Power prices unchanged

The new power tariffs will not raise prices for households while increasing revenue for the sector, an official of the Electricity of Viet Nam (EVN) said.

Hoang Van Tuy, deputy head of the Finance and Marketing Department under the EVN, told an online discussion on power retail prices held in Ha Noi yesterday that the three ways to calculate power consumption released by the EVN last week were aimed at reducing shortcomings in electricity payment, thus ensuring the rights and benefits to consumers.

"The calculations are being studied which should provide feasible plans while evaluating advantages and disadvantages to choose the best option," he said.

He added that the Minister of Industry and Trade asked the EVN, in co-operation with the Electricity Regulatory Authority of Viet Nam (ERAV), to evaluate the tariffs to ensure that poor and low-income households enjoy support from the government.

Tran Dinh Long, vice chairman of the Viet Nam Electricity Association said the number of tariff levels was not important. However, the ministry should suitably recalculate the difference among the levels.

Long proposed calculations for power consumption to be divided into two levels of less than 100kWh and more than 700kWh.

Nguyen Anh Tuan, ERAV's director said electricity prices have a significant effect on all socio-economic activities as well as people's lives. This was why asking for ideas on the proposed tariffs would make a big difference.

"The new tariffs would ensure that retail electricity prices were higher than production costs while encouraging power saving as well as increasing transparency," Tuan said.

Answering a question related to State-owned groups of the EVN and the Viet Nam Oil and Gas Group (Petrovietnam) reporting losses due to changes in the exchange rate, he said this was one of the four factors, which included a power mobilisation structure, fuel prices and power purchase spending to adjust power tariffs.

"If all of these factors have changes of more than seven per cent, the ministry would review the price adjustment. The time for the review is six months," he said.

The director also affirmed that money spent by the EVN in non-core businesses of tennis courses and swimming pools would not be calculated into the power price.

The group would be organising conferences on power tariffs in three regions this month. The EVN would complete the plan, and submit it to the ERAV and the ministry for consideration before submitting it to the prime minister for approval.

IT application among Ha Noi firms remains low

An information and technology (IT) survey of nearly 200 enterprises in Ha Noi showed that IT application among local small- and medium-sized and state-owned enterprises remains low.

IT application among small- and medium-sized and state-owned enterprises in the capital city of Ha Noi remains low. -Photo baocongthuong.com.vn

The survey was carried out by the Ha Noi Department of Information and Communication and related agencies.

The survey showed that Ha Noi companies spend only from 0.15 per cent to 0.3 per cent of their revenue for IT operations.

Most enterprises are equipped with between 10 and 100 computers and had their computers connected to the Internet.

Enterprises also increased using anti-virus software for information security, however, most of these have not applied information security solutions for network systems, host computers and datas.

Under 10 per cent of enterprises in Ha Noi hold periodic evaluation on information safety of their IT system, according to the survey.

Ninety per cent of enterprises had website application and used free email systems.

Many enterprises applied management software in human resources, financing and accounting, customer relations, goods purchasing, inventory and projects.

However, these software are mostly not managed well and were used incoherently.

The Politburo issued Resolution No.36-NQ-TW in July, 2014 on boosting IT development and application to serve the nation's sustainable development and international integration.

To implement the Resolution, the capital city determined IT development and application a strategic priority in order to enhance production and business efficiency, lay the foundation and motivation for socio-economic development and quicken the city's industrialisation and progress.

Effective application of technology will help enterprises govern better with software which allows enterprises to work more effectively, increase efficiency, save costs, create new motivation and lift an enterprise's position, e-newspaper VietnamPlus qouted Nguyen Ba Quynh from Microsoft Viet Nam as saying.

Fruit & vegetable exports reach $1.3 billion

Fruit and vegetable exports in the first nine months of the year reached nearly $1.3 billion in value against an annual target of $2 billion. According to the Vietnam Fruit & Vegetables Association (Vinafruit), exports have seen strong growth in recent years after standing at just $460 million in 2010.

Dr. Nguyen Huu Dat, Director of the Center for Plant Quarantine After Import 2 at the Ministry of Agriculture and Rural Development, said that Vietnam is now exporting 40 types of fruit to 40 countries and territories worldwide, totaling over 1.6 million tonnes. Dragonfruit leads the way, with over 997,000 tonnes, followed by watermelon with 300,000 tonnes, longan over 100,000 tonnes, and lychee over 70,000 tonnes.

Fruit exports have been increasing since 2008, when some fastidious markets were opened. By 2014 exports into these markets reached over 3,000 tonnes. Some fruit have been penetrating into high quality markets in recent times, such as mangoes in Japan and lychees in Australia. It is expected that mangoes and star apples will enter the US by the end of this year.

According to Dr. Nguyen Quoc Vong from RMIT University, exports would be higher if Vietnam did not pay so much attention to rice, as the market for the product is quite low. “If there was strategic investment to improve technology and quality, fruit and vegetables could bring in billions of dollars to Vietnam,” Dr. Vong was quoted as saying.

IP, EZ revenue heading upwards

Total revenue from industrial parks (IPs) and economic zones (EZs) around Vietnam reached $110 billion in the first nine months of the year, increasing 90 per cent year-on-year and representing 85 per cent of the annual plan, the Ministry of Planning and Investment wrote in a report on the construction and development of IPs. Besides the strong growth in revenue, exports from the parks stood at $47.6 billion, or more than half of Vietnam’s total exports.

In the first nine months there were four new IPs established or expanded: Thanh Hai (Ninh Thuan province), Chu Trinh (Cao Bang province), Chan Hung (Vinh Phuc province), and Mong Hoa (Hoa Binh province). Three new EZs were also established or expanded: South East Quang Tri (Quan Tri province), South East Nghe An (Nghe An province), and Nghi Son (Thanh Hoa province).

To date, 299 IPs and EZs have been licensed, of which 212 have been put into operation and 87 are under construction. The total land area is more than 26,000 ha, with an occupancy rate of 48 per cent.

Investments in IPs and EZs continue to grow handsomely, in particular attracting foreign direct investment. In the first nine months total FDI in the parks reached $8.72 billion, a 12 per cent increase year-on-year and focusing on the production of high-quality garments, electronics, and the processing and manufacturing sector.

FLC's Nhon Ly complex ahead of schedule

The FLC Group has recently announced that the Nhon Ly resort, villa and luxury entertainment complex (Nhon Ly complex) in south-central Binh Dinh province is expected to open in early 2016 as construction has been accelerated.

About 1,000 professionals, engineers, and workers are on the job day and night to complete the project, according to Chairman of FLC Trinh Van Quyet.

Construction at the complex is proceeding faster than at FLC Samson Beach & Golf Resort in Sam Son town in the north-central province of Thanh Hoa due to favorable construction conditions.

The outline of 18 holes and six fairways at the golf course have been completed, while infrastructure such as electricity and water supply are still under construction.

Almost all villas have seen their brickwork finished and are entering the completion stage. The À La Carte Hotel has seen its foundation laid and the building of its structure is about to begin.

According to FLC, the villas and golf course are expected to be put into operation at the end of this year. The entire project will welcome guests early next year, creating 2,000 jobs.

The Chairman of the Binh Dinh People’s Committee said that FLC has been the largest investor in Binh Dinh to date. The provincial government considers the Nhon Ly complex a key project in local economic restructuring and investment attraction efforts.

On an area of nearly 300 ha in Quy Nhon city, the project, with total investment of VND3.5 trillion ($162 million), comprises villas, a golf course, a six-star standard resort, a five-star restaurant, an international conference center, an entertainment complex, and other facilities.

Vibrant Q3 performance in Hanoi high-end apartments

High-end apartments continued to count for the largest share in newly-launched stock of condominiums for sale in Hanoi during the third quarter, according to CBRE’s quarterly report released on September 29. Some 2,900 high-end units were launched in the quarter, accounting for 32 per cent of total new launches.

In the first nine months of this year the supply of high-end apartments accounted for 25 per cent of total new supply, up from 20 per cent in the first half.

Overall, positive market sentiment remained in the quarter, spurring cash inflow from buyers. An estimated 6,880 units were sold, up by 154 per cent against the third quarter of 2014. Continuing the trend from the previous quarter, high-end apartments accounted for an increasing share of units sold.

High-end sales accounted for 29 per cent in the first nine months, up from 25 per cent in the first half.

In terms of pricing, the average resale price fell 0.2 per cent quarter-on-quarter in USD terms but increased 2 per cent in VND terms.

On a year-on-year basis, average prices were on an upward trend in both USD and VND terms, increasing 1.4 per cent and 7 per cent, respectively. New projects under construction saw sharper price increases than completed projects.

Primary prices were on the rise in most segments, especially in high-end and luxury projects, by an average of 5-7 per cent year-on-year.

“In Quarter 3, 2015, positive market momentum continued in Hanoi, boosting new launch activities and sales performance,” said Ms. Nguyen Hoai An, Associate Director of CBRE Vietnam. A total of 9,160 new units were launched from 26 projects, double that in Quarter 2, 2014.

By location, it was noted that new supply in the south of the CBD (Hai Ba Trung district) and the south (Hoang Mai district) in Hanoi accounted for 48 per cent of total newly-launched stock in the quarter, while that in the west and the south-west accounted for a more modest 42 per cent.

In the three months since new regulations came into effect there has been increasing interest from foreign buyers though no high jump in sales, as more legal guidance is still on the way.

“Professionalism, language proficiency, and ease of payments are among the key matters once foreign buyers are involved,” the CBRE report stated.

Savills: IP land rent in HCMC higher than in Hanoi

Average annual space rent at industrial parks (IPs) in HCMC is much higher than in Hanoi as shown in a recent report by property service provider Savills Vietnam.

According to the report, the highest space rent at IPs in HCMC is US$242-286 per square meter a year while that in Hanoi is US$120-190. 

In HCMC, the highest annual rent is US$242-286 per square meter at Tan Tao IP, followed by Tan Binh IP with US$220-250 per square meter and Vinh Loc A IP with US$180-190 per square meter.

Tay Bac Cu Chi IP offers the lowest rent, at US$40-50 per square meter a year. Meanwhile, the rent is US$60-70 for Hoa Phu and Dong Nam IPs and US$65-75 for An Ha and Tan Phu Trung IPs.

Figures in the report showed the average rent at IPs in HCMC is double that in neighboring southern provinces including Binh Duong, Long An and Dong Nai.

Apart from the operational 16 IPs, HCMC is preparing to develop seven new IPs to attract foreign direct investment in the apparel, service and food processing sectors.

Currently, Hanoi has a dozen industrial and hi-tech parks with space rent doubling that of IPs in other northern localities.

The rent is US$120-190 per square meter per annum at Nam Thang Long IP, US$130-150 at Noi Bai and Hanoi-Dai Tu IPs, and US$90-150 at Quang Minh, Phu Nghia and Thang Long IPs.

The lowest average space rent in the capital city is US$50-60 per square meter at Hoa Lac Hi-tech Park, followed by Kim Hoa IP with US$50-80 per square meter.

According to the Ministry of Planning and Investment, Vietnam has 299 industrial zones occupying a combined area of 84,000 hectares. Of the total number, 212 have come online and 87 are under construction.

Around 26,000 hectares out of the 56,000 hectares available for lease at the industrial zones across the country has been occupied by tenants.

In the southern region, Dong Nai Province has the largest number of IPs, followed by Binh Duong, Ba Ria-Vung Tau, HCMC and Long An.

Meanwhile, the leader in IPs in the north is Bac Ninh Province. Hanoi comes second, followed by Haiphong, Thai Nguyen and Hung Yen.

Local firms advised to think beyond ASEAN market

Tran Tuan Anh, Deputy Minister of Industry and Trade, said at a business forum in HCMC last week that local enterprises should seek to make the most of opportunities in a bigger market than just ASEAN.

Anh told Vietnam CEO Forum 2015 that the establishment of the ASEAN Economic Community (AEC) late this year would enable local enterprises to tap into a single market of 600 million people, but Vietnam has already signed 10 free trade agreements and local businesses should think about this. 

Commenting on the fact that a few domestic companies know about the AEC, Anh said many businesses have given little care to the AEC though they can easily get information from the Vietnam Chamber of Commerce and Industry (VCCI).

“Have any businesses contacted VCCI for information about the AEC?” Anh questioned business leaders attending the forum but not many of them raised their hands.

Hans-Paul Burkner, chairman of Boston Consulting Group, advised Vietnamese enterprises to focus on their strengths and join forces to grow on the local market before branching out to overseas markets like Thailand and Indonesia.

Burkner called for businesses to learn about the culture of a market before entering it.

Speaking to the Daily on the sidelines of the forum, PEB Steel executive chairman Sami Kteily said Vietnamese companies should have a practical view of the ASEAN market and that it is difficult for Vietnamese goods to compete with products of the same types made in Thailand, Indonesia and Malaysia.

Minister of Justice Ha Hung Cuong said businesses should study the legal system of a market before they decide to make investments.   

Construction agency seeks low rents for public houses

The HCMC Department of Construction has proposed the city government apply affordable rents for public houses in accordance with the financial capability of civil servants and employees of public services.

As of August 2014, HCMC had managed four public housing buildings, including block B of 225 Tran Hung Dao apartment building in District 1, block C of Ngo Tat To apartment building in Binh Thanh District, and public houses in Binh Khanh and Can Thanh in the outlying district of Can Gio.

The department suggests two rent schemes for public houses, with the first based on operation and management costs reported by the management units of public houses.

Under the first scheme, the planned rent is VND2.4 million (US$106.6) per month for each apartment at block B of 225 Tran Hung Dao apartment building, VND770,000 per month for Binh Khanh public house and some VND560,000 per month for Can Thanh Town public house.

Meanwhile, in the second scheme the department suggests rents on the investment capital of public houses set by the Ministry of Construction and fixed operation costs set by the government of HCMC and calculated for a public employee last year.

The rent proposed in the second scheme is just VND1.2 million per month for each apartment at block B of 225 Tran Hung Dao apartment building, VND200,000 per month for Binh Khanh public house and VND150,000 per month for Can Thanh Town public house.

The department petitions the city government to select the second rent scheme for public houses in the city as people eligible to lease such houses will stay during the periods of their office terms. 

The department noted that public houses were built in areas for civil servants with limited incomes, so construction features and facilities of the public housing buildings are different from other buildings.

Only 38 NGOs in city register local employee recruitments with FOSCO

Though there are 132 non-governmental organizations (NGOs) in HCMC, only 38 of them have registered to recruit local employees through Service Company to Foreign Missions (FOSCO), the firm authorized to recruit and manage Vietnamese employees at foreign entities.

FOSCO deputy general director Phan Tien Cong told a conference on employment at NGOs in 20 southern provinces and cities in HCMC last week that the company had got employment registrations from only 38 NGOs, with 11 of them based in Hanoi and the rest in HCMC. Only 447 employees of NGOs have been registered via FOSCO.

Le Hung Quoc, chairman of the HCMC Union of Friendship Organizations, questioned whether the other NGOs in HCMC had not employed Vietnamese.

Regulations of Government Decree 85/1998/ND-CP introduced between 1998 and 2014 required foreign organizations to employ Vietnamese via authorized organizations.

FOSCO is authorized by the Ministry of Foreign Affairs to supply labor for foreign NGOs in 20 provinces and cities from Binh Thuan to Ca Mau. In case FOSCO is unable to meet recruitment requirements, foreign organizations and individuals can directly find Vietnamese employees and then submit files to FOSCO to complete required procedures.

With Government Decree 75 coming into force on September 15 last year, foreign organizations and individuals wanting to employ Vietnamese must register with FOSCO, the Service Center for Danang Foreign Affairs, the Job Service Center. Within 15 days, if the authorized organizations fail to introduce qualified Vietnamese candidates, the foreign entities can directly recruit Vietnamese and then inform the authorized organizations of their employment.

According to Quoc, Decree 85 is strict as it requires NGOs in the southern region to hire people via FOSCO while Decree 75 is liberal as it does not include sanctions. Without sanctions, it is hard to manage employment at foreign entities.

Saigon Port to develop huge riverside property project

Saigon Port Co. Ltd. will partner with Vingroup to develop a real estate project worth over VND11 trillion (US$490 million) by the Saigon River in the current premises of Saigon Port after the port is relocated in 2016.

Saigon Port unveiled the partnership plan with Vingroup at its first general meeting held on September 28 to announce its operation conversion into a joint stock company. After equitization, Saigon Port will join forces with Vingroup to establish an urban development investment company called Ngoc Vien Dong to implement the project.

As planned for the project, Ngoc Vien Dong with a 26% stake to be held by Saigon Port will develop a 32.1-hectare residential area comprising 3,000 apartments, riverside villas, office buildings, commercial facilities, a terminal for boat passengers, and schools.

The area will be home to an estimated population of 11,650 and have a waterfront length of 1,800 meters. The company is expected to sell housing in the project from 2018 and will offer dividends of over 10% per year to shareholders.

At the meeting, shareholders approved Saigon Port’s business plan for 2015 with cargo throughput of 9.9 million tons at ports operated by the company, revenue of VND992.5 billion, after-tax profit of VND64.2 billion and no dividend would be shared.

The respective targets for the final quarter of the year are 2.3 million tons, VND291.8 billion and VND16.7 billion.

According to the equitization plan of Saigon Port, 77.86 million shares will be offered for sale but 74.73 million shares of them have already been sold. After going public, the company will have chartered capital of VND2.16 trillion (US$96.1 million) with the State holding of 141.56 million shares, 65.45% of the total.

Of the remaining volume, the company sells 35.7 million shares (16.51%) to normal investors via public auctions and an equal amount of these shares to strategic investors, 0.13% to the company’s labor union and 1.23% to its employees.

Two strategic investors, Vietnam Bank for Industry and Trade (VietinBank) and Vietnam Prosperity Bank (VPBank), held 19.6 million shares (9.07%) and 16.09 million shares (7.44%) at Saigon Port respectively.

Rice exports forecast to reach 6 million ton this year

Vietnam’s rice export is forecast to get this year target of over six million tons, according to chairman of the Vietnam Food Association Huynh The Nang.

Export is likely to recover in the rest of 2015 and next year because El Nino has caused dry weather reduce output in many import nations of Vietnam, Nang added.

Vietnam has won a bid to export 450,000 tons out of 750,000 tons of rice that the Philippines opened for tenders on September 17. The country is expected to import more Vietnamese rice in the last months this year.

In addition, Indonesia might purchase Vietnamese rice to make up local shortfall.

Vietnamese businesses have exported over 4 million tons of rice by the end of August, a reduction of 10 percent over the same period last year.

The number approximated five million tons if including small volume export through the border to China, equivalent to the same period last year.

Successful tech firms to share experiences at fair

Around 90 successful domestic enterprises will tell their stories at the four-day tech fair Techmart Vietnam in Hanoi from October 1.

Many firms have researched and applied new technology to create quality products, according to Le Xuan Dinh, director of the National Agency for Science and Technology Information under the Ministry of Science and Technology.

Take as an example Vietnamese porcelain maker Minh Long 1 Co. Ltd. The firm has invented one-time baking technology. Ly’s Horeca, a new line of products, uses nanotechnology that helps remove dirt without using detergent.

Local stationery producer Thien Long Group (TLG) has invested in research since 2008 and introduced a range of new techniques for ink and stationery manufacture. As a result, TLG’s technical knowhow is the same as in advanced countries like Japan and Switzerland and has taken the market lead in Vietnam.

Rang Dong Light Source and Vacuum Flask JSC and Dien Quang JSC have invested in new technology and collaborated with scientists to create specialized lines of products, including LED lamps whose quality is comparable to imported products.

Dinh said Saigon Paper Corporation (SGP) has bought advanced machinery so as to export its products to over 20 countries. Due to its products imitated in China, Nhon Hoa Scale Manufacturing Co. Ltd. set up shop in the northern neighbor and is now successful in the southern Chinese market.

Niche market proposed for chickens to avoid competition

Instead of focusing on farmed chickens, Vietnam should find a niche market for free-range chickens or salted eggs to avoid competition with foreign rivals, especially when the Trans-Pacific Partnership (TPP) is signed, heard a seminar last week.

At the seminar on enhancing the competitiveness of Vietnam’s poultry industry in the run up to the signing of the Trans-Pacific Partnership (TPP) agreement, Le Thanh Hai, vice chairman of the Vietnam Poultry Association, said Vietnam’s free-range chicken volume was 560,000-620,000 tons while the volume of farmed chickens was 393,000-402,000 tons.

Salted egg is another product with a competitive edge.

According to Hai, the demand for processed chicken products will increase but they must be of high quality and meet the tastes of local and foreign consumers. Therefore, the local poultry industry should focus on processed free-range chickens as a niche market.

To develop free-range chicken farming, Hai said, poultry farming cooperatives whose minimum scale is one million units per year should be built. However, the State is expected to offer loans for them to improve processing techniques. 

Such cooperatives will gradually grow to become farming and processing companies and there must be some kind of coordination among farming households to meet market demand.

In addition, cooperatives have to join hands with enterprises to sell products, raise poultry meeting VietGAP standards, slaughter chickens and process meat in line with food safety and hygiene requirements.

Cao Van Khanh, director of Cao Khanh Poultry Breed Co., said there is a shift to raising free-range chickens naturally. Khanh said McDonald’s was planning to switch to using eggs from free-range hens.

However, this will require a zoning plan to avoid disease infections and environmental pollution and local chickens will not have to directly compete with imported chickens then.

According to the association, Vietnam is ranked 21st globally in terms of poultry supplies and, second by the volume of ducks. It is also among the top ten countries with high duck meat and egg supplies. However, the country has had difficulty developing the industry and exporting poultry products.

Poultry farms in Vietnam are mostly small, accounting for 65-70% of the total, and there is a lack of coordination between production and consumption, resulting in low economic efficiency, Tran Duy Khanh, vice chairman cum general secretary of the association, told at the seminar.

Input costs such as breeds, feed and veterinary medicine are high, eroding the competitiveness of poultry products. Feed costs make up 65-70% of total farming costs but compared to other regional countries, poultry feed in Vietnam is 10-15% higher.

Key road, tunnel projects put into use

Traffic has been allowed in a number of important road and tunnel projects in central Vietnam, facilitating goods and passenger transportation in the region, according to the Ministry of Transport.

The widened National Highway 1A section passing through Khanh Hoa Province was opened to traffic last Friday after nearly two years of construction, reducing travel time between Khanh Hoa Province and neighboring areas.

The VND9.9 trillion (US$442 million) project was implemented under the build-operate-transfer (BOT) format and funded by the proceeds from Government bond sales.

The expanded 142-kilometer section of National Highway 1A connects Phu Yen and Ninh Thuan provinces. Vehicles are allowed to travel at a maximum speed of 80 kilometers per hour on the six-lane road.

Also in Khanh Hoa Province, Co Ma tunnel, which is part of the tunnels under the Ca Pass, was opened to traffic over the weekend.

The Co Ma tunnel and road project starts from Dai Lanh Commune and ends at Van Tho Commune in Khanh Hoa’s Van Ninh District. Costing VND784 billion (US$35 million), the project comprises two parallel tunnels with each measuring 500 meters in length and two 9.75-meter-wide lanes for vehicles to travel at 80 kilometers an hour.

The ministry said 55% of construction work at Ca Pass tunnel, the longest of the Ca Pass Tunnel project with a total length of 4.1 kilometers, is complete and will be opened to traffic in September next year.

The ministry held a groundbreaking ceremony for Cu Mong tunnel in Quy Nhon City, Binh Dinh Province over the weekend. The 2.6-kilometer tunnel is designed to link Binh Dinh and Phu Yen provinces.

The tunnel is being carried out under the BOT and BT (build-transfer) formats at a total cost of VND3.9 trillion (US$174 million).

Two parallel tunnels, which are 30 meters apart, will be built in the first phase of the two-phase project.

Cu Mong Pass is a notorious area for traffic accidents and is the only pass on National Highway 1A without a tunnel in operation.

Co Ma, Ca and Cu Mong tunnels are the three components of Ca Pass Tunnel project worth VND15.6 trillion (US$694 million). The project is expected to help reduce traffic accidents and facilitate vehicular traffic on the national highway.

PwC Vietnam provides transaction advisory for e-GP project

Under the comprehensive cooperation agreement signed earlier this week, Japan Construction Management Corporation (JCM) would provide investment consultancy, project management, and quality supervision for all BID Vietnam projects. JCM also pledged to help BID Vietnam improve and upgrade its management by sending high-ranking construction specialists to BID Vietnam with the aim to establish a building system that meets international standards.

Meanwhile, PwC, one of the largest professional services firms in the world, would provide BID Vietnam with three services. These include consultancy for restructuring, administrative supervision and the and leadership assessment.

Tran Van Manh, chairman and general director of BID Vietnam, highlighted that the cooperation would help BID Vietnam complete a professional and effective administrative system that will save plenty of time and money, thus improving production effectiveness, competitiveness and enabling the corporation to catch up with new trends in the world.

At the ceremony, JCM's general director Jun Kawamuro committed to help BID Vietnam introduce new ways of thinking to assure success in the future.

Ramon Chelva, PwC's managing director, also stressed that "This shows that BID Vietnam has a clear desire to become not only a strong brand in the market, but also one of the leading real estate companies in Vietnam."

Commenting on this cooperation, Vu Tien Loc, chairman of  the Vietnam Chamber of Commerce and Industry, said that the cooperation was an important step for BID Vietnam and that it demonstrated proper vision.

“In my opinion, technology and international management are the key factors that help young firms reach the international level. Today I see BID Vietnam step on the right track with a promising long-term vision,” said Loc

BID Vietnam was established in 2006 and has become a powerful synergy/accumulation of all its members’ experience and prestige in architectural design, civil and industrial project construction, real estate investment management and material import and export.BID sailing with giants, ambitions on the horizon.

Hanoi-based Building and Infrastructure Development Company teamed up with Japan Construction Management Corporation and PricewaterhouseCoopers in order to increase its competitiveness and reach its ambition to become of Vietnam’s largest construction firm.

Under the comprehensive cooperation agreement signed earlier this week, Japan Construction Management Corporation (JCM) would provide investment consultancy, project management, and quality supervision for all BID Vietnam projects. JCM also pledged to help BID Vietnam improve and upgrade its management by sending high-ranking construction specialists to BID Vietnam with the aim to establish a building system that meets international standards.

Meanwhile, PwC, one of the largest professional services firms in the world, would provide BID Vietnam with three services. These include consultancy for restructuring, administrative supervision and the and leadership assessment.

Tran Van Manh, chairman and general director of BID Vietnam, highlighted that the cooperation would help BID Vietnam complete a professional and effective administrative system that will save plenty of time and money, thus improving production effectiveness, competitiveness and enabling the corporation to catch up with new trends in the world.

At the ceremony, JCM's general director Jun Kawamuro committed to help BID Vietnam introduce new ways of thinking to assure success in the future.

Ramon Chelva, PwC's managing director, also stressed that "This shows that BID Vietnam has a clear desire to become not only a strong brand in the market, but also one of the leading real estate companies in Vietnam."

Commenting on this cooperation, Vu Tien Loc, chairman of  the Vietnam Chamber of Commerce and Industry, said that the cooperation was an important step for BID Vietnam and that it demonstrated proper vision.

“In my opinion, technology and international management are the key factors that help young firms reach the international level. Today I see BID Vietnam step on the right track with a promising long-term vision,” said Loc

BID Vietnam was established in 2006 and has become a powerful synergy/accumulation of all its members’ experience and prestige in architectural design, civil and industrial project construction, real estate investment management and material import and export.

Sapphire starts building HOLM riverfront complex

Real estate developer Sapphire has begun construction of the HOLM riverfront residences at 151 Nguyen Van Huong street, Thao Dien, District 2 in Ho Chi Minh City.

Located on the Thao Dien peninsula, the 2.7 hectare site has more than 200 metres of river frontage, which will house 29 villas with land ranging from 272 square metres to 1,018sqm. Registrations of interest are now open at the residences’ website. The villas will be handed over in the fourth quarter of next year with all appliances and furnishings included.  Hoa Binh Corporation and Prime Construction & Trading Co. Ltd were appointed as the main contractor and interior decorator of HOLM Residences.

Sapphire develops both residential and commercial projects in Vietnam. Other projects by Sapphire include the office building President Place in District 1 of Ho Chi Minh City, the beachfront Sanctuary Ho Tram Resort Community in the southern province of Ba Ria-Vung Tau, the Centrepoint office building in Phu Nhuan district of Ho Chi Minh City and the City Garden apartment complex, also in Ho Chi Minh City. Vietnam’s real estate market, especially the high-end segment, has seen a revival, and is likely to see strong growth in the near future.

In the first eight months of 2015, successful transactions in Hanoi and Ho Chi Minh City reached 13,000 and 12,000 respectively, almost doubling the figures for the same period last year, according to former Deputy Minister of Construction Nguyen Tran Nam at the 3rd Annual Real Estate Symposium recently held in Ho Chi Minh by the Australian Chamber of Commerce in Vietnam.

EVN in need of $26.68 billion from 2016 to 2020

In the 2016-2020 period Electricity of Vietnam (EVN) will need VND600 trillion ($26.68 billion) for investment in electricity projects, a representative of EVN’s Department of Planning told a meeting held by the Ministry of Planning and Investment on September 25.

In the first nine months of the year EVN invested VND82.173 trillion ($3.65 billion) in a range of projects and the total for the year is expected to be VND127 trillion ($5.65 billion). “In the 2016-2020 period more than VND600 trillion ($26.68 billion) is required for investments, or $6 billion to $7 billion annually on average,” the representative said. This figure is around 25 per cent higher than in the 2011-2015 period. In addition to equity capital and domestic loans, EVN is contemplating borrowing from foreign organizations.

Electricity production and distribution increased 11.4 per cent in the first nine months. Electricity for manufacturing and electricity purchased was estimated at 118.5 billion kWh, a 12 per cent increase year-on-year, which cut the country’s reliance on China. Electricity for sale is estimated at 106.1 billion kWh, 11 per cent higher compared to last year. Most households have higher electricity consumption than previously.

To the end of the year EVN is trying to put the first power generation unit of the Lai Chau hydropower plant into use, ahead of schedule, and is also investing in plants in the central region and the south.

According to electricity planning for 2011-2020, Vietnam is to build 54 coal-fired power plants as well as gas-fired power plants, hydropower plants, and nuclear power plants.

Domestic glass firms vie for market

Domestic glass companies are losing market share to foreign businesses because of loopholes in import duty policies, weak market management and customer preference for imported products, the Dau Tu (Viet Nam Investment Review) newspaper reported.

Raw glass, for example, has an import tax of 35 per cent, while the tax on finished glass is only 5 per cent.

In addition, instead of outsourcing, several import companies have reduced the size of their raw glass to take advantage of lower import duties.

The fraudulent activity has affected domestic raw material glass producers and outsourcing businesses in Viet Nam.

Market management has also been ineffective, leading to unregulated glass imports and smuggled glass. These products, especially thick glass, do not meet quality standards.

In some cases, importers claim they use a 2mm- thick glass standard, but the glass is only 1.7mm thick.

Nguyen Minh Khoa, director of Viglacera Float Glass Company, said the Saint Gobain glass group of France closed its factories in China in October last year because fake products under its brand name had flooded the Chinese market.

However, many high-rise building projects have used glass with the Saint Gobain brandname imported from China.

"The fraudulent activity has increased at an alarming rate," Khoa said.

Nguyen Cong Chinh, general director of Sado Group, which specialises in producing glass in Dong Nai Province, said that many of the high-rise projects had foreign consultants who had suggested use of imported glass despite its high price (US$150-130 per sq.m).

Nguyen Quang Cung, deputy chairman of Viet Nam Association for Building Materials, said that agencies need to adjust raw and finished glass import duties to encourage local production and create a fair playing field.

Domestic glass companies should also talk to authorities and protect their rights, Cung said.

Local businesses have said that market management was weak and that it should be more transparent.

Khoa said that the quality of imported glass should be checked before it is accepted.

The State should also issue support policies to encourage the use of locally made glass, he said. 

Capital's credit growth picks up

Credit in the capital city has surged sharply, roughly doubling the average rate of the entire banking system.

According to the Ha Noi Statistics Office, total outstanding loans of the capital in the first nine months of the year is estimated to reach VND1,195.9 trillion (US$53.15 billion), up 18.3 per cent against December last year.

Short-term loans were estimated to rise 16.8 per cent while the increasing rate of medium- and long-term loans was 20.9 per cent.

Total capital mobilisation of the city in the period rose 11 per cent, reaching VND1,321.8 trillion ($58.74 billion).

As the credit growth rate was much higher than that of capital mobilisation, commercial banks have to continuously increase deposit interest rates to attract depositors in a move to balance deposit and credit sources.

Sacombank last week continuously inched up its deposit interest rate by 0.1-0.2 percentage points per year. This was the third interest hike of the bank since August this year. The bank's highest rate of 7.55 per cent is applied for 13-month deposits.

Eximbank early this week also released the new interest rate level with a rise of 0.1-0.2 percentage points per year for some terms, effectively from September 21. The bank's highest rate was 7.5 per cent, which is applicable for 13-month deposits.

Previously, An Binh Bank, VIB and SeaBank also increased the deposit interest rates by 0.2-0.3 percentages points per year for some terms.

Experts were concerned that the deposit interest rate hike would cause a negative impact on lending rate.

Banking expert Nguyen Tri Hieu said that in the context of changes in the domestic and global financial market, banks had to enhance the liquidity through deposit interest rate hike.

It would therefore leave lending interest rates difficult to reduce in the future, Hieu said.

Economist Dinh The Hien also suggested that the Government should take more measures to better control the deposit rate hike. Avoiding it could cause lending interest rates to rise in the near future.

It was contrary to the government's guidance in cutting lending interest rates to support domestic business and production, Hien said. 

Property sales down in HCMC

The number of successful transaction in Ho Chi Minh in the third quarter was only 7,862, a 20 per cent decrease compared to the record of over 10,000 in the second quarter, according to a report from CBRE Vietnam on the city’s property market. The absorption rate has fallen significantly.

The reason is the high amount of supply coming on to the market. In the third quarter there were 10,000 apartments on sale, of which supply in the southern part of the city, including Districts 4, 7, and 8 and Nha Be district, was increasing. In the first nine months of the year there were 25,000 apartments on sale in the city.

Supply was previously focused on the eastern side of the city but is now distributed around other areas. This has caused buyers to hesitate.

Ms. Duong Thuy Dung, Associate Director of Research and Consulting at CBRE Vietnam, believes that market liquidity for apartments is going down but not by much. Only when the absorption rate is at 50 per cent or lower is it seen as unstable. “We are still observing the market and will issue a warning as soon as there are any disturbing signs,” she was quoted as saying.

The market, she said, is now distributed around many areas of the city with more target segments. Many firms are extending from the premium segment towards the middle segment in order to diversify supply, increase opportunities to approach customers, and effectively stimulate demand. This is a sound multiple strategy because it will avoid monopolies and price increases. She forecast that to the end the year apartment projects on sale in the city will be more segmented, but premium apartments will still dominate. Market liquidity is likely to slow down and stay flat.

FLC's Nhon Ly complex ahead of schedule

The FLC Group has recently announced that the Nhon Ly resort, villa and luxury entertainment complex (Nhon Ly complex) in south-central Binh Dinh province is expected to open in early 2016 as construction has been accelerated.

About 1,000 professionals, engineers, and workers are on the job day and night to complete the project, according to Chairman of FLC Trinh Van Quyet.

Construction at the complex is proceeding faster than at FLC Samson Beach & Golf Resort in Sam Son town in the north-central province of Thanh Hoa due to favorable construction conditions.

The outline of 18 holes and six fairways at the golf course have been completed, while infrastructure such as electricity and water supply are still under construction.

Almost all villas have seen their brickwork finished and are entering the completion stage. The À La Carte Hotel has seen its foundation laid and the building of its structure is about to begin.

According to FLC, the villas and golf course are expected to be put into operation at the end of this year. The entire project will welcome guests early next year, creating 2,000 jobs.

The Chairman of the Binh Dinh People’s Committee said that FLC has been the largest investor in Binh Dinh to date. The provincial government considers the Nhon Ly complex a key project in local economic restructuring and investment attraction efforts.

On an area of nearly 300 ha in Quy Nhon city, the project, with total investment of VND3.5 trillion ($162 million), comprises villas, a golf course, a six-star standard resort, a five-star restaurant, an international conference center, an entertainment complex, and other facilities.

HAGL, IAS tie up to produce soybeans for Nutifood

Hoang Anh Gia Lai (HAGL) Group has teamed up with the Institute of Agricultural Science for Southern Vietnam (IAS) to produce soybeans for nutrition firm Nutifood.

Under an agreement struck by representatives of the three parties in HCMC on September 29, the institute will carry out studies and experimental plantings to produce soybean varieties with high yields and quality. Meanwhile, HAGL will grow the plant on about 1,000 hectares of land in the Central Highlands province of Gia Lai in the initial time and 3,000 hectares in the next five years.

Nutifood will buy all the soybean output for soymilk processing. Nutifood expects to produce 3.5 million liters of soymilk from 2,500 tons of soybeans supplied by HAGL in the first year and 185 million liters from 22,000 tons per annum in the following years.

Doan Nguyen Duc, chairman of HAGL, said the first batch of soymilk products would be launched in the next three months. The institute’s director Tran Thanh Hung said soybeans will be produced by HAGL from domestic varieties rather than genetically modified seeds.

Also on September 29, Nutifood unveiled its Nuti pasteurized milk, which is the fruit of a cow farming cooperation deal clinched by the company and HAGL in June last year.

The project has a total investment of over VND11 trillion (US$489.17 million), with VND6.3 trillion spent by HAGL to develop a herd of 120,000 cows and VND5 trillion by Nutifood to build a milk processing plant with a capacity of 500 million liters per year in Gia Lai Province.

HAGL has now nearly 10,000 cows, including over 5,000 cows producing more than 100 tons of milk a day. Nuitifood buys this milk volume to produce Nuti fresh milk and yogurt.

Nutifood chairman Tran Thanh Hai said Nutifood fresh milk products have competitive prices thanks to the partnership with HAGL. Duc said HAGL had made use of available food sources like corn, molasses and palm oil it had to feed dairy cattle and applied high technology to help cows produce more milk.

Duc said HAGL is also investing in growing Thailand’s elephant grass with drip irrigation technology from Israel to feed its dairy herd.

Jetstar Pacific to open new domestic routes in October

Jetstar Pacific Airlines will open three new air routes – HCMC-Pleiku, Chu Lai-Buon Ma Thuot and Hue-Dalat – in October.

Le Hong Ha, chief executive officer of Jetstar Pacific, said in a statement that the low-cost carrier will operate a daily service between HCMC and Pleiku from October 25.

For the route linking Chu Lai in the central province of Quang Nam and the Central Highlands City of Buon Ma Thuot, the airline will operate flights on Tuesdays, Thursdays and Saturdays from October 27. It will start to fly on the Hue-Dalat route on October 25 with three weekly services on Wednesdays, Fridays and Sundays.

JPA will use Airbus A320/A321 aircraft for flights on the three new routes.

The carrier is selling tickets online for HCMC-Pleiku and Chu Lai-Buon Ma Thuot routes with prices starting from VND450,000. Air-tickets for the Hue-Dalat route cost from VND550,000 and will be available for purchase from October 29.

The airline plans to launch promotion programs for the new routes.

Currently, Jetstar Pacific operates 25 domestic and international routes. Its main shareholders include Vietnam Airlines and Qantas Group of Australia.

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