Forbes Vietnam: Vinamilk a top 50 company

Forbes Vietnam has selected the Vietnam Dairy Products Joint Stock Company (Vinamilk) as one of the 50 best listed companies in Vietnam.

According to Forbes, Vinamilk has a proven track record and currently has a 50% market share in the liquid milk market with revenues exceeding VND31,000 billion. It has generated thousands of jobs and has benefited shareholders, investors, and the national economy.

Recently, the company implemented two plants in Binh Duong with a total investment capital of over VND4,000 billion. It also increased its presence abroad by investing in two factories in the US and New Zealand and a new joint venture factory in Cambodia.

Currently, the company’s products are available in 31 nations around the globe.

To date, the company has five dairy farms nationwide with a total investment of VND1,600 billion, with plans to put an additional four dairy farms into operation in the time ahead.

In the period from 2014 to 2016, Vinamilk intends to import high quality cow breeds from Australia and the US and increase its herd to 100,000 heads by 2017 and 140,000 by 2020.

About 1,000 Vietnam brand names registered overseas

Vietnamese enterprises have about 1,000 brand names registered for protection on foreign markets, the Vietnam Chamber of Commerce and Industry (VCCI) told a seminar in Hanoi on November 5.

The event focused on brand name building and intellectual property protection in international trade.

Participants suggested local companies pay due attention to registering their brand names overseas, especially when Vietnam is integrating deeply into the global market.

Vietnamese enterprises should take advantage of the right of priority and the principle of independence of patents in accordance with the Paris Convention for the Protection of Industrial Property, they said.

Those local enterprises, who have already registered for brand name protection at the National Office of Intellectual Property of Vietnam (NOIP), can use the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (Madrid Protocol) to protect their rights and trademarks.

VCCI Vice Chairman Doan Duy Khuong emphasized that in the globalization process, intellectual property right has an increasingly important role. Therefore, local firms should have specific strategies to access overseas markets.

It is also essential to have a strategy on mobilizing social resources for infrastructure development in line with international practice, as well as investing in human resource development, he added.

Chinese investors eye VN factories

Major Chinese investors have shown growing interest in Vietnam's manufacturing sector because of the country's low labour costs and its proximity to China, according to a white paper published by the real estate consultancy firm Cushman & Wakefield.

The report, China's Outbound Boom: The Rise of Chinese Investment in Global Real Estate, notes that China has emerged as a major global exporter of capital in recent years, with Chinese outbound real estate investment growing rapidly.

Chinese investors prefer developed and mature markets in Asia, North America and Europe.

Data indicates that Chinese outbound investment in commercial property reached a total of about US$33.7 billion from 2008 to June 2014, growing more than 200-fold during that time.

Recent huge and highly publicised real estate deals around the world highlight the growing presence of Chinese investors in overseas property markets.

Timothy Horton, general manager of Cushman & Wakefield Vietnam, said the Chinese were resuming interest in Vietnam across most sectors after the slowdown earlier this year caused by the Chinese oil-rig illigally placed in Vietnam's waters in the East Sea.

In other asset classes, large-scale developers who have experience in residential projects still see Vietnam and its coastline as relatively untouched and a relatively more affordable option for them in comparison to China and other parts of the region.

"As investment in infrastructure improves throughout Vietnam, it will continue to attract investors across all sectors and we will see the market sustainably correct into the medium-term future," the report said.

"Chinese investors face an array of challenges in going global," Horton said. "These take the form of government controls on capital flows; talent shortages; differences in corporate and management cultures; and unfamiliarity with foreign legal and regulatory environments, including sometimes-daunting tax laws."

Italy considers Vietnam ideal gateway to ASEAN

Italian businesses have paid growing attention to Vietnam – an emerging market in the region and considered it as an ideal gateway to ASEAN and Asia.

This was stated by Ambassador to Vietnam Lorenzo Angeloni at a press briefing in Hanoi on November 5 to announce a visit to Vietnam of an Italian economic mission from November 22-26.

Deputy Minister of Economic Development Carlo Calenda will lead around 100 Italian business people operating in different fields to seek cooperative and investment opportunities in the country.

Ambassador Angeloni said the visit aims to realize two economic and political related tasks. Official dialogues will be held according to the Strategic Partnership Agreement signed by the two governments before the Italy-Vietnam Business Forum.

In addition, the Italian Trade Commission (ITC) will organise bilateral meetings between Italian firms and Vietnamese partners, aiming to boost bilateral economic cooperation relations, the ambassador emphasised.

The ITC will also hold trade summits and events in Hanoi on November 24-25 and Ho Chi Minh City on November 26.

Italy has become a leading European Union partner of Vietnam. Two-way trade turnover hit around 3 billion euro in 2013 and is expected to reach 3.5 billion euro this year and 5 billion euro in 2016.

VCBS triples nine-month profit on-year

Stock brokerage VCBS has reported net profit of VND93.72 ($4.4 million) in the first nine months of this year, 3.2 times that of the same period last year.

According to the company, rising profits are attributed to it selling a portion of its long-term portfolio in the third quarter. In fact, its long-term financial investments have been reduced by VND203 billion ($9.53 million) since the beginning of the year.

Aside from stock brokering, the firm wants to focus more on bonds. VCBS currently holds a 30 per cent share of the Vietnamese bond brokerage market.

VCBS has set a target of VND110 billion ($5.17 million) in net profit for this year, up 25 per cent against 2013.

Tan Phu Trung Industrial Zone continues to woo investors

Investors keep flocking to Tan Phu Trung Industrial Zone in Ho Chi Minh City’s Cu Chi district which possesses multiple advantages.

From the outset of 2014, the IZ has attracted a number of investors.

On July 21, Kem Nghia JSC penned a contract on leasing five hectares space in the IZ for building a mechanical factory.

Most recently, CP Vietnam Livestock Limited leased over 6ha space for deployment of its food processing plant.

In the year to date, the Southwest Saigon City Development Corporation (SCD), the developer of Tan Phu Trung IZ, has attracted nine investors operating in different fields as mechanical engineering, packaging and food to land their projects covering 16.5ha in total area in Tan Phu Trung IZ.

This month, developer SCD will sign contracts with new investors, proving the IZ increasing appeal to investors and businesses.

Tan Phu Trung Industrial Zone’s developer (SCD) was grown from Song Tan JSC which was founded on November 4, 2003.

Its founding shareholder is state-own Ho Chi Minh City Finance and Investment Company (HFIC).

SCD’s key strategic shareholder is Kinh Bac Urban Development Corporation (KBC), one of member businesses belonging to Saigon Invest (SGI)- a leading professional group in industrial zones investment and development in Vietnam.

Since its debut more than a decade ago, Tan Phu Trung IZ has undergone many ups and downs associated with regional and global financial crises.  

Through making gigantic efforts, the IZ has posted sound achievements and made significant contributions to industrial property sector development as well as Vietnamese society.

Last year was full of hardships for the property market, and particularly industrial property segment and businesses operating in industrial zone infrastructure investment and trade.

Tan Phu Trung IZ management and employees had ramped up efforts to weather the storm and gradually get out of difficulties.

The IZ has proved itself a safe harbour to investor ventures.

In the upcoming period, Tan Phu Trung IZ is committed to making use of every chance to effectively serve investors, partners and customers.

Located in Ho Chi Minh City’s Cu Chi district, Tan Phu Trung Industrial Zone is 25km away the centre of Ho Chi Minh City and only 15km from Tan Son Nhat International Airport.

Vietnamese businesses encouraged to build on strong online presence

The value of strong online presence to businesses, particularly those small and medium in size (SMEs), was the main focus of a Verisign-sponsored seminar on brand building, development, and intellectual property in international trade, hosted by the Vietnam Chamber of Commerce and Industry in Hanoi on November 5.

A representative from Mat Bao, one of Vietnam’s market leading domain registrars, participated in the conference as one of the presenters.

During the seminar, various experts shared trends and their experiences in creating e-identity and emphasised the benefits of having a branded domain name that is associated with the business’ online presence.

There are multiple domain extensions available but .com is one of the most widely recognised standards for businesses online, with 114.9 million domain names registered worldwide at the end of 2014’s third quarter.  

Luong Thi Thanh Huong, managing director of Mat Bao Network in the north, said “International domains play and important role for online business, and .com is powered by Verisign – the operator of the largest domain name registry in the world. Verisign has proven industry-leading expertise in managing the .com infrastructure with 100 percent operational accuracy and stability for more than 15 years.”

“Enterprises that use .com domain names can benefit from this availability, reliability and stability,” Huong asserted.

In fact, a .com domain name can be purchased at only a fraction of a business’ overall set-up costs, but it can become the most valuable investment a business can make to enable customers to find its online “home” at any given time even as that enterprise looks to grow footprint at home and abroad.

With 100 percent operational stability for more than a decade, .com is highly recommended domain choice by global experts.

Mat Bao was founded in 2002, at the very first step of Vietnam’s Internet development.

Mat Bao started its business by creating websites and developing software ordered by customers. Today, the company has over 1,000 employees with its subsidiary companies such as Mat Bao Network, Mat Bao Media, BPO Mat Bao, and more.

VietinBank launches mPOS service

The State Bank of Vietnam (SBV) has permitted the Vietnam Bank for Industry and Trade (VietinBank) to implement a pilot scheme to provide mobile points of sale (mPOS) service to its customers.

The central bank has told VietinBank to follow regulations on accounting and banking documents as well as electronic transactions for the new service. For example, the electronic receipts of the service must contain all the information required for a transactions via a normal POS.

The bank should get card holders’ permission before sending the electronic receipts to their e-mails or cellphones so as to keep their personal information confidential as stipulated in prevailing regulations.

The trial use of the electronic receipts is one year from the date of VietinBank getting SBV approval for the mPOS service.

Minister supports special zone plans

Justice Minister Ha Hung Cuong said the schemes to establish special economic zones (SEZs) Van Don, Bac Van Phong and Phu Quoc are in accordance with the Government’s policy though some legal issues need to be tackled.

The issues are related to the ‘too special’ management mechanisms and incentives for the planned SEZs in the northern province of Quang Ninh, the central province of Khanh Hoa and the Mekong Delta province of Kien Giang.

Cuong said the ministries of justice, finance and planning-investment, and the National Assembly Office have had a meeting with the localities to discuss the legality of the SEZs.

At the meeting, representatives from the three provinces expected to get approval for the SEZ establishment with special management mechanisms as well as land and tax incentives to help them attract more investments and beef up their socio-economic development.

However, some delegates at the meeting said the planned SEZs should be weighed as the management mechanisms proposed for these SEZs are ‘too special’ and the incentives for these SEZs will be the most preferential ever.

However, Cuong said the proposals of Quang Ninh, Khanh Hoa and Kien Giang provinces to set up special administrative and economic entities for the SEZs are in line with the Government’s policy.

Local firms’ integration readiness in doubt

Nguyen Dinh Cung, director of the Central Institute for Economic Management (CIEM), has cast doubt on the readiness and ability of Vietnamese firms to capitalize on the country’s deepened integration into the global economy.

Competition will grow stronger, Cung told a function held in Hanoi on November 4 to release the findings of a survey on small and medium enterprises (SME) in 2013 sponsored by the Danish International Development Agency (DANIDA) and compiled by CIEM, the General Statistics Office (GSO) and the University of Copenhagen.

Cung said he is not certain whether Vietnam’s integration commitments would open up opportunities for local SMEs or just for foreign-invested companies in the country.

The survey was conducted with nearly 2,500 private SMEs in the processing field in ten provinces and cities, including Hanoi, Haiphong, HCMC, Phu Tho, Nghe An, Quang Nam, Khanh Hoa, Lam Dong and Long An.

According to the survey, up to 95% of enterprises were of micro scale in 2011 and these enterprises had remained super small until last year.

Some 92% enterprises surveyed in 2011 still survived last year while only 431 enterprises were said to disappear. 70% said their business activities last year were affected by the global economic slump while only 15% said they did not feel negative impacts of the crisis.

Reducing production costs (58%) and seeking new markets (49%) were the common measures used by enterprises to weather tough times.

According to the report, there were a few enterprises posting good results last year thanks to their access to low-cost inputs and available skilled labor.

What is notable in the report is falling productivity, mainly at micro enterprises in rural areas. Up to 75% enterprises reported declining labor productivity in the 2011-2013 period.

The ratio of enterprises making new investments also tumbled, from 56% in 2011 to 48% last year, mostly contributed by small enterprises in southern areas.

Professor John Rand from the University of Copenhagen said the business environment has remained almost unchanged from the surveys in 2009-2011. Enterprises still had to cope with a host of obstacles when doing business, he added.

According to Cung, the latest survey uncovered the bleak situation of SMEs in Vietnam in 2012-2013. All indicators like the number of enterprises, scale, productivity, investment and innovation were seen falling.

“What makes us worry is why Vietnamese enterprises cannot grow and the reason is that they lack fundamentals. Therefore, the measures taken by the Government to support the country’s further integration and institutional reform are unlikely to deliver good results,” Cung said.

Jan-Oct budget collections up 15.2%

State budget collections in the first 10 months of the year neared VND719.5 trillion, rising 15.2% compared to the same period last year and meeting 91.9% of the whole year’s target.

The Ministry of Finance said State budget collections have grown steadily this year. In the year to the end of last month, total State budget revenues had surpassed VND636 trillion, or 81.3% of the year’s target.

Tax and fee collections from domestic sources in the January-October period increased 16.5% year-on-year and reached 90% of the year’s target. The respective figures from imports and exports were 14.4% and 92.2%.

According to the ministry, relevant agencies have taken drastic measures to collect taxes and fees and tax arrears, as well as intensify inspections and improve management.

The ministry said State budget spending in the ten-month period was over VND853.6 trillion, or 84.8% of the estimate for this year. The disbursements from State budget for development investment were nearly 85% of the target and from government bond sales 74.5%.

The January-October budget deficit was put at nearly VND135 trillion, nearly 60% of the estimate for this year.

As of October 24, some VND221,240 trillion had been raised through government bond sales, meeting 74.4% of the target for capital mobilization this year to make up for the budget deficit and development investment.

HCM City aims to complete SOE equitization by 2017

The HCMC government plans to equitize a dozen State-owned enterprises (SOEs) this year and complete its SOE equitization program by 2017.

The equitization plan was updated by HCMC chairman Le Hoang Quan at a meeting on SOE equitization in the city on October 4.

According to the HCMC steering committee for enterprise reform and development, the city looks to equitize 31 SOEs in 2012-2015, and 48 others after that.

The city government expected 12 SOEs would go public this year instead of 15 as previously planned due to delays in asset evaluations at three enterprises.

Earlier this year, leaders of 29 SOEs in the city pledged to resign or face sanctions if their enterprises cannot go public by the end of 2015.

According to HCMC vice chairman Le Manh Ha, the city government last year failed to equitize nine SOEs.

HCM City suggests moving apparel plants to provinces

The HCMC government wants to relocate apparel factories to neighboring localities to cope with the labor shortage here, and the city to serve as a fashion design hub.

This orientation is included in a master plan for developing the city’s textile-garment industry to 2020 with a vision to 2030 which is expected to be issued early this week by the city’s Department of Industry and Trade.

As planned, the city’s apparel output is estimated to increase by 53 million products by the end of next year, or equal to the combined average output of 17 garment factories.

After 2020, apparel factories will be located in industrial zones and other provinces with sufficient labor supply. Meanwhile, garment companies in the city should be solely responsible for design and export-import operations.

Cu Chi, Hoc Mon, Nha Be, Thu Duc districts in the future will only have small-scale apparel facilities with three to five production lines to provide products for the city’s tourists while textile-garment firms in the inner-city districts will focus on designing and introducing new products without expanding their current manufacturing facilities.

At the same time, Tan Binh, Dai Quang Minh, and Soai Kinh Lam textile markets among others will become wholesalers of textile-garment materials.

The total investment capital for developing the city’s textile-garment industry is estimated at VND33 trillion by 2025 with investments in the inner city accounting for VND8.75 trillion.

According to experts, the training of human resources is core to achieving the goal of turning the city into a fashion design hub. The city will also need at least 3,000 more engineers, technicians and designers by 2025.

Global experts attend HCM City technology conference

One hundred leading experts from Viet Nam and around the world are attending the 13th International Conference on Computer Information Systems and Industrial Management Applications that opened in HCM City yesterday.

At the three-day annual event at Ton Duc Thang University, they will present 60 papers on algorithms, data analysis and information retrieval, industrial management and other applications, modelling and optimisation, networking, pattern recognition and image processing and various aspects of computer security.

More than 10 of them will be presented by Vietnamese researchers and scientists from Ton Duc Thang University, the HCM City University of Technology, and the HCM City University of Science.

VN firms urged to protect brands overseas

As intellectual property rights are becoming increasingly important in international trade, experts urged Vietnamese companies to pay attention to overseas trademark protection registration.

According to the Viet Nam Chamber of Commerce and Industry (VCCI), only about 1,000 Vietnamese trademarks are currently registered overseas. This is just a modest number given the hundreds of thousands of existing Vietnamese companies.

At a workshop on trends and measures of brand development and intellectual property protection in international trade held yesterday, experts said brands and intellectual property were increasingly ruling global product value. They noted that brand value now accounted for one-third of the global economy's value.

Doan Duy Khuong, VCCI deputy chairman, said brand and trademark building must always be associated with registration for intellectual property protection.

He observed that brands were critical for a sustainable economy, and a competitive economy must have competitive brands in both domestic and international markets.

However, according to Tran Van Hai, head of the Intellectual Property Division of the University of Social Sciences and Humanities, many companies have not paid adequate attention to trademark registration, especially overseas, and some don't even fully understand independent protection principles under the provisions of the Paris Convention for the Protection of Industrial Property.

Hai said small, medium and large enterprises risked losing their intellectual property in international trade. He cited the cases of Vietinbank and Buon Ma Thuat coffee as examples.

A Russian commercial bank registered Vietinbank's formal name, Incombank, while a Chinese company registered coffee brand Buon Ma Thuat for sole patent rights in China beginning 2010.

The concerned Vietnamese companies were informed about these registrations after the fact. The Chinese Ministry of Industry and Trade cancelled the Buon Ma Thuat Coffee trademark registration early this year.

Hai explained that trademark protection registration was indispensable and urged Vietnamese companies to have a better understanding of international trademark protection principals.

At the workshop, experts also urged Vietnamese companies to pay attention to online brand identity in a rapidly changing and digitised world, as this allowed for differences in competition.

HCM City slashes meat, egg prices

The HCM City Department of Finance on Tuesday approved a plan to cut the prices of poultry and animal meat and eggs sold under the price stabilisation programme.

The new prices, down by VND1,000 -VND5,000, took effect yesterday.

The price of duck meat has fallen by VND5,000 a kilogramme to VND65,000, and chicken and duck eggs are down VND1,000 for a box of 10 to VND23,000 and VND32,000 respectively.

Companies participating in the programme, including Big C, Saigon Co.op, and Vissan, cut pork prices by VND2,000-VND3,000 a kilogramme.

Nguyen Quoc Chien, head of the department's Price Division, attributed the price decline to lower prices in the market and a drop in costs.

Many of the participating companies said they cut prices to stimulate demand, which has been falling.

Suppliers and supermarkets have also launched promotions.

Vo Hoang Anh, Saigon Co.op's marketing director, said with fuel and cooking gas prices falling, the supermarket has urged suppliers to cut prices of essential items to spur demand.

Saigon Co.op has cut the prices of thousands of essential products by 10-50 per cent until November 12, he said.

Participants in the price stabilisation programme are required to cut the prices of goods when their cost falls by 5 per cent.

The price of all the goods in the programme are 10 per cent lower than market prices.

The department estimates that since the supply of poultry will be abundant until year end, prices will remain stable.

NA backs microfinance companies

The banking services of credit institutions have so far met the economy's diversified demands, but more microfinance organisations and consumer finance companies need to be set up.

This was the suggestion made in a report, released this week by the National Assembly's Economic Committee, on licensing business registration, establishment and operation of enterprises and credit institutions as well as insurance, securities and fund management companies.

According to the committee's report, the banking system currently has 47 commercial banks, two policy banks, and 53 foreign banks' branches, besides 28 non-banking credit institutions, one cooperative bank and 1,144 people's credit funds, as well as two microfinance organisations.

Currently, commercial banks play a key role in the whole credit institution system, the committee said, adding that Vietnamese commercial banks have an advantage over foreign banks in terms of operational network.

However, the relevant authorities should boost the establishment of microfinance organisations and consumer finance companies as their number remains restricted, the report said.

It added that the State Bank of Viet Nam, in the 2011-13 period, issued licences for the establishment and operation of only two microfinance organisations, a foreign bank's branch and 58 people's credit funds.

The committee attributed the modest number of microfinance organisations to a lack of legal framework for licensing the establishment and operation of such organisations.

The report said that the number of newly established enterprises in real estate, construction, mining and industrial processing, besides manufacturing has reduced significantly, in contrast to a consecutive rise of those in education and training, arts and entertainment, and healthcare and social work sectors.

Citing national data on business registration licences, the committee reported that at the end of last year, Viet Nam had roughly 500,000 operational firms among 770,000 firms licensed to be set up.

The provinces and cities in the country's northern mountainous and Central Highlands regions last year saw the maximum increase in the number of newly established firms with 26 per cent and 45.5 per cent respectively, while the number of firms that were dissolved or had ceased operations in the regions fell by 5 per cent and 6.7 per cent respectively.

The number of newly established firms in the Song Hong (Red River) Delta region rose by just 1.9 per cent, while the number of firms that were dissolved or ceased their operations in the region rose by a high 13.3 per cent, the committee said.

Viet Nam urged to maintain sustainable economic growth

Viet Nam should maintain sustainable growth as the economy will face numerous difficulties and challenges in spite of recent recovery.

This was the consensus of experts at a conference held here yesterday on "Economic 2014 Review and 2015 Prospects."

Sanjay Kalra, the International Monetary Fund resident representative in Viet Nam and Laos, told the conference that global GDP this year would reach 3.3 per cent, a 0.4 per cent decrease over the figure reported last April.

Kalra said the forecast was lower than expected because difficulties arising from the global economic crisis remained, along with unpredictable changes in the financial market.

The IMF representative also forecast global GDP next year to reach 3.8 per cent. For Viet Nam, he noted that in the past two years, the economy has seen positive and sustainable change in spite of instability, and investors' confidence has risen.

But Kalra suggested that Viet Nam continue maintaining stable macro-economic growth and restructuring.

"The country's economic growth and macro-economic stability has shown remarkable improvement. However, risks have been huge as debt has been a concern while business effectiveness of State-owned enterprises stirred challenges for Viet Nam's financial year," he added.

He said the banking sector should also be restructured and merged to ensure a system that was strong enough to improve bad debts. The economy needed reforms to improve output and quality, he added.

Barry Weisblatt, head of VPBank Securities' Analysis Department, said most of Viet Nam's key sectors, including agriculture, industry and services, showed growth prospects while the real estate market showed signs of recovery.

Nguyen Duc Vinh, general director of VPBank, said business and finance directors as well as banks mapped out plans for 2015.

A report from the bank showed that Viet Nam has remained in the difficult situation of having to choose between achieving a high growth rate or maintaining sustainability.

If the Government chose a high growth rate, the country's public debt would be higher. If the Government maintained current sustainability, annual GDP growth will be less than six per cent and lead to record inflation.

However, the currency will remain unchanged and securities growth will remain at 20 per cent per year.

The Government will have to reduce public debt through State-owned enterprises' restructuring to divest from ineffective businesses while promoting private investment and commerce.

"If the Government chooses the second plan, the lending interest rate will be at a low level next year, leading to higher profits for businesses. The lending costs will also be reduced, thereby contributing to credit growth," the report said.

The bank also said that regardless of which plan the Government choose, share prices would rise in the first half of next year.

However, Tran Dinh Thien, head of the Central Institute for Economic Management (CIEM), believes that difficulties lie ahead for the economy.

"The economy's recovery remains faint, as domestic enterprises were weaker than foreign ones," Thien said, adding that the Government should provide solutions that make domestic businesses stronger.

He suggested that the country renew its growth model and mechanism, as well as craft and implement policies encouraging the development of domestic companies.

Nguyen Mai, chairman of the Viet Nam Association of Foreign Invested Enterprises, expressed the same view, saying that the first task should be to review public debts. The country should take measures to help small and medium enterprises gain access to capital for production.

"If the Government resolves the issues of capital and public debts, the country's growth in 2015 will be higher," Mai added.

Vo Tri Thanh, CIEM deputy head, noted that the economy has shown positive and negative signs.

"However, Viet Nam should focus on maintaining sustainable growth instead of fast development," Thanh said, and predicted the country's growth rate next year to reach 5.8 per cent.

Funds pledged for water supply projects

Contractors who build water-supply projects would receive financial and policy support from Ha Noi People's Committee, said Dao Duy Tam, deputy director of Ha Noi's Agriculture and Rural Development Department.

"The city's government will fund 45 to 90 per cent of the estimated cost of building clean water plants," he said.

The amount of funding will increase if the plants are built in mountainous and ethnic minority areas. Other plants in hill and midland areas will receive less, and those in delta regions and towns will receive the least. The graded funding is meant to encourage development in rural areas which are in need of water systems.

According to the new policy, contractors would only receive the rebate when they finish construction of plants, Tam said.

However, he suggested that the funds would be better distributed in an incremental fashion, based upon the progress of construction and financial reports issued by contractors.

Contractors should also be able to receive loans from preferential credit funds, the city's development and investment funds and international organisations, he added.

Tam added that previously there were almost no land policies for the construction of clean water plants. The lack of official guidance about appropriate construction procedures often forced constructors to abandon projects.

Many commune authorities and local residents also showed little interest in clean water projects and many contractors lacked sufficient capital to carry them out.

The chairman of Ba Vi's People's Committee, Duong Trung Lien, told Viet Nam News that a planned project had not been carried out in his commune because the contractor lacked capital.

Projects also received little interest from locals in Thach That District's Tien Xuan commune. The commune's chairman, Bui Van Tinh, told Viet Nam News that residents were happy with well water since it was safe, hygienic and free.

The average income of local residents is VND16.5 million (US$785) a month and the average income of its poorest residents is below VND550,000 ($26) per month.

Tinh said the lowest water price would be VND5,020 ($0.23) per cubic metre, which would be untenable for many residents.

So far, city authorities have approved construction of six clean water projects and distribution of 40,000 water filters to supply water to 340,000 rural residents, the Deputy Director of Agriculture and Rural Development Department said.

However, to date, city authorities have only completed installation of 10,000 filters for 45,000 residents in Phu Xuyen, Ung Hoa, Thanh Oai and Thuong Tin district, he said.

Adjusted EZ planning gives VSIP incentives

The government last week gave approval in principle for expansion of the Dong Nam-Nghe An Economic Zone to include the Vietnam Singapore Industrial Park and combined township.

The adjustment would allow manufacturers and investors planning to invest in the Vietnam Singapore Industrial Park (VSIP) Nghe An project to enjoy the highest tax incentives offer for economic zones.

The approval follows a petition from the People’s Committee of Nghe An province in April. In an announcement released by the Government Office on October 29, Deputy Prime Minister Hoang Trung Hai directed the provincial people’s committee to be responsible for adjusting the Dong Nam-Nghe An Economic Zone borders set forth in the master plan to include the VSIP Nghe An project.

The Ministry of Planning and Investment was responsible for appraising the adjustment and then submitting it to the government for final approval.

In February, Nghe An’s People’s Committee signed a memorandum of understanding with Becamex, the Vietnamese stakeholder of the reputable industrial park developer VSIP, to conduct a feasibility study of a VSIP industrial park and township complex in the province.

The site of the project was located just outside the Dong Nam-Nghe An Economic Zone, and the developer demanded inclusion into the zone as a precondition for investment. The government’s decision to support VSIP in this is a big step forward for the group’s investment in the country.

Established in 1996 as a joint venture between Vietnam’s Becamex IDC and Singapore’s Sembcorp Industries, VSIP is a prominent IP developer in Vietnam and is considered an icon of economic co-operation between Vietnam and Singapore.

Thus far, VSIP has developed five industrial parks nationwide, including two in Binh Duong, one in Bac Ninh, one in Haiphong and one in Quang Ngai. More than 500 companies have invested in its industrial parks and township with a total capital of $7.4 billion.

The VSIP Nghe An project, if carried out, would be VSIP’s second in the central region. The developer is also currently conducting a feasibility study for developing another project in Binh Dinh.

Last month the Hai Duong People’s Committee announced that the Vietnam-Singapore Industrial Park Bac Ninh, a VSIP subsidiary, will acquire Cam Dien-Luong Dien Industrial Park from Phuc Hung Company Limited.

Wood firms face fiercer competition at home

Local wood enterprises will face a tougher price and product quality competition with their rivals from other parts of Southeast Asia next year when the ASEAN Economic Community (AEC) takes shape.

When the AEC is formed, enterprises in ASEAN countries will enjoy free tariffs on their many goods exported to Vietnam, said Huynh Van Hanh, vice chairman of the Handicraft and Wood Industry Association of HCMC (HAWA).

Tariff exemptions will make life harder for Vietnamese producers, particularly wood firms, on the local market, Hanh told a news briefing held in HCMC last week to introduce the Vietnam Furniture & Home Furnishing Fair, or VIFA Home 2014.

Thailand and Malaysia have been named as major competitors of Vietnam in the wood sector as their companies have already invested in wood processing factories in this market, Hanh said.

Currently, Thai companies look more aggressive in their plans to acquire supermarkets and attract distributors to realize their targets to make and sell their products in Vietnam.

More challenges will also be from China as Chinese wood products abound in the north of Vietnam though imports from the northern neighbor declined in the first six months of this year.

Imported wood products accounted for 20% of the domestic market in the first half of this year, and furniture shipments from China fell sharply. “The shrinking percentage is a good sign as the figure was 30-40% in previous years,” Hanh said.

A lack of timber is also a great challenge for the local wood sector because domestic supply now can meet only half of the demand for wood product processing and export.

Last year, Vietnam chopped down 15 million cubic meters of cajuput trees and shipped ten million cubic meters of the volume to China and other markets including Japan and Hong Kong. China used the wood material to produce furniture for export to Vietnam at much high prices, Hanh said.

To help the local wood sector prepare for the challenges, Hanh suggested the Government draw up proper policies to develop wood factories near forests in the central region to enable enterprises to process wood on the spot before having it transported to furniture makers, helping firms save up to 75% of transport costs.

Nguyen Chien Thang, chairman of Alliance Handicraft Wooden Fine Art Corporation, said to ensure material supply and reduce costs, his company is working on a project to financially support tree growers in the central province of Quang Tri.

In previous years, growers cut down five-year-old trees for sale to have money for their daily expenditure though wood from these young trees was of low economic value. With the project, they are assisted to keep their forests for four to five years more to ensure higher quality of their wood material.

The Ministry of Agriculture and Rural Development estimated the combined exports of timber and wood products at US$528 million last month and US$4.98 billion in the January-October period, rising 12.8% year-on-year. The ministry aims for US$6.3-6.5 billion this year.

AGPPS unveils SCPE as major shareholder

An Giang Plant Protection Company (AGPPS) has announced Standard Chartered Private Equity (SCPE) as its major shareholder at a recent extraordinary general meeting.

The investment arm of Standard Chartered Bank has spent around US$90 million acquiring 21.5 million shares, equivalent to a 34.2% stake at the Vietnamese firm, heard the meeting in HCMC last Friday.

Speaking at the meeting, AGPPS chairman and general director Huynh Van Thon said some major shareholders decided to divest from AGPPS as their interests were no longer suitable to the company’s development strategy.

Thon expected that SCPE’s investment will help AGPPS enter a new stage of development.

Though SCPE is not a board member of AGPPS in the 2014-2019 term, SCPE will assist AGPPS in drawing up development plans and expand operations in the coming time.

With the participation of SCPE, AGPPS aims for revenue of VND8.4 trillion and after-tax profit of VND543 billion this year, up 13% and 8.5% year-on-year respectively. Besides, AGPPS targets earnings per share of VND8,333 this year, rising 3.4% against last year.

S.Korea firms seek local partners

South Korean’s enterprises and research institutes are looking for Vietnamese partners to assist them in the transfer of new technologies to this market, according to the assistant Minister of Science and Technology.

The technology transfer plans of South Korean firms were shared by Bui Van Quyen at a meeting with reporters on the sidelines of a seminar on technology application and cooperation opportunities in HCMC last week.

Eight South Korean companies attended the seminar to meet Vietnamese distributors of their technologies for clean and renewable energy projects in the country.

Sinsane Co. Ltd. wanted to sell solar water heating systems and equipment to big hotels and factories at prices around 20% higher than similar products available in Vietnam.

CoolTop Company introduced drying and cold storage systems for the agriculture sector. Nguyen Van Minh, chairman of the Southeastern Institute for Agricultural Mechanization, said he encouraged the company to promote the technology in Tay Ninh and other localities in Vietnam.

Ben Thanh Tourist offers IPO shares at VND10,500

Ben Thanh Tourist Service Joint Stock Company, or Ben Thanh Tourist, looks set to sell 25 million shares at the starting price of VND10,500 each at its initial public offering (IPO) slated for next month.

The shares will be auctioned at the Hochiminh Stock Exchange on December 9. After going public, the State will hold a 49% stake at the travel firm, which has total chartered capital of VND250 billion.

Reporting to the economic and budget committee of the HCMC People’s Council last week, Hoang Tam Hoa, general director of Ben Thanh Tourist, said Phan Thanh Trade & Service Co. Ltd. and Viet Real Estate Commercial Joint Stock Company (Vietcomreal) are the two strategic investors as they have bought three million and 2.9 million shares respectively.

In addition, 885,700 shares (3.54%) will be offered to employees of the enterprise and 5.9 million shares (23.73%) to the public.

Currently, Ben Thanh Tourist has 462 staff and 24 property sites across in the city. The company has plans to organize a shareholders meeting this month and complete procedures to operate as a joint stock company in January 2015.

Over the past 20 years, Ben Thanh Tourist has emerged as a major provider of inbound, outbound and domestic tours, and overseas education consulting and transport services. The company has also been active in many other fields such as hotel, restaurant, investment service, trade development and distribution.

After equitization, it will continue focusing on core business operations such as restaurant and hotel, Hoa said.

According to the HCMC government, Ben Thanh Tourist is one of the 11 State-owned enterprises (SOEs) mandated to finish IPOs within this year.

In March this year, leaders of 29 SOEs in the city agreed on sanctions such as salary reduction, transfer or dismissal if they fail to realize their equitization plans between now and 2015.

HCMC vice chairman Le Manh Ha said nine SOEs in the city were unable to complete equitization plans last year due to internal problems, slow property handover or contract signing with consulting firms. Some enterprises were found to commit violations related to labor agreements, salary and changes to key staff.

As scheduled, 31 SOEs will be equitized in 2014-2015. However, two of them have asked for approval to delay equitization until after 2015 while the remaining firms have pledged to go public before December 2015.

List of 29 SOEs set for equitization in 2014-2015

- Gold Dragon-SJC Gem Identification Co.

- Saigon Cultural Products Corporation

- Labor Export and Expert Co.

- Trung An Water Supply Co.

- Tan Hoa Water Supply Co.

- Satra Tien Giang

- Satra Southwest

- Saigon Forestry Co.

- Gia Dinh Real Estate Investment Co.

- Saigon No. 5 Trade and Construction Co.

- Housing Trade & Development Co.

- Ben Thanh Tourist

- River Port HCMC Co.

- An Phu Shipbuilding Co.

- Thu Thiem Investment & Development Co.

- Mebiphar

- Gia Dinh Garment & Textile Co.

- Saigon Garment & Textile Co.

- Ben Thanh Housing Development Co.

- Binh Thanh Real Estate Co.

- Traffic & Public Works Consulting Co.

- Traffic & Public Works Co.

- Binh Minh Construction Co.

- Saigon Industrial Park Development Co.

- Hi-tech Park Development Co.

- Cho Lon Investment, Export-Import Co.

- Bridge and Ferry Work Co.

- Public Lighting Co.

- Saigon Traffic Co.

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