Businesses focus on improving job skills

Companies in Viet Nam this year will focus on improving skill sets of staff by using internal programmes, a survey from an international recruiting company has found.

According to the Robert Walters' annual Global Salary 2014, companies face recruitment pressure because of a small pool of highly qualified staff.

"As companies continue to compete for top Vietnamese talent, the shortage of candidates and lack of skills in niche areas pose recruitment challenges," Jon Whitehead, country manager of Robert Walters Viet Nam, said at a conference early this week in HCM City.

"Employers are likely to focus on training and development programmes for existing teams in order to nurture talent internally," he said. "Attracting overseas Vietnamese back home is another viable option as such candidates are valued for their international exposure and expanded portfolio.".

The survey points out that 3.5 out of 5 respondents are looking to switch jobs this year, with top reasons being salary increases and lack of career progression in current job.

According to Whitehead, the outlook is fairly positive this year with multinationals converting representative offices into wholly-owned businesses and subsidiaries.

"Companies will have to be more flexible in their hiring requirements and consider candidates with broadly matching skill sets," he said.

Figures from the survey suggest that candidates who switched jobs last year could command an average 10-20 per cent salary increment. And this trend is likely to continue in 2014.

The entrance of new Fast-Moving Consumer Goods (FMCG) businesses in Viet Nam may also potentially lead to an increased demand for qualified professionals for sales and marketing positions.

Hiring for procurement specialists is likely to increase due to growth within industries such as garment manufacturing, electronics, electronic equipment and FMCG businesses.

In addition, internationally-recognised certifications such as ACCA, CIMA and CPA are gaining value in Viet Nam, and will be an added advantage for accounting and finance candidates looking to move to another job.

Online auctions help improve transparency

Online auctions provide an effective way of improving the transparency of buying and selling and preventing corruption, according to Deputy Minister of Planning and Investment Dao Quang Thu.

At a conference in Ha Noi last week, participants discussed online auctions and Thu expressed his belief that with the new Law on Tendering taking effect on July 1, the carrying out of auctions will be further expanded.

Online auctions have become popular in many countries, as they help save from 3 to 20 per cent of auction package values, according to reports.

In Viet Nam, the total value of auction packages bid every year is over US$20 billion. Therefore, expanding online auctions will contribute billions of dollars to the State budget annually.

Quang Nam to invest in Cua Dai port

The central Quang Nam Province will invest VND45 billion (US$2.1 million) to build a tourism and service centre in Cua Dai port.

The centre, which covers 39ha, will include a reception area and tourism information service for cruise ship passengers disembarking at the port.

Cua Dai beach, 5km from Hoi An's old quarter, is a favourite location for tourists visiting the UNESCO-recognised city.

The central province welcomed 1.65 million foreign tourists in 2013.

HCM City to host annual international furniture expo

The seventh Viet Nam International Furniture and Fine Arts Exports Fair 2014 will be held at the Sai Gon Exhibition and Convention Centre in District 7 from March 11 to 14.

The expo, VIFA EXPO 2014, will feature 630 booths representing 129 local and international enterprises from 11 countries and territories, including Singapore, Malaysia, China, France, Canada, Italy, Japan and South Korea.

Despite tough economic times, the number of participating companies proves there is strong demand for new customers among firms involved in the industry, according to the organisers.

With many advertising campaigns launched within and outside the country, the fair hopes to attract many new potential customers.

In addition, as part of the ASEAN Furniture Show Circuit organised by the ASEAN Furniture Industry Council, the expo will benefit from the council's advertising campaigns directed at importers in the US, Japan, and Europe.

The organisers have received more than 900 registrations from furniture importers in 70 countries and territories. Most of these will seek new partners and suppliers at the fair.

Co-organised by the HCM City Department of Industry and Trade, the Handicraft and Wood Industry Association of HCM City (Hawa) and Hawa Corporation, the fair also includes two seminars, one on the latest safety regulations and standards to wood products exports to the US, and the other on the domestic furniture design industry.

Last year, Viet Nam earned US$5.56 billion from exports of wood and wood products, up 19.2 per cent over the previous year, according to Hawa, adding that exports to key markets such as the US, China and Japan rose strongly in the period.

State-funded projects back local IT products

The Ministry of Information and Telecommunications has released a new circular, which decrees that any IT projects funded by the state budget, must buy local products first.

The circular applies to all state-offices – political organisations, social organisations and armed forces - and says that other economic sectors should prioritise local IT products over imported ones.

To be considered a local product, it must be produced in Viet Nam by a Vietnamese legal entity or individual who owns a majority share of the company, it must be a registered brand name in Viet Nam and have technical guidelines printed in Vietnamese and a clear guarantee and maintenance policy. It must also detail the responsibility of the service provider.

The circular specifies what kind of products may be used, such as hardware, electronics, software, digital content and IT services.

All offices and departments that use the state budget for IT investment must follow the circular. Special approval must be given if non-local products are used due to a specific technical requirement.

The circular will come into effect on April 8.

HCM City sees start of year bump in FDI

Foreign direct investment (FDI) into HCM City has risen sharply - in terms of registered capital and the number of investment licences – over the first two months of 2014, according to the HCM City Department of Planning and Investment.

Speaking at a recent meeting at the HCM City's People's Committee office, Thai Van Re, Director of HCM City Department of Planning and Investment, said in the first two months of the year, the city authority has granted 46 investment licences, up by 12.2% compared with the same period last year, with a total registered capital of US$164.3 million, up by 267.2% on last year.

In addition, the city authority has approved plans for capital expansion of US$52.6 million for operational projects.

Re said the city's economy remained stable and is showing positive signs of recovery.

In February the city attained total retail sales and service revenues of VND43.4 trillion (nearly US$2.6 billion), an increase of 3.8% over the same period last year, although this was a 27.2% drop from January 2014, according to the report released by the HCM City People's Committee.

The city's total retail sales and service revenues in the first month of the year amounted to VND103 trillion (nearly US$4.9 billion), up by 11.8% compared with the same period last year.

The city's tourism and hospitality industry and transport services also scored growth. The city welcomed some 396,000 foreign visitors in January and 778,000 foreign guests in the first two months, which is an 11% increase over the same period last year.

The early opening of shopping malls after Tet and the market stabilisation programmes in February have helped the city to attain low CPI rate of 0.24% compared with January 2014.

The city has shown growth in other areas too - it reported an export turnover of US$1.8 billion in February, which is up 14.7% and the city's agricultural production scored a 6.3% growth rate over the same period last year.

Also in February, 2,741 new businesses were established in the city, with total registered capital of over VND14.36 trillion (nearly $680 million).

After the Lunar New Year Festival (Tet), enterprises in the city didn't suffer labour shortages like in previous years, because businesses, (in particular companies that employ large numbers of labourers), provided staff with financial help returning home for Tet.

In February, there were 25.000 employment opportunities in the city, including 12,300 new jobs, up by 15.6% over January.

To improve further still on the socio-economic growth, the city's People's Committee has asked district authorities, departments and agencies to focus on efforts to curb inflation, stabilise the macro-economy, and ensure social welfare for its residents.

The city authority asked agencies to further develop market stabilisation programmes to create favourable conditions for enterprises to boost production, and in doing so promote their brands and in the long-term, raise living standards.

HCM City signs deal to develop ICT sector

The HCM City Department of Information and Communication and the HCM City Computer Association (HCA) on Friday signed a co-operation agreement, intended to boost the development of the city's information and communication technology sector.

Under the agreement, the two sides will co-operate on research projects into ICT's human resources, as well as gather opinions on how to develop the sector's human resources between now and 2020.

Research into how prepared various state agencies and businesses are for IT integration, will be done this year.

They will hold annual events such as seminar on Viet Nam's information and communication technologies, and electronics and communication technology fair, as well as work together to generate business opportunities for local firms. In addition, they will offer short training courses for ICT firms.

Chu Tien Dung, HCA's chairman, said the association will also begin building a database for the industry, to help investors draw out better business strategies.

Dung said enterprises should focus more on developing applications based on new technology like cloud computing, big data and mobility, to catch up with global technology trends.

According to ICT firms, there is a strong demand for software products based on new technologies like cloud computing and mobility. However, a shortage of professional human resources, has prevented domestic firms from meeting big export orders, they said.

They called for closer co-operation between the relevant associations, agencies and businesses, to help develop human resources in the ICT industry.

On the same day, HCA also signed a co-operation agreement with the Viet Nam Electronics Industries Association, the Viet Nam Information Security Association, the HCM City Semi-Conductor Industry Association and the HCM City Young Business People Association, with the aim of sharing information and supporting one another's future development.

Speeding up SOE equitisation

The perfection of legal institutions and mechanisms is one of the prerequisite tasks in order to speed up the equitisation of State-owed enterprises (SOEs).

According to Pham Viet Muon, deputy head of the Steering Committee for Business Renovation and Development, the Government’s Decree No. 99/2012/ND-CP has clarified the rights, responsibilities and obligations of the Government, ministries, agencies, local governments and member councils of State-owned economic groups and corporations.

Under the decree, relevant ministries are responsible for exercising the rights, responsibilities and obligations of the State as the owner of SOEs, particularly State-owned groups and corporations, which includes inspecting and assessing the efficiency of business operations.

Reports show that the implementation of State ownership management has been improved following the issue of the decree, towards ending State agencies’ administrative interference into SOEs’ operation. The management method of State capital in SOEs is also gradually shifted from administrative to business forms.

Between 2011 and 2013, the country equitised 180 SOEs, bringing the number of wholly State-owned businesses down to 949. Of these, 19 were State-owned corporations and 21 had State capital of over VND100 billion.

Among the equitised were the Bank for Foreign Trade of Vietnam (Vietcombank), the Bank for Investment and Development of Vietnam (BIDV), Petrolimex, Vietnam Steel Corporation and Viglacera.

According to the steering committee, after equitisation, the businesses have enjoyed considerable growth and performed their tasks more effectively. The appearance of joint stock companies has increased the economy’s competitiveness and accelerated the restructuring of the stock market.

The equitised corporations have also reorganised business and production activities and reshuffled member companies while merging those which overlap.

Implementing financial restructuring, a number of businesses have increased their charter capital and withdrawn capital from non-core areas.

Despite numerous difficulties in 2013, 18 State-owned groups and corporations recorded total revenues of VND1,184 trillion (US$56.38 billion) and contributed VND191 trillion (US$9.1 billion) to the State budget.

Under the 2011-2015 SOEs restructuring plan, the country will have to complete the equitisation of 531 SOEs by 2015.

To have the remaining 432 businesses equitised between now and 2015, the Ministry of Planning and Investment stressed the need for a determination and unity from central to local levels to ensure the progress of SOEs restructuring.

Dong Nai adopts mechanical engineering strategy

Southern Dong Nai province has approved a mechanical engineering development plan for 2020 with the aim of attracting more than US$2.37 billion in investment capital by 2025.

Provincial Department of Industry and Trade Director Le Van Danh said his province considers mechanical engineering a key industry for socio-economic development and will priotize developing competitive industries, such as producing metal structure, boilers, electric equipment, motive power machines and agricultural machines.

It will focus on improving support industries to increase the localization rate of machinery and equipment and actively engaging in the global chain of value.

Under the plan, solutions and incentive policies will be worked out to attract investment capital into the engineering industry by 2025.

Manufacture has recently experienced rapid development, since the end of 2011 Dong Nai has managed to lure 32 projects in the field.

By June 10, 2013, provincial industrial zones attracted 270 foreign invested projects, of which the engineering industry with US$3.237 billion accounted for 22.2% of total investment capital. Meanwhile, domestic businesses have invested a staggering VND5.682 trillion in 49 engineering projects.

The industrial production of the engineering industry tripled from 2005 and made up more than 20% of the province’s total industrial value with exports fetching US$1.2 billion in 2013.

Surge in Venezuela – Vietnam trade

Despite a modest value, Vietnam’s exports to Venezuela have enjoyed relatively high and consecutive growth.

In 2013, exports rose by 1.06% to US$26.66 million and imports fell by 37.8% to US$1.15 million.

Major exports to Venezuela are machinery, equipment and tools (US$8.65 million), footwear (US$2.8 million), garment (US$2.3 million) and rubber (US$1.6 million) while major imports include materials for garment and footwear, rubber, machinery, equipment and tools.Both countries boast great potential for boosting bilateral cooperation in energy, oil and gas, agriculture, industry and consumer goods production,(electric equipment, electronics, garments and footwear), health care, science and technology.

Vietnam pursues green economy

A green economy forum for sustainable development was held in Hanoi from February 28- March 1 with Vice Chairwoman of the National Assembly (NA) Tong Thi Phong in attendance.

Discussions at the forum helped promote the Government’s policies for the development of a green economy and raise public awareness of the effective and eco-friendly use of natural resources.

Deputy Minister of Natural Resources and Environment Nguyen Linh Ngoc said a green economy is one that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities.

According to the United Nations Environment Programme, “In its simplest expression, a green economy can be thought of as one which is low carbon, resource efficient and socially inclusive.”

Last September, the Government adopted a national strategy on green growth, demonstrating Vietnam’s prioritisation of sustainable development.

The aim of the strategy is to improve the economic development model to dramatically reduce green house gas emissions and form an effective economic structure.

Ngoc said that in order to catch up with the global development trend, it is vital for Vietnam to develop a green economic model.

To do so, he said Vietnam needs to adjust its economic growth strategy and achieve its set targets, including sustainable growth, social progress and equity, improvement in the quality of life and environmental protection.

Most participants at the forum agreed that a green economy will bring long-term benefits to Vietnam, and considered it the best solution for sustainable development and poverty reduction.

They suggested Vietnam pour more investment into several major green economic sectors such as organic agriculture, eco-tourism, recycling and bio-energy.

They highlighted the significance of building and developing sustainable residential and industrial zones as part of Vietnam’s industrialisation and modernisation plan,, helping to ease environmental pollution and conserve natural resources.

As a developing country, Vietnam needs a green economy to narrow the development gap with other countries and become a modern, civilised and sustainable economy, they said.

As part of the forum, a televised exchange among businesses was held to offer a chance for managers, experts, scientists and businessmen to seek measures to boost green economic development and contribute to the sustainable development of the country.

Vietnamese female businesswomen honoured

100 outstanding Vietnamese businesswomen were honoured at a March 1 ceremony for their excellent entrepreneurship and great contributions to promoting social-economic development.

They were presented with the “Yellow Rose” Cup for their accomplishment to sustainable economic development during the 2011 to 2013 period

At the ceremony, Vice National Assembly (NA) Chairwoman Nguyen Thi Kim Ngan congratulated the awardees for their achievements. In light of the current economic difficulties, businesses have made great effort to stand firm, generate more jobs for workers and maintain high growth.

She urged honoured entrepreneurs to improve their management skill to restructure their businesses, and grasp opportunities for rapid and sustainable growth as positive contributions to stronger national development and deeper international integration.

Exports to Australia improve in January

Exports to Australia rose by 4.1% to US$294.47 million in January, reports the Vietnam Customs office.

Major exported products included oil products, electronics, telephone handsets, seafood (mainly shrimp), machinery, equipment, tools, cashew nuts, furniture, timber products and footwear.

The top exported products were crude oil with a value of US$150.14 million (up 55.4%, accounting for more than 50% of the total), followed by telephone handsets and components at US$26.78 million (down 6.2%) and seafood with US$19.58 million (up 31.5%).

Products with high export growth included garments (up 47.7%), vegetables and fruits (50.6%), chemical products (22.9%), wood and timber products (15.9%) and iron and steel (95.2%).

Despite huge potential, exports to Australia are still relatively modest.

 A free trade agreement between Australia and ASEAN, including Vietnam, will facilitate Vietnam’s exports to the market in the future.

Wood and timber exports nudge up in February

Wood and timber product exports rose 8.4% to US$796 million in the first two months of the year, reports the Ministry of Agriculture and Rural Development (MARD).

The MARD reports the US remains Vietnam’s biggest wood and timber products consumer with US$186.67 million in January, accounting for 30% of the total value.

Major exported products to the US market are chairs, fir beds, tables and wardrobes.

China came second with imported value of US$90.56 million in January, skyrocketing 60.3% compared to the same period last year.

Japan ranked third with imports of US$67.76 million, relatively unchanged when compared to the prior year.

Cumulative wood and timber exports in 2013 reached more than US$5.37 billion, a year-on-year increase of 15.2%.

The Vietnam Timber and Forest Product Association (VIFORES) says that Vietnam aims to export a total US$6-6.2 billion of wood and timber products exports this year.

Vietnam, China, Malaysia and Indonesia are currently the largest exporters to the EU.

Local exporters eye French markets

The Ministry of Industry and Trade has set a target of US$2.45 billion in export to France for this year in view of gloomy economic conditions, and encouraged businesses to focus on consumer goods tailored to the tastes of French low and middle markets.

According to the ministry’s Import-Export Department, French markets remain fertile lands for Vietnamese products, which account for a mere two percent of the markets, excluding footwear, which claims nearly 10 percent.

In addition, Vietnam is set to benefit from France’s policy to increase trade promotion activities with the Association of Southeast Asian Nations (ASEAN).

The French Foreign Trade Ministry has singled out Southeast Asia as one of the target markets for its new overseas trade strategy.

Statistics from the Vietnam Trade Office in France showed that Vietnam’s exports to France hit 2.7 billion EUR in 2012, up nearly 40 percent year on year. During the year, Vietnam also recorded a 2.1 billion EUR trade surplus with France , a year-on-year increase of over 77 percent.

In 2013, Vietnam’s exports to France stood at 2.79 billion EUR, according to statistics from the French customs authority.

Vietnamese goods, especially household articles, garments and footwear, enjoy increasing popularity in France thanks to their quality and reasonable prices, commercial experts commented.

This year, Vietnam is among 10 developing countries to enjoy a tax rate reduction from 12-14 percent to 3-4 percent for footwear commodities shipped to the EU market.

In order to make inroads into France – a gateway to other EU nations, Vietnamese businesses are recommended to build trust and prove their cooperation capacity and quality of products for their potential partners.

They are also advised to avoid using such free email services as yahoo, hotmail and gmail in business transactions.

Seafood exports surge 23.5% in two months

Seafood export earnings hit US$335 million in February, bringing its two-month export value to US$919 million, a year on year rise of 23.5%.

The Ministry of Agriculture and Rural Development (MARD) reports the US remains Vietnam’s biggest seafood consumer, accounting for 26.67% of the total value.

In January alone, the US imported US$155.6 million worth of Vietnamese seafood, a staggering increase of 89% compared to the same period last year.

Exports to Japan, the Republic of Korea and Australia spiked up by 17.85%, 29.27% and 31.45%, respectively, while exports to China and Thailand tumbled by 37.79% and 7%.

Vietnam imported US$75 million worth of seafood in February, bringing the total import value in the first two months to US$175 million, double last year’s figure.

Its two chief suppliers are India (accounting for 47.9% of total import value) and Taiwan (6%).

Delta sees significant tra fish slump

The tra fish farming area in the Cuu Long (Mekong) Delta and output fell considerably in February from the same period last year, according to the Directorate of Fisheries.

In Can Tho City, for instance, the area is down 8.57 per cent to 480ha; in Vinh Long Province, it is down 10 per cent to 277ha; and in Dong Thap Province, it is down 4.7 per cent to 989ha. Their output respectively fell by 5.99 per cent, 11.5 per cent, and 0.9 per cent.

The Directorate of Fisheries blamed it on the falling prices of tra, and high cost of fish feed and medicines, and the deterioration in the quality of tra breed stock – and thus the quality of fish farmed.

The price of the fish has fallen to VND22,500-23,000 per kilogramme while the production cost is VND23,000-24,000, the Vinh Long Department of Agriculture and Rural Development said.

Many farmers in Can Tho have switched to raising other kinds of fish like snakehead and featherback.

The tra fish farming area has plunged to 4,679ha now from 5,556ha last year. More than 90 per cent of the country's tra output is exported.

PM asks central bank to boost credit growth

Prime Minister Nguyen Tan Dung has directed the State Bank of Viet Nam (SBV) to facilitate credit growth, quickly inject capital into the economy and improve enterprises' access to capital.

The PM was speaking at the monthly meeting of cabinet, which he chaired yesterday.

At the meeting, SBV Governor Nguyen Van Binh revealed that a total of US$4 billion had been added to Viet Nam's foreign exchange reserve.

According to Binh, this was due to a stable foreign exchange rate and the fact that the state bank released VND150 trillion ($7.1 billion) in January to ensure liquidity.

He added that Viet Nam would closely co-ordinate fiscal and monetary policies to keep foreign exchange rates stable and interest rates for loans at reasonable level.

Also, at the meeting, PM Dung urged all ministries, sectors and localities to speed up the restructuring of State-owned enterprises.

He said it was crucial to focus on stepping up business privatisation, while strengthening management and supervision over the State-owned sector.

He also asked for quicker disbursement in capital for construction sourced by bonds, the budget and official development assistance (ODA) while ensuring construction quality.

According to a report by the Ministry of Planning and Investment, in the first two months of 2014, the country recorded a trade surplus with surges in exports as well as industrial and agricultural production values.

The disbursement of ODA and FDI capital continues to rise compared to the same period last year, while the service sector also reports good results. The report added that the number of foreign tourists in Viet Nam also increased sharply.

Regarding specific measures to solve difficulties in business and production, many cabinet members proposed that the Government prioritise credit for the agricultural sector and rural areas, while intensifying investment promotion and expanding the export market, especially for key agricultural products.

According to Minister of Agriculture and Rural Development, Cao Duc Phat, ministries and authorised agencies should work more closely with the ministry to seek and broaden export markets for major agricultural products, especially rice.

He also called for ministries, sectors and localities to strengthen co-ordination in the inspection and quarantine of poultry, strictly supervising the cross-border trade of livestock and fowls, and minimising the spread of epidemics across borders, especially in the north.

Meanwhile, Deputy Prime Ministers Nguyen Xuan Phuc and Hoang Trung Hai underscored the necessary improvement of the domestic business environment and the effective implementation of policies to attract foreign investment.

They asked the Ministry of Planning and Investment to coordinate with other ministries to find measures to assist new enterprises, while eradicating obstacles for BOT (build-operate-transfer) projects.

Mentioning ways to pick up business, Deputy Prime Minister Vu Van Ninh said the promotion of production should be closely attached with the search for and forecast of markets.

ACV plans HCM City airport expansion

The Airports Corporation of Viet Nam (ACV) has proposed expansion of the Tan Son Nhat international airport in HCM City to meet increased passenger demand.

Airports Corporation executives met with the Minister of Transport, Dinh La Thang, on Wednesday.

Last year, the airport serviced nearly 20 million passengers, with a maximum of 550 flights per day, Nguyen Nguyen Hung, chairman of ACV's board, told the minister.

More daily flights are needed to service demand, Hung said.

He also noted that the proposed Long Thanh International Airport, which was expected to reduce demand at Tan Son Nhat, was still under consideration.

Tan Son Nhat has 40 aircraft parking spots, but it needs 60-65 spots in order to service 26 million passengers a year, according to Hung.

If the remaining land and part of the land fund for national defence were used, an additional 21 spots could be built, according to ACV.

Under the proposed plan, Tan Son Nhat's international terminal will be expanded to make space for an additional 40 check-in desks, while the domestic terminal will be extended by 3,900 sq metres.

Minister Thang said the ACV should evaluate the entire plan and develop an overall strategy for the airport.

Property market shows positive signs

The local property market has shown signs this year that property development will continue, after a weak 2013, according to experts.

Early this week, Novaland Group said it will invest VND3.7 trillion (US$176.2 million) to purchase three building projects, including commercial and residential properties in HCM City, as it expects the local property market to improve in the next few months, reported the Thoi bao Kinh te Viet Nam (VnEconomy) newspaper.

Phan Thanh Huy, Novaland's general director, stated that the group decided to buy the three projects as they fit into its development strategy.

The local property market is entering a new development period and there is demand for property products, Huy noted.

It is now a good time for enterprises to complete projects for consumers who need them, he remarked.

Many experts have said this year that there is demand for apartments in urban areas, including provinces and cities, in the local property market, so domestic investors are expected to focus on selling and buying apartment projects.

Tran Duc Dien, director of Maxland property's trading floor, told Nguoi Dong Hanh online newspaper that the local property market has been recovering since the last quarter of 2013.

Maxland's transactions increased 35 per cent in the last quarter of 2013, as compared to the same period in 2012, he said. Customers have chosen products that are cheaper, while demand for luxury properties has begun to increase.

However, economic expert Alan Phan told BizLive online newspaper that the property market this year will not see significant changes because the average income of the Vietnamese people remains low, while prices of properties, according to investors, are not expected to decline further.

The market will improve dramatically, however, when selling prices of properties approach the people's average incomes, he remarked.

This year, the property market will start to recover, he said, and reach its peak in 2015-16.

Nguyen Duy Minh, general director of Hung Thinh Property Company, noted that this year investors who have capital and a reputation will be able to complete their unfinished property projects.

S Africa seeks VN investment

South Africa has sought to partner with the central province of Binh Dinh in the fields of wood industry and tourism.

The South African Ambassador to Viet Nam Kgomotso Ruth Magau expressed the desire during a workshop held in the province on Thursday.

He pointed out that Viet Nam is now one of South Africa's important economic partners and the country is willing to create the best conditions for investors from Viet Nam.

First Secretary of the Republic of South Africa MC Van Der Westhuizen said the wood industry was a rising sector in his country, where raw materials were abundant.

Meanwhile, Binh Dinh is one of Viet Nam's three largest wood-production localities, generating US$2.3 billion in export turnover since 2010. The locality exports its wooden products to 70 countries and territories across the world.

South Africa has called for investments in farm produce processing, automotive and ancillary industries, chemicals and plastics and electronics.

The country has also sought investments in sectors such as IT and communications, metallurgy, transportation and garments and textiles, as well as footwear and tourism.

In 2013, Viet Nam's exports to South Africa reached $1.061 billion and the country imported $155 million worth of goods from the latter.

SBV to issue new bad debt rules

The State Bank of Viet Nam (SBV) will issue new regulations with some revisions of Circular 02 on bad-debt classifications and risk provisions this April, for execution beginning in June.

This was reported by the online news portal VnExpress, which quoted a source from the central bank.

Circular 02, which regulates asset classifications, the levels and methods of risk provisioning and the use of provisions to handle risks by credit institutions and branches of foreign banks, was initially expected to come into effect on June 1, 2013, in a bid for stricter regulations of bad debts.

After discussions, the implementation of the circular was postponed by one year to June 1, 2014. The delay was aimed at enabling businesses to access loans and boost credit growth in the context of the continuing economic hardships and providing credit institutions more time to prepare a roadmap and the necessary conditions to fully apply the provisions of this circular.

However, concerns still persist among banks about the implication of the debt classifications under the regulations. Many banks say that the new regulations will lead to a surge in bad debts and a collapse of big businesses, which could have a potential domino effect on the financial system.

According to industry insiders, the amended regulations of Circular 02, which will not allow a bad debt to affect the classification of other loans given to the same borrower by other banks, will provide some relief.

The circular initially stipulated that a "substandard" to "bad" loan with one bank would classify all other loans of that borrower into the same group.

In Viet Nam, the assessment of bank loans classifies them into five groups: current, special mention, substandard, doubtful and bad.

The revision would also postpone an initial requirement, wherein if central bank inspectors send banks a warning note for any loan they find is violating regulations, it will be classified as substandard. The violation can be a relatively minor one, such as the lack of appropriate documents or a customers' vague purpose for borrowing.

According to the central bank, the bad debt ratio of the banking system was 3.63 per cent last December. The government aims to keep the bad debt ratio at 3-4 per cent of total lending by the end of 2015.

Viet Nam has one of Asia's highest ratios of non-performing loans, which has troubled the economy and led to a tightening of the credit policy required to boost consumer spending and keep businesses afloat.

Southern province revokes licences for 8 projects

The southern coastal province of Ba Ria-Vung Tau has withdrawn the investment licences of eight projects, worth US$71.5 million, since the start of this year.

Investors in these projects had been urged to start construction, but they had failed to comply.

According to the provincial Department of Planning and Investment, local authorities will hold meetings with investors to enquire about the difficulties they are facing as well as their expectations, so the authorities can take measures to support them.

Based on the inquiry, the province will cancel licences for projects that their investors are unable to implement.

Ba Ria-Vung Tau Province has granted investment licences to seven new local projects so far this year. Its target is to give permission to 17 domestic projects to be constructed in 2014.

In 2013, the province attracted 13 foreign-invested projects worth $217 million and 29 others by local businesses with investments valued at VND14 trillion ($666.6 million).

VietJetAir launches HCM City-Da Lat route

VietJet Air has launched flights between HCM City and the Central Highlands resort town of Da Lat in Lam Dong Province, its 22nd route so far.

The HCM City-Da Lat air-link operates seven weekly round trips with a total of 2,520 seats.

To mark the occasion, the airline will put on sale 30,000 discounted tickets on all its routes for just VND22,000, or US$1, for three days from March 5. The offer will apply for flights scheduled between March 22 and May 20, excluding national holidays.

Dong Nai attracts $331m in foreign investment

The southern province of Dong Nai has attracted US$331 million in foreign direct investment (FDI) to date this year.

This was stated by the director of the provincial Department of Planning and Investment Bo Ngoc Thu.

Of the total, approximately $86 million came from nine newly licensed projects with the remainder coming from nine others with increasing levels of capital, Thu noted.

The latest additions have increased the number of licensed projects in the locality to roughly 1,400, worth a total of $24.7 billion.

Japan is now Dong Nai's leading source of FDI, with 167 projects and investments valued at $3.1 billion.

Lotte Viet Nam plans international push

To further expand in Viet Nam in the future, the Republic of Korea's Lotte retail group plans to develop Lotte Viet Nam into one of its leading branches abroad.

Visiting the country and exploring investment opportunities in the northern province of Ha Nam is part of the plan, said Director General of Lotte Centre Ha Noi Lee Jong Kook during his working session with local authorities on Thursday.

The company's representative praised the province's socio-economic progress in the past few years and its policies to attract foreign investments.

He also emphasised that the local transport system is an advantage, which will facilitate operations by overseas investors, including Lotte. He added that Lotte hoped to contribute to the area's development.

Ha Noi to expand My Dinh Bus Station

The municipal People's Committee has decided to invest over VND51 billion (US$2.43 milion) this year in building and expanding My Dinh Bus Station in the west of Ha Noi.

The total investment would include VND25 billion ($1.19 billion) for construction, while the rest of the funds would be spent on land clearance, rehabilitation and other costs. Covering an area of 13,000 square metres, the station would comprise services, technical infrastructure, parking area, water drainage, trees and lighting system.

The Viet Nam Transport Corporation is the project's investor.

Minister orders review of property market

The Ministry of Construction has asked localities nationwide to review real estate projects, housing development projects and urban areas and send the report to the ministry.

The report would be submitted to Prime Minister Nguyen Tan Dung in March.

Statistics from the State Bank of Viet Nam showed that by the end of last month, banks had committed to give loans of more than VND2.3 trillion ($109.5 million) to 2,246 home buyers. Banks disbursed loans of VND1.06 trillion ($51 million) to 2,218 borrowers, an increase of VND200 billion over last January.

The ministry said the production and business value at its enterprises was estimated at VND10.4 trillion ($495.24 million), accounting for 7.4 per cent of the whole year's target and a reduction of 9.5 per cent over the same period last year. The reduction was due to the long Tet holiday.

Vinamilk shuts down its real estate company

The Viet Nam Dairy Product Joint-Stock Company (Vinamilk) has announced the closure of its real estate and investment company.

This was disclosed in a letter sent to the State Securities Commission and the HCM City Stock Exchange on Monday by Vinamilk's general director Mai Kieu Lien.

Lien said the VND160 billion (US$7.6million) real estate company International Real Estate Investment One-Member Co Ltd was established as a Vinamilk subsidiary for real estate businesses such as those involved in the brokerage and leasing of real estate and warehouses in HCM City, in 2006.

Property developer has new foreign partners

Affordable property developer Nam Long, which is listed at HOSE as NLG, on Thursday handed over share certificates to three new foreign strategic partners, who acquired 15.5 million shares from its recent private placement.

The three international investment institutions, World Bank's affiliate International Finance Corporation (IFC), Bridger Capital and Probus Asia, who respectively acquired 7.5 million, six million and two million shares at the price of VND18,000 (US$0.86) compared to the par price of VND10,000 ($0.48).

Their investment helps increase NLG's foreign investment state to 43.6 per cent.

The previous foreign investors include Aseana Properties Limited, Nam Viet (a fund of Goldman Sachs Group) and Viet Nam Azalea Fund managed by Mekong Capital.

Also receiving share certificates the same day were three local investment organisations, the securities firm HSC, Huong Viet and Tan Hiep.

These six new investors purchasing 25.5 million shares helped the property developer to raise VND459 billion ($21.85 million).

General director Nguyen Vinh Tran said at the event that his company's legal capital has increased from VND955 billion ($45.4 million) to VND1,210 billion ($57.6 million).

The money will be added to its working capital to support its future affordable apartment projects.

The company plans sale offers of 2,000 units this year, twice the number it sold in 2013.

50 million shares for sale in Hancorp IPO

The Ha Noi Construction Corporation (Hancorp) will sell nearly 50 million shares in the corporation's initial public offering (IPO) this year.

Hancorp's chairman Nghiem Sy Minh said that each share would be worth VND10,200 (US$0.48).

At present, Hancorp has invested in 14 associated companies with a total investment of VND1.182 trillion ($56.285 million).

According to the equitisation plan of Hancorp which was approved by the Prime Minister in the Decision 28/QD-TTg in January 2014, the IPO will help Hancorp increase its charter capital from VND1.2 trillion ($57.1 million), to VND1.9 trillion ($90.4 m).

Working mainly in construction and as contractor of infrastructure, industrial zones, urban areas and housing projects, Hancorp is known for the construction of the Daewoo Hotel, National Conference Centre, Keangnam and Royal City.

Hancorp, with 33 member companies working in the construction industry across the country, earned VND9 trillion ($428.5 million), as revenue in the last three years. Its total assets are worth VND16 trillion ($761.9million).

Hancorp expects to gain VND8 trillion ($380.9 million), in revenue and VND1 trillion ($47.6 million) in profits in the next five years, said Minh.

Vinamotor plans IPO launch in March

The Viet Nam Motors Industry Corporation (Vinamotor) will launch its initial public offering (IPO) at the Ha Noi Stock Exchange on March 27 this year.

The corporation will auction 51 million shares, which are equal to 51 per cent of the charter capital and are worth VND10,000, or $0.47, each.

Vinamotor was established in 1964. Its main products include coaches, buses, trucks and automobile parts. Its equitisation plan, which has a charter capital of VND1 trillion ($47.6 million), has been approved by the Prime Minister.

Dragon Capital’s bond funds merged

Fund manager Dragon Capital has merged VDeF-A and VDeF-B under the Vietnam Debt Fund SPC (VDeF), forming a general portfolio to improve investment and risk management.

The merged fund now has total asset of US$38.5 million. Converting all bonds in the VDeF-A into the VDeF-B was approved at Dragon Capital’s shareholder meeting in Hong Kong last month.

Established in 2007, VDeF is an open-ended Cayman Island-registered fund that seeks sustainable profits in the local debt market. It has been listed on the Ireland stock market in Dublin.

The VDeF-A fund concentrates on government debts and debts of State-owned enterprises. Meanwhile, the VDeF-B has a broader investment strategy with corporate bonds included.

VDeF has made strong growth over the past three years with VDeF-A and VDeF-B rising 9.25% and 10.36% respectively. With the results, the two funds took the lead in the Emerging Market Corporate Debt report announced by the analytical service provider Camradata recently.

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