Local bank seeks firm niche in Cambodia

The Saigon-Hanoi Commercial Joint Stock Bank (SHB) has recently opened its second foreign branch in Stung Sen, Cambodia’s Kampong Thom province, bringing its branches abroad to three, according to Lao Dong newspaper.

Kamphong Thom province sees the presence of a majority of Vietnamese investors in rubber tree planting in Cambodia.

SHB has been awarded the Best Cross-border Core Banking Project Award for Vietnam in 2012 by the Asian Banker magazine.

Vietnam is now one of the leading foreign investors in Cambodia, with its businesses operating in the fields of telecommunications, banking, rubber tree planting and farm product processing.

In 2012, the two countries’ two-way trade fetched up 3.3 billion USD. The figure for the entire 2013 is estimated at 3.5 billion USD.

SeABank to raise charter capital

Governor of the State Bank of Viet Nam (SBV) Nguyen Van Binh has permitted SeABank to raise its charter capital to VND5.46 trillion (US$260 million) from VND5.33 trillion ($254 million).

This increase was allowed as part of the charter capital raising plan approved at this year's SeaBank shareholder meeting.

Raising charter capital is meant to enhance the finance capacity of a bank and create incentives to expand its network and diversify banking services, while raising its competitiveness to meet increasing demands from customers. Currently, France's top-tier retail bank, Societe Generale, holds a 20 per cent stake of SeABank, with the remainder being held by domestic shareholders.

$100 mln steel plant begins production

The Maruichi Sun Steel Joint-Stock Company opened a new steel factory on a 30-ha land lot in the Di An District of southern Binh Duong Province yesterday.

This CGL&CCL plant has a total investment of US$100 million, with the dominant stake owned by the Japanese Maruichi Group.

The new factory has a monthly production capacity of 32,000 tonnes of products, including aluminum and zinc-coated steel coil, hot-dip zinc-coated steel coil, galvanised hot-dip aluminium and zinc.

Some 70 per cent of the output would be exported, and the remaining 30 per cent would be sold in the local market. The company was established in 1996 and its first plant began operating in 1997 in Binh Duong with an investment of $130 million, providing 600 jobs. The first factory produces steel pipes, steel wire, steel sheets, galvanized steel tubes, and stainless steel tubes.

Its products are sold in Viet Nam and demanding markets including Canada, the US and Australia.

Danish, Vietnamese firms talk social responsibility

Danish businesses exchanged their experience in social responsibility at a seminar in Ho Chi Minh City on December 3.

The event, held by the Danish Embassy in Vietnam in conjunction with the Danish Investment Fund for Developing Countries (IFU), drew the participation of more than 100 experts and representatives from Vietnamese and Danish enterprises.

Experts said consumers in developed countries are well aware of corporate social responsibility, forcing businesses to successfully fulfil their role.

An IFU representative held that social responsibility lies not only with charitable activities but belongs right in their business strategies.

Danish Ambassador John Nielsen said most Danish businesses that have created good jobs and ensured stable lives for their staff are those with effective operations and a high competitive edge.

He called on Danish businesses to share their experience in this field while suggesting Vietnamese businesses pay attention to job generation, anti-corruption, health and work conditions of their labourers and environmental protection.

Participants at the event also touched upon ethics in business and personnel strategies.

On this occasion, the Danish Embassy launched the Red Carpet Programme that provides fast-track business visas for businesses who are partners of Danish companies.

Can Tho leads Mekong region in per capita income

The Mekong Delta city of Can Tho is leading regional localities in per capita income , with 62.9 million VND (2,989 USD), 357 USD above last year’s level.

The result shows the city has successfully met its economic targets, bringing its total GDP in the first eleven months of this year to 62.6 trillion VND (2.94 billion USD), up 11.6 percent over the same period last year. Industrial and construction areas account for 90 percent of the GDP.

Along with investing continuously in modern machinery, Can Tho city has worked to reduce production costs and lower the price of products, making an industrial production value of 87 trillion VND (about 4 billion USD).

In addition, the city also focused on improving the competitiveness of exports, while promoting international economic integration, bringing its export turnover in 2013 to 1.5 billion USD and service turnover to 62 trillion VND (2.91 billion USD).

During the year, Can Tho has helped businesses operating in the locality integrate into international markets, by training human resources, promoting foreign trade relations, proposing strategies of production and business in a new market, and issuing preferential policies on capital.

The city also poured money in building and upgrading its infrastructure system, especially roads and ports; health, culture and education facilities and new residential and resettlement areas. It also created jobs and provided vocational training courses for ten thousands of labourers.

For the agricultural sector, Can Tho sped up the structure change of farm production to create high-quality farm products through the sustainable polyculture model, while applying advanced technologies in producing, preserving and processing.

It also promoted the development of biotechnology by creating new varieties of plant that can meet the huge demand.-

Mining policies need to go deeper

The Government Portal yesterday held an on-line forum to review the implementation of policies governing the mining industry of Viet Nam.

Participating were Nguyen Linh Ngoc, Deputy Minister of Natural Resources and Environment, and Nguyen Manh Quan, director general of the Heavy Industry Department of the Ministry of Industry and Trade.

Referring to the low ranking position of Viet Nam's mineral resource management index, released by the US Revenue Watch Institute – in which the country placed 43 out of the 58 countries covered in the survey, Deputy Minister Ngoc said such a conclusion didn't reflect the whole picture of Viet Nam's mineral industry.

"It only makes assessment on the group of fossil minerals - mainly oil and gas." Ngoc said. "We have to carefully review the current status of our work on mineral resource management."

Responding to a comment that the work of mineral resource planning contains three activities - exploration, exploitation and using a format called "three in one", which has a great potential of risk, director Quan conceded that this was the weakness in the nation's mineral industry.

"Most of the planning done by either central government agencies or local agencies have failed to come up with a long vision," Quan said.

"Basic survey activities are the weakest in the chain due to budget constraints.

The State budget is able to cover just about 40 per cent of the work. That's why many of the surveys have failed to give a correct forecast of the reserve of each mineral."

Regarding the tendering process of the minerals under the 2010 Mineral Law, Ngoc agreed that there remained much work to do to turn the law into reality.

He said though the Government's Decree 22 on mineral bidding for exploitation was issued in March 2012, by now it had not been implemented due to a lack of guiding documents.

He blamed the slow implementation of the law, including decree 22 and other legal documents, on poor coordination between government agencies, particularly the Ministry of Natural Resources and Environment and the Provincial/City People's Committees.

Asked why more than half of the 957 permits for mineral exploitation issued by local government in two years (2011-2012) were not in line with government policies or law, Ngoc attributed this to poor awareness about the legal documents among local government officials and their poor professional skills. He also blamed the lack of responsibility on senior officials who are assigned to the job from the central and provincial governments.

Under sections of Article 82 of the 2010 Mineral Law, the Provincial People's Committee is allowed to grant permits to small mines which are defined by the Ministry of Natural Resources and Environment (MONRE). However, in practice some local governments divided large mines into small sections so they could grant exploitation permits, according to Ngoc.

"We have to take action to halt such illegal activities immediately" Ngoc said.

To overcome "loop holes" in mineral exploitation, Quan proposed that the State levy taxes on the approved mineral reserves of the mines, not on the actual mineral exploitation, as presently done.

In his conclusion, Ngoc promised that his ministry would do its best to ensure that transparency and efficiency will be applied in the exploitation of mineral resources.

BIDV offers infrastructure funds

The Bank for Investment and Development (BIDV) will provide a VND300 billion ($14.3 million) loan for developing infrastructure in Phuoc Ly in Lien Chieu District, north of Da Nang City.

The fund will help boost the sale of land plots in the 47.9-ha urban area, as well as assist the stagnated property market in the central city.

According to the urban management board, 250 plots were sold in the first stage last year, while the second stage will this year offer lots at VND348 million ($16,600).

Sun Group offers social housing

The Sun Group has launched its first social housing project, the Sun Home, with total investment of VND150 billion (US$7.1 million).

Funding also included VND102 billion ($4.94 million) from the Government's VND30 trillion ($1.5 billion) preferential credit package to low income buyers in the central city.

The project will offer sale prices from VND6.5 million to VND7 million per square metre for apartments with areas between 30 and 62 sq.m from 2013-14.

The 450-apartment project, which was built in an area of 7,000sq.m in Son Tra District, will provide 450 apartments for local residents.

Last year, the city and ministry of construction agreed to a housing programme for the 2013-17 period, providing 1.4 million sq.m of apartments for workers, students and low-income consumers in the city. The city still has over 15,000 people, of which 7,000 are from poor households, who need to purchase social houses at priority prices.

Investors demand faster SOE reforms

The business community yesterday called for Viet Nam to speed up reforms of state-owned enterprises, as the country enters a new phase of economic reforms.

They were attending the Viet Nam Business Forum (VBF), the bi-annual dialogue between the private sector and the government on improving Viet Nam's business environment.

Taking the floor, Minister of Planning and Investment Bui Quang Vinh reaffirmed the Government's willingness to listen to the private sector's concerns about economic reforms.

"We want to know where the difficulties lie in improving the investment climate and increasing the competitiveness of our economy," Vinh said.

At the forum, most representatives from various business communities felt that stalling the reforms of state-owned enterprises (SOEs) could cause distrust, especially among foreign investors.

Steven Winkelman, chairman of the American Chamber of Commerce in Viet Nam, said the new phase of economic reforms call for encouraging and protecting private enterprises, committing to global best practices and restoring investor confidence – especially in the context of the Trans-Pacific Partnership (TPP) negotiations.

"Our members are hopeful that TPP will tear down trade barriers in areas such as government procurement and set standards for workers' rights, environmental protection and intellectual property rights," he said.

"TPP may also help with the difficult task of reforming Viet Nam's state-owned enterprises."

According to Dominic Scriven, head of the Capital Marketing working group under VBF, the equitisation process of state-owned enterprises is even more urgent now, as the state coffers remain limited despite the large need for public spending and investment.

As a result, the government has recently extended the state budget over-expenditure cap from 4.8 per cent of GDP to 5.3 per cent.

According to Scriven, the gross capitalised value of the public shareholding in 11 companies among the 20 largest-listed companies on the Ho Chi Minh City Stock Exchange is US$14.8 billion, or 38 per cent of the value of the entire HCM City Stock Exchange.

"Selling parts of these companies will easily compensate for the state budget deficit in the current difficult time, instead of cutting the minimum wage or resorting to other extreme measures," Scriven said.

The Capital Market working group under VBF also suggested that the first step would be cutting public equity in listed companies down to between 35 per cent and below 50 per cent and accelerating the "corporatisation" process in wholly state-owned enterprises.

Workers test copper sheet quality at the Lao Cai Copper Refinery Company.—VNA/VNS Photo Trong Dat

Tran Anh Duc, representative of the Investment and Trade Group, said the equitisation speed has been reduced over the past years, with more than 800 enterprises equitised in 2004-05, compared to 13 in 2012.

"This fact has raised a big question about the speed of the equitisation progress in the coming years," Duc said.

Seck Yee Chung, vice-president of Singapore Business Group in Viet Nam, said domestic debt incurred by state-owned enterprises amount to about VND403 trillion (about $19.2 billion), and called for non-commercial SOEs to divest from non-core businesses by equitisation to ensure that they can effectively fulfill their social missions.

On concerns of the business community, Deputy Finance Minister Vu Thi Mai said the Ministry was working on easing restrictions on how non-commercial SOEs could divest from non-core businesses.

According to Mai, the Ministry would also consider increasing foreign ownership in Vietnamese listed enterprises, which are currently capped at 49 per cent, except for securities firms.

"We therefore welcome the move from the Ministry of Finance to put forward proposals to raise this limit," said Preben Hjortlund, chairman of the European Chamber of Commerce in Viet Nam.

Hjortlund also added that the Free Trade Agreement between the EU and Viet Nam would likely be concluded at the end of 2014.

Regarding bad debts, Deputy Governor of the State Bank of Viet Nam Le Minh Hung announced that bad debts currently were listed at VND142.3 trillion ($6.78 billion), based on banks' reports.

He added that the State Bank would work with the Finance Ministry on building a legal framework to monitor the management of bad debts and the market.

Hai Phong targets $1.2b FDI in 2014

The northern port city of Hai Phong hopes to attract US$1.2 billion in foreign direct investment (FDI) in 2014, according to the municipal Economic Zone Management Board.

To reach the goal, Hai Phong will continue to streamline administrative procedures, perfect the infrastructure of its economic and industrial zones, renovate investment promotion activities and improve the quality of personnel resources, the board said.

The city will also improve public administration services and care for the need of businesses operating in industrial parks, thus advertising the province's investment environment, it said.

In recent years, Hai Phong has become one of the country's leading drawcards for foreign-invested projects. In the past 11 months, it has attracted more than $2.47 billion in FDI, bringing the total pumped into the locality to $8.27 billion.

The scale of foreign-invested projects has improved significantly in past years, head of the management board Pham Thuyen said.

He added that it has attracted large-scale projects from international giants in the United States, South Korea and Japan.

Among them, most significant was a $1.5 billion manufacturing facility financed by the South Korean LG Electronics Group in Trang Due Industrial Zone, he said.

VN urged to attract Japanese investors

A surge of foreign direct investment (FDI) inflow from Japan brought business opportunities for Viet Nam, but improving services for the investors remained a challenge.

This is the opinion voiced by Phan Duc Tu, general director of the Bank for Investment and Development of Viet Nam (BIDV), at a conference in Ha Noi yesterday.

Japan is the largest investor and ODA provider in Viet Nam, with more than 2,100 projects capitalised at US$34.5 billion.

In the first 11 months of the year, new and additional investment from Japan amounted to $5.6 billion, accounting for 27.3 per cent of the total.

Bilateral trade turnover between the two countries was estimated to reach $29 billion this year.

Do Nhat Hoang, head of the Ministry of Planning and Investment's Foreign Investment Agency (FIA), said that Japanese investors concentrated on Viet Nam's processing and manufacturing industry, their funds accounting for 84 per cent of the industry's total, followed by real estate trading and construction.

Under an industrialisation strategy to 2020 with a vision to 2030, Viet Nam will focus on six prioritised industries for co-operation with Japan: electricity, agricultural machines, agro and fisheries processing, shipbuilding, environment and energy saving, automobile manufacturing and spare parts.

By working with Japanese investors, Vietnamese firms hope to bolster the value and competitiveness of their products.

Hoang said Viet Nam had taken measures to improve its business climate, such as continuing to implement joint initiatives with Japan and improving models designed to support Japanese investors such as the Japan desk, Aichi support desk and Saitama desk.

Further co-operation among banks and businesses would attract more Japanese investment, he added.

Viet Nam has attracted more FDI from Japan than many other ASEAN countries, but competition from regional neighbours means the nation must improve its business environment and related policies, according to Hoang.

The ministry plans to ask the Government to help Viet Nam develop a support industry and ensure that foreign investors enjoy preferential treatment.

BIDV, which was co-organising the conference with Shinkin Central Bank (SCB) ,was one of the first banks in the country to actively seek Japanese FDI. The bank promoted co-operation with the SCB, one of the six largest banks in Japan, to provide services for Japanese investors in Viet Nam.

It also signed a memorandum of understanding with the Japanese Bank for International Co-operation (JBIC) to establish support mechanisms for small and medium-sized Japanese enterprises investing in Viet Nam.

VN strives to attract more industrial zone investment

Viet Nam should accelerate investment promotions to attract more advanced technology and environmentally friendly projects as support industries to its industrial zones (IZs) and economic zones (EZs), said Deputy Minister of Planning and Investment Nguyen Van Trung.

During a conference in Ha Noi late last week, Trung emphasised the importance of creating a favourable investment climate to improve investor confidence.

Upgrading the industrial infrastructure and planning to train human resources to meet investors' demands should also be included, he said.

Head of the ministry's Development Strategy Institute Bui Tat Thang agreed that speeding up investment promotions was necessary.

He suggested that localities should take the initiative to organise trade promotions at a regional level.

Over the past two decades, IZs and EZs had made effective contribution to the country's economic growth, the ministry said.

The country is now home to 289 IZs and 15 coastal EZs, which account for 35 per cent, or over US$80 billion, of the nation's yearly import-export turnover. These zones also draw about 70 per cent of the total foreign investment flow into the country, and create over 2 million local jobs.

Statistics from the ministry's EZ Management Department revealed that as of October, these zones had attracted above 7,400 foreign-invested projects, with capital totalling $69.2 billion.

In the past 10 months alone, $9.9 billion in FDI has been pumped into the zones, making up 70 per cent of total FDI registered in Viet Nam during the period.

Despite these achievements, problems in IZs and EZs including a lack of infrastructure and accommodation for workers still hindered their development throughout the country, economists said, adding that their investment was also being affected by the global economic downturn.

Firms show distaste for local salt

Local enterprises have asked the State to give them quotas on importing industrial salt for chemical and healthcare sectors while the local raw salt inventory remains high.

Vietnamese industrial salt has a higher price than imported salt, even when transport fees and duties are included. For this reason firms have imported salt to save money, said Pham Tat Thang, a trade expert.

The State should offer support by giving loans and technological support to salt farmers in order to enable the local salt industry to develop and meet local as well as export demands, he said.

He added that the State should have policies to encourage local firms to purchase all salt from local farmers and enterprises where possible.

The Ministry of Industry and Trade has given quotas on importing industrial salt to three local enterprises for manufacturing and production in the chemical and healthcare sectors.

The quota was 20,000 tonnes of industrial salt for the South Chemical Ltd Company, 10,000 tonnes for Viet Tri Chemical Joint Stock Company and 21,000 tonnes for Vedan Vietnam Ltd Company.

The ministry said the refined industrial salt it permitted the local enterprises to import is the result of a deficit in the local supply.

Meanwhile, the Ministry of Agriculture and Rural Development (MARD) said by the end of October, the national raw salt inventory from farmers and local enterprises stood at 118,146 tonnes.

The ministry also said many foreign food firms in Japan, the Republic of Korea, Taiwan and the US have imported Vietnamese raw salt in order to refine it.

Ngo Tan Ban, former leader of the Vietnam Salt Corporation said that many foreign firms imported high volumes of Vietnamese raw salt for production purposes.

Ban said the production of industrial salt needs considerable investment. He believes the State needs to support farmers by providing support for both input capital and for upgrading manufacturing equipment.

Last year, Vietnam exported a total of 20,500 tonnes of salt to Japan, the Republic of Korea, Taiwan and the US, MARD said.

The Thanh Hoa Salt Company alone sent 554 tonnes of salt to the US and Japan. The company expected to export 600 tonnes of salt to the two markets this year and to expand its exports into other foreign markets.

Central Thanh Hoa province exports 4-5 containers of raw salt monthly, while southern Bac Lieu province, which is the largest salt producer in Vietnam, recently signed a partnership to export high quality raw salt to Japan.

Stronger administrative reforms to attract investment

Deputy Prime Minister Hoang Trung Hai on December 3 reaffirmed Vietnam’s commitment to finalizing institutions and accelerating administrative reforms to facilitate business operations.

He told the 2013 Vietnam Business Forum in Hanoi that the reform process was slow going recently due to the impact of the global economic recession and domestic difficulties, but assured them the Vietnamese government will go ahead with its commitment.

Hai asked relevant ministries and agencies to to step up administrative reforms in tax, customs, business establishment and dissolution, capital access, land and natural resource use, and regulatory formalities.

A complete system should be established to receive citizen petitions and take action against any officials abusing their position or found harassing or harming their constituents, he said.

The Deputy PM briefed domestic and foreign delegates on Vietnam’s efforts to implement its socio-economic development strategy with a vision towards 2020, saying the country is fine-tuning government institutions and the legal system, improving the quality of human resources, restructuring the economy, and renovating growth models to better drive sustainable development.

Hai said Vietnam’s growth targets for 2014 and beyond require effective fiscal and monetary policy management to control inflation and the price of services, support production and trading, and maintain macroeconomic stability.

Minister of Planning and Investment Bui Quang Vinh told the forum’s opening ceremony it serves as both a bridge linking the Government and existing domestic and foreign business partners, and a promotional confirmation of Vietnam’s healthy business environment.

Thanks to recommendations from consultants, investors, and the broader business community, Vinh said, the Government and its agencies have adjusted important policies to better reflect international economic principles and the socialist-oriented market economy.

He affirmed the forum will devise specific restructuring measures for State-owned enterprises.

Business and international institutional representatives agreed the Vietnamese Government has made significant improvements to the country’s investment environment. They are anticipating even more proactive reforms in the very near future.

European Chamber of Commerce President Preben Hjortlund said Vietnam’s economic sustainability ambitions demand higher volumes of quality foreign direct investment (FDI).

Themed “New Phase Of Economic Reform: From Agenda to Action” the forum discussed a range of issues related to capital markets, State-owned enterprise equitisation, infrastructure development, education and training, and customs and tax policy.

The 2013 Vietnam Business Forum was jointly held by the Ministry of Planning and Investment, International Finance Corporation (IFC) and World Bank (WB) ahead of the Vietnam Development Partnership Forum scheduled for December 5.

TPP seen leading to drastic customs rule changes

Vietnam will have to make a lot of customs rule changes to harmonize with the rules to be set out in the Trans-Pacific Partnership agreement over which the country is in negotiations with 11 other member countries in the Asia-Pacific.

Au Anh Tuan, deputy head of the Management and Oversight Division of the General Department of Customs, told a business-customs meeting in HCMC last week that when the country signed up for the TPP agreement, a slew of customs regulations would be revised.

Take express delivery service for example. The customs clearance time would be reduced to a mere six hours as enterprises could file documentation with the customs prior to arrival of shipments. The value of tariff-free goods shipped between the TPP economies could be less than US$200, or VND4 million, which is four times higher than the current permissible amount in Vietnam.

Tuan said he was worrying that the shortened period for customs clearance would put huge pressure on the customs authority.

Speaking at the meeting, which was attended by hundreds of foreign companies, an executive at express service provider UPS said it now took two to five days to have goods cleared by the customs because goods owners had to move their shipments around the city for all sorts of inspections.

One noticeable thing about the TPP customs policy is the member countries can draw up a list of enterprises enjoying customs priority based on the criteria set out by the World Customs Organization (WCO). The requirements for selection of those enterprises must be specific and transparent and the TPP members must recognize each other’s chosen enterprises.

For Vietnam, Tuan said, eligible enterprises must have strictly abided by Vietnamese customs regulations and generated huge export revenues. Some businesses have complained about the high-export-revenue requirement.

The number of enterprises with customs priority in Vietnam is less than 20 and the country is piloting this program, he said.

The Japan External Trade Organization (Jetro) said at the meeting that more than half the Japanese firms now active in Vietnam are small and medium, so they could not meet the requirements for being recognized as prioritized entities. Vietnam should adopt more appropriate criteria, he added.

The origin of goods rule which is being discussed at TPP negotiations requires enterprises to declare the origin of goods and hold responsible for what they say.

The current Vietnamese rule forces enterprises to submit the certificate of origin (C/O) issued by the exporting country when working with the customs.

The 12 countries involved in the proposed regional free trade agreement – Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam – are still working on this matter with two approaches being weighed.

One of the approaches is the exporter (producer or trading firm) would confirm the origin of goods in their own invoices which would be sent to importers as proof for priority customs treatment. The other approach is to allow the importer to declare the origin of goods without having to show the certificate of origin issued by the exporter.

Vietnam’s view is that for export goods, both approaches should be applied but for import goods, the importer would submit the C/O issued by the exporter rather than the authority of the exporting country.

Tuan said either way would require Vietnamese customs officers to have profound knowledge of origin of goods and equip themselves with sufficient tools to inspect this.

First PPP expressway kickoff expected in 2015

Construction of the Dau Giay-Phan Thiet Expressway, the first infrastructure project to be implemented under the format of public-private partnership (PPP), is expected to begin in the third quarter of 2015, according to the PPP project management board under the Ministry of Transport.

The project will shorten the time for traveling from HCMC to the south-central region and ease traffic congestion on the National Highway 1A. The expressway will also promote development of industrial parks and tourist sites along the route.

There have been seven investors applying to become the second investor of the project. The ministry will evaluate the bidders basing on international PPP standards.

Le Anh Tuan, head of the management board, said that investor selection steps are conducted seriously via competitive and transparent bidding. The second winning bidder will be announced late 2014 so as for the project to get off the ground in 2015.

In September, the ministry held a pre-selection ceremony to choose the second investor for the project with the participation of 12 investors. However, only seven investors have sent applications to the ministry.

Bitexco Group has been chosen as the first investor of the expressway project and will contribute 60% of the project’s capital. The second investor will contribute the rest.

As Dau Giay-Phan Thiet is the first project to be developed under the PPP format, investors will enjoy a lot of incentives. They will get a grant from the World Bank (WB) and will not have to borrow from commercial banks as WB will provide another loan at an interest rate lower than a commercial one.

The Government will be in charge of site clearance. State-owned capital in the project is estimated at around US$257 million.

The 98.7-kilomter Dau Giay-Phan Thiet Expressway connects HCMC-Long Thanh-Dau Giay Expressway and the National Highway 1A leading to Ba Bau in Binh Thuan Province. The project needs around US$750 million.

Infrastructure crucial for logistics development

Experts during a seminar last Friday said that sufficient infrastructure and synchronous modes of transportation are the key factors for logistics service development, increasing service quality and reducing logistics expenses for enterprises.

Speaking at a seminar on maritime logistics in HCMC last Friday, the director of the Vietnam Maritime Administration office in HCMC, Nguyen Van Hung, said Vietnam has many favorable conditions for logistics development such as its railways, waterways, airports and international border gates.

Hung said solid and comprehensive infrastructure would provide great impetus for logistics services to grow. Ports should be seen as a point of convergence for all means of transport like railway, waterway and road.

Therefore, the Ministry of Transport has built and upgraded many traffic infrastructure systems to reduce logistics fees, helping enterprises improve business operations and increase competitiveness of their services.

The ministry is weighing connecting all modes of transportation and providing support services for major clusters of ports. The project could go before the Government this month, Hung said.

Suzanne Sweerman, executive director of the Netherlands’ Foreign Investment Agency in Southeast Asia, said infrastructure is the most important factor of logistics services.

In the Netherlands, traffic systems are well connected to ports.

Concerning import and export formalities, container checks are conducted by scanners, thus helping speed up customs procedures, Sweerman said.

To attract shippers to seaports in the Netherlands, the nation has offered deferred

payments of value added tax (VAT) for enterprises shipping goods to Europe through Dutch ports. The tax incentive has given support to enterprises given the current economic crisis.

MOU clinched for city’s belt road

The Ministry of Transport and the Asian Development Bank (ADB) have signed a memorandum of understanding (MOU) on technical assistance and loans for a project to construct to a major road to improve connectivity between HCMC and the neighboring provinces of Binh Duong and Dong Nai.

Belt Road No.3 has a total length of some 89 kilometers, with 73 kilometers to be re-built, while the My Phuoc-Tan Van section stretching 16.3 kilometers is being constructed by Binh Duong Province. The scheme costs about VND55.8 trillion, which is funded by the State budget, money from government bond sales and ODA loans.

According to the Transport Ministry, the MOU was signed after a working session between the two sides in Hanoi on Friday. At the meeting, both sides discussed the construction of Belt Road No.3, including Tan Van-Nhon Trach section, a section connected with National Highway 1 and the sections of Ben Luc-National Highway 22 and National Highway 22-Binh Chuan.

As Belt Road No.3 in HCMC is important, the Vietnam side promised to fulfill its commitments to reciprocal capital, technical design, and financial audit and reports, Deputy Minister of Transport Nguyen Van The said. The project when in place is expected to help ease traffic congestion in the city and strengthen connectivity between the city, Binh Duong and Dong Nai to reduce costs and time in transporting passengers and cargo.

GE helps Vietnam in wind power development

U.S.-based General Electric (GE) group on Wednesday signed an agreement with the Electricity Regulatory Authority of Vietnam (ERAV) for technical assistance to help turn wind power into a stable energy source for the national electricity system.

The project “Technical assistance in constructing wind power connection and studying renewable energy integration in Vietnam” uses non-refundable aid funded by the U.S Trade and Development Agency in line with a financial support agreement between the U.S. Government and ERAV.

Under the agreement, GE will offer a technical supporting consulting service to the Ministry of Industry and Trade, especially ERAV, on necessary requirements to set up specific regulations for connecting wind power sources to the grid. The study will give detailed evaluations on the impacts of the power system’s stable operation possibility as well as assessing the reliability of forecasts on long-term wind power supply. Besides the technical consultation, GE will also hold training seminars on wind power development.

The studies of the International Energy Agency and the World Bank indicate that Vietnam has the highest potential in wind power development compared to Thailand, Laos and Cambodia. Some 8.6% of Vietnam’s territory is said to have huge potential for construction of large-scale wind power projects.

The signing ceremony was organized in celebration of the 20th anniversary of the establishment of GE in Vietnam.

On the same day, GE also announced to put into operation its Vietnam Technical Design Center. John Rice, vice chairman of GE, said that besides the group’s plant making wind turbines and components in the northern coastal city of Haiphong, the newly-established center is considered as proof of the long-term cooperation between GE and Vietnam. The center was commissioned with 41 engineers specializing in different oil and gas exploitation products.

Budget home project off ‘n running

Gia Phu Cooperative and National Housing Organization Joint Stock Company kicked off construction of Thanh Loc condo project, or First Home, in HCMC’s District 12 last Friday.

The project has total investment of VND200 billion and comprises of 14 stories and a basement to supply around 500 low-cost condos measured from 42.5 to 61 square meters each.

The apartments will be offered at VND386-400 million each. The investor has pledged to finish the project within 24 months.

Earlier, Hoang Quan Consulting-Trading-Service Real Estate Corporation commenced work on HQC Plaza budget housing project in Binh Chanh District. The project is expected to be complete in late 2015, launching over 1,700 condos on the market. Customers of the project may be able to access the Government’s VND30-trillion loan package with a lending rate of 6% per annum.

Low-cost apartments not as cheap as seen

Work has finally started on the first commercial-turned-budget apartment project in HCMC, and if everything goes as planned, low-income people would be able to move to their homes in the next two years.

If one looks at retail prices, budget homes seem much cheaper than commercial ones.

Over a week ago, Hoang Quan Consulting – Trading – Service Real Estate started construction of the HQC Plaza low-cost apartment project in the outlying district of Binh Chanh after about eight months of seeking permission to convert the commercial scheme into a budget one.

The conversion allowed Hoang Quan to increase the number of units from 1,060 to 1,735. The price of the condo ranges from about VND11.8 trillion to VND12.8 million a square meter, with half of the units offered to staff of the Ministry of Public Security under an agreement signed with the project owner. The remaining condos meanwhile will be sold to other customers eligible for the city’s budget home policy.

In comparison to other commercial home projects on offer in the market at the moment, the prices of budget homes are not at all lower. In fact, a number of commercial apartment projects are on offer at competitive prices.

For instance, Dream House Ltd. Co. on November 23 offered advice to help customers gain access to the preferential credit package of the Government. The apartments in the company’s scheme have a starting price of VND11.9 million per square meter.

Similarly, Dat Xanh Group has launched onto the market the Sunview Town apartment project in Thu Duc District at a price hovering around VND10.9 million a square meter. This is a large-scale project with over 1,600 condos measuring 46-100 square meters a unit, and units of less than 70 square meters make up 80%.

In particular, while buyers of budget housing have to go through a troublesome procedure, customers of commercial housing projects enjoy a much more flexible and convenient procedure. Besides, numerous commercial projects are in a race to offer lots of incentives to homebuyers, which cannot be found at low-cost home projects.

24 million Techcombank shares snapped up

Vietnam Airlines offloaded over 24 million shares of Techcombank to three individuals via bidding on Monday, according to a notice of the Hanoi Stock Exchange.

The three individual investors registered to buy a total 24.1 million shares, or a 2.7% stake in Techcombank, with the winning price equal to the starting price of VND10,800 each. The biggest bidding volume was 12.1 million shares versus the smallest of five million shares.

This was the second auction of Techcombank shares after the first one on September 26 failed to attract any investors. The move is part of capital divestment process by State-owned groups and corporations.

As of the end of the third quarter, Techcombank had charted capital of over VND8.8 trillion. The bank obtained pre-tax profits of VND750 billion in the Jan-Sept period, plunging by 66% against the previous year.

Techcombank reported a high bad debt ratio of 5.93% by late September against 2.7% at the end of 2012.

The bank’s total assets stood at nearly VND166 trillion, an 8% drop against late last year. HSBC Bank now holds a 20% stake in the lender.

SMEs not eligible for unsecured loans

Small and medium-sized enterprises (SMEs) from now on will face stricter credit guarantee conditions as they are required to have collateral to take out bank loans.

Given the new regulation on operation of credit guarantee funds for SMEs effective on Monday, SMEs must have total collateral and mortgage value equal to at least 15% of the loan value if they want to have their loans underwritten. Meanwhile, enterprises only seek credit guarantees from the funds when they have no mortgaged assets.

Do Tan Truc, deputy head of the financial investment consultancy department at the HCMC Credit Guarantee Fund for SMEs, said that enterprises usually contact the fund when they have no mortgaged assets to ask for bank loans. The fund is now providing guarantees to enterprises to take out unsecured loans.

Following the regulation, the fund will only give guarantees to secured loans. Therefore, the number of SMEs eligible for credit guarantees will decline next year, Truc said.

Earlier, credit guarantee funds for SMEs in HCMC and other provinces sent a petition to the Government to adjust the regulation. However, they failed to make any changes, he added.

According to the city’s socioeconomic situation report in the Jan-Nov period, the fund gave guarantees to 117 enterprises with a total value of loans at VND840 billion.

This year, outstanding loans of credit institutions via guarantees have slightly decreased as many enterprises have liquidated credit contracts. The number of enterprises contacting the fund has also declined compared to last year.

As banks have set up stricter conditions for corporate borrowers, many firms have failed to access capital.

Earlier, if an enterprise had no mortgaged assets, banks will introduce the enterprise to the credit guarantee fund. Now, just a few enterprises are recommended to the fund as banks are afraid of risks, Truc explained.

Meanwhile, speaking at a credit conference on socio-economic development in the Mekong Delta in late November, Ho Thi Tham, vice permanent chairwoman of Vinh Long Business Association, said that enterprises had a strong demand for capital. However, they had no mortgaged assets to ask for loans.

According to the central bank’s HCMC branch, just a few firms can access unsecured loans, with these credits accounting for just 10% of total outstanding loans in the city.

New foreign investors interested in VPBank

After Oversea-Chinese Banking Corporation Limited’s (OCBC) withdrawal from Vietnam Prosperity Bank (VPBank), new foreign investors have expressed interest in the local commercial joint-stock bank.

According to a statement released last week, VPBank said OCBC’s pullout had left no foreign ownership at the bank.

The bank now has nearly 3,700 local individual shareholders with a combined stake of 87.86% and 35 domestic institutional shareholders with a total 12.14% stake. The bank has neither major shareholder nor foreign shareholder.

This shows a diverse share ownership structure at the bank. There has been little change in the structure except for the transaction of OCBC, the statement said.

On November 22, OCBC offloaded over 85.8 million shares, or a 14.88% stake, of the local bank, ending a seven-year partnership. VPBank was the first bank in Vietnam to sell shares to a strategic foreign partner.

Domestic individual shareholders acquired all the shares from OCBC.

VPBank has total assets of over VND119.5 trillion and equity of over VND7.1 trillion. In the Jan-Sept period, the bank obtained total profit of VND560 billion.

Coronary stent factory to go up in SHTP

United Healthcare Factory Co. Ltd has begun work on a plant at Saigon Hi-tech Park (SHTP) in HCMC to produce coronary stents for cardiovascular treatment, thus reducing reliance on imports, according to the authority of SHTP.

The US$10 million facility, which will cover one hectare in the park and come on stream in 2016, will use manufacturing technology from the U.S. to produce stents, mainly for domestic use.

As a hi-tech project in the healthcare sector and the first such plant in Vietnam, the company has received much support and financial assistance from the city government and the technology ministry.

The HCMC government will provide a seven-year loan of VND91 billion while the Ministry of Science and Technology will supply VND47.5 billion aid for technology transfer from America.

According to the company, such assistance will make products of the plant more competitive in terms of price than imports.

300 firms join Vietnam Expo 2013 in city

Around 300 companies from 12 countries and territories will be gathering in HCMC from tomorrow until Saturday to attend the 11th Vietnam International Trade Fair (Vietnam Expo 2013).

Exhibitors from India, Cambodia, Taiwan, Hong Kong, South Korea, Malaysia, Indonesia, Japan, Switzerland, China, Italy and Vietnam will display machineries, electronic products, household appliances, components, beverages and cosmetics.

The fair will include the Inter Cycle 2013 showcasing bikes, electric bikes and bike components of many famous brands.

Vietnam Expo 2013 organized by Vinexad Co. at Saigon Exhibition and Convention Center in District 7 is expected to welcome around 10,000 visitors.

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