading.

Any foreign currency lending cases that do not adhere to these regulations must be approved by the SBV Governor in writing.

The new policy also notes that individuals and organisations that apply Viet Nam's Resident Law can benefit from these new foreign currency lending regulations.

Cooking gas price shoots up 4%

Many gas retailers announced a 4.2-4.5 per cent hike in the price of cooking gas last Saturday, saying they have to resort to expensive imported gas since the Dung Quat Oil Refinery has shut down for maintenance.

Following the hike, the price of a 12-kilogram cylinder sold by Sai Gon Petro, Vina Gas, Gia Dinh Gas and others has gone up by VND14,000.

"The two-week closure by the Quang Ngai Province-based refinery means a shortfall of 15,000 to 20,000 tonnes of gas," Nguyen Hoai Giang, managing director of the Binh Son Refinery Company which manages Dung Quat, said.

However, some retailers have not hiked the price, including Southern Gas Trading Joint Stock Company, which has been little affected by the shortage, according to its managing director, Doan Van Nhuom.

French-owned Elf Gas, a big player in the Vietnamese market, said it would not increase price either until a new contract price is finalised on the international market by month-end.

Small companies export most of VN's agricultural products

Viet Nam export billions of agricultural products each year, but most of the companies involved are small- and medium-sized, according to an official of Ministry of Agriculture and Rural Development (MARD).

Speaking at a conference in HCM City last Friday, Nguyen Huu Diep, director of MARD's Department of agricultural enterprise renovation and management, said more than 90 per cent of companies from the agricultural sector had capital of only VND10 billion (US$480,000) each.

Six per cent have capital of between VND10 billion and VND50 billion ($2.4 million). Only one per cent of agricultural companies have capital of VND200 billion ($9.6 million).

In the recent financial situation, SMEs are expected to meet many difficulties in accessing loans from banks and approaching the international market, a representative of an association said.

According to MARD, companies should focus on raising the knowledge of human resources, renovating equipment and applying new technology in producing, adjusting business strategies to accord with recent financial situation, and strengthen ties with other enterprises and associations to heighten competitiveness.

Representatives of several associations from the sectors of cashew, coffee and seafood, claimed that the Government should have specific policies for them because their businesses affected not only their employees, but also dozens of thousands of farmer households.

To support the development of agricultural enterprises, MARD created several policies including financial aid by establishing the Credit Guarantee Fund for SMEs and an SME Development Fund to finance activities to enhance competitiveness.

MARD has suggested that the Government use land originally slated for industrial parks for SMEs instead.

High rise building to house oil and gas cluster

A 79-storey building will be built in Ha Noi's Tu Liem district, the main investor in the project, PetroVietnam Construction Joint Stock Corporation (PVC), said yesterday.

Named the Viet Nam Oil&Gas Tower, it would be built to international standards on 6.5ha in Me Tri Commune, PVC said at a news conference.

The new building, to cost US$600 million, would have five underground storeys and would house offices, a trade centre and a hotel.

It was to be the international symbol of Viet Nam's oil and gas industry, PVC said.

Construction would begin next year for completion in 2015.

PVC said it would not use State and Petro Viet Nam funds for the building but rather would call for investment from international and domestic financial corporations.

The company planned to set up an investment joint-stock company for the project with itself as the main shareholder.

Four international construction consultant companies had registered to take part in the competitive examination for the project design, PVC said, all of which were experienced in earthquake resistance.

Vietnam resort ranks 1st on top ten hideaways

Six Senses Ninh Van Bay resort in Vietnam’s central Nha Trang city has topped a list of ten romantic beach retreats released by boutique hotel collection Mr & Mrs Smith (www.mrandmrssmith.com).

The other nine include Cap d'Antibes Beach Hotel, Côte d'Azur (France), Lizard Island, Great Barrier Reef (Australia), The Datai, Langkawi (Malaysia), Masseria Torre Coccaro, Puglia (Italy), Zeavola, Ko Phi Phi, (Thailand), Martinhal Beach Resort & Hotel, Sagres, (Portugal), Cocoa Island (Maldives, Indian Ocean), Shore Club Miami, Miami (United States), and Alila Villas Soori, Bali (Indonesia).

Vietnam highest-building project lowers bar

PetroVietnam Construction Joint Stock Corp – PVC (stock code PVX) announced they will build a 79-storey building instead of 102 stories as previously planned at a press conference held in Hanoi on March 27.

Last May, Dai Duong (Ocean) Group Joint Stock Co (OGC) and PVC in Hanoi signed an investment cooperation agreement to jointly build the 102-story building in Tu Liem district’s Me Tri commune in Hanoi with total investment of $1 billion, turning it into the highest-building ever in Vietnam.

However, according to Trinh Xuan Thanh, the chairman of PVC, after acquiring recent ideas from members of the National Assembly about this huge project, PVC has decided to drop by 23 storeys to reduce costs and to ensure profits.

He added the international trade and finance center still remains a symbol of Vietnam’s oil and gas industry. The investment of the project is now down to $600 million, to be mobilized mainly from PVC.

Presently, Kinh Bac Corporation is asking the governemt’s permission to carry out 100-storey Lotus five-star hotel located in Hanoi’s outskirts.

If they obtain the license, it will become the highest building in Vietnam.

Ericsson to launch online health solutions

Swedish telecommunication giant Ericsson will launch e-health and mobile health projects at Hanoi’s Trang An hospital in the third quarter which will eliminate the need for patients to visit the hospital in person.

The allow patients to be diagnosed and even treated through the internet and 3G broadband networks and through mobile phones.

The focus will be on Trang An’s asthma, diabetes, and potential stroke patients during the trial period.

Ericsson’s Mobile Health Solution Kit launched globally in June 2010 seeks to provide medical services to people living in rural areas and far from hospitals.

It has proven successful in India, which, like Vietnam, has 70 percent of its population living in rural areas, as well as several European countries like the Netherlands, Germany, and Spain.

Half the patients are not present at the hospital, resulting in a huge saving in expenses for people who are often poor.

The projects are awaiting approval from the Ministry of Health (MoH).

Last year the MoH reported 40 percent of poor patients in Vietnam did not get medical treatment since they were not willing to travel from rural areas to city hospitals or unable to afford the cost.

Funds-starved property firms hit market

Faced with pressure to complete ongoing projects and with lending for the sector restricted, many property developers are turning to the equity market to raise funds.

De Tam Joint Stock Company (Detaco) is set to issue 5 million shares to mobilize capital for its ongoing Detaco Phu Quoc villa project in Phu Quoc.

Becamex Infrastructure Development Joint Stock Company (Becamex IJC) is offering to sell nearly 220 million shares, which will increase its chartered capital four times, to raise money for its IJC urban area project in Binh Duong Province.

Vietnam Housing Joint Stock Company and Housing and Land Investment and Development Joint Stock Company (Cotec Land) also have plans to his the market.

All of them are already listed.

Many stock brokerages, including Ho Chi Minh City Securities, Viet Dragon Securities, and Sacombank Securities have also announced plans for issuing shares this year.

Other industries with such plans include oil and gas, construction, fisheries, and food processing.

Analysts attribute this suddent rush to the difficulty in obtaining credit and sky-high interest rates, but are unsure of the benefits.

Most of the isues are likely to be at par, or VND10,000 (US$0.5).

“The fact that so many listed companies are all making fresh issues capital is not only a worry for new investors but also jeopardizes the benefits of existing shareholders,” Le Dat Chi, a securites analyst, said.

Without many sources of funds and with many stock prices falling below par, investors will consider carefully before subscribing to these issues, he said.

The propects for their projects, the firms’ profitability after the capital increase, and other factors will also determine the success of the issues.

The analysts said the companies should not have opted for fresh issues, causing “difficulties” for shareholders and the market when the government is calling for stability rather than growth.

City allows LED billboards

Ho Chi Minh City authorities have green lighted the use of LED screens in public places by advertisers but with certain provisos.

The brightness of the screen should not exceed 2500 lux in order not to distract drivers, and the screen size must be appropriate for the location, harmonizing with the surrounding landscape.

Besides, only images are permitted and not sounds, again to ensure traffic safety.

The Department of Culture, Sports and Tourism will be in charge of licensing the displays.

A license will be valid for 12 months from the grant date.

Meanwhile, the City recently allowed Vincom building to operate a 400-meter LED screen for six months to test traffic safety.

But in May 2010 it was ordered to be turned off for exceeding the maximum size allowed and fined VND40 million (US$2000).

 

VN, Japan to organize support industry expos

Vietnam and Japan will cooperate in organizing three exhibitions on support industries in Hanoi in September this year.

An agreement to this effect was signed between Hanoi Trade Promotion Centre, Japan External Trade Organization, Vietnam Trade Promotion Department and Reed Trades Company, in Hanoi on March 25.

According to the agreement, between September 15-17, the Vietnam Support Industry Products Exhibition 2011, the 4th Vietnam-Japan Support Industry Exhibition and Vietnam Manufacturing Expo 2011 will simultaneously take place at the Hanoi Cultural Friendship Palace.

At the exhibitions, Japanese companies will show their demand to buy spare parts and accessories from Vietnamese producers, who will display products they want to provide for Japanese partners.

Advanced technologies from many countries in the world and sub-contracting services will be showcased during the events.

The exhibitions will provide opportunities for Vietnamese producers to trade directly with importers to expand their export markets, as well as access the latest manufacturing technologies in the region and the world.

They will also help managers assess the role and reality of the country’s support industries, and create suitable policies for the sector.

Vietnamese company builds plaza in Laos

The Viet-Lao Power Joint Stock Company (VLPC) on Friday hosted a ceremony to inaugurate its invested Vientiane Plaza complex in the Lao capital city of Vientiane.

Costing around US$10 million, Vientiane Plaza consisted of Vientiane Plaza Hotel and Vientiane Plaza Office.

The Vientiane Plaza hotel accommodates 50 rooms and provides a restaurant system serving Vietnamese, Lao, Asian, and European food.

Meanwhile, the Vientiane Plaza office offers up to 2,000 sq.m of floor space for multi-purpose use.

The complex contributes to promoting Vietnam’s images in Vientiane.

Building Vietnamese timber trademarks

Although Vietnamese timber products make up one of the country’s top ten exports their brand names are still weak.

Under framework of the first Vietnam Wood Furniture and Forest Product Festival in Binh Dinh province, the Ministry of Agriculture and Rural Development, along with the Vietnam Timber and Forestry Product Association, held a Vietnam Forestry Forum aiming to develop forestry processing and trade in line with the sustainable management of forests.

The forestry processing industry has made significant progress in recent years. Export values increased from about US$200 million in 2000 to US$3.4 billion in 2010. It is one of the country’s top ten highest value exports.

Although it generates high export value, the Vietnamese forestry industry is still limited. Most materials for production and export are imported, while forest plantation and exploitation brings only low value. Export markets are not stable and many businesses do not have specific development strategies and are not actively exploiting the domestic market. In addition, Vietnamese timber products have weak brand names.

Vice Chairman of the Binh Dinh Timber and Forestry Product Association, Nguyen Van Tham, said to build a strong trademark, businesses must use production process that follow international standards and most importantly protect environment. They should also pay more attention to the domestic market and reduce the number of exports.

Euro 264,000 for tra fish breeding in Tra Vinh

Farmers, processing factories and animal food producers in the southern province of Tra Vinh will be supported with Euro264,000 to implement a project for the sustainable farming and supply tra fish. 

The project will be financed by the German Company for International Coooperation (GTZ), the Dutch Sustainable Trade Initiative (IDH), the World Wildlife Fund (WWF) and GlobalGap and coordinated through the board for Improving Market Participation of the Poor in Tra Vinh (IMPP-TV).

The programme will focus on small and medium scale breeders, groups of farmers and cooperatives in the province during the 2011-2012 period.

Around 100ha in Tra Vinh is being use to breed tra fish for export. The province plans to increase that area to 2,710 ha by 2015 and reach a volume of 200,000 tonnes of tra fish for export.

Vietnam ranks second in Southeast Asia for foreign arrival growth

The Pacific Asia Travel Association (PAPA) has announced the number of foreign arrivals to various regions in the world for the first two months of 2011.

Overall, destinations in Southeast Asia saw strong growth in the number of foreign visitors. Myanmar ranks first with growth of 27 percent, followed by Vietnam at 22 percent, Cambodia (18 percent), the Philippines (17 percent), Singapore (16 percent), Thailand (12 percent) and Indonesia (11 percent).

According to PAPA, foreign arrivals to North East Asia and the Pacific region recorded slower growth mainly due to the recent earth quake and tsunami in Japan.

Ipads coming to Bac Giang

Taiwan’s Wintek Corporation has doubled its investment in Vietnam to build a manufacturing plant to supply touch screens for Apple’s Ipad and Iphones.

Located in northern Bac Giang province’s Quang Chau Industrial Zone, the facility, which was licenced by Bac Giang Industrial Zone Management Authority in March, will be invested to the tune of $250 million. The Wintek plant, the first of its kind in Vietnam, is scheduled to churn first products in July this year.

The firm is one of the only two manufacturers in the world to make touch screens for Ipad products. Previously, Wintek signed a land leasing contract with the Saigon Bac Giang Industrial Zone Joint Stock Company, the developer of Quang Chau Industrial Zone, to lease 60 hectares for its plant.

Freight carrier looks to reach for the sky

Vietnam might have the country’s second specialised air cargo carrier this year after Vinafreight submitted its proposal to the Civil Aviation Administration.

Do Xuan Quang, chairman of VinaFreight, said the company had completed a feasibility study and would ask for approval at the company’s annual general shareholder meeting on April 23 to operate.

“We will hire aircraft for delivering services in the first year of operation to domestic and regional destinations up to 5,000 kilometres away. We will buy our own aircrafts in the following years,” said Quang.

VinaFreight plans to increase its chartered capital to meet requirements for international air cargo carriers with chartered capital of VND500 billion ($24.1 million). The company currently has chartered capital of VND56 billion ($2.7 million), but made a profit of VND55 billion ($2.6 million) last year. The company targets to nearly triple its revenue to $100 million in the next three years.

VinaFreight has business relationship with 24 air carriers in the world and plans to double its partner number in the next two years.

Vietnam’s first specialised air cargo carrier Trai Thien Air Cargo was licenced in October 2009 and is facing the threat of having its licence withdrawn due to financial distress. It has not yet to be operational.

Trai Thien Air Cargo carrier initially focused on cargo delivery in domestic and regional markets including the ASEAN and Northeastern Asia with Boeing 737-300 Freighter.

Retailers split over direction ahead

The concept of partnering foreign retailers to enhance competitiveness is triggering divergent opinions among local industry insiders.

“Going into joint ventures with foreign partners is of necessity to raise trading capacity and expand market,” said chairman Pham Dinh Doan of Phu Thai Group, one of Vietnam’s leading distributors.

Phu Thai Group has cooperated with Japanese giant Family Mart Group to open convenience store chain selling Japanese goods in Vietnam.

The two companies plan to open 300 such outlets around the country over the next five years.

“Partnering with Family Mart would help us take advantages of the foreign partner’s cutting-edge technology and management expertise,” said Doan.

He said Phu Thai Group would not sell its stakes in the joint venture to the Japanese partner following a rumour that the group would possibly do that in the coming period.

“Foreign retailers found it easier to source space through shaking hands with local firms. Some time later, the local firms may withdraw their capital from the joint ventures,” said Hanoi Supermarket Association chairman Vu Vinh Phu.

Phu took out the case the owner of electrical mechanical appliances store chain B.C had withdrawn capital from a joint venture with a Japanese firm after several years working together.

“Whether local firms selling their stakes to foreign joint venture partners depends on particular business targets of each firm,” Phu said, adding the foreign partners with a rich pool of experience in retail and practical business plans would bring profits to local firms.

Vietnam Retailers Association chairman Phan The Rue said local firms were often concerned about their competitive disadvantages over foreign retailers in terms of financial capacity and business techniques.

Going into associations with foreign partners would be a good option, but local firms must outline plans to enhance their capacity and sharpen competitiveness to stay healthy in the marketplace, Rue said.

Of the same mind, deputy director general of Nhat Nam Joint Stock Company, the owner of FiviMart supermarket chain, Vu Thi Hau said: “The retail field is a hard nut to crack. Thereby, going on the appropriate way to ameliorate competitive edge when the local market is entirely open to foreign retailers remains a hard puzzle in the distribution field.”

Hi-tech software park to debut in Hanoi

Hanel Company Limited will start work on building the Hanoi software park this April.

The $35 million Long Bien district park will be divided into zones for software outsourcing and e-commerce centres, a software technology training school, a green park, a water reservoir, a five-star hotel, experts’ residential complexes and hi-end office building and trade centres.

At completion which slated for early 2014, the 312,000 square metre park will attract around 15,000 labourers.

“When park is active, alongside incentives the Vietnamese government offers information technology sector, investors doing business in the park will benefit from special supportive policies from the government as well as Hanoi authorities,” said the company’s general director Nguyen Quoc Binh.