High-tech agricultural centre inaugurated in Thanh Hoa

A high-tech agricultural centre was officially inaugurated and put into operation in Lam Son town, Tho Xuan district in the north-central province of Thanh Hoa last week.

The event was attended by Politburo member and Minister of Transport Dinh La Thang; and Party Central Committee member and Vice Chairman of National Assembly Uong Chu Luu.

The project was financed by Lam Son Sugar Joint Stock Corporation (Lasuco) with a total cost of nearly VND200 billion (US$9 million).

The project consists of modern and synchronous facilities to serve research purposes and the production of high-tech agricultural products.

In addition to high quality and disease-free sugarcane varieties that meet the needs of the processing industry, the centre will produce a variety of seedless oranges.

The centre will produce more than 300 tonnes of safe and high quality vegetables and fruits including cantaloupe, cherry tomatoes and capsicums.

On the same day, the 2016 Lam Son Spring Fair themed ‘For the quality of life’ was held, attracting a large number of visitors.

The fair displayed a wide variety of high-tech agricultural products from numerous enterprises, producers, growers, co-operatives and trade villages around the province, including Lasuco.

Two more firms eye Casino’s Vietnam assets

Singapore’s Dairy Farm International Holdings and South Korea’s Lotte Shopping have shown interest in acquiring French retail group Casino’s Big C supermarket chain in Vietnam after two major Thai firms said they are bidding for Casino’s assets here.

According to Reuters, Casino’s sale of its Thai and Vietnam units has drawn the attention of Dairy Farm and Lotte Shopping but they will need punchy bids to go up against the deep-pocketed Thai giants, Berli Jucker and Central Group.

The competition represents a rare opportunity for cashed-up Asian companies to expand into what analysts say are two of Southeast Asia’s most profitable retail markets, but they also warn there is a risk of overpaying, particularly in Thailand where the economy is slowing.

Both Dairy Farm and Lotte Shopping also have strong finances. Dairy Farm, the second largest retailer in Singapore and Hong Kong, operates major brands like 7-Eleven, Cold Storage, Guardian, Wellcome Giant and Hero.

Lotte Shopping is the biggest department store operator in South Korea with US$23 billion in revenue and US$509 million in profit reported in 2014.

Reuters said Japanese retail conglomerate Aeon Co. Ltd. is also weighing an offer. However, it might not bid aggressively.

The three potential bidders have been active in the local market and plan to expand their business.

Lotte Shopping under Lotte Group has developed over 10 supermarkets and commercial centers in HCMC and other localities. It has also acquired Diamond Plaza, a shopping center in the heart of HCMC, from Posco.

Earlier, speaking to the Daily, a leader of Lotte Shopping in Vietnam said the retailer would strengthen its presence by participating in all modern retail channels, and mergers and acquisitions (M&A) deals.

Dairy Farm, which has supermarkets and hypermarkets in Singapore, Malaysia, Indonesia and Brunei with over 5,000 stores, has opened its first outlet in HCMC’s District 7. Among the international retailers active in Vietnam, Dairy Farm seems to be slow in business expansion, so buying the Big C assets would be an opportunity for it to speed up its expansion.

Aeon, though showing no aggressive move, is seen as a strong contender in this race. In the past three years, Aeon has launched a commercial center in each of HCMC, Binh Duong Province and Hanoi. A new center will be up and running in HCMC’s District 7 in July.

Its total investment in the four facilities amounts to half a billion U.S. dollars.

Aeon has secured a 49% stake in the Citimart supermarket chain and a 30% stake in the Fivimart store chain also. When Aeon announced its share acquisitions early this year, Fivimart had 20 stores in the nation’s north while Citimart had 27, mostly in HCMC.

According to Reuters, Central Group, Thailand’s biggest retailer led by tycoon Tos Chirathivat, has an advantage in its bid for Casino’s Vietnam assets as it currently owns a quarter of Big C Thailand.

Central said it is keen to buy Casino’s 58.6% stake in Thailand’ Big C, with a total value of around US$3.1 billion at current market prices, and Casino’s wholly owned unit, Big C Vietnam, which bankers have valued at US$800 million to US$1 billion.

Second Aeon Mall set to open in HCMC in July

Japanese retailer Aeon, riding on the back of its first mall in Tan Phu District, HCMC which attracts around one million guests a month, will open a second in the city in July, said Nagahisa Oyama, senior executive vice president and CEO of ASEAN Business of Aeon.

Speaking at a meeting with HCMC chairman Nguyen Thanh Phong last week, Nagahisa Oyama said work on Aeon Mall Binh Tan at the Hi-Tech Healthcare Park of Hoa Lam Shangri-La in the outlying district of Binh Tan is on schedule.

Yasuo Nishitohge, general director of Aeon Vietnam, said the firm is spending around US$120 million developing Aeon Mall Binh Tan on 4.6 hectares, which is bigger than Aeon Mall Tan Phu Celadon which has been operational since early 2014.

Aeon has two other malls, with one in neighboring Binh Duong Province and the other in Hanoi. Investment capital for the four malls totals around US$500 million.

Aeon looks to have 20 malls across Vietnam by 2020. In a strategic business shift to Asia, Aeon is expanding investment activity in ASEAN countries. In Vietnam, the Japanese retailer also owns 49% of the Citimart store chain and 30% of another store chain, Fivimart, and operates Ministop convenience stores

Vietnam stands fourth in wood exports

Vietnam has been the world’s fourth largest exporter of wood and wooden products after China, Germany and Italy, reported the Handicraft and Wood Industry Association of Ho Chi Minh City.

Last year Vietnam yielded a total export turnover of US$6.9 billion from wood and wooden products, up 10.7 percent over the previous year. Still this number was behind forecast of US$7 billion.

Of the US$6.9 billion, wooden products brought US$4.3 billion, a year on year increase of 7.8 percent.

The U.S., China, Japan and the EU have been the largest import markets of Vietnamese wood and wooden products.

The export turnover is expected to hit US$7.2-7.3 billion this year with growth rate approximating 8-10 percent.

Demand for clean farm produce huge

Enterprises said demand for their unprocessed and processed agricultural products meeting international food safety and hygiene standards has surged.

Vo Phat Trien, director of Viet Duc Company, a Dong Thap Province-based firm specializing in dried mango products, said German customers ordered three 40-foot container loads of dried mango a month but the company refused due to its limited capacity and unstable supply of raw material.

Trien told a meeting on solutions to agriculture in HCMC on Tuesday that the firm’s dried mango is favored in the German market because the company uses mangos that meet Global Good Agricultural Practice (GlobalGAP) standards.

Nguyen Lam Vien, general director of Vinamit Joint Stock Company, which is implementing a Vinamit Organic project, said importing countries need more organic agricultural products while local consumers are increasingly aware of clean farm goods, especially in Hanoi.

Vien said producers in the agricultural sector cannot compete with rivals in developed countries. However, there would be opportunities if the sector turns out more organic products as Vietnamese production costs are lower than in many countries thanks to low labor cost.

Organic agricultural products will bring about more profit and items processed from organic products will have an added value increase by at least 50% compared with conventional products, according to Vien.

Pham Minh Thien, executive director of Co May, a private firm which produces rice and mushrooms in Dong Thap, said demand for clean food products is large.

SBIC restructures 225 businesses

Shipbuilding Industry Corporation (SBIC), formerly known as the Vietnam Shipbuilding Industry Group (Vinashin), has restructured 225 out of 272 affiliates over the past five years.

Nguyen Ngoc Su, chairman of SBIC, said at a conference on SBIC’s plans for 2016 in Hanoi on Tuesday that the number of restructured firms represented 82.7% of the target and that they were merged, dissolved or let to go bankrupt. The remaining 47 companies will be restructured this year.

Many firms have yet to be restructured due to their huge debt. For instance, Halong Shipbuilding saw its negative equity amounting to VND2.6 trillion (US$115.5 million).

At present, SBIC has eight businesses under its umbrella and operating in the shipbuilding sector.

SBIC obtained VND5.9 trillion in revenue and VND1 trillion in net profit last year.

SBIC will continue restructuring debt this year. It has to pay the original loan of US$750 million provided by the Government in 2010 and restructure international bonds issued in 2015 and another VND7 trillion of domestic debt.       

The Government has allowed SBIC to issue Government-guaranteed bonds with a tenor of 10 years on international and domestic markets as part of a plan to reduce 70% of its original debt. 

BSC warns investors of share oversupply

BIDV Securities Company (BSC) has called for investors to stay cautious before making a trading decision as the stock markets could face an oversupply this year.

In a macro outlook report released on Monday, BSC forecast 2016 would be a tough year for global markets but Vietnam might remain a bright note compared to other markets. Excluding factors like possible exchange and interest rate increases, other indicators such as consumer price index, foreign direct investment and credit growth are seen staying stable.

Business and production activities will continue expanding with earnings per share (EPS) projected to rise by over 5%. This will help the market maintain stability and reduce negative impact from foreign markets.

In 2015, Vietnam wrapped up negotiations over a number of important international trade deals such as the Trans-Pacific Partnership (TPP) and the Vietnam-European Union (EU) free trade agreement. They will create investment opportunities in finance, export and import sectors and supported the country to woo more foreign investors.

However, BSC said domestic capital flow would depend much on many macroeconomic factors and investor sentiment.

The market has had 1.5 million accounts, rising by 105,000 accounts against late 2014. However, this is because there is no limit on the number of accounts held by a single investor whereas brokerage firms have scaled down margin activities due to Circular 36. Therefore, domestic capital flow is unlikely to rise strongly.

Meanwhile, foreigners have become active, extending net buying activities despite unfavorable developments on the market.

The merger & acquisition (M&A) market in Vietnam is forecast to reach US$3.8 billion with nearly 400 deals to be announced in the coming time, well above US$2.8 billion in 2014. This will certainly cause positive impact on foreign capital flows on the market.

Some 500 enterprises will have to go public in the 2016-2020 period and the Government has pushed equitized companies to list on the market for unlisted public enterprises (UPCoM), so the market will see huge supply in the coming time. State-owned enterprises will speed up divestments and other businesses will also issue shares to raise capital, BSC said.

Therefore, the brokerage advised investors to be cautious over those listed enterprises with repeated and large capital increase schemes.

According to BSC, the two local exchanges saw 27 firms having turnover at over US$1 million each session in 2015, down by 11 companies against the previous year.

Beer firm raises VND188 billion from IPO

Viet Ha Investment One Member Co Ltd collected over VND188 billion (US$8.3 million) from an initial public offering (IPO) auction organized at the Hanoi Stock Exchange on Tuesday.

Over 18.7 million shares of the beer producer, or 24.3% of chartered capital, were offered at the starting price of VND10,000 each, VietnamPlus reports.  

Eleven investors registered to buy 44.5 million shares, 2.3 times higher than the volume offered for sale.   

The highest bid was VND10,500 per share and the lowest was VND10,000 per share. The biggest registered volume was 9.2 million shares and the smallest was 1,000 shares.

Closing the IPO auction, all 18.7 million shares were snapped up by one institutional and five individual investors. The highest winning price stood at VND10,500 per share and the average winning price was VND10,100 per share.

Viet Ha raised VND188.8 billion from the share sale, VND1.8 billion higher than the sum quoted at the starting price.

A representative of the firm said that Viet Ha will have chartered capital of VND769 billion after it goes public. It will sell over 18.7 million shares to strategic investors and nearly 257,900 shares to its employees. The State will hold a 51% stake in the company, equivalent to over 39.2 million shares.

CBU auto imports tumble in January

Completely built-up (CBU) auto imports have declined sharply in January after months of strong growth in 2015, according to data of the General Statistics Office (GSO).

CBU auto imports reached 7,000 units worth US$175 million, dropping by 50% and US$222 million against December respectively. The figures are down 26.7% in volume and 5.1% in value year-on-year.

The drop is seen as an abnormal market movement as people often rush to buy cars in January for travel during the Lunar New Year holiday (Tet) as had happened in previous years. This year, the first day of the Lunar New Year is February 8 and workers will have more than one week off for the nation’s biggest holiday.

Auto traders said many auto firms sped up CBU imports in the final months of 2015 in order to avoid a higher special consumption tax caused by a new tax calculation which is in place this year.

However, Vietnam has spent US$260 million importing auto components in the first month of this year, US$50 higher than in the same period last year.

Imports of CBU cars and auto parts have totaled US$435 million in January, up 10.3% against the same period last year.

The country spent nearly US$3 billion importing 125,000 CBU autos last year, the highest volume ever.

Agriculture ministry criticized over macadamia policy

The Ministry of Agriculture and Rural Development should encourage enterprises to invest in macadamia cultivation and banks to lend to projects in this field, instead of embracing the lamentable “ask-and-give” mechanism, LienVietPostBank said.

In a statement released on January 5 to review one year of its cooperation program for macadamia cultivation with Him Lam Joint Stock Company and orientations of the Steering Committee for the Central Highlands region, LienVietPostBank pointed out this hindrance.

LienVietPostBank said enterprises and banks have faced impediments from getting involved in macadamia farming projects.

Nguyen Duc Huong, vice chairman of the bank, said in the statement that the ministry is acting as if it were doing enterprises and banks a favor.

To support macadamia growers, the Government’s Decree 210/2013/ND-CP, effective from February 10, 2014, clarifies that farmers are provided with VND15 million (US$666) for each hectare if they develop at least 50 hectares of macadamia.   

However, the bank said the decree backs the rich as it is impossible for poor farmers to amass 50 hectares of land for macadamia cultivation.

Huong proposed the decree be revised, saying that farmers having one hectare of macadamia shall be given VND15 million to develop their farms.

The ministry should work out an orientation while zoning plans can be decided by localities, and should build a national program for macadamia development.

Provinces should add macadamia farming to their economic restructuring plans and build zoning plans for macadamia cultivation based on land, especially for aging coffee plants. Land for low-yielding crops should be taken back to grow macadamia.

Experts and management agencies under the ministry have criticized Him Lam and LienVietPostBank over their ambitious plan to make macadamia a key plant in the Central Highlands region.

Many said the two businesses should be careful though macadamia is predicted to become a cash-cow crop for its nutrition values and increasing demand in Vietnam.

Him Lam and LienVietPostBank became members of the Australian Macadamia Society last year. They also set up two plants to process macadamia and two incubators to produce seedlings in the Central Highlands province of Lam Dong.

Meanwhile, a number of provinces in the Central Highlands like Dak Nong introduced zoning plans for macadamia farming. This locality plans to grow macadamia on nearly 15,000 hectares in Tuy Duc District.

According to data of the committee, the region was home to around 2,500 hectares of macadamia in 2014, including 960 hectares in Lam Dong, 800 hectares in Daklak, 600 hectares in Dak Nong.

Traffic infrastructure projects need private capital

Prime Minister Nguyen Tan Dung has called on the Ministry of Transport to encourage more private investors to get involved in traffic infrastructure projects in the next five years.

Dung’s request came up at a recent web conference on the four-year implementation of the Party Central Committee’s Resolution No. 13-NQ/TW on infrastructure development for turning Vietnam into an industrialized economy.

The Government leader told the ministry and relevant agencies to strengthen the capacity and efficiency of State management with a focus on improving institutions and policies.  

Dung said institutional reforms in the transport sector would help attract more investment. The State budget for traffic infrastructure projects will remain constrained in the coming time due to difficult Government bond sales and rising public debt, he said.

He said Vietnam has identified transport infrastructure development as one of the key drivers for it to become an industrialized country. Therefore, Dung said capital mobilization from domestic and foreign sources for transport projects is important.

The transport ministry was told to review master zoning plans for road, air, sea and inland waterways and find ways to encourage private sector participation in projects in these areas.

Regarding the implementation of the resolution, the transport ministry reported that transport infrastructure development has been robust over the past years.   

For instance, the Ho Chi Minh Road section in the Central Highlands was opened to traffic 1-1/2 years ahead of schedule. The expansion of the National Highway 1A section from Thanh Hoa Province to Can Tho City was completed one year earlier than expected.  

Around 704 kilometers of expressway were put into use, 104 kilometers higher than the target set in the resolution. A number of deteriorating bridges and railways have been upgraded.   

Most of the transport infrastructure projects with the involvement of private firms have been carried out under the build-operate-transfer (BOT) format. Though this form of investment has helped ease pressure on the State budget, the public has bemoaned toll collections and toll hikes for a number of roads from this year.

Agriculture ministry to put restructuring on fast track

The Ministry of Agriculture and Rural Development has pledged to step up the restructuring of the agricultural sector with an aim at turning out more value-added products and improve incomes for farmers.

The ministry said at a review conference for the agricultural sector on January 5 that despite significant growth in the past five years, Vietnam’s cultivation value has remained low, making life tough for farmers.

The ministry reported that farmers could earn VND54.6 million (US$2,427) from a hectare of crop in 2010 and VND82.5 million (US$3,667) last year. This 1.5-fold increase helped farmers obtain meager profit.

Aquaculture generated revenue of VND183 million (US$8,134) per hectare last year, up from VND103.8 million (US$4,614) in 2010.

According to the ministry, the agricultural sector’s gross domestic product (GDP) growth was 3.13% in the 2011-2015 period, far below the nation’s GDP growth.

In 2016-2020, the ministry will boost the restructuring  of the agricultural sector with a focus on value-added products and use of high technologies.

The ministry will provide more support for cultivation to enable it to produce more quality rice at lower cost. The ministry plans to shift about 100,000 hectares of low-yield paddy to corn and other crops with higher yields.

For aquaculture, five large fishing centers will go up in Haiphong, Danang and Can Tho cities and Khanh Hoa and Kien Giang provinces this year to fuel growth in the field as envisaged in a sustainable development program of the General Department of Fisheries.

The ministry said bilateral and multilateral trade agreements will create fresh opportunities for the agro-aqua-forestry sector as a result of import tariff reductions and exemptions. However, countries will set up new non-tariff barriers to protect their domestic producers, so the ministry will back local firms to overcome such barriers to expand markets and promote exports.

Besides, the ministry will support organizations and individuals to develop brands for and improve the quality of their agro-aqua-forestry products.

The ministry noted agencies under its umbrella should draw up development plans based on the national scheme for agricultural restructuring to help realize targets for high value- added products, and improve incomes and living conditions for farmers, infrastructure development to prevent and mitigate impact of natural disasters, environmental protection and efficient use of resources.

Vietnam workers abroad need no local social insurance

Vietnamese nationals who are not socially insured in the country can still go abroad for guest work, according to the Department of Social Insurance under the Ministry of Labor, Invalids and Social Affairs.

Tran Thi Thuy Nga, director general of the department, told the Daily that the 2014 social insurance law does not provide any regulation forbidding Vietnamese to go overseas for guest work if they do not buy social insurance at home.

According to Nga, compulsory social insurance for Vietnamese workers abroad is not at all new as such a regulation did exist in the 2006 social insurance law. The old legislation required Vietnamese workers abroad to buy social insurance in the country no matter whether they were covered by insurance policies in the countries where they were employed.

The 2014 law requires all workers to buy insurance, including those employed abroad.

As for insurance in the countries where Vietnamese people work, Nga said they can only get short-term benefits like compensation for occupational accidents, illnesses and healthcare, instead of long-term benefits such as retirement pensions.

Therefore, the 2014 social insurance law requires Vietnamese working in foreign nations to register for pensions and survivorship allowances. If they do so, they will be allowed to enjoy short-term benefits in foreign countries if they buy social insurance there and long-term benefits in Vietnam.

Vietnamese workers may travel frequently for employment in different countries, so they need to buy insurance at home to get more benefits including retirement pensions.

Foreigners will have to buy insurance from 2018 if they want to obtain work permits in Vietnam.

Nga said that as instructed by the Prime Minister, the ministry is proceeding with negotiations over reciprocal agreements on social insurance with Germany and South Korea.  

Asked why Vietnamese workers abroad are not allowed to apply for voluntary social insurance, Nga said there is a big difference between them and voluntary social insurance buyers. The former group has labor contracts and stable incomes while the latter do not have stable incomes.

However, pension benefits of the compulsory and voluntary social insurance are pretty similar. Therefore, Vietnamese workers abroad can continue paying social insurance voluntarily or compulsorily when returning to Vietnam, Nga said.

CBRE: 2015 apartment sales grow 98% in city

Property service provider CB Richard Ellis (CBRE) has estimated that more than 36,000 apartments were sold in HCMC last year, up 98% compared to 2014.

Duong Thuy Dung, director of research and consulting at CBRE Vietnam, said buyers of the apartments were individuals, corporate investors and real estate sales agents.

Dung said mid- and high-end apartments with prices from VND1.3 billion (less than US$57,800) to VND5 billion a unit accounted for more than 75% of the total. This was in stark contrast to the 2009-2014 period when condos with prices of less than VND1 billion made up a majority of total sales.

With a firm recovery seen in the local property market last year, investors of real estate projects, particularly those with good planning, amenities, greenery and location, have adjusted up selling prices.

Dung said apartment prices on the primary market went up by 4.4% in 2015 compared to 2014 while housing projects at prime locations had revised prices up 10-15%.

“Despite higher prices, projects were still quickly absorbed,” Dung said.

Regarding the prospect for the property market, Dung said developers of real estate projects are anticipating more buyers in the coming years.

Last year, 78 new projects with a total of 41,787 apartments in HCMC were introduced and sold to customers. They included Vinhomes Central Park with 7,500 units in Binh Thanh District and Masteri Thao Dien with 3,700 units in District 2.

The apartment supply in the city will have more than 45,000 apartments from 90 new projects in different segments this year. Among that, the top-tier products will grow by 20% over last year.

Marc Townsend, managing director of CBRE Vietnam, said ample housing supply would result in fiercer competition on the property market and piled pressure on investors of property projects, especially those not competitive in terms of location and product.

If the market grows too fast, risk should be taken into account, Townsend warned.  

Earlier, the HCMC Real Estate Association (HoREA) said there were 26,000 successful housing transactions in HCMC last year and apartments made up a bigger part of the total sales volume.

Hai Phong Port Joint Stock Company (PHP) reported higher earnings for last year's operations in the northern port of Viet Nam.

The port received 31.8 million tonnes of commodities, 22 per cent higher than last year; consolidated revenue of VND2.514 trillion (US$111.7 million), 20 per cent higher than 2014; and consolidated profit of VND607 billion ($26.97 million), up 16 per cent from last year.

SCIC to sell stake in SWC

State Capital Investment Corporation (SCIC) said early this week that it was offloading all its shares in the Southern Water Transportation Corporation (SWC).

Accordingly, SCIC has registered to sell 44.68 million shares or a 66.58 per cent stake in the HCM City-based company. Trading was expected to conducted between January 2 and February 4, 2016, as per agreements, SCIC said.

India boosts chemicals and cosmetics exports to Vietnam

Indian businesses considers Vietnam a potential import market of their dye and basic chemicals, said S. G. Bharadi, the Acting Executive Director of the Indian Basic Chemicals, Pharmaceuticals and Cosmetics Export Promotion Council (CHEMEXCIL).

Exports of these products to Vietnam rose 5.85% to US$114.02 million in 2014 and 2015, according to CHEMEXCIL.

Bharadi led an Indian business delegation, comprising 50 businesses, to Vietnam to attend a trade exchange and a chemicals and cosmetics exhibition in HCM City on January 7-8.

The activity is part of the Indian Government’s program to seek opportunities to speed up exports of chemicals, dye and cosmetics to other countries and attract multinational companies, including Vietnamese investors, to set up global production centres in India, said Bharadi.

Housing transactions in Hanoi hit record high

Housing transactions in Hanoi last year hit a record 21,100, surpassing the sector’s peak in 2009, according to property service provider CB Richard Ellis (CBRE) Vietnam .

High-end apartment transactions accounted for 32% of the total, up from 20% in previous years.

According to CBRE, a number of property investors have sped up delayed projects. Several apartment projects have been restructured in both size and price in accordance with market demands.

The mid-end and low-cost apartment transaction rate was down compared to 2014, however, it still accounted for a large share of the total sales due to reasonable pricing.

In 2015, about 28,300 apartments were put on the market in Hanoi , up 70% compared with the previous year.

High-end apartments accounted for 28% of the total share compared to the peak of 21% in 2009.

In terms of location, new properties from Hoang Mai and Hai Ba Trung districts accounted for nearly 50% of the total, while the city’s western and south western parts accounted for a more modest 46%.

Average prices of new projects increased by 3-5% year-on-year, and even the prices rose about 5-7% for high-end projects, said Nguyen Hoai An, CBRE Vietnam’s Vice Director.

Experts agreed that since the amended Housing Law came into effect on July 1 last year, interest from foreign buyers in high-end projects in Hanoi and Ho Chi Minh City has increased.

VEF/VNA/VNS/VOV/SGT/SGGP/Dantri/VET/VIR